Capitol Insights: December deadline sharpens WOTC year-end outlook

Capitol Insights provides updates on federal legislative activity that may affect employer tax incentives and workforce programs.

At a glance:

• Congress has funded the government through December 11.
• The House has shortened its September schedule, leaving limited time for major legislation before the midterm elections.
• Bipartisan tax measures continue to advance as lawmakers consider priorities for potential year-end tax legislation.
• WOTC supporters continue working to position the pending extension and update legislation for inclusion in a year-end tax title.

Recent developments in Congress are beginning to create a more defined potential path for WOTC as lawmakers look toward the end of the year. While the program’s extension remains pending, changes to the congressional schedule, a new government funding deadline and continued bipartisan tax activity are providing a clearer picture of how WOTC could move forward.

Congress changed course on its September schedule

When lawmakers left Washington for the August recess, the House was expected to return in September with several weeks available for legislative work. Government funding was expected to be one of the first major priorities ahead of the September 30 end of the fiscal year.

Instead, the House acted sooner than expected. On September 1, the House voted 370–48 to approve the Senate's version of a temporary government funding bill. The President signed the measure September 2, keeping federal departments and agencies funded at fiscal year 2026 levels through December 11.

With the immediate funding issue resolved, House leadership also shortened its September schedule.

• The House is expected to return on September 14 for four days of legislative work.

• Members will leave Washington on September 17 to campaign ahead of the November 3 midterm elections.

• Congress is scheduled to return November 9 for a post-election session. 

The change leaves significantly less time for major legislation before the election and shifts more unfinished business toward the final weeks of the year.

Why the December 11 deadline matters for WOTC

The temporary funding measure keeps the government operating, but Congress will need to address government funding again before December 11. That creates another opportunity for lawmakers to address other priorities that have not advanced on their own, potentially including tax provisions. Large year-end funding bills have previously included tax legislation alongside the spending measures Congress must complete.

No year-end tax package has been finalized or announced, but congressional tax committees continue working on bipartisan proposals that could become part of year-end negotiations. These include tax administration reforms, expired and expiring tax provisions, and other proposals with bipartisan support.

Legislation to extend and update WOTC remains pending, and supporters continue working to position it for inclusion in any year-end tax title that develops.

Congress has used year-end legislation for WOTC before

Congress has repeatedly used year-end legislation to extend WOTC, including after periods when the credit had already expired. In 2015, for example, WOTC remained on hiatus for nearly the entire year before Congress included an extension in broader year-end legislation. The extension applied retroactively to eligible hires beginning January 1, 2015, and continued the program for another five years.

While previous congressional action does not determine what will happen in 2026, this history provides precedent for WOTC being addressed late in the year and for eligible hires made during a hiatus to be covered retroactively.

Looking ahead

Congress is scheduled to return November 9, with the December 11 government funding deadline creating the next major legislative window for WOTC. We'll continue monitoring potential year-end tax legislation and whether the pending WOTC extension and update are included.

In the meantime, employers should continue WOTC screening, while also ensuring their screening process accounts for proposed WOTC enhancements, including the addition of military spouses and removal of the age restriction for SNAP recipients. Given the precedent for retroactive action, capturing this information throughout the current hiatus can help preserve potential credit opportunities and avoid the administrative burden of identifying and evaluating months of previous hires later.

If you have questions about maintaining WOTC screening during the hiatus or preparing for potential changes to the program, contact Maximus.