|
CapinCrouse has been a thought leader in the not-for-profit accounting world for more than 35 years. We have always felt compelled to share this expertise not only with our clients but with the entire not-for-profit community.
Tax & Business Issues
2009 - 09 September
|
![]() | Tax Calendar
September - December 2009:
- Time for your 2009 Fall and 2010 Tax Planning. Contact this office to schedule a consultation appointment.
October 15, 2009:
- This is the FINAL extended filing due date for your 2008 individual income tax return.
December 31, 2009:
- This is generally the LAST day that you can pay tax-deductible expenses for the year. IRA contributions and some self-employed retirement plan contributions can be made after the close of the year.
Back to top
| Hope is Gone; American Opportunity Is In
For a number of years, the tax code has provided an education incentive in the form of tax credits for post-secondary education tuition paid during the year for taxpayers and their dependents. Until 2009, these credits consisted of the Hope Credit, which was generally limited to a tuition credit that was capped at $1,800 (2008 cap) for each of the first two years of post-secondary education for each student, and the Lifetime Learning Credit, which provides up to $2,000 of credit for each family every year. In 2008, these credits were phased out for joint filers with incomes between $96,000 and $116,000 ($48,000 to $58,000 for single filers) and not allowed at all for married individuals filing separately.
American Opportunity Tax Credit Is In. The American Opportunity Tax Credit replaces the Hope Credit for 2009 and 2010. It provides credit for four years of college expenses, and the maximum credit per student increases to $2,500 per year. The credit will be based on 100% of the first $2,000-and 25% of the next $2,000-of tuition, fees and course material (including books) expenses paid during the tax year. 40% of the credit is refundable, provided the taxpayer is not: (1) a child under the age of 18 or (2) under the age of 24, a full-time student and is not self-supporting. For higher-income taxpayers, this credit begins to phase out for AGI in excess of $80,000 ($160,000 for married couples filing jointly), a significant increase from the previous phase-out thresholds noted above. This enhanced credit can be used to offset the alternative minimum tax in both 2009 and 2010.
Back to top | BuyingorSellingTime Is Running Out for the $8,000 First-Time Homebuyer Credit
You need to act soon if you want to take advantage of the $8,000 first-time homebuyer credit. This once-in-a-lifetime home purchase incentive only applies to purchases completed before December 1st of this year. Although this benefit is called a tax credit, it is actually a financial subsidy to help taxpayers purchase a home located in the U.S. It does not have to be repaid if the home is occupied as a principal residence for the first 36 months after its purchase. The credit is 10% of the cost of the home, up to a maximum credit of $8,000; therefore, nearly all qualified first-time homebuyers will be eligible for the $8,000 maximum, considering that homes selling for less than $80,000 are very rare in most parts of the country. If the credit exceeds your tax, you can claim a refund of the excess.
A taxpayer is considered a first-time homebuyer if he or she (and spouse, if married) had no present ownership interest in a principal residence in the U.S. during the three-year period before the purchase of the home to which the credit applies. However, this credit is not available to high-income taxpayers and begins to phase out for married couples with adjusted gross incomes (AGI) in excess of $150,000 and for unmarried taxpayers with AGI in excess of $75,000.
The credit is available on a taxpayer's 2009 return or amended 2008 return, which means that the funds are not available until after the refund is received from either of those filings. This can be a problem for some potential buyers who have difficulty coming up with funds for the required down payment and closing costs. Recently, however, the Department of U.S. Housing and Urban Development announced that the Federal Housing Administration (FHA) will allow homebuyers to apply the $8,000 first-time homebuyer tax credit toward the purchase costs of an FHA-insured home.
FHA-insured home mortgages require a minimum 3.5 percent down payment, and under the terms of this modified policy, lenders can now monetize the tax credit for use as additional down payment or for other closing costs, which can help achieve a lower interest rate. In addition to the borrower's own cash investment, the FHA allows parents, employers and other governmental entities to contribute towards the down payment.
Back to top | Relief Is Here! RMDs Have Been Waived for 2009
Retirement plan account participants, IRA owners, and their beneficiaries do not have to take their required minimum distributions (RMDs) attributable to 2009. Congress waived those RMDs for 2009 so that distributions would not have to be taken while the stock markets-and, correspondingly, plan values-were at a low, in hopes that the markets would recover quickly.
