The VOW to Hire Heroes Act of 2011 has made several changes to the Work Opportunity Tax Credit (WOTC). VOW adds two new categories to the existing qualified veteran targeted group and made the WOTC available to certain tax-exempt employers as a credit against the employer’s share of social security tax. VOW allows employers to claim the WOTC for veterans certified as qualified veterans and who begin work before January 1, 2013.

The credit can be as high as $9,600 per qualified veteran for for-profit employers or up to $6,240 for qualified tax-exempt organizations, but the amount of the credit will also depend on a number of factors, including the length of the veteran’s unemployment before hire, the number of hours the veteran works, and the veteran’s first-year wages. The amount of the credit for qualified tax-exempt organizations may not exceed the organization’s employer social security tax for the period for which the credit is claimed.

All employers must obtain certification that an individual is a member of the targeted group, before the employer may claim the credit. The process for certifying the veterans for this credit is the same for all employers.

Normally, an eligible employer must file Form 8850, Pre-Screening Notice and Certification Request for the Work Opportunity Credit, with their respective state workforce agency within 28 days after the eligible worker begins work. But under a special rule included in IRS Notice 2012-13, employers have until June 19, 2012, to complete and file this newly-revised form for veterans hired on or after Nov. 22, 2011, and before May 22, 2012. The 28-day rule will again apply to eligible veterans hired on or after May 22, 2012.

For for-profit employers, the law now allows a tax credit for hiring qualified veterans who begin work before January 1, 2013.

After the required certification is secured, for-profit employers claim the tax credit as a general business credit against their income tax. The process for for-profit employers claiming the Work Opportunity Tax Credit under the VOW to Hire Heroes Act for qualified veterans remains the same.