Qualified Veterans

Tax Credit Unit Fact Sheet

Work Opportunity Tax Credit (WOTC)

Target group: Qualified Veterans

A WOTC eligible veteran must meet the criteria below:

1. 
   Served on active duty (not including training) in the U.S. Armed Forces for more than 180 days or discharged/released from active duty for a service-connected disability; and
   
2. 
   Can’t have a period of active duty (not including training) of more than 90 days that ended during the 60-day period ending on the hiring date.
   

• 
  Time spent in training only does not apply toward the 180 days.
  
• 
  The service member that received a less than honorable or dishonorable discharge may participate in WOTC.
  

Veteran receiving SNAP, Target Group 2Ba:

A veteran receiving SNAP is member of a family that received SNAP benefits (food stamps) for at least a three-month consecutive months during the 15-month period ending on the hire date.

Maximum Credit Amount $2,400

Tier 1-Worked at least 120 hour, but less than 400 hours

• 
  Up to $1,500
  
• 
  25 percent of $6,000 of first-year wages
  

Tier 2 -Worked at least 400 hours

• 
  Up to $2,400
  
• 
  40 percent of $6,000 of first-year wages
  

Veteran Disabled Discharged, Target Group 2Bb:

A Veteran Disabled Discharged is a veteran as defined by WOTC criteria who is entitled to compensation for a service-connected disability; AND has a hire date within one year of discharge or release from active duty.

Maximum Credit Amount $4,800

Tier 1-Worked at least 120 hour, but less than 400 hours

• 
  Up to $3,000
  
• 
  25 percent of $12,000 of first-year wages
  

Tier 2 -Worked at least 400 hours

• 
  Up to $4,800
  
• 
  40 percent of $12,000 of first-year wages
  

Veteran Disabled and Unemployed, Target Group 2Bc:

A Veteran Disabled and Unemployed is a veteran as defined by WOTC criteria who is entitled to compensation for a service-connected disability; and was unemployed at least six months during the year ending on the hire date.

Maximum Credit Amount $9,600

Tier 1-Worked at least 120 hour, but less than 400 hours

• 
  Up to $6,000
  
• 
  25 percent of $24,000 of first-year wages
  

Tier 2-Worked at least 400 hours

• 
  Up to $9,600
  
• 
  40 percent of $24,000 of first-year wages
  

Veteran Unemployed 4 weeks, Target Group 2Bd:

A Veteran Unemployed 4 week’s is a veteran as defined by WOTC criteria who was unemployed at least four weeks, but less than six months during the year prior to the hire date.

Maximum Credit Amount $2,400

Tier 1-Worked at least 120 hour, but less than 400 hours

• 
  Up to $1,500
  
• 
  25 percent of $6,000 of first-year wages
  

Tier 2-Worked at least 400 hours

• 
  Up to $2,400
  
• 
  40 percent of $6,000 of first-year wages
  

Veteran Unemployed six month’s Target Group 2Be:

A Veteran Unemployed six month’s is a veteran who was unemployed at least six months during the year prior to the hire date.

Maximum Credit Amount $5,600

Tier 1-Worked at least 120 hour, but less than 400 hours

• 
  Up to $3,500
  
• 
  25 percent of $14,000 of first-year wages
  

Tier 2-Worked at least 400 hours

• 
  Up to $5,600
  
• 
  40 percent of $14,000 of first-year wages
  

Examples of supportive documentation for veteran target groups include:
• DD-214 or Discharge Papers

• Reserve Unit Contacts or Letters of Separation

• Letter issued only by the Department of Veterans Affairs (VA) on VA Letterhead or bearing the Agency Stamp, with signature, certifying veteran service dates or that the veteran has a service-connected disability.
Please note that the maximum tax credit amounts listed above are applicable to private-sector businesses only. For more information on WOTC for tax-exempt organizations, please visit IRS’s WOTC webpage at: www.irs.gov/pub/irs-pdf/f5884c.pdf.