In an effort to help curb rising veteran unemployment, the States of Pennsylvania and Illinois, are the most recent to expand their veteran tax credit program incentives.
Philadelphia, PA, is offering a credit against the Philadelphia Business Income and Receipts Tax for hiring veterans of the Armed Forces. To qualify for the credit, the veteran must be hired between July 1, 2012 and June 30, 2014; be employed in a position where the veteran is subject to Philadelphia Wage Tax; and receive compensation that is either (1) equivalent to those wages and benefits afforded regular employees in comparable positions, or (2) if a comparable position does not exist, compensation at an average hourly rate, excluding benefits, of at least 150% of the federal minimum wage.
The amount of the credit for qualifying employees employed for more than six months is equal to $2,000 multiplied by the percentage of the tax year that each qualifying full-time employee was employed, or $1,000 multiplied by the percentage of the tax year that each qualifying part-time employee was employed.
The tax credit is available for 24 months of employment, and may not exceed $4,000 for all tax years for each qualifying full-time employee, or $2,000 for all tax years for each qualifying part-time employee. Any unused credit may be carried forward for three years from the date the qualifying employee was hired.
On July 9th, the Illinois State Legislature gave employers more incentive to hire veterans by doubling the state’s income tax credit. The law raises the Illinois Hiring Veterans Tax Credit from 10 percent to 20 percent of annual wages, and more than quadruples the annual cap from $1,200 to $5,000. Employers for veterans who served after September 11, 2001, and who work at least 185 days a year are eligible. This credit will not sunset until December 31, 2016, and has a carry forward of five years.
Veterans face higher unemployment rates than the general population. According to the U.S. Bureau of Labor Statistics, in 2011, the jobless rate for those who’ve served since September 2001 was 12.1 percent, compared with 8.7 percent for those who are not veterans. Among male veterans ages 18 to 24 it was about 29 percent, compared with 17 percent for those of the same age who are not veterans.