WOTC Eligibility in 2026: Is the Tax Credit Still Available?

The Work Opportunity Tax Credit (WOTC) was authorized through December 31, 2025, and the IRS states that it does not apply to employees who begin work after that date. In the sources we reviewed, Congress had not renewed it as of this update. Employees who started on or before December 31, 2025 and were certified may still matter for your tax filings, so confirm the details with your tax professional.

Key Takeaways

• The IRS says the work opportunity credit does not apply to employees who begin work after December 31, 2025.
• Employers had to certify eligibility through a State Workforce Agency (SWA), with the pre-screening paperwork due within 28 days of the employee’s start date.
• Ten target groups qualified, ranging from qualified veterans to summer youth employees.
• Do not budget on WOTC for 2026 hires unless Congress renews the credit and the IRS issues guidance.
• If you hired and certified employees in 2025, review that paperwork with your tax professional.

Hiring decisions get harder when a tax credit you counted on disappears. Many employers have asked us whether the Work Opportunity Tax Credit (WOTC) still applies to the people they are hiring now, and the answer changed at the end of 2025. At Lift HCM, we have helped businesses claim WOTC for many years.

Lift HCM has helped businesses file for WOTC since the program’s inception. We’ll walk you through the requisite qualifications of the 10 WOTC target groups to give you a better idea of whether any current or future candidates are likely to qualify.

Is the Work Opportunity Tax Credit Still Available in 2026?

The Work Opportunity Tax Credit was authorized by Congress through December 31, 2025. The Department of Labor describes it as authorized until that date, and the IRS states that the work opportunity credit does not apply to employees who begin work for the employer after December 31, 2025. In the sources we reviewed, Congress had not renewed the credit at the time of this update.

That means a candidate hired in 2026 generally does not qualify you for the credit, even if the person fits one of the target groups described below. Proposals to extend or enhance the credit have been discussed, so check IRS.gov and the Department of Labor for the latest status before you make a hiring or budgeting decision.

Can I Still Claim WOTC for Employees Hired in 2025?

To qualify, you must have completed the pre-screening form on or before a candidate’s offer date and submitted all relevant documentation to the appropriate SWA within 28 days of their start date. Once the SWA certifies an employee’s eligibility, most employers claim the credit on their federal income tax return (Form 5884), and qualified tax-exempt organizations claim it differently. Remember that the credit applies only to employees who began working on or before December 31, 2025. Because the credit is based on first-year wages, wages paid in 2026 to a certified employee who started in 2025 may still count. Ask your tax professional how this applies to your return.

Who Qualified for WOTC? The 10 Targeted Groups

Candidates whose wages you claimed WOTC must have met the qualifications for any of the 10 target groups. Use these summaries as a reference for your 2025 hires, and confirm the details in the IRS instructions before relying on them.

1. Veteran WOTC Qualifications

A veteran is considered to be anyone who meets the following two qualifications:

1. They have served on active duty with the United States’ Armed Forces for over 180 days (excluding training) or have been discharged or released from active duty due to a service-related disability.
2. They have not served on active duty (again, not counting their training) with the United States Armed Forces for a period of 90 days ending within the 60 days prior to their hiring date.

Those considered veterans by these standards must also meet any of the following qualifications:

• They are a member of a family that has received SNAP benefits for three of the 15 months prior to their hiring date.
• They’ve been unemployed for between four weeks and six months (it doesn’t have to be consecutive) within one year of their hiring date.
• They’ve been unemployed for a total of at least six months (again, the dates don’t have to be consecutive) within one year of their hiring date.
• They’re eligible for compensation for a service-related disability and are being hired within one year of having been released or discharged from active duty in the U.S. Armed Forces.
• They’ve been eligible for compensation for a service-related disability and have been unemployed for at least six consecutive or non-consecutive months within a year of their hiring date 

2. Ex-Felon WOTC Qualifications

An ex-felon must have been convicted of a felony or released from prison for a felony, and the hiring date must fall within one year of the conviction or release.

3. SSI Recipient WOTC Qualifications

Candidates qualify if they’ve received supplemental security income (SSI) during any month that ended within 60 days of their hiring date. This includes anyone receiving benefits as defined in section 1616 of the Social Security Act as well as section 212 of Public Law 93-66.

4. IV-A Recipient WOTC Qualifications

Applicants must belong to a family that received assistance from a program funded by title IV of the Social Security Act during any nine of the 18 months prior to their hiring date, meaning programs related to Temporary Assistance for Needy Families (TANF).