Beneficiaries taking retirement plan distributions over a five-year period can also waive the distribution for 2009, effectively permitting the beneficiary to take distributions over a six-year period.
However, this special one-year relief from taking RMDs does not apply to 2008 RMDs that were deferred until 2009, since those are actually delayed 2008 distributions; therefore, they are not included in the waiver relief for 2009 distributions.
However, this special one-year relief from taking RMDs does not apply to 2008 RMDs that were deferred until 2009, since those are actually delayed 2008 distributions; therefore, they are not included in the waiver relief for 2009 distributions.
Does this mean that you cannot or should not take a distribution in 2009? Not necessarily; you can still take a distribution if you need or want to. Even if you do not need to take a distribution, it may be appropriate for you to take one based on your income and deductions for the year. If your taxable income is negative, you can take a distribution equal to the negative amount free of any taxes. If you are in an abnormally low-income year, you may also wish to take a distribution and take advantage of a lower-than-normal tax rate.
Back to top | Six Valuable Tips for the Unemployed
If you have, unfortunately, joined the many individuals who are unemployed due to the current economic downturn, there are a number of tax provisions available in 2009 that you may find helpful in weathering a difficult period.
Unemployment Compensation - Partially Tax-Free - Although some states don't tax unemployment compensation, it is taxable income for federal purposes. However, for 2009, there is no federal income tax on the first $2,400 of unemployment benefits; the balance is taxable. For a married couple, the exclusion applies to each spouse individually. Thus, if both spouses receive unemployment benefits during 2009, each may exclude from income the first $2,400 of benefits he or she receives.
COBRA Continuation Premium Subsidy - If you were eligible for COBRA medical insurance continuation with your prior employer between September 1, 2008 and December 31, 2009, you are probably qualified for the tax-free premium subsidy equal to 65% of the cost of the insurance for a period of up to nine months. The former employer pays the subsidy but is reimbursed by the government. This benefit is not available if your adjusted gross income for the year is over $145,000 ($290,000 married joint filers). If you think you might qualify, contact your former employer.
Costs of Seeking New Employment - The costs incurred while seeking new employment are generally deductible as a miscellaneous itemized deduction. These include the cost of preparing, reproducing and mailing resumes; employment agency fees; travel expenses including auto travel at 55¢ per mile, airfare, out-of-town lodging and 50% of meals; long-distance telephone charges; etc. The expenses must be for searching for a new job in the same field as was your previous employment.
Certain Penalty-Free Pension Withdrawals Permitted - Although all pension withdrawals are generally taxable, the early withdrawal penalties can be avoided when the withdrawals are to pay:
- Unreimbursed Medical Expenses. Amounts withdrawn from any qualified plan to pay unreimbursed medical expenses that would be deductible on Schedule A during the year and that exceed 7.5% of the taxpayer's AGI are exempt from penalty. This is true even if you don't itemize your deductions.
- Medical Insurance. This exception allows you, if qualified, to make penalty-free withdrawals from your IRA to pay for medical insurance for yourself, your spouse and dependents. To qualify for this exception, you or your spouse must have lost your job; received unemployment compensation for 12 consecutive weeks; made withdrawals during the year the unemployment was received or in the following year; and made the withdrawals no later than 60 days after being re-employed.
- Higher Education Expenses. Withdrawals made from an IRA during the year for qualified higher education expenses for yourself, spouse, children or grandchildren are exempt from the early withdrawal penalty.
Home Sale Exclusion. Generally, to qualify for the exclusion of gain, a taxpayer must own and use the home as his or her primary residence for two of the prior five years. However, where you are forced to sell the home because of a job-related move, you can no longer afford to maintain it, or you are eligible for unemployment benefits, you can qualify for a partial prorated exclusion without meeting the two-year qualification period.
Gifts. If you are receiving assistance from a family member in the form of a gift, you should be aware that the gift is not taxable income to you, nor is it deductible by your benefactor. However, the person making the gift may need to file a gift tax return if he or she gives you more than $13,000 during 2009. The giver can gain some tax benefit by gifting appreciated property, thereby transferring the tax liability for the gain to you at-hopefully-a lower tax rate.
For example, a parent makes a gift to his child of appreciated stock. If the parent sells the stock and gives the child the cash, the parent must also pay the income tax on the gain. On the other hand, if the parent gives the stock to the child, who then sells it, the child will be taxed on the gain. Call this office if you are considering such a strategy.
