For small business owners who are contemplating adding to their workforce in the coming year, special attention should be given to tax incentives that might make that decision a bit easier. While no broad based tax incentive program currently exists for hiring the long term unemployed, the Returning Heroes and Wounded Warrior Tax Credits are worth investigating.
The Returning Heroes Tax Credit provides incentives for both the short term and long term unemployed. A tax credit of 40% of the first $6,000 (up to $2,400) is applied for those businesses who hire a veteran who has been unemployed for at least four weeks. 40% of the first $14,000 (up to $5,600) is available as a tax credit for those who hire veterans who have been out of work for more than six months.
Incentives to hire veterans with service-connected disabilities who have been out of work for six months or more is offered as a Wounded Warrior Tax Credit. Employers can earn a tax credit of 40% of the first $24,000 earned (up to $9,600).
Presumably, with the wind down of the War in Afghanistan in 2014, the plight of our returning service men and women could be even more profound, especially given that the number of the long term unemployed face even more challenges. In an article written by Boston Globe Correspondent Edward Mason on December 28 (‘They’re getting hammered for something they didn’t do’), as many as 60,000 Massachusetts residents will lose jobless benefits this week because Congress adjourned without reauthorizing extensions as part of the bipartisan budget deal. If extensions are not granted by Congress, that number could approach 200,000 in the Commonwealth in 2014.
While worker productivity has improved dramatically, and the stock market is trading in record territory, the problems of the long term unemployed will continue to grow. Perhaps as part of another bipartisan budget deal, tax incentives for businesses to hire the long term unemployed may be in the offing. But for now, employers who hire a veteran can help themselves and their country, all while truly thanking those who served.
If you have questions or would like to learn more, please reach out to Genesis HR Solutions at AskUs@genesishrsolutions.com or 800-367-8367.
Genesis HR Solutions is the premier PEO provider for Massachusetts based businesses.