MainStreet.com: Hire a Veteran, Save on Taxes

The paperwork consists of a one-page IRS Form 8850 and one-page ETA Form 9061. The 8850 is a prescreening document that alerts a business to an employee's eligibility for veteran credits.

"Sometimes that can be awkward asking personal questions, so we ask that employers include the 8850 in their employer packet," says Steffens. "Then veterans can just check a box indicating whether they were injured or received food stamps." The forms are available on state government Web sites or by calling your state's tax unit. The paperwork must be postmarked no later than 28 days after a veteran starts on the job.

There are several resources for business owners looking to recruit veterans. Our two favorites:

Monster.com (MNST Quote) powers its own veteran recruiting arm stocked with more than 200,000 veteran resumes.

Also, International Franchise Association's VetFran is for veterans looking to start a business of their own. The initiative helps qualified veterans acquire small franchise businesses.