Home / Tax Credits / WOTC

Not availableAuthorization lapsed January 1, 2026. No hire starting on or after that date generates a credit today. Credits earned on 2025 and earlier wages are still claimable.

IRC Section 51 · Form 5884 · Tax credit

Work Opportunity Tax Credit

Lapsed as of January 1, 2026. Here is what to do anyway.

Not available for 2026 hires. Congress has not reauthorized it.

Who it is forEmployers who hired from specified target groups. Currently relevant only for wages paid on or before December 31, 2025, plus anyone positioning for a possible retroactive reauthorization.

What it is worthUp to $2,400 per hire for most target groups, up to $9,600 for a disabled veteran unemployed six months or more, and up to $9,000 across two years for a long-term assistance recipient.

Where it is claimedForm 5884, under IRC Section 51

Why businesses miss this one

Right now the miss is the opposite of usual. Plenty of payroll vendors and credit shops are still selling WOTC screening as though the credit is live. It is not. Anyone telling you they can get you a credit for a 2026 hire is either behind or not being straight with you.

How the money actually works

The credit was 40% of qualified wages if the employee worked 400 or more hours in the first year, or 25% if they worked 120 to 399 hours. Under 120 hours produced nothing.
Ten target groups qualified, including recipients of public assistance, veterans, ex-felons, vocational rehabilitation referrals, summer youth in empowerment zones, and the long-term unemployed.
The largest single credit was $9,600, available for a veteran with a service-connected disability who had been unemployed six months or more.
Screening had to happen before the job offer, not after, and certification had to be requested from the state workforce agency within 28 days of the start date.
Credits already earned on wages paid through December 31, 2025 remain claimable on Form 5884, and unused amounts carry back one year and forward twenty.

Free screener

See which programs are worth a closer look

Nine questions about how your business actually operates. You get back the federal programs that fit your situation, what each one is worth in general terms, and the documents to gather before you talk to a tax professional. No email required to see your results.

Run the screener →

Big Brain Funding is not a CPA firm, an enrolled agent, or a tax preparer. We do not prepare, file, or sign tax returns. This screener is educational and points you toward programs to discuss with a licensed tax professional.

What to gather before you call anyone

Organized records are the difference between a preparer who says it is not worth the trouble and one who finds the money. Have these ready.

Certifications already issued by your state workforce agency for pre-2026 hires
Payroll records showing qualified wages and hours worked for those employees
Form 5884 for any unclaimed 2025 or earlier credit
Ongoing screening records if you choose to hedge against retroactive reauthorization

Disqualifiers and traps

These are the places claims fall apart, either at filing or on examination.

Any employee who started work on or after January 1, 2026 generates no credit under current law. Full stop.
The IRS made Form 8850 obsolete in March 2026. There is no active IRS pre-screening form right now, even though state agencies are still instructed to accept and hold requests.
Do not pay anyone a contingency fee to chase a credit that does not currently exist.
For pre-2026 credits that are still claimable, the under-120-hours rule is absolute. There is no partial credit.
The credit is nonrefundable, so it does nothing in a year with no tax liability except carry forward.

One more thing worth knowing

This credit has lapsed and been retroactively reauthorized many times before. After the 2015 lapse the IRS granted transition relief allowing late filings. If you hire from these groups routinely, continuing to screen and submit to your state agency costs little and preserves your position if Congress acts. Treat that as a hedge, not as a credit you can count on.

Sources

Every figure on this page traces to one of these. All verified August 14, 2026.

Other programs

FICA Tip CreditAvailable now
Research and Development Tax CreditAvailable now
Section 179 and Bonus DepreciationAvailable now
Cost SegregationAvailable now
Qualified Production PropertyDeadline ahead
Commercial Solar Investment CreditDeadline ahead

This is educational information, not tax advice. Big Brain Funding is not a CPA firm, an enrolled agent, or a tax preparer. We do not prepare, file, or sign tax returns, and we do not determine whether any business is eligible for any tax program. Eligibility depends on facts specific to your business and on tax law that changes. Nothing here is a promise of a refund, a credit, or a deduction amount. Confirm everything with a licensed CPA or enrolled agent before you file or amend a return.

Program details on this page were verified against official IRS and government sources on August 14, 2026. Tax law changes, sometimes mid-year. Check the linked sources for the current position before acting.