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Under current IRS guidance, employees who began work after December 31, 2025, do not qualify for the Work Opportunity Tax Credit (WOTC). The IRS also says Form 8850 is no longer in use. The eligibility groups below apply to hires during the program’s authorized period; check for a later extension or change in law before relying on them for a new hire. The IRS status notice was published March 19, 2026.
Who qualified for WOTC during its authorized period?
A new employee had to meet the rules for one of the ten statutory target groups. Membership in a broad demographic group, or an employee’s own statement, was not enough: each category had its own conditions and required state workforce agency certification.
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| Target group | Eligibility basis and key conditions |
|---|---|
| Qualified IV-A recipient | The employee was a member of a family receiving assistance under a state Temporary Assistance for Needy Families (TANF) program for at least 9 months during the 18-month period ending on the hire date. |
| Qualified veteran | The employee met at least one statutory test. Tests included family SNAP receipt for at least 3 months during the 15-month period ending on hire, unemployment of at least 4 weeks but less than 6 months in the prior year, or unemployment of at least 6 months in the prior year. Other tests involved service-connected disability and discharge or unemployment timing. The IRS instructions define who counts as a veteran for this credit. |
| Qualified ex-felon | The employee had a felony conviction under federal or state law and was hired no more than 1 year after conviction or release from prison for that felony. |
| Designated community resident | Generally, the employee was at least 18 and under 40 and lived in an empowerment zone or rural renewal county on the hire date. Applicable designations should be checked in the relevant Form 8850 instructions. |
| Vocational rehabilitation referral | The employee had a physical or mental disability and was referred while receiving, or after completing, qualifying rehabilitation services through an approved state plan, a Ticket to Work employment network plan, or a VA program. |
| Qualified summer youth employee | Generally, the employee was 16 or 17 under the statutory timing rule, worked for the employer between May 1 and September 15, and lived in an empowerment zone. Specific age and employment conditions applied. |
| Qualified SNAP recipient | Generally, the employee was at least 18 and under 40 on the hire date and belonged to a family receiving SNAP for the previous 6 months or for at least 3 of the previous 5 months. |
| Qualified SSI recipient | The employee received Supplemental Security Income for a month ending within the 60-day period ending on the hire date. |
| Long-term family assistance recipient | The employee met specified extended TANF receipt tests, or had recently stopped qualifying because a federal or state time limit ended payments. The alternative tests and applicable two-year periods are set out in the Form 8850 instructions. |
| Qualified long-term unemployment recipient | The employee had been unemployed for at least 27 consecutive weeks at hiring and received unemployment compensation during some or all of that period. |
These are separate eligibility routes, not interchangeable descriptions of a general category of “disadvantaged worker.” Exact definitions and exceptions are in the Instructions for Form 8850; the IRS also summarizes the WOTC target groups. Because the credit is no longer available for employees starting after December 31, 2025 under current IRS guidance, historical forms and instructions should be read in light of any later legal change.
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What employers had to do for an eligible hire
For hires during the authorized period, an employer had to prescreen and request certification on time. Filing a form by itself did not establish that the employee qualified.
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- Complete Form 8850 by the offer date. The employer and applicant had to complete the prescreening notice on or before the day the job offer was made.
- Submit the certification request within 28 days after the employee started. The employer generally sent Form 8850 to the state workforce agency for the state where the employee worked. The agency determined whether the employee met a target-group definition. The Department of Labor filing guidance describes the process; the IRS also explains it in its Form 8850 instructions and WOTC FAQ.
- Meet the applicable hours requirement. Certification did not eliminate the separate minimum-hours rule for the credit. The threshold and credit calculation depended on the applicable rules.
For the long-term unemployment group, DOL guidance describes use of ETA Form 9175 as part of the certification request process.
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How to read the commonly cited WOTC numbers
- 27 consecutive weeks is the legal unemployment threshold for the long-term unemployment target group, not a workforce statistic.
- 9 months within an 18-month period is the TANF receipt test for the qualified IV-A group, not a general rule for every public-assistance recipient.
- 28 days after starting work was the Form 8850 submission deadline during the authorized period; it is not a current filing route for new hires after the credit’s expiration under current IRS guidance.
- 40% of qualified wages for an employee who worked at least 400 hours in the first year is the IRS’s general historical description of the credit calculation. It should not be applied to hires beginning after December 31, 2025.
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