5. SNAP Benefits Recipient WOTC Qualifications

The candidate is at least 18 but not yet 40 (as of their hiring date) and

1. has received (or is part of a family that has received) SNAP benefits for the previous six months or at least three of the previous five months, or
2. while not eligible for assistance as defined in section 6(o) of the Food and Nutrition Act of 2008, is part of a family that received SNAP benefits in at least three of the five months prior to their hiring date.

6. Long-Term Unemployment Recipient WOTC Qualifications

The candidate has been unemployed for at least 27 consecutive weeks prior to their start date (or the day they completed their portion of Form 8850 as a pre-screener; whichever is earlier) and has received unemployment compensation for at least part of that time.

7. Long-Term Family Assistance Recipients WOTC Qualifications

Candidates must meet any one of the following conditions:

• Has received (or is part of a family that has received) Temporary Assistance for Needy Families (TANF) payments for a minimum of 18 consecutive months prior to their hiring date.
• Has received TANF payments for at least 18 months (beginning after 8/5/1997), with the earliest month ending within two years of their hiring date.
• Is within two years of becoming ineligible for assistance from TANF payments due to state or federal limitations on the maximum window of time for their eligibility.

8. Vocational Rehabilitation Referrals WOTC Qualifications

The candidate possesses a physical or mental disability and is being referred to you, the employer, while receiving (or upon completing) rehabilitative services in accordance with:

• A program organized by the Department of Veterans Affairs,
• A plan approved by the state under the Rehabilitation Act of 1973, or
• An Employment Network Plan (as laid out by the Ticket to Work program).

9. Summer Youth Employee WOTC Qualifications

The candidate must live in an Empowerment Zone (EZ)* and must be at least 16 years old, but under the age of 18 by their hiring date (or on May 1; whichever is later). They may only provide services to you, the employer, between May 1 and September 15 (meaning they could not have been employed by you prior to May 1). They also must never have worked for you before.

10. Designated Community Residents (DCR) WOTC Qualifications

The candidate is at least 18 but not yet 40 (by their hiring date). Wages used to determine the credit must be earned for services performed while the candidate’s principal residence was within an Empowerment Zone (EZ) or a Rural Renewal County (RRC).

See Form 8850 instructions for a full list of Empowerment Zones and Rural Renewal Counties in each state.

What Should Employers Do Now About WOTC?

Because the credit does not apply to employees who begin work after December 31, 2025, the most useful steps now are about protecting what you already earned and staying ready:

• Review your 2025 certifications. Confirm which 2025 hires received SWA certification and keep the documentation with your tax records (see our guide on how to claim WOTC).
• Ask your tax professional how to claim. Confirm the correct forms and timing for your business before you file.
• Follow up on pending requests. If you submitted paperwork for a 2025 hire and never received a determination, contact your SWA.
• Stop budgeting on WOTC for 2026 hires. Do not count on the credit for new hires unless Congress renews it and the IRS issues guidance.
• Watch for updates. Check the IRS and Department of Labor WOTC pages for any change in status.

FAQs: Common Questions About WOTC in 2026

Is the Work Opportunity Tax Credit still available in 2026?

Not for new hires, based on the sources we reviewed. The IRS states that the credit does not apply to employees who begin work after December 31, 2025, and we found no enacted extension as of this update. Check IRS.gov for the latest status.

Can I still claim WOTC for employees I hired in 2025?

Possibly. Employees who began work on or before December 31, 2025 and were certified by your SWA may still affect your tax filings. Talk with your tax professional about timing and forms.

Do I still need to file Form 8850?

The IRS has said Form 8850 is no longer in use because the credit does not apply to employees who begin work after December 31, 2025. If Congress renews the credit, the IRS would be expected to issue new guidance, so watch IRS.gov.

Could Congress bring WOTC back?

It is possible. Proposals to extend the credit have been discussed, and in past lapses Congress has renewed the credit retroactively. That is not guaranteed, so avoid making hiring or budget decisions that depend on it.

What was the 28-day WOTC deadline?

When the credit was available, employers generally had to submit the pre-screening paperwork to the SWA within 28 days after the employee began work. Employees who began on or before December 31, 2025 were subject to that rule.

The Bottom Line on WOTC in 2026

You now know that WOTC covered employees who began work on or before December 31, 2025, and that the IRS says it does not apply to anyone who starts after that date. The 10 target groups still matter if you have certified 2025 hires or if Congress renews the credit. Your next step is to review your 2025 certifications with your tax professional and check IRS.gov for any change in status. Lift HCM can help you keep payroll and tax records organized through our payroll and tax management services, and our team is on call if you have questions.

This information is for educational purposes only and is not intended to replace legal counsel. Please confirm current WOTC rules with the IRS, your State Workforce Agency, or a qualified tax professional.