3% withholding bites the dust; vets get jobs tax credits — Business Management Daily: Free Reports on Human Resources, Employment Law, Office Management, Office Communication, Office Technology and Small Business Tax Business Management Daily

3% withholding bites the dust; vets get jobs tax credits

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in Hiring,Human Resources,Office Management,Payroll Management

Congress has repealed the dreaded withholding provision under which state and local governments would have been required to withhold 3% of payments made to any payee for goods and services. The provision was slated to go into effect on Jan. 1, 2013.

Also included in the 3% Withholding Repeal and Job Creation Act (P.L. 112-56) is the VOW to Hire Heroes Act of 2011, which amends the Work Opportunity Tax Credit (WOTC) to provide enhanced tax credits for employers that hire veterans.

VOW to hire vets

The WOTC already allows employers that hire veterans to take a 40% tax credit on up to $6,000 in first-year wages paid to veterans ($12,000 for disabled vets). The law retains the 40%/$6,000 credit, and makes the following amendments for post-Sept. 11 vets. Employers that hire:

  • Veterans who have been unemployed for more than four weeks, but less than six months, can take a maximum credit of $2,400
  • Vets who have been unemployed for longer than six months can take a maximum credit of $5,600
  • Disabled vets who have been unemployed for at least four weeks, but less than six months, can take a maximum credit of $4,800
  • Disabled vets who have been unemployed for longer than six months can take a maximum credit of $9,600.

TAX-EXEMPT EMPLOYERS, TOO: Normally, tax-exempt employers can’t take the WOTC. However, tax-exempt employers that hire vets may claim a credit against the employer portion of Social Security taxes. The credit is the lesser of the WOTC or the employer’s portion of Social Security taxes with respect to wages paid to all employees. The credit may be taken for the one-year period beginning on vets’ first day of work.

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susanknopf December 25, 2011 at 12:35 am

That’ what High Speed Universities is all about, to further the education of students. They need more than a high school degree today, they need at least 2 years of college, preferrably 4, and then we’re going to work with communities so they can grow economically and create more jobs for our young people

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