Veteran Employment Tax Credit (code 27)
A non-refundable credit is available to taxpayers who hire a qualified recently deployed veteran on or after January 1, 2012.
A qualified recently deployed veteran is an individual who was mobilized to active federal military service in an active or reserve component of the United States Armed Forces, and received an honorable or general discharge within the two-year period before the employment begins.
To qualify for the credit, the qualified veteran must meet all of the following conditions:
- Have received an honorable or general discharge within the two-year period before the employment begins;
- Was collecting or was eligible to collect unemployment benefits, or has exhausted their unemployment benefits within the last two years, under Title 35A, Chapter 4, Part 4, Benefits and Eligibility;
- Work for the taxpayer for at least 35 hours per week for not less than 45 of the 52 weeks following the veteran’s employment start date.
The credit is claimed beginning in the year the 45 consecutive weeks in paragraph 3 above are met.
|Calculating the Veteran Employment Tax Credit|
|First Year Credit (count all months in the year the 45 week requirement is met)|
|1. Number of months or partial months veteran employed since hiring1|
|2. Monthly credit allowable in first year||$ 200|
|3. First year credit – multiply line 1 by line 2 (maximum $2,400)2||$|
|Second Year Credit|
|4. Number of months or partial months veteran employed in 2nd year|
|5. Monthly credit allowable in second year||$ 400|
|6. Second year credit – multiply line 4 by line 5 (maximum ($4,800)||$|
1. The qualified veteran must work at least 35 hours per week.
2. The credit is taken in the first year in which the veteran was employed 45 consecutive weeks.
Any credit in excess of tax due will not be refunded, but may be carried forward to offset tax for up to five years.
The following documentation for the qualified recently deployed veteran must be retained by the taxpayer to support the credit claimed, and made available to the Tax Commission upon request:
- Veteran’s name, last known address, and taxpayer identification or social security number;
- Start date of employment;
- Documentation establishing that the veteran was employed 45 out of the 52 weeks after the date of employment;
- Documentation provided by the recently deployed veteran’s military service unit establishing that the veteran is a recently deployed veteran; and
- A signed statement from the Department of Workforce Services that the recently deployed veteran was collecting, was eligible to collect, or exhausted their unemployment benefits within the last two years.