Tax credit against employer share of Social Security tax available to tax-exempt organizations that hire qualified veterans

Exempt Organizations Tax Services Update

On November 21, 2011, the VOW to Hire Heroes Act of 2011 was enacted that made changes to the Work Opportunity Tax Credit (WOTC) by making the WOTC available to certain tax-exempt employers as a credit against the employer's share of Social Security tax. For employers described in IRC section 501(c) and exempt from taxation under IRC section 501(a), the WOTC applies to the hiring of "qualified veterans" and who begin work on or after November 22, 2011, and before January 1, 2013. The credit can be as high as $6,240 per employee for tax-exempt organizations, but the credit will depend on a number of factors. This credit is processed separately from the employer's Form 941 and is also independent of any other tax filing (i.e., Form 990-T).



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