Hiring Military Spouses Could Earn Companies Tax Credits Under Proposal in Congress

Employers that hire military spouses could be eligible for a tax credit under a proposal being pushed by a bipartisan group of lawmakers in both chambers of Congress.

Under the Military Spouse Hiring Act, an existing tax break known as the Work Opportunity Tax Credit would be expanded to incentivize employers to hire military spouses. The bill, which was introduced Wednesday by four senators and four congressmen equally representing both parties, aims to curb an issue that military families have identified as a top stressor: spousal unemployment.

"Our service members and their families make countless sacrifices for our security and freedom," Sen. Tim Kaine, D-Va., lead sponsor of the Senate version of the bill, said in a statement. "In turn, we have a responsibility to take care of them -- and that must include helping America's talented military spouses access a wide range of work opportunities."

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The unemployment rate for military spouses has hovered around 21% since 2015, according to Defense Department data. By comparison, the national average unemployment rate sits at 3.4% right now, according to the Bureau of Labor Statistics.

A survey released by the DoD last month found that spouses' satisfaction with military life hit a new low in 2021, with just 49% of respondents saying they were content compared to 56% in 2019. Spousal support for their husband or wife staying in the military also dipped to 54% in 2021 from 59% in 2019. While the survey did not provide explanations for the drops, advocates suggested that continued high unemployment rates could be a factor.

Other surveys by outside organizations have found that unemployment is a leading stressor among military spouses. A 2021 survey by Blue Star Families saw 47% of active-duty spouses and 25% of active-duty troops identify spouse employment as one of their top concerns.

The Military Spouse Hiring Act seeks to address that by adding military spouses to the categories eligible for the Work Opportunity Tax Credit. The tax credit, created in 1996 to encourage employers to hire job seekers who have historically faced barriers to employment, currently applies to veterans, ex-felons and recipients of some government aid such as food stamps, among other qualifying groups. Employers can generally receive up to $2,400 in tax credits through the program, according to the IRS.

In addition to Kaine, the other Senate sponsors of the bill are Sens. John Boozman, R-Ark.; Maggie Hassan, D-N.H.; and Mike Rounds, R-S.D. The House version is sponsored by Reps. Don Beyer, D-Va.; Mike Kelly, R-Pa.; John Carter, R-Texas; and Jimmy Panetta, D-Calif.

The same bill was introduced last Congress and garnered wide bipartisan support, with 282 House sponsors and 54 Senate sponsors. But it didn’t end up getting a vote.

Still, Beyer, who is the lead House sponsor this year, expressed optimism that "this is the kind of bipartisan measure that I believe could win passage in the Ways and Means Committee." Beyer is a member of the committee, which has jurisdiction over tax issues. One of the other House sponsors, Kelly, chairs the Ways and Means tax subcommittee.

"Our bipartisan, bicameral legislation aims to help active-duty families get a leg up financially by encouraging local businesses to hire more military spouses in their communities," Kelly said in a statement. "It's a win-win for America."

-- Rebecca Kheel can be reached at rebecca.kheel@military.com. Follow her on Twitter @reporterkheel.

Related: Spouse Satisfaction with Military Life at a New Low, DoD Survey Finds