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Win/Win: Immediate Tax Credits For Employers Who Hire Veterans
October data from the Bureau of Labor Statistics reveals that more than 850,000 veterans were looking for work, most of them from service duties post-9/11. Further, an additional one million U.S. troops will be seeking work when they return home from Iraq and Afghanistan between now and 2016. As part of the American Jobs Act, on November 21, 2011, President Obama signed into law a bill to help both unemployed veterans and employers. The bill received unanimous support from both the House (422-0) and the Senate (95-0).

The Returning Heroes Tax Credit will provide tax credits to firms that hire unemployed veterans. The amount of the tax credit increases based on the length of time that the veteran has been unemployed:
  • Veterans out of work at least one month: a credit of 40% of the first $6,000 in wages up to $2,400
  • Veterans out of work at least six months: a credit of 40% of the first $12,000 in wages up to $5,600
The Wounded Warriors Tax Credit will increase the existing tax credit for firms that hire veterans with service-connected disabilities who are searching for work, as well as those who have been unemployed for a significant length of time. The tax credits are:
  • Disabled veterans looking for work: a credit of 40% of the first $12,000 in wages up to $4,800
  • Disabled veterans out of work at least six months: a credit of 40 percent of the first $14,000 in wages up to $9,600
The tax credits go into effect immediately, which gives employers a financial incentive to hire applicants with military experience. White House officials estimate that the tax credits alone could help create more than 25,000 jobs for veterans in the next few years.

Other Provisions
The bill also expands an education and jobs retraining program for unemployed veterans. It will provide an extra year of GI Bill benefits for 100,000 unemployed veterans of all ages to retrain them for jobs in “high-demand sectors,” which is worth about $1,300 per month to cover the cost of classes, certification and living expenses. This program is anticipated to begin on July 1, 2012 and initially will be limited to 45,000 veterans.

Not So Fast: Waiting Period For Unemployment Benefits Begins January 1
When the Wisconsin Legislature passed a bill in August 2011 that authorized the state to use federal funds to extend unemployment insurance benefits by 13 weeks, it also included a provision to establish a one-week waiting period for new claims for unemployment benefits. That measure goes into effect on January 1, 2012.

So, how does this requirement actually work and how will it affect employers who implement more than one layoff during a year in which employees return to work for a period of time between layoffs? Below is a summary of how the one-week waiting period will work:

Summary of Requirements
  1. During the first week of a given employee's "benefit year," the employee will not receive any unemployment benefits.
  2. The one-week waiting period will apply only once during a given employee's benefit year.
  3. The one-week waiting period will only apply to a given employee's benefit year that starts on or after January 1, 2012.
  4. A given employee's "benefit year" is a total of 52-weeks -- an employee's benefit year starts the week of claimed benefits and includes the next 51-weeks after that (regardless of how many subsequent weeks of unemployment occur during this time period).

Remember that you have to take into consideration when a benefit year begins for each employee when determining when there is a waiting period for benefits will begin.

If you have any questions about these topics or any other employment or labor law issue, please call me at 414-988-8404 or contact me via e-mail at: Thanks.

Posted 12/15/2011.
If you have any questions or comments, please contact me at 414-423-1330 or via e-mail at:
Thomas P. Krukowski, Esq.
Krukowski & Costello, S.C.
Legislative Partner

Krukowski &
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Margie Harvey

Margie Harvey, SPHR
Miles Kimball Company 
250 City Center
Oshkosh, WI  54906
Ph: 920.232.6409
Fx: 920.231.1247   

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