Back to top | 2009 Brings "Add-Ons" to the Standard Deduction
You would think a standard deduction would be a fixed amount. Well, for 2009, that's not the case! In addition to the long-standing additions for being age 65 and over and being blind, you can also add on certain items for 2009 that normally would be deductible only to those who itemize their deductions. Don't think that this article is only applicable to taxpayers using the standard deduction; some who would normally itemize may find it to their advantage to use the standard deduction plus the special add-ons in 2009.
So how is the standard deduction for 2009 determined? We start off with the basic standard amount, which is $11,400 for joint filers, $8,350 for those filing head-of-household and $5,700 for all others. To that, you would add the age and blind extra amounts, which are $1,100 each for joint filers and married filing separately, and $1,400 for others. For example, a married couple both age 65 or over and one blind would qualify for an extra amount of $3,300 ($1,100 x 3). The following items that would normally require itemizing would be added to that total:
- Real Property Tax - Limited to $1,000 for joint filers and $500 to others.
- New Vehicle Sales Tax - Limited to the tax on the first $49,500 of each new vehicle purchased from February 17, 2009 through December 31, 2009 and subject to phase-out for higher-income taxpayers.
- Disaster Casualty Losses - Defined as a casualty loss related to a federally declared disaster.
Continuing our previous example, if the couple had $2,400 of new car sales tax and real property taxes of $1,500, their total standard deduction for the year would be computed as follows:
An added complexity is the alternative minimum tax, which does not allow the standard deduction with the exception of the qualified motor vehicle sales tax and disaster casualty loss deductions.
To determine whether to itemize or take the enhanced standard deduction requires computing both and using the better result.
Back to top | Taking Your Business Home
The economic downturn has many businesses struggling to stay afloat. With so much at stake, some owners have moved their businesses into their homes to save money. If you are considering this option, then you need to be aware of the rules that apply when deducting home office expenses.
Generally, a self-employed individual will qualify for a home office deduction if the office is a place where the taxpayer meets with customers, patients or clients, or is used on an exclusive and regular basis for administrative or management activities of his or her trade or business, and there is no other fixed location of the business where the taxpayer conducts substantial administrative or management activities of the business. Even if a taxpayer conducts administrative activities at a fixed location outside the home, he or she is still eligible to claim a deduction as long as the administrative activities conducted at the outside location aren't substantial. Space in the home used to store inventory for a wholesale or retail business also qualifies as business use of the home.
Deductible home office expenses fall under two basic categories: direct and indirect expenses. Expenses that are directly attributable to the home office, such as painting the office, repairs to the office space, etc., are 100% deductible to the business. The second category is indirect expenses that are attributable to the entire home, for which only a fraction of the total amount is allocated to the home. These include home mortgage interest, property taxes, insurance, certain utilities and depreciation. If the home is rented, substitute rent paid for interest, taxes and depreciation. The fraction used to allocate business portions of the indirect expenses is determined by dividing the business use square footage by the total square footage of the home.
The home office deduction is, however, limited to the gross income of the business derived from the use of the home for that business, and where the gross income is less than the expenses, certain expenses can be carried forward for the same trade or business in the subsequent years but cannot be used against a positive income from another business. Carryover never includes home interest, taxes and casualty losses because they are allowed without regard to the gross income limitation.
If the self-employed taxpayer owns the home, there is a negative aspect to the home office deduction that can create unexpected consequences when the home is sold. First, the allowable home office depreciation is never excludable under the $250,000 ($500,000 for joint filers) exclusion of gain for primary residences and will end up being recaptured as taxable income upon sale. Worse yet, if the office is located in a separate structure, then the home sale is treated as two sales (the sale of the home portion and the sale of the office portion). Any gain from the office portion would not qualify for the home gain exclusion and would be taxable.
For example, a married couple sells a home that includes a home office in a separate structure that is 20% of the total home square footage. The home, originally costing $150,000, is sold for $500,000. If the home office had never been claimed, or if the office had not been in a separate structure, the entire home gain, except recaptured depreciation, could be excluded from income. However, in this case, $70,000 (20% of the gain) becomes taxable income. (For this example, to keep it simple, we haven't taken into account improvements, selling costs, or depreciation.)
