You already know about the federal tax credit for hiring veterans. Most employers stop there. They miss the second layer of savings sitting in their own state.

Many states run their own tax credit when you hire a veteran. These stack on top of the federal credit. So one good hire can cut your tax bill in two different places at once. Most finance teams never claim the state side because nobody told them it exists.

This guide covers the state-level credits only. The federal Work Opportunity Tax Credit (WOTC) is a separate program with its own rules and dollar caps. We cover that one in full in our WOTC employer guide. Read that for the federal piece. This article is about the credits your state offers on top of it.

State programs change often. Some sunset. Some get renewed. So the rule for every figure below is simple: use it to know the credit exists, then confirm the current amount and deadline with your state agency before you file. We link the official source for each one.

How are state veteran hiring credits different from the federal WOTC?

The federal WOTC is one national program run through the IRS and your state workforce agency. It has set veteran groups and set dollar caps. It applies the same way in every state.

State credits are different. Each state writes its own. The amount, the rules, and the paperwork all change at the state line. A credit worth $1,800 in one state can be worth $5,000 in another. Some states have no veteran hiring credit at all.

The good news is they usually stack. A state credit reduces your state income tax. The federal WOTC reduces your federal income tax. Different tax bills, different forms, same hire. You can claim both for the same veteran if the person meets each program's rules.

One more difference matters. Most state credits require the veteran to stay employed for a set time. Often one full year. The federal credit pays out faster, based on hours worked in the first year. So plan for the state credit to land later, after the worker hits the one-year mark.

Which states offer a tax credit for hiring veterans?

Many states run a veteran hiring credit. The list shifts as laws pass and expire. Below are real, currently active examples with their official source pages. Treat these as a starting point. Then check your own state, even if it is not listed here.

New York

New York runs the Hire a Veteran Credit. It is one of the larger state credits in the country. The amount is 15% of the wages you pay a qualified veteran in their first year of work. The cap is $15,000 for a full-time hire and $7,500 for part-time.

Hire a veteran with a service-connected disability and the numbers go up. The credit becomes 20% of first-year wages. The cap rises to $20,000 full-time and $10,000 part-time. You claim it after the veteran completes one year of work. Per New York's Department of Taxation and Finance, the credit is available through the 2028 tax year.

Illinois

Illinois offers a credit for hiring unemployed veterans. For a qualified veteran of recent conflicts, the credit is 20% of wages paid, up to $5,000 per veteran each year. A second tier covers other eligible veterans at 10% of wages, up to $1,200. The details and current forms are on the Illinois Department of Veterans' Affairs site.

West Virginia

West Virginia has the Military Incentive Credit. For hiring an economically disadvantaged Vietnam era or Korean conflict veteran, the credit is 30% of the first $5,000 in wages you pay that worker. West Virginia legislation to expand this credit to all veterans has been introduced but has not yet passed. For a disabled veteran, the credit equals the veteran's disability percentage times that first $5,000. The veteran must be certified as eligible, and the credit ties to a full year of employment. See the West Virginia Tax Division for the current schedule and certification steps.

Utah

Utah's Veteran Employment Tax Credit pays per month, not per year of wages. Year one is $200 per month, capped at $2,400. Year two rises to $400 per month, capped at $4,800. The veteran must have been discharged within the past two years and meet unemployment criteria, and must work at least 35 hours a week. Utah's Department of Workforce Services notes this credit can be combined with the federal WOTC.

New Mexico

New Mexico runs a Veteran Employment Tax Credit for businesses that hire recently returned veterans. The amount and the eligibility window are set by state rule and can change. Confirm the current figure with the New Mexico Department of Veteran Services before you file.

This is a sample, not the full map. States like Connecticut, New Mexico, and others run their own versions. The amounts and rules differ, and they get revised by the legislature. Always pull the current number from the state's own revenue or workforce page.

Why do state credit amounts and deadlines change so often?

State tax credits live and die by the state budget. A credit gets passed for a few years. Then it has to be renewed. If the legislature lets it lapse, it is gone until they bring it back. This is the single biggest trap for employers.

Maryland is a clear example. Its Hire Our Veterans Tax Credit gave small businesses 30% of the first $6,000 in wages, up to $1,800 per veteran. But per the Maryland Department of Commerce, that credit applied to first-year employment in tax years 2017 through 2020. For positions after that, the state points employers to a different program.

So an employer who reads an old blog post and files for the Maryland veteran credit in 2026 would be filing for a credit that no longer works that way. That is wasted time and a possible audit flag.

The lesson is not that these credits are risky. They are real money. The lesson is that you have to check the current rule each tax year. A credit that was worth $1,800 two years ago might be larger now, smaller, or gone. Your state's own page is the only source that is current.

How do you actually claim a state veteran hiring credit?

The steps are similar across most states. The forms and agency names change, but the flow is the same. Here is how it usually works.

Give all of this to whoever does your taxes. A good accountant will know the state form. Your job is to flag the veteran hire early and keep the records, so the credit is not lost at filing time.

Which veterans actually qualify for these state credits?

Not every veteran hire triggers a state credit. Each state sets its own bar. But a few patterns show up again and again. Knowing them helps you spot a credit-eligible hire before the start date, when you still have time to gather proof.

The most common qualifier is unemployment. Many state credits, like the Illinois one, target veterans who were out of work before you hired them. Some states want a set length of unemployment. Others just want the veteran to be eligible for state unemployment benefits at the time of hire.

The second common qualifier is a service-connected disability. States often pay a larger credit for hiring a disabled veteran. New York and West Virginia both scale the credit up for disabled hires. The veteran's disability rating can even set the size of the credit, as it does in West Virginia.

A discharge window matters too. Several states only count veterans discharged within the last one or two years. Utah uses a two-year window. So a recent separation is often worth more to you than a hire who left the service a decade ago.

The takeaway for your hiring team is simple. Ask about veteran status early. Note unemployment and disability where the candidate offers it. Then start the certification before day one, so the credit is locked in by the time you file.

Does the tax credit make veteran hiring worth it on its own?

No. And it should not be the reason you hire. The credit is a bonus on top of a hire that already makes sense for your business.

Think of it this way. A state credit might return $1,800 to $20,000 depending on the state and the veteran. That is real money. But it is a one-time or short-term return. The lasting value is the worker. A veteran shows up with leadership reps, a security mindset, and a track record of getting hard things done under pressure.

We break down that side in our ROI of hiring veterans guide. If you need to win budget approval for a veteran hiring push, the tax credits are one line in a bigger case. Our internal business case guide shows how to put the full pitch together for your finance team.

Where do midsize employers find veterans to hire in the first place?

A tax credit only pays off if you actually hire the veteran. For most midsize companies, that is the real bottleneck. You do not have a recruiting team aimed at military talent. You do not get a steady flow of veteran resumes.

That is the gap Best Military Resume fills on the employer side. BMR is where transitioning service members and veterans build their resumes for civilian roles. Over 1,000 new veteran profiles are added every month. More than 60,000 resumes have been built on the platform. That is a fresh, growing pool of military talent already translating their experience into the language your hiring managers read.

You can reach that talent directly. If you want a steady source of veteran candidates to pair with the tax credits in your state, you can partner with us to access BMR's veteran talent pool.

A few more guides if you are building out the rest of the program. Learn how to interview a veteran candidate so you read their answers right. See how to become a SkillBridge host company and bring on talent before separation. And if you run federal contracts, our OFCCP benchmark guide covers what you have to track.

Start with the credit your state offers. Verify the current amount. Then build the pipeline that lets you use it again and again.