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1Repair Windows errors before they cause bigger problems2Scan for outdated or missing drivers - takes under a minute3Clear out junk files and repair common Windows errorsAs of October 4, 2026, the Work Opportunity Tax Credit (WOTC) is not authorized for employees who start work in 2026. The U.S. Department of Labor says Congress has not extended the program beyond December 31, 2025. WOTC remains a useful comparison for employers reviewing earlier hires, but it is not currently a confirmed federal credit for a 2026 start date. Other federal programs that help small businesses—such as the Disabled Access Credit—are based on eligible expenses, not hiring an employee. State and local hiring incentives depend on location.
Is WOTC available for employees hired in 2026?
No, not under the authorization in effect as of October 4, 2026. The Department of Labor’s FY 2026 guidance says Congress has not extended WOTC authority for employees who begin work after December 31, 2025. During this lapse, state workforce agencies may review and prepare requests for 2026 start dates but may not issue certifications for them. An agency accepting or holding a request is not an approval and does not guarantee that a credit will become available later. DOL FY 2026 guidance
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For employees whose start date was on or before December 31, 2025, the IRS describes the usual WOTC certification and claiming process below. Because authorization can change, check the IRS WOTC page, current Department of Labor guidance, and the relevant state workforce agency before acting.
How WOTC compares with other federal small-business incentives
WOTC is a targeted hiring credit: eligibility depends on the employee’s qualifying group, certification, wages, and hours worked. The Disabled Access Credit and barrier-removal deduction are useful small-business comparisons, but neither is a general hiring credit. Their trigger is spending on accessibility, not adding a worker.
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| Program | What triggers it | Who may qualify | Amount or calculation | Key distinction |
|---|---|---|---|---|
| Work Opportunity Tax Credit (WOTC) | Hiring and employing a worker in a qualifying targeted group, with certification | Employers with an eligible, certified worker; WOTC authorization for new hires currently lapses for start dates after December 31, 2025 | Historically, generally 40% of up to $6,000 in first-year wages, or a maximum $2,400, for a worker with at least 400 service hours. The rate is 25% for 120–399 hours. For certain qualified veterans, up to $24,000 in wages may be considered, for a potential maximum of $9,600. | Requires pre-screening and state workforce agency certification. The figures are statutory maximum calculations, not guaranteed savings. |
| Disabled Access Credit | Eligible expenditures to improve access for people with disabilities | Qualifying small businesses with prior-year receipts of $1 million or less, or no more than 30 full-time employees | Up to $5,000, according to the IRS disability-related business tax benefits page | Nonrefundable; based on eligible access expenses, not hiring. Verify current Form 8826 instructions and expense limits. |
| Barrier-removal deduction | Qualifying costs to remove architectural or transportation barriers | Businesses of any size, subject to the rules for qualifying expenses | Up to $15,000 per year, according to the IRS disability-related business tax benefits page | A deduction rather than a per-employee credit. The deduction must be reduced by any credit claimed for the same expenses. |
WOTC amounts above are the IRS program’s stated maximum calculations, not typical realized savings or an estimate of what a particular employer will receive. Taxable employers claim the credit against income tax, subject to general business-credit rules. Eligible tax-exempt organizations can claim WOTC only for qualified veterans, using the payroll-tax process. The IRS explains the categories, calculations, and forms on its WOTC page. The separate accessibility programs are described in the IRS disability-related business tax benefits guidance.
How WOTC worked for eligible hires through 2025
WOTC was designed to encourage employers to hire people in specified groups who face barriers to employment. For a hire within the authorized period, the employer’s potential credit depended on the worker’s eligibility, certification, qualified wages, and time on the job—not simply on making a hire.
- General calculation: the IRS states a credit of 40% of up to $6,000 in first-year wages for an eligible worker with at least 400 service hours, giving a potential maximum of $2,400.
- Shorter service: for 120–399 service hours, the stated rate is 25%.
- Certain qualified veterans: up to $24,000 in wages may be considered, producing a potential maximum of $9,600.
- Below 120 hours: the cited IRS program page does not state a credit for this service range.
These are maximum program calculations, not a promise of tax savings. The employee must meet the applicable targeted-group requirements, the employer must obtain certification, and the amount claimed remains subject to tax rules and limits. The IRS describes the categories and calculations at Work Opportunity Tax Credit.
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What employers had to do to claim WOTC
The sequence mattered: the initial screening and form completion had to happen by the job-offer date, followed by a submission to the designated local agency shortly after the employee began work.
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- By the job offer date: the employer and applicant complete Form 8850. It must be completed on or before the date the job offer is made.
- Within 28 calendar days after the employee starts: submit Form 8850 to the designated local agency, not the IRS. Follow the agency’s submission instructions.
- After certification: a taxable employer calculates the credit on Form 5884 and claims it through Form 3800, subject to general business-credit rules. The IRS describes applicable carryback and carryforward rules.
- For an eligible tax-exempt employer hiring a qualified veteran: use Form 5884-C to claim the credit against payroll taxes.
For a hire starting in 2026, an employer may encounter a state agency that accepts or retains a request under the current lapse procedures. That does not replace certification, create an available credit, or make the request safe to treat as an approved tax benefit. See the DOL FY 2026 guidance and the IRS instructions at Work Opportunity Tax Credit.
Can WOTC be combined with other hiring credits?
Do not assume the same wages can support multiple wage-based credits. The IRS says wages used to calculate WOTC generally cannot also be used to calculate other wage-based credits. Employers considering overlapping incentives need to identify which wages are allocated to each credit and check the current form instructions and program rules. IRS guidance on employer certification and wage coordination
The Disabled Access Credit and barrier-removal deduction have different expense bases from WOTC, but they have their own coordination rule: if a business claims the credit for eligible access expenses, it must reduce the deduction for those same expenses by the amount of the credit. Do not treat separate programs as automatically additive.
How to find other hiring incentives
This comparison covers federal programs; there is no single federal list that establishes every state or local hiring incentive. Availability and requirements can depend on the employer’s location, the worker’s circumstances, and the hiring date. Check the state workforce agency and state revenue department for the work location, and confirm any local program with the relevant jurisdiction. For a 2026 WOTC start date, verify authorization again before treating a pending request as a credit.
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