Back to top | Luxury Car Rules May Limit Vehicle Write-Offs
Unfortunately, if you deduct actual expenses for the business use of your car, you will probably find your write-offs for depreciation restricted due to so-called luxury car limitations. And most any cars (including trucks or vans) fit the IRS definition of a "luxury vehicle," regardless of their cost. If a vehicle is four-wheeled, used mostly on public roads, and has an unloaded gross weight of no more than 6,000 pounds, the car is considered a "luxury vehicle."
To see how this works, let's hypothetically say you and an associate each bought a car in 2008. Your car costs $50,000 while your associate's costs $25,000. You both use your vehicles 75% for business. Cars are in the 5-year life depreciation category and generally the first-year depreciation for 5-year life items is 20%. However, your depreciation deduction for the year (including any choice to expense part of the car's cost) will be subject to the first-year "luxury vehicle" limitation, which for 2008 and 2009 is $2,960 or $10,960 if a special bonus allowance is claimed.
As you can see, both you and your associate's depreciation for the first year is the same amount because of the luxury auto limits. Thus, your associate will be able to deduct the same amount as you, even though his car had a much lower cost than yours.
To stimulate the economy, Congress has temporarily allowed businesses to recover the costs of capital expenditures made in 2008 and 2009 faster than the ordinary depreciation schedule would allow, by permitting these businesses to immediately write off 50% of the cost of new, depreciable property (e.g., equipment, tractors, wind turbines, solar panels, and computers) acquired in 2008 and 2009 for use in the United States.
This bonus depreciation provision also applies to new cars but is limited to a maximum of $8,000. So, in our example above, the annual depreciation before applying the business use factor will be equal to $10,960 ($2,960 + $8,000).
Thus, your first-year depreciation (you used the vehicle 75% for business) will be $8,220 (10,960 x .75).
This may seem unfair, but there is an alternative that can help. Certain sports utility vehicles (a Suburban for example) exceed 6,000 pounds unloaded gross weight and have special rules.
Back to top | Writing Off Equipment Purchases in 2009 Can Be Tricky
Generally, assets (equipment) other than real property, leasehold improvements and certain farm structures acquired by a small business can be written off using three provisions of the tax law or combinations of the three. Choosing the right provision or a combination of provisions can have a significant impact on your taxes in 2009 and future years, so careful planning is required for any significant purchases made in 2009. The three write-off methods are outlined below so you can better understand the tax implications of using them.
- Section 179 Expense Deduction - This is a provision that permits a business to write off any portion of the cost of a newly-purchased asset in the first year it is placed in service. The first-year write-off cannot exceed the greater of the taxable income from all of the taxpayer's active trades or businesses or the annual cap, which for 2009 is $250,000 ($125,000 for married taxpayers filing separately). Any amount which can't be deducted in one tax year because of the taxable income limit may be carried over to the next year and added to the cost of qualifying property in that year. There is also an investment limit of $800,000, which is rarely encountered by small businesses.
Should the asset be taken out of service before the end of the normal useful depreciable life of the asset, then the Section 179 deduction will be recaptured in that year to the extent it exceeds the otherwise allowable MACRS depreciation.
When combining the three write-off provisions, the Section 179 allowance must be taken first and reduces the basis of the property before the application of the other two provisions. There are no adverse alternative minimum tax (AMT) implications to using the Section 179.
- Fifty Percent Bonus Depreciation - For 2009, a small business can take a 50% bonus depreciation write-off in the year the asset is placed in service. Only new property qualifies. Bonus first-year depreciation automatically applies to qualified property, unless the taxpayer "elects out." The election out applies to all assets in the same class, i.e., 3-, 5-, 7- or 10-year class of property for 2009.
There is no AMT depreciation adjustment associated with the 50% bonus depreciation. In addition, for property with a life of 10 years or less, the balance of the asset's cost may be depreciated using the 200% declining balance method instead of the 150% declining balance with the normal AMT adjustment.
- Modified Accelerated Cost Recovery System (MACRS) - The third provision is the normal depreciation allowance over the useful life of the equipment. Generally, the useful lives are 3, 5, 7, or 10 years depending upon the type and use of the equipment. MACRS provides accelerated depreciation (front-loaded) using the 200% declining balance method.
The following illustrates the three basic write-off provisions for $60,000 of business equipment purchased in 2009 with a useful life of 5 years and shows the maximum and minimum amount available.
Back to top | Converting a Rental to a Home
A $250,000 ($500,000 for joint filers) exclusion is available to offset the gain from the sale of a taxpayer's principal residence. This exclusion can be used repeatedly, provided the eligibility requirements are met, but generally not more than once every two years.
