What is the Veteran Hire Tax Credit?
The Veteran Hire Tax Credit (VHTC) is a tax break awarded to verified employers for hiring "qualified veterans." The VHTC offers small businesses with fewer than 100 employees a $2,500 tax break for each qualified veteran they hire. The veteran must live in Massachusetts and meet one of the following requirements:
- Be part of a family that has received SNAP benefits for at least 3 months in the year before the hiring date.
- Been unemployed for at least 4 weeks in the year before the hiring date.
- Have a service-connected disability and be hired within one year of military leave.
- Have a service-connected disability and have been unemployed for 6 months in the year before the hiring date.
The Executive Office of Veterans Services (EOVS) must certify both the veteran and the small business before businesses are granted access to this tax credit. Small businesses can use the credit for two years, including the year they hire the veteran, after which they must reapply for the credit.
How much is the VHTC worth?
The VHTC is worth $2,500 per veteran per tax year.
What are the "Employer Eligibility Requirements" for receiving the VHTC?
- Employers must conduct business within the Commonwealth of Massachusetts (satisfied by the Work Opportunity Tax Credit (WOTC) Certificate).
- Employers must not be debarred from conducting business with the Commonwealth (Department List).
- Employers must not be a state, local, or federal government unit.
- Employers must have 100 or fewer full-time employees.
- Employers must comply with all applicable state and federal tax and employment laws and maintain good standing in Massachusetts (this requirement is satisfied by the Veteran Ready Business Program).
What is the definition of a "Qualified Veteran"? How do I know if I meet the requirements?
The definition of a "qualified veteran" is based on the federal definition outlined in the Work Opportunity Tax Credit (WOTC). For the Massachusetts Veteran Hire Tax Credit, the "Qualified Veteran" MUST
- Live in Massachusetts
- Meet the service requirements to be considered a veteran
- Meet ONE of these criteria:
- Belong to a family that received SNAP benefits for at least 3 months in the past year
- Have been unemployed for at least 4 weeks in the past year
- Have a service-connected disability and were hired within one year of leaving the military
- Have a service-connected disability and were unemployed for 6 months in the past year
How many times can I claim the VHTC per qualified veteran?
Each qualified veteran may claim the VHTC up to two times, which must be claimed in sequential years.
How is this different from the "Work Opportunity Tax Credit"? Where can I find more information about it?
WOTC is a Federal tax credit incentive that employers may receive for hiring individuals from certain groups who have consistently faced barriers to employment.
Follow this link to learn more about the Work Opportunity Tax Credit
What is the Veteran Ready Business Program?
The Veteran Ready Business Program is a certification process that teaches employers the benefits of hiring veterans and how to support their needs in the workplace. Certified VRB businesses receive:
- Notification of veteran hiring events
- A veteran employee resource guide
- Exposure to veterans seeking VRB employment opportunities
- Listing on the EOVS VRB webpage
- A copy of the ‘Massachusetts Veteran Ready Business’ logo to display on your website
Learn more about the VRB Program and get certified
How will the VHTC affect a veteran’s SNAP benefits?
If a veteran is receiving SNAP benefits and starts earning wages, the wages may impact their SNAP benefits. This is based on the certification type that DTA has assigned to the client’s case:
- Bay State Cap:
If the client receives SNAP and is certified as Bay State Cap, they must report to the Social Security Administration (SSA) if they start working. Bay State CAP clients are not allowed to have earned income and will be assessed for reassignment to another certification type. - Elderly-Disabled Simplified Application Project Reporting (EDSAP):
If the client receives SNAP and is certified as Elderly-Disabled Simplified Application Project Reporting (EDSAP), they must report if they start working a job, regardless of the amount they are being paid. EDSAP clients are not allowed to have earned income and will be assessed for reassignment to another certification type. - Simplified Reporting, and the household includes at least one member who is elderly (age 60 or more) or federally certified disabled (such as 100% Veterans Disability, in receipt of SSI or RSDI):
If the client receives SNAP and is certified as Simplified Reporting, and the household includes at least one person who is elderly (age 60 or more) or federally certified disabled (such as 100% Veterans Disability, in receipt of SSI or RSDI), the client is not required to report income changes to DTA until they renew benefits (called recertification). - Simplified Reporting and the household does not include any elderly or disabled members.
If the client is certified as Simplified Reporting but the household does not include at least one elderly or disabled member, the client must report to DTA if they start working a job and the income is above the gross maximum for the household size.
Please note: Clients who are approved for SNAP benefits are issued an approval letter. This letter advises the client of their certification type and reporting requirements, allowing the client to know what they need to report to DTA. Finally, if a client is in doubt about what/when to report earned income, they may call the DTA Assistance Line before sending any pay stubs to DTA.
Is the Credit Transferable?
The VHTC is not transferrable or refundable.
Is there an Annual Cap?
- The tax credit is capped at $1,000,000 annually, awarded on a first-come, first-served basis.
This structure provides clarity around business qualifications, certification requirements, and the necessary documentation for claiming the credit.
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