As today is the Marine Corps birthday and Veteran’s Day is approaching tomorrow, we’d like to take some time out and thank those who have served our country. What better way to do this than discuss some tax advantages Veterans may find themselves eligible for!
Earned Income Tax Credit
This credit is meant to benefit those making under $53,930 per year. Some pay doesn’t qualify as earned income such as combat pay, basic allowance for housing, and basic allowance for subsistence; all of these can be elected to be included in earned income for the purposes of the tax credit. Choosing to include these or not can increase or decrease the credit amount, so it is smart to do some calculations before coming to a decision. The EITC is a refundable credit, meaning that if it reduces your tax liability below zero, you could be paid out on the difference.
Returning Heroes Tax Credit
- Short-term Unemployment: 40% of the first $6,000 in wages (up to $2,400) for employers who hire veterans who have been unemployed for at least four weeks
- Long-term Unemployed: 40% of the first $14,000 of wages (up to $5,600) for employers who hire veterans who have been unemployed for longer than 6 months
Wounded Warrior Tax Credit
- A credit of 40% of the first $24,000 of wages (up to $9,600) for firms that hire veterans with service-connected disabilities who have been unemployed for over 6 months
Differential Wage Payment Credit
This credit is purposed for employers who pay Reserve and National Guard employees while they are away on active duty for more than 30 days and have been employed for over 90 days. The credit can be up to $4,000, and is now available to all businesses, whereas before 2015 only small businesses found themselves eligible.
With many tax advantages in place for veterans, many can get forgotten about. For more information on potential benefits or assistance claiming them give our office a call at 516-541-6549!