So you want to hire veterans. It's a great way to give back to those who have served for their country. But more imporant, your business adds talented employees who have worked through real stress, understand orders and initiatives, and grasp the notion of discipline.

Incentives available for hiring veterans

For a number of years, employers have enjoyed added benefits of hiring and training of veterans with a number of federal programs. Unfortunately, things have changed, and there is no longer a guarantee of money. Nevertheless, this is a case where you'll want to do the paperwork anyway, with the possibility that you might find a retroactive helping hand come tax time.

The big program for hiring vets has been the Work Opportunity Tax Credit (WOTC). The program was part of the stimulus legislation of 2010. Employers could claim a tax credit for hiring people from certain target groups, including veterans that fulfilled any of a number of specific conditions (as expressed in IRS Form 8850):

  • If a veteran was entitled to compensation for service-connected disability and is hired within a year of discharge or release of duty
  • If a veteran was entitled to compensation for service-connected disability and had been unemployed for at least six months ending on the date of hire
  • If a veteran was unemployed for total periods of at least four weeks (consecutive or not) but less than six months in the one-year period ending on the hiring date
  • If a veteran was unemployed for a total of at least six months (consecutive or not) in the one-year period ending on the hiring date
  • If a member of the veteran's family received food stamps (Supplemental Nutrition Assistance Program, or SNAP, benefits) for at least a three-month period during the fifteen-month span ending on the hire date

The veteran must have been on active duty, not including training, in the U.S. Armed Forces for at least 180 days or must have been discharged or released from active duty because of a service-connected disability. At the same time, the person must not have had a period of active duty of more than ninety days that ended during the 60-day period before the hire.

The WOTC tax credit ran between $1,200 to $9,600 and was equal to 25 percent of the first-year wages if the employee worked at least 120 hours, and 40 percent if the employee worked at least 400 hours.

The credit expired at the end of 2013, so why pay attention? Because this is not the first lapse. The program was supposed to end more than once, and Congress eventually passed a retroactive extension. The same could happen again.

To claim the credit, however, you have to fill out the proper paperwork when someone is hired and submit it to the appropriate state, not federal, agency that authorizes the credit. A number of states are suggesting that employers fill out the paperwork and file it in case it becomes available. If it does, that would mean a credit for the 2014 tax year.

If you hire vets who fit the requirements, do a Web search for WOTC and the state in which the person is hired and submit the paperwork. At worst, you've wasted a bit of time filling out forms. At best, you'll have saved some significant money. But in the end, you have hired a veteran and strengthen your work force.

Should there be extra financial benefits for companies that hire veterans? Let us know what you think by commenting below.

Erik Sherman is an NCMM contributor and author whose work has appeared in such publications as The Wall Street Journal The New York Times Magazine Newsweek, the Financial Times Chief Executive Inc., and Fortune. He also blogs for CBS MoneyWatch. Sherman has extensive experience in corporate communications consulting and is the author or co-author of 10 books. Follow him on Twitter.