Employers could receive tax credits for employing eligible veterans

Eligible employers could receive a $2,000 state tax credit after certification. Employers must be subject to taxes covered by the proposal; taxes withheld from employees’ pay do not count. The Department of Labor and Industry would certify that an employee meets the federal veteran definition cited in the proposal. Credits would go to applicants first come, first served, with a $20 million statewide limit each fiscal year. The proposal would take effect immediately upon becoming law and apply to tax years beginning after December 31, 2024.

Taxpayers could use unused credits in later years and share certain business credits with owners. These rules would cover taxpayers using the credit and eligible owners of partnerships and Pennsylvania S corporations. Unused credits could not be refunded, transferred to someone else, or applied to earlier tax years. When an eligible partnership or Pennsylvania S corporation lacks covered tax liability, its owners could claim shares based on their income shares. The business and its owners could not claim the credit for the same expense. The 15-year carryover period would follow the first tax year for which the taxpayer was entitled to claim the credit.

The state would send legislative leaders annual reports naming businesses that use the credit. Reports would assess the credit’s use and effectiveness and list each participating business’s approved and used credit amounts. The reported information would be public even when tax-record confidentiality laws would otherwise apply. The annual report would be due to legislative leaders no later than March 15.