Vow To Hire Heroes Act Becomes Law

November 22, 2011 | Roger McEowen

 

On November 21, the President signed into law H.R. 674.  Title II of the legislation is entitled the "Vow To Hire Heroes Act."  The legislation passed both bodies of the Congress unanimously (at least the final vote was unanimous).  Title II, Sec. 261, includes tax credits for qualified wages paid to qualifying veterans that are hired from November 22, 2011 through 2012 (even if some of the wages are paid after 2012) as part of the existing Work Opportunity Credit as follows:

  • A credit, capped at $4,800, equal to 40 percent of the first $12,000 of qualifying wages paid to veterans that have a service-related disability that are hired within 12 months of being discharged from military service.
  • A credit, capped at $9,600, equal to 40 percent of the first $24,000 of qualifying wages paid to veterans that have a service-related disability who have been unemployed for at least half of the prior year (six months out of 12 months).
  • A credit, capped at $5,600, equal to 40 percent of the first $14,000 of qualifying wages for veterans that are not disabled, but have been unemployed for at least half of the prior year (six months out of 12 months).
  • A credit, capped at $2,400, equal to 40 percent of the first $6,000 of qualifying wages for veterans that have been unemployed for at least four weeks, but less than half of the past year (six months out of 12 months).

Under the provisions of the Work Opportunity Tax Credit legislation (which is set to expire at the end of 2011) which apply to these new credits for hiring qualified veterans, employers will have to certify the new employees (via Form 8850) to the appropriate state agency within 28 days of the new employee's start date. 

Importantly, there is no provision in the new law that prohibits an employer from firing an existing employee (including a veteran) to make room for the hiring of a qualified veteran and receive the applicable credit.  So, the legislation could lead to no net gain in employment. 

For details on the Work Opportunity Tax Credit, see our detailed article here: CALTLegalBrief-WOTC.pdf