This often tempts owners of rental properties to sell their current home-their principal residence-to utilize the exclusion, and then occupy one of their rental properties until the requirements are met to be eligible for the exclusion again. If the taxpayer owned multiple rentals, the same process could be applied to each property, allowing the individual to benefit from the exclusion numerous times.
When the rental is not a place in which the taxpayer would want to live during the qualification period, the rental can be swapped through a tax-deferred exchange for a more suitable one, which the property owner must rent out for a reasonable period of time before occupying it to meet the exclusion qualifications. These types of transactions became so popular that Congress passed two laws to make it more difficult to achieve this tax-saving strategy.
Generally, to qualify for the gain exclusion, a taxpayer must own and use the home as a primary residence for two of the five years prior to the sale. However, if the home was acquired by means of a tax-deferred exchange, Congress increased the ownership requirement from two years to five years, thereby requiring the taxpayer to wait five years before being able to qualify for the home sale gain exclusion for the exchanged property.
Beginning in 2009, Congress added yet another roadblock to this strategy by making the gain attributable to nonqualified periods nonexcludable. "Nonqualified use" is when the home isn't used as the taxpayer's principal residence. Luckily, this restriction was not implemented right away. Instead, it was phased in by only counting periods of nonqualified use beginning in 2009, and grandfathered in periods before 2009 as qualified use. However, over time, this new law will diminish the benefits from this strategy.
Keep in mind that even when a home qualifies for the home gain exclusion, the gain attributable to the depreciation allowable after May 5, 1997 on the home, and prior rental in case of an exchange, is not excludable and will be taxable.
Although these laws have complicated the benefits of converting a rental property to a primary residence prior to sale, with careful planning the strategy is still a viable one and can provide shelter from rental gains.
Back to top | Is This the Year to Convert Your 401(k) to a Roth IRA?
One benefit of a Roth IRA over other forms of retirement savings is that, when the funds are withdrawn, they are not taxable. However, all contributions to a Roth IRA are post-tax and the real benefit lies in the tax-free earnings accumulation. The tax code includes provisions that allow you to roll over other retirement funds to Roth IRAs.
If you expect your 2009 income to be lower than normal because you've been forced to take a pay cut, your investments aren't producing the income they used to, or for other reasons due to the current recession, it may be an opportune time to convert some or all of your 401(k) funds into a Roth IRA. Although the amount rolled over will be taxable, if your tax bracket is lower than normal, it may present an opportunity that should be considered. This can be done by rolling over money from your 401(k) to a Roth IRA, provided both of the following conditions for the year of the rollover are met:
- Your modified adjusted gross income (MAGI) for Roth IRA purposes is $100,000 or less; and
- You are not a married individual filing a separate return.
You can elect, with your plan administrator, to do a direct rollover where the funds are transferred directly from your 401(k) account to the Roth IRA account. The plan administrator will complete Form 1099-R so that it properly reflects the rollover to the Roth IRA.
If you choose to receive the 401(k) money and roll it over yourself, simply roll it to a Roth IRA within 60 days of receipt. In this case, the administrator is required to withhold 20% of the distribution for federal income taxes (which is claimed on your tax return just as you do income tax withheld from your wages). Therefore, you will have to replace the 20% withheld for income taxes with other funds if you want to roll over the entire amount that was withdrawn from your 401(k) account.
You must include in your gross income the total previously untaxed amount that was in your 401(k) account (up to the amount withdrawn).
A traditional IRA can also be converted to a Roth IRA if the two conditions listed above are met.
The amount of tax you will have to pay on the conversion will be based upon your tax bracket for the year. For instance, if you are in the 15% tax bracket and roll over $20,000 of taxable distributions into a Roth IRA, your federal tax would be $3,000 (.15 x $20,000). You may be subject to state tax as well.
A word of caution... if you use part of the 401(k) funds to pay the rollover tax, those funds are not treated as part of the rollover and, instead, are treated as a premature distribution subject to an additional 10% early withdrawal penalty.
Example: You are in the 15% tax bracket and take a $20,000 distribution on which $4,000 (.20 x $20,000) is withheld. $1,000 of the withholding deduction is replaced with other funds and $17,000 is rolled over into the Roth IRA. You would be subject to a 15% tax on the entire $20,000, plus a 10% penalty on the $3,000 that wasn't rolled over. Thus, the total federal liability created by the rollover would be $3,300. The 10% penalty will not apply if you are over age 59½ when the 401(k) withdrawal is made.
