West Virginia Military Incentive Program Employer Tax Credit

The Military Incentive Program Act of 1991, West Virginia Code 21A-2C, is a credit for the employer rather than money for the veteran. It is in this catalog because it is a concrete thing a job seeker can put in front of a hiring manager, and because for a disabled veteran its value rises with the rating. An employer who employs a qualifying person for a continuous period of one year is entitled to a credit against personal income tax, if a person or partnership, or against corporate net income tax, if a corporation. The credit is nonassignable and cannot exceed the employer's liability for that tax. The amounts are set against a wage base defined as the first $5,000 in wages actually paid to the employee. For a disabled veteran, the credit is a percentage equal to the percentage of disability multiplied by the wage base, and the statute defines that percentage as the percentage of compensation for service-connected disability as determined by the Department of Veterans Affairs. So a veteran rated thirty percent carries a $1,500 credit, seventy percent carries $3,500, and one hundred percent carries $5,000. This is the rare state benefit that scales continuously with the rating instead of switching on at a threshold, which means a veteran at any compensable percentage has something real to offer. For an economically disadvantaged Vietnam era or Korean conflict veteran, the credit is thirty percent of the wage base, up to $1,500. For an unemployed member of the West Virginia National Guard or of the reserve forces of the United States, the credit is twenty-five percent of the wage base, up to $1,250. The operational step that decides whether any of this happens is the voucher, and it is the veteran's to obtain. Under 21A-2C-6 the program is run primarily by the employment services section of what is now WorkForce West Virginia, together with the West Virginia National Guard, and reserve units may verify eligibility for reserve members. A qualifying individual is given, on request, a voucher certifying eligibility. The employer submits that voucher to the issuing agency, the agency certifies a list of qualified employers to the State Tax Commissioner each year, and the employer then claims the credit on its return. Without a voucher in hand there is nothing for an employer to file. So the sequence that works is: request the voucher, then raise it during hiring. Presenting it after a year of employment is too late to be useful to anyone. Three limits. The employer cannot claim the credit for anyone employed less than a continuous year, except where the individual voluntarily leaves, becomes totally disabled and unable to continue, or is terminated for good cause, in which case a proportional partial credit is available for the time actually worked. The employer cannot claim it for an individual who displaces someone already employed, or for an individual for whom the employer receives federal or state job training payments. But the employer may take this credit and a federal targeted-jobs credit for the same hire if otherwise qualified, which makes a veteran hire cheaper still.