This article was last updated on August 6
The Obama administration has proposed a host of new tax credits and programs to encourage employers to hire our growing army of veterans, particularly those that have been unemployed for a considerable time. This latest commitment to service members and veterans aims to provide a comprehensive plan to lower unemployment and ensure that service members leave the military career-ready to work and be hired in the private sector. The need for this assistance is particularly important now given one million veterans were unemployed as of June and the jobless rate for post-9/11 veterans was 13.3 percent. Further as the Iraq war ends and the wind down in Afghanistan continues, one million more service members are projected to leave the military between 2011 and 2016.
With this in mind, the President is asking Congress to approve the following tax credits and programs through 2013:
The Returning Heroes Tax Credit is a new hiring tax credit that will provide an incentive for firms to hire unemployed veterans.
- Short-term unemployed: A new credit of 40 percent of the first $6,000 of wages (up to $2,400) for employers who hire veterans who have been unemployed at least 4 weeks.
- Long-term unemployed: A new credit of 40 percent of the first $12,000 of wages (up to $4,800) for employers who hire veterans who have been unemployed longer than 6 months.
The Wounded Warrior Tax Credit will double the existing tax credit for long-term unemployed veterans with service-connected disabilities.
- Maintain the existing Work Opportunity Tax Credit for veterans with service-connected disabilities (currently the maximum is $4,800).
- A new credit of 40 percent of the first $24,000 of wages (up to $9,600) for firms that hire veterans with service-connected disabilities who have been unemployed longer than 6 months.
Under the Recovery Act, employers who hired certain unemployed veterans were eligible for a tax credit of up to 40 percent of the first $6,000 of wages, for a maximum credit of $2,400. This credit expired at the end of 2010 and is to be replaced by the above two credits.
Career-Ready Military: The Departments of Defense and Veterans Affairs, working closely with other agencies and the President’s economic and domestic policy teams, will lead a new task force to develop reforms to ensure that every member of the service receives the training, education, and credentials they need to transition to the civilian workforce or to pursue higher education. These reforms will include the design of a “Reverse Boot Camp,” which will extend the transition period to give servicemembers more counseling and guidance and leave them career-ready.
Reference Source: The White House