Obama Signs Law Granting Tax Credits for Hiring Jobless Vets

November 22, 2011

Bloomberg News

By Roger Runningen

President Barack Obama signed into law a measure that provides tax credits to companies that hire unemployed veterans and repeals a requirement that federal, state and local governments begin withholding 3 percent of payments to contractors in 2013.

Obama, at a ceremony for the signing, said about 1 million veterans will be entering the civilian workforce over the next five years as the war in Iraq winds down. He said businesses recognize that the work experience they gain while in the service are valuable to private enterprise.

Companies can claim a credit against taxes owed of as much as $5,600 for hiring veterans, and as much as $9,600 for hiring veterans with service-connected disabilities, if the veteran has been looking for work for six months or longer.

The new law also provides as much as $2,400 for hiring a veteran who has been looking for work for one to six months.

The tax credits are part of a measure that also repeals a requirement that federal, state and local governments begin withholding 3 percent of payments to contractors in 2013. The Senate and House passed the legislation on Nov. 10 and Nov. 17 respectively.

The tax credits for hiring veterans will cost the Treasury $95 million over a decade and other veterans programs in the bill will cost $152 million, according to the Congressional Budget Office.

The unemployment rate for military veterans who joined the service since the Sept. 11 terrorist attacks was 12.1 percent in October, according to the Labor Department.

To further encourage hiring veterans, the government can pay employers for providing on-the-job training to veterans who haven’t been rehabilitated, up to the point of employability.

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