The Work Opportunity Tax Credit (WOTC) officially expired on December 31, 2025. For employers who have relied on WOTC to offset hiring costs while creating opportunities for job seekers facing barriers to employment, the lapse raises an important question: should you pause your screening process, or keep moving forward?
WOTC has lapsed before and been renewed retroactively
This is not the first time WOTC has expired. The program lapsed briefly in 2014 before Congress renewed it retroactively, allowing employers to claim credits for hires made during the gap. The same thing happened at the end of 2020, when WOTC expired and was later extended retroactively through 2025.
In both cases, employers who continued screening and submitting certifications during the lapse were able to capture those credits once renewal passed. Employers who stopped lost out on significant savings.
WOTC has strong bipartisan support because it aligns workforce development with business incentives. Retroactive renewal has been the norm, not the exception, and the program’s consistent track record suggests that pattern will continue.
What happens to hires made during the lapse
If WOTC is renewed retroactively, any eligible hire made after December 31, 2025, could qualify for the credit as long as the proper certification process was followed at the time of hire. That means employers need to continue screening new hires and submitting Form 8850 and ETA 9061 within the required timelines. If you wait until renewal is official, you will miss the deadline to certify those hires, and the credit will be lost even if the law is extended.
The IRS and state workforce agencies require that Form 8850 be submitted within 28 days of the employee’s start date. That window does not reopen after a retroactive renewal. If the form was not filed on time, the hire cannot be certified later.
Employers face a low-risk decision
Continuing to screen for WOTC during a lapse involves minimal cost and effort, especially if you are working with a third-party administrator who manages the process. The administrative burden does not increase, and the potential upside is substantial if renewal occurs.
Stopping the process, on the other hand, creates a definite loss. Every eligible hire that is not screened and certified is a missed opportunity, whether that is $2,400 or up to $9,600 depending on the targeted group.
For employers that hire at scale, those missed credits can add up quickly. A retailer hiring 200 employees per quarter could forfeit hundreds of thousands of dollars in potential tax savings by pausing its WOTC program during even a short period of uncertainty.
Retroactive renewal does not help employers who did not prepare
If and when WOTC is renewed, the credit will likely apply to hires made during the lapse, but only if those hires were properly screened and certified in real time. Employers who pause their process will not be able to go back and certify workers hired months earlier. Certification deadlines are tied to the hire date, not the date of renewal. This has been a costly lesson for employers who sat out previous lapses.
Preparation goes beyond paperwork. It includes maintaining internal workflows, vendor relationships, and staff training, so the program continues to function smoothly. Restarting a paused WOTC program often creates delays, confusion, and added administrative work.
What employers should do now
The most prudent approach is to continue business as usual. Keep screening new hires, submitting certifications, and tracking eligibility as if the program were still active. Employers preparing for WOTC renewal should continue screening new hires and submitting certifications as usual to preserve eligibility if the program is extended retroactively.
If you use a third-party WOTC provider, confirm that submissions are still being processed and that legislative updates are being monitored. If you manage the program internally, ensure your team understands the importance of maintaining timelines and documentation.
Monitoring updates from the IRS and the Department of Labor can help employers stay informed as renewal discussions continue. Industry groups, employer coalitions, and regular legislative updates, such as Maximus’ Capitol Insights coverage, can also provide early visibility into WOTC-related activity.
WOTC’s value extends beyond the credit itself
The WOTC screening process provides value beyond tax savings. It helps employers better understand their workforce, supports inclusive hiring goals, and creates documentation that can be useful for other incentive programs or reporting needs. Many employers naturally hire individuals from WOTC target groups, including veterans, individuals with disabilities, justice-impacted individuals, and people facing long-term unemployment. These candidates bring skills, resilience, and perspective. Hiring decisions should always be based on qualifications and fit. WOTC simply recognizes and supports inclusive hiring when it occurs.
The credit was never intended to drive hiring decisions. It exists to reduce risk for employers willing to invest in people who may face barriers to employment. For now, the best strategy is to stay the course. Continue screening, stay informed, and be prepared to capture the value of every eligible hire if and when renewal occurs.
Need help navigating a WOTC lapse?
Periods of uncertainty can raise questions about compliance, timing, and risk. Maximus works with employers to maintain compliant WOTC screening, monitor legislative developments, and ensure eligible hires remain on track during program lapses.
Connect with a WOTC specialist to review your current process and confirm you are prepared for potential renewal.
