Thank A Veteran! Then Hire One To Become Eligible For A Tax Break

On this Veterans Day, it's important to remember the sacrifices our military members have made to keep our country safe. It is also important to thank our veterans for their selfless service, as they have done so much for our country.

One way to thank a veteran? Hire one!

Benefits of Hiring a Veteran

The benefits of hiring a military veteran may seem obvious—veterans generally are loyal, honest, hard-working and well-trained leaders (the list goes on). But did you know that hiring a veteran can make your business eligible for tax incentives?

Recent data from the U.S. Department of Labor indicates that in 2024, 17.6 million men and women were veterans, accounting for 7% of the civilian noninstitutional population age 18 and over.

Further, according to the Department of Labor,

• the unemployment rate for all veterans was 3% and lower than the rate for nonveterans at 3.9% in 2024;
• as of March 2025, 8.3 million veterans account for 5.2% of the US labor force;
• veterans consistently have lower unemployment rates than non-veterans;
• 66% are 45 years or older;
• 2% are 24 years or under 45% Gulf War Era II veterans;
• women represent 10% of the total veteran population and 20% of veterans who have served since 9/11;
• 40% of all women veterans are in the post-9/11 group compared with 23% of all male veterans;
• approximately 180,000 service members separate annually from the military and transition to civilian life; and
• the percentage of veterans in both the population and the workforce continues to decline with veterans representing 5.4% of the workforce.

Tax-Friendly Incentives to Hire a Veteran

The Work Opportunity Tax Credit, (WOTC) and Returning Heroes Tax Credit, Wounded Warriors Tax Credit, and Vocational Rehabilitation and Employment (VR&E) program, among other programs, provide incentives to businesses for hiring eligible veterans who have service-related disabilities or have been unemployed for a specified period.

WOTC
The WOTC may be earned by employers who hire unemployed veterans, with benefits ranging from $1,200 to $9,600, depending on the veteran's status, according to the U.S. Department of Veteran's Affairs (VA). The tax credit reduces an employer's tax bill dollar-for-dollar, so each $1 of WOTC saves $1 in taxes and the credit is limited to the amount of the business income tax liability or social security tax owed.

The incentives vary according to the length of time the veteran has been unemployed and an employer must obtain certification that an individual is a member of the targeted group, before the employer may claim the credit. There is no limit on the number of eligible employees that can be hired to obtain the credit.

Returning Heroes Tax Credit

The Returning Heroes Tax Credit provides incentives of up to $5,600 for hiring veterans who have been unemployed longer than six months and $2,400 for hiring veterans who have been unemployed at least four weeks. To be eligible, employers have 28 days from the employee's start date to complete and submit the appropriate forms, and the veteran must provide proof of unemployment.

Wounded Warrior Tax Credit

Under the Wounded Warrior Tax Credit, businesses that hire veterans with service-connected disabilities within one year of being discharged from the military are eligible to receive up to $4,800, while hiring veterans with service-connected disabilities who have been in receipt of unemployment insurance or compensation for longer than six months could result in up to $9,600 for businesses. To qualify for the credit, the veteran must have a service-connected disability and be hired within one year of their discharge from the military.

VR&E

Businesses can also reap tax credit under the VA's Vocational Rehabilitation and Employment (VR&E) program, which provides eligible veterans the opportunity to obtain training and practical hands-on experience through its Special Employer Incentives (SEI) program.

Employers are eligible to receive reimbursement of up to 50% of a veteran's salary during the SEI program, which typically lasts up to six months. The VA also provides tools, equipment, uniforms and other supplies; appropriate workplace accommodations based on individual needs of the veteran; and support during training and the placement to assist with veteran work or training-related needs.

Hiring activated military reservists provides employers yet another way to obtain tax credit. The Activated Military Reservist Credit provides employers with a credit of up to $4,000 for each employee who is a National Guard member or reservist, and to whom the employer pays wages while the service member is away from work on active duty.

It is available to employers for payments to any employee who has been employed for more than 90 days prior to being called to active duty, who serves in the Reserves or National Guard, and who is called up to active duty "in the uniformed services" for more than 30 days. To find out more about how your business can benefit from hiring a military veteran or reservist, contact a Tully Rinckey PLLC attorney at (888) 529-4543.

VETCON 2025

Veterans and veteran-owned businesses are encouraged to attend VETCON, Dec. 2-3 at the Crowne Plaza Desmond Hotel in Albany, N.Y. The event is sponsored by the Tully Rinckey Foundation, the philanthropic arm of Tully Rinckey PLLC. In 2024, more than 600 attendees made VETCON a huge success—and made impactful changes in numerous veterans' lives. Visit https://www.vetconny.com/ for details.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.