On November 16, 2011, the House, by a vote of 422 to 0, approved legislation (HR 674) to repeal the three percent withholding on government contracts scheduled to take effect in 2013. The legislation also includes a new tax credit of up to $5,600 for hiring military veterans unemployed for six months or more, up to $2,400 if unemployed for four weeks or more. The tax credit for hiring disabled veterans was also expanded to up to $9,600.
The $12.8 billion ten-year cost of the legislation is paid for by changing the calculation of modified adjusted gross income in determining eligibility for some health care credits and delaying scheduled fee reductions on mortgage applications for loans guaranteed by the Department of Veterans Affairs.
The Senate passed the legislation on November 10, 2011. The President is expected to sign the legislation.