Is The Work Opportunity Tax Credit Still Available?

Almost everything written about the Work Opportunity Tax Credit right now describes a credit an employer cannot currently claim for a new hire. That includes a fair amount of material produced by people who should know better.

Here is the actual status, what an employer can still do, and why the confusion is so widespread.

Is WOTC available for a 2026 hire?

No. The Work Opportunity Tax Credit was authorized only until December 31, 2025, and Congress has not extended it.

The Department of Labor states it plainly on its Work Opportunity Tax Credit page^[1]: “WOTC is authorized until December 31, 2025 (Section 113 of Division EE of P.L. 116-260 — Consolidated Appropriations Act, 2021).” The IRS says the same on its Work Opportunity Tax Credit page^[2]: “The Consolidated Appropriations Act, 2021 (Section 113 of Division EE P.L. 116-260) authorized the extension of the WOTC until December 31, 2025.”

The operative instruction is what the Department of Labor told the states. Its guidance to state workforce agencies covering fiscal year 2026 funding states that Congress has not extended legislative authority for employers to claim the credit for new hires beginning work beyond December 31, 2025, and that states may continue to review and prepare certification requests during an authorization lapse but may not issue a certification.

That last clause is what settles it. A certification is a prerequisite to claiming the credit. Without one, there is no claim to make.

What is still claimable

Anything that started in time. An employee who began work on or before December 31, 2025 sits inside the authorized period, and state workforce agencies continue to process and certify those requests, including backlog.

So an employer who hired a qualifying person in October 2025 and never filed should still look at it. The claim itself runs on Form 5884, carried to Form 3800 as part of the general business credit, and a tax-exempt employer hiring qualified veterans uses Form 5884-C instead. Whether a specific prior-year hire can still be captured, and whether an amended return is available, is a question for a licensed tax professional.

Why does everyone still say it is available?

Because a lapse produces no announcement, and the pages employers actually read do not carry a status banner. This is worth spelling out because it is the reason otherwise careful businesses are being told the wrong thing.

Nevada’s own DETR Work Opportunity Tax Credit page^[3] presents the program as active. It lists the targeted groups, explains the application process, and names a WOTC coordinator, with nothing indicating that certifications cannot currently be issued. An employer reading the state’s page in good faith would conclude the credit is live.

Payroll vendors and hiring platforms are worse, because their WOTC material is usually evergreen marketing content that nobody revisits when authority expires. The result is a market full of confident guidance built on a statute that stopped applying more than eight months ago.

Anyone presenting WOTC as a current benefit should be asked one question: through what date is it authorized. The answer is on two federal pages and it has not changed.

What should an employer do in the meantime?

Preserve position and stop counting on it. Two separate actions, and confusing them is how a business ends up with a hole in its projections.

Keep filing the pre-screening paperwork. IRS Form 8850 must be completed by both employer and applicant on or before the day the job offer is made, and submitted to the state workforce agency within 28 calendar days of the employee’s start date, along with ETA Form 9061 or a conditional certification on ETA Form 9062. Continuing that process for 2026 hires costs very little and keeps an employer positioned if Congress extends the credit retroactively. After a prior lapse the IRS issued transition relief that allowed employers to catch up on filings, so the precedent exists.

Do not budget for it. Preservation is not a claim. Extension bills have been introduced in the 119th Congress and none has been enacted, so any business modeling WOTC into 2026 hiring costs is modeling a credit that does not currently exist.

One more correction worth making while the subject is open. The enhanced WOTC amounts, the ones reaching up to $9,600, are specific to qualified veteran subcategories. The separate targeted group for a long-term unemployment recipient, meaning someone unemployed 27 consecutive weeks or more, carries the ordinary $6,000 wage cap and a maximum credit of $2,400. Marketing copy conflates those two constantly.

What credits are actually available right now?

Several, and they are not small. An employer who came looking for a hiring credit and found a lapse should redirect the attention rather than lose it.

The retirement plan credits under SECURE 2.0 are live, unchanged for 2026, and generous for exactly the employer sizes that qualified for WOTC. A startup cost credit covering up to 100 percent of qualified costs, an employer contribution credit worth up to $1,000 per employee, and a $500 automatic enrollment credit are all detailed in the retirement plan tax credits guide, with the amounts broken down in how much is the small business 401(k) startup tax credit.

On the payroll side, a Section 125 plan reduces the employer’s own FICA and FUTA liability on every pre-tax premium dollar and requires no congressional action at all, which is covered in how a Section 125 plan cuts employer payroll tax. Nevada employers with tipped staff also have the federal FICA tip credit, explained in what is the FICA tip credit.

We are insurance nerds, not tax professionals. Whether any of these apply to a specific business, and how they land on a specific return, belongs with a licensed tax professional.

As an official Paychex partner, ProtectHealth can map payroll, HR, retirement and benefits in one conversation instead of four. Owners who want that for their own business can book a conversation.

Keep Reading

More ProtectHealth guides and answers on this topic.

Full Guide The Federal Credits That Pay For A Small Business Retirement Plan SECURE 2.0 covers up to 100 percent of qualified startup costs for employers with 50 or fewer employees, adds up to $1,000 per employee for contributions, and $500 a year for automatic enrollment. What each credit is worth, who qualifies, and the 2026 figures.

Questions People Ask About This

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GuideNevada's Retirement Plan Mandate: What Employers With Six Or More People Must DoRead the guide →GuideHow A Section 125 Plan Cuts An Employer's Payroll Tax BillRead the guide →

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ProtectHealth brokers are insurance professionals, not tax professionals. Eligibility for any coverage or tax-advantaged structure depends on business structure, income, and household situation.