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Tax credits available for hiring vets, others

If you have hired an unemployed veteran or unskilled younger worker this year, you have until August 17 to claim the newveteran1newly expanded work opportunity tax credit (WOTC). Normally, a business must file Form 8850 with the state workforce agency within 28 days after the eligible worker begins work to claim the tax credit. But under a special rule, businesses have until Aug. 17 to file this form for unemployed veterans and disconnected youth who begin work on or after Jan. 1, 2009 and before July 17, 2009.

The American Recovery and Reinvestment Act, enacted in February, added unemployed veterans returning to civilian life and “disconnected youth” to the list of groups covered by the credit.

In general, an unemployed veteran is a person discharged or released from the military during the five years preceding the hiring date who received unemployment benefits for at least four weeks during the one-year period ending on the hiring date. A “disconnected youth” is a person age 16 to 24 on the hiring date who has not been regularly employed or attending school and who meets other requirements.

The WOTC offers tax savings to businesses that hire workers belonging to any of 12 targeted groups. The other 10 groups include people ages 18 to 39 living in designated communities (including Jacksonville) in 43 states and the District of Columbia, Hurricane Katrina employees, recipients of various types of public assistance, and certain veterans, summer youth workers, and ex-felons. The instructions for Form 8850, available at IRS.gov, detail the requirements for each of these groups.

Source: Internal Revenue Service, www.irs.gov


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