Work Opportunity Tax Credit Program Veteran Categories



Frequently Asked Questions


What is the Work Opportunity Tax Credit (WOTC)?
On November 21, 2011, President Obama signed into law the Vow to Hire Heroes Act of 2011, which was also extended by Congress in 2013. Section 261 of the Act, the “Returning Heroes and Wounded Warriors Work Opportunity Tax Credits,” amends and expands the definition of the WOTC’s Veteran target groups. The changes and new provisions in this Act apply to individuals who begin to work for an employer after November 21, 2011.

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What are the Veteran “target groups” for the WOTC?
A qualified Veteran receiving Food Stamps is a member of a family that has received Food Stamps/SNAP (Supplemental Nutrition Assistance Program) benefits for at least 3 consecutive months in the 15 months prior to the date of hire.
A Disabled Veteran is receiving disability benefit payments for a service-connected disability of at least 10%, and is hired within one year from discharge date from active service. 
A Returning Hero is a Veteran who received unemployment compensation for at least 6 months during the 1- year period ending on the hiring date, or received unemployment compensation for at least 4 weeks and not more than 6 months during the 1-year period ending on the hiring date. 
A Wounded Warrior is a Veteran receiving disability benefit payments for a serviceconnected disability of at least 10%, and who received unemployment compensation for at least 6 months during the 1-year period ending on the hiring date.


How much is the credit?
The credit is a 2 tiered credit based on the total number of hours worked by the eligible employee 
during their first year of employment.

Tier 1: Employee worked for 120-399 hours

For the “Veteran Receiving Food Stamps” and short-term unemployed “Returning Heroes” Target Groups

25% up to first $6,000 in wages
Maximum credit is $1,500 

For the “Disabled Veteran” Target Group

25% up to the first $12,000 in wages 
Maximum credit is $3,000 

For the long-term unemployed “Returning Heroes” Target Group

25% up to the first $14,000 in wages 
Maximum credit is $3,500

For the “Wounded Warriors” Target Group

25% up to the first $24,000 in wages 
Maximum credit is $6,000

Tier 2: Employee worked for 400+ hours 
 

For the “Veteran Receiving Food Stamps” and shortterm unemployed “Returning Heroes” Target Groups

40% up to the first $6,000 in wages 
Maximum credit is $2,400

For the “Disabled Veteran” Target Group

40% up to the first $12,000 in wages
Maximum credit is $4,800 

For the long-term unemployed “Returning Heroes”
Target Group

40% up to the first $14,000 in wages
Maximum credit is $5,600 

For the “Wounded Warriors” Target Group

40% up to the first $24,000 in wages 
Maximum credit is $9,600



 

Veteran Tax Credit