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When running a business, keeping costs down and retaining good employees are two of life's major challenges. But what if you could do both at the same time?
Foxconn just announced its plans to launch a military veteran recruiting campaign with 20 stops across the country to help staff its new flat screen manufacturing facilities in Wisconsin. Its goal is to hire 3,000 veterans, and at a potential annual tax benefit of $9,600 per employee per year; that's nearly $29 million per year in tax credits, which are far more valuable than tax deductions.
Interested in these sorts of tax credits for your company? Here's some information on the Work Opportunity Tax Credit (WOTC) plan.
Approximately 250,000 Americans transition from the military to civilian life each year. Many struggle to find jobs for a variety of reasons. Some can't find civilian jobs in the field they were trained in the military. Some lack civilian business connections. And some are disabled, and have a more difficult time finding gainful employment. In response, the WOTC was created to entice business owners to hire unemployed veterans. Specifically, the Obama Administration created the Returning Heroes Tax Credit, which provides up to $5,600 for hiring unemployed veterans between January 1, 2016 and December 31, 2019, with amounts varying based on how long the veteran had been unemployed. This amount is doubled, up to $9,600, under the Wounded Warrior Tax Credit, if the new employee has a service-connected disability.
It's the U.S. Tax System, so of course, certain restrictions apply. Also, before the credit can be taken, the employment needs to be verified through a very specific process. Keep in mind that, since this is a tax credit and not a tax deduction, certain tax-exempt organizations can receive this credit as well, and take the credit towards their employer's share of Social Security taxes.
Foxconn, a Taiwanese electronics manufacturer, may have ulterior motives behind this campaign. It has received a host of negative press after announcing the manufacturing plant buildout back in 2017. Although this plant will result in the largest job creation in Wisconsin history, many locals are skeptical and aren't sure the benefits outweigh the costs. Maybe Foxconn is just announcing its plans to hire veterans in an attempt to look good to a traditionally military-friendly state. After all, Foxconn is known for overpromising and under delivering when it comes to creating jobs. Pennsylvania is still waiting on hundreds of promised jobs after Foxconn built a $30 million facility back in 2013.
If you think that hiring unemployed veterans might be a good fit for you company, both from a tax and PR perspective, contact a local tax attorney to see if the credits will work in your favor.
Meeting with a lawyer can help you understand your options and how to best protect your rights. Visit our attorney directory to find a lawyer near you who can help.