Does your AGI exceed $100,000? If so, you cannot make the conversion in 2009, and will have to wait until 2010 when the AGI limitation will be removed.
If you have any questions or need help with any of the items discussed above, please contact us.
Back to top | Questions & Answers
Q. My wife is confined to a wheelchair so I would like to make some modifications to our home to make it more accessible to her. Can I deduct those modification costs as a home improvement?
A. Generally, home improvements are not deductible except to offset home gain when the home is sold. But a medical expense deduction may be claimed when it is a medically-necessary home modification. The modification expense is deductible as a medical expense to the extent it exceeds any resulting increase in the value of the property. The full cost of certain improvements can be included as medical expenses, because they are considered not to increase the home's value. Examples of these types of improvements include constructing entrance or exit ramps for the home; widening entrance/exit doorways, hallways and interior doorways; installing railings and support bars; and lowering or modifying kitchen cabinets. Note, however, that medical expenses can be claimed only to the extent that they exceed 7.5% of the taxpayer's adjusted gross income (AGI) (10% if taxed by the AMT).
Q. I noticed that my payroll withholding dropped a small amount in the spring. I didn't think much about it at the time, but that decrease is adding up and causing me some concern. Since I usually break even at tax time, I don't want to end up owing taxes next year.
A. Your decrease in withholding is probably attributable to the new "Making Work Pay Tax Credit." This is being paid to taxpayers in advance of filing their 2009 tax returns by way of a payroll withholding reduction. The reduction was accomplished by tweaking the withholding tables, which does not consider your specific tax circumstances. Unless your income is above $75,000 ($150,000 for joint filers), you will probably qualify for the tax credit of $400 ($800 for joint filers) to offset this reduction. Compare your estimated reduced withholding for the year with the credit; if you feel that there is problem, give this office a call.
Q. I would like to use the special expensing provision to write off all the new equipment that I purchased for my small business this year. Do you have any advice for me?
A. This provision, often referred to as the Sec. 179 deduction, has three limits: the annual deduction limit ($250,000 for 2009), the investment limit ($800,000 for 2009) and the taxable income limit. If you do not exceed the deduction or investment limits, the only issue would be the income limit. This limits the deduction to the taxable income from a taxpayer's active trades or businesses and any excess is carried over to the subsequent year. Since employees are considered to be engaged in the active conduct of the trade or business of their employment, wages, salaries, tips and other compensation are all included for purposes of the taxable income limit. So if you are employed and operate your business, including your wages for the taxable income test may allow you to deduct the entire expense this year. Include your spouse's wages if you are married and file a joint return.
Q. I am uncertain how well my business is going to fair this year and don't want to overpay my estimated tax because I need the cash. But I don't want to get stuck with penalties either. Do you have any suggestions?
A. There is a special break this year for small business owners that provides a "safe-harbor" estimate amount that will protect you from federal under-estimated tax penalties. To qualify, 50% of your gross income should come from a business with no more than 500 employees and your 2008 AGI should be less than $500,000 ($250,000 if filing married separate). If you qualify, your required annual payment for 2009 is the smaller of 90% of the tax shown on your 2008 tax return or 90% of the tax shown on your 2009 tax return.
If you don't qualify for this special break, the annual safe-harbor payment is the smaller of 90% of the tax shown on your 2009 tax return or 100% of the tax shown on your 2008 return. However, if your 2008 AGI was over $150,000 ($75,000 if filing married separate), the 2008 safe-harbor figure is increased to 110%.
Under any of the safe-harbor provisions, if you fail to make the required installment amount timely or pay less than the required amount for any of the "quarters," you may still be subject to penalty for the period the payment was late or underpaid.
Q. I would like to hire an unemployed veteran, and I understand that there is some sort of credit available for doing so. Can you help?
A. Yes, the credit is 40% of first-year wages (but not exceeding $6,000), for a maximum credit of $2,400 (.4 x $6,000). A qualifying veteran is one who has been discharged or released from active duty in the Armed Forces at any time during the five-year period ending on the hiring date, and who receives unemployment compensation for no less than four weeks during the one-year period ending on the hiring date. The veteran must have served for more than 180 days or been released from service due to a service-connected disability. You will need to obtain certification from your state workforce agency.
Back to top |
| ![]() |
|
|
