First, thank you for your service.
If you start your own entity you would not be eligible for the credit if you hire yourself. According to the Internal Revenue Code, if the taxpayer is a corporation, to an individual who owns, directly or indirectly, more than 50 percent in value of the outstanding stock of the corporation, or, if the taxpayer is an entity other than a corporation, to any individual who owns, directly or indirectly, more than 50 percent of the capital and profits interests in the entity then the wages paid would not qualify for the credit.
If your friend hires you from his corporation your wages would qualify for the credit. The employer would need to ask for and be issued a certification for each employee from the state employment security agency (SESA). The certification proves that the employee is a member of one of the targeted groups.
Below is information from the instructions for Form 5884.
Employers need to Complete Form 8850, Pre-Screening Notice and
Certification Request for the Work Opportunity Credit, on
or before the day you offer the individual a job and receive
the certification before you claim the credit.
If you complete Form 8850, it generally must be signed
by the employer and the individual and submitted to the SESA of
the state in which your business is located (where the
employee works) by the 28th calendar day after the individual begins work.
To qualify for the maximum credit you must fall into the following category: a qualified veteran certified as being entitled to compensation for a service-connected disability, and unemployed for a period or periods totaling at least 6 months (whether or not consecutive), in the 1-year period ending on the hiring date.
The employee needs to work for 400 hours to receive a 40% credit. The credit would be based on qualified wages. The limits on qualified wages depend on what class that the employee is a part of. The limits of qualified wages for the above class would be $24,000. So if the employee qualified, was paid $24,000 and worked more than 400 hours the employer would qualify for a credit of 40% of the $24,000 of wages. This would be the $9,600 maximum.
Please let me know if you have any questions or need further clarification.