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Tax Planning
Tax credit for hiring vets expires, likely to get renewed

A tax incentive for employers hiring veterans will expire at the end of December, but the longtime incentive program is likely to get renewed next year by Congress. The Work Opportunity Tax Credit includes incentives for employers who hire employees in certain categories, including individuals who receive public assistance and military veterans. In 2011, Congress made changes to the program by adding new categories to the veterans group. The amounts for the 2012-13 credits were also increased to up to $5,600 for qualified veterans and up to $9,600 for veterans with a service-related disability.

Employers have 28 days from hire date to file for the credit, which is administered through the state Employment Security Department. Generally, the ESD continues taking applications even after the credit lapses, because Congress makes it retroactive after renewal.

Bill Tarrow, Employment Security Department deputy communications director, said WOTC is typically passed for one to three years and sometimes Congress makes changes, such as the higher credits in 2012. The program has been in place since 1996 and last year had the longest hiatus after expiration — all of 2012 — with another hiatus in the past lasting 11 months. But normally, Congress renews the program after one to four months, and given the history of the WOTC, Tarrow said it was likely to be renewed again.

The state received 56,000 applications this year for the credit, on pace with previous years’ numbers. The application process is easy, Tarrow said, but generally only about 50 percent of applications qualify. One reason is because many companies file for all new hires without knowing who will qualify, and another reason is the very specific qualification criteria. About 70 percent of the new employees for whom the credit is given are in the public assistance category.

Tarrow said WOTC tends to be for workers in entry-level jobs and in sectors such as retail and hospitality, but in the case of veterans, the jobs are more in the medical, IT, manufacturing and management fields.

“I think in general employers in this state and across the country are interested in hiring veterans anyway,” Tarrow said. “They tend to have high integrity, they’re hard workers and they show up to work on time.”

Margaret Hess, administrator for WorkSource Kitsap County, said veterans have a lot of transferable skills and have an especially high recruitment rate by federal contractors because of their ability to get security clearances fast. In Kitsap, the Navy shipyard is the largest veteran employer, but many other businesses, including in the manufacturing sector, are veteran-friendly.

“They’re a proven commodity in that they have a strong work ethic, they’re trained and have a steady work history,” Hess said.

Todd Wagner, a 20-year Navy veteran who’s been working as the local veterans employment representative at the Kitsap WorkSource for more than four years, said he’s noticed an increased interest from local employers. He works with the businesses to find qualified veterans and also helps them navigate available programs — including a VA rehabilitation program that pays a veteran’s wages for a short time. He said among the qualities that distinguish vets include discipline and time management.

“The things instilled in a person in the service is compatible with a corporate environment,” he said.

Veterans receive priority referrals to the approximately 16,500 jobs typically listed on the state’s employment website, Go2WorkSource. This year, WorkSource served 1,065 veterans through October, with 1,513 served in 2012 and 1,980 in 2011. The reduced number follows a similar trend in reduction in services for job-seekers on unemployment insurance, Hess said.

In addition to job placement, WorkSource offers veterans services such as transition assistance and job development. The agency also works closely with the Employment Security Department.

Wagner, who frequently goes around the county to talk to employers, encouraged anyone interested in hiring veterans to contact him at (360) 337-4752.

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