Massachusetts Veterans Hiring Tax Credit

This is an employer-facing credit rather than a payment to a veteran, and it is in this catalog for one reason: a veteran who knows about it can point a small Massachusetts employer at $2,500 they did not know they could claim. Subsection (u) of G.L. c. 62, s. 6 covers pass-through businesses, and section 38GG of chapter 63 does the same for business corporations. The structure is the same in both. A business qualifies if it employs not more than 100 employees, is certified by the Secretary of Veterans' Services under G.L. c. 115, s. 2C, and qualifies for and claims the federal Work Opportunity Credit under section 51 of the Internal Revenue Code for hiring qualified veterans in the commonwealth. Where all of that is true it is allowed a credit of $2,500 for each qualified veteran hired. Two conditions in subsection (u)(2) decide most cases. The primary place of employment and the primary residence of the qualified veteran must both be in the commonwealth. And not later than six months after the individual begins work, the business must have obtained certification from the Department of Career Services, or any successor agency, that the individual is a qualified veteran. Six months is the deadline that gets missed. Qualified veteran has the same meaning as under section 51(d)(3) of the Internal Revenue Code, which is the federal Work Opportunity Tax Credit definition. That is a federal test built around unemployment duration, receipt of food assistance and service-connected disability, and it is entirely different from every Massachusetts definition of veteran in this file. A veteran is a qualified veteran for this credit, or not, on federal criteria. The certification under G.L. c. 115, s. 2C is the state-side hook. Section 2C directs the Secretary to develop a programme to enhance employment opportunities and outcomes among veterans by assisting businesses to attract, hire, train and retain them, including a workforce assessment and training programme for participating employers and a certification and assessment process under which employers set measurable goals for hiring, training and retaining veterans. An employer who wants the credit has to engage with that programme, which is the point of tying the two together. The amount was raised from $2,000 to $2,500 by sections 25 and 27 of the 2024 HERO Act, effective for taxable years beginning January 1, 2024. Any guide still printing $2,000 is one increase behind. The credit is attributed pro rata to the owners, partners or members of a pass-through entity, and under the chapter 63 version a taxpayer may carry excess credit forward against the next three taxable years. What this is not. It is not a payment to the veteran, it does not require the veteran to do anything, and it creates no right for a veteran against an employer. The Massachusetts private-sector counterpart of a veterans hiring preference is not in this provision; Massachusetts has no statutory voluntary private employer preference of the kind Kansas, Wisconsin and Nebraska carry. The practical use is at interview. A veteran applying to a Massachusetts business with fewer than a hundred employees can mention that hiring them may be worth $2,500 in state credit on top of the federal Work Opportunity Credit, provided the business gets certified and files the Department of Career Services paperwork inside six months. Small employers frequently do not know.