Important Update: WOTC Has Expired
The Work Opportunity Tax Credit (WOTC) expired on December 31, 2025. As of January 1, 2026, employers are no longer able to claim WOTC for new hires, and the program is currently in a hiatus period pending potential reauthorization by Congress.
The information in this article reflects the program as it existed prior to its expiration and is being kept for reference purposes. WOTC has lapsed and been retroactively renewed by Congress multiple times in the past, so reauthorization remains possible. If the program is reinstated, credits may be applied retroactively — which is why experts recommend that employers continue WOTC screening practices in the meantime.
Paycor will update this content if and when Congress acts to renew the program.
The Work Opportunity Tax Credit (WOTC) is a federal tax credit initiative offering substantial savings for businesses hiring from specific, historically disadvantaged groups. By targeting these underemployed populations, the WOTC aims to boost their workforce participation while providing a competitive edge for participating companies.
Businesses can claim a WOTC of up to 40% of a new hire’s first-year wages, capped at $9,600 for most target groups. This translates to significant tax savings, directly offsetting a company’s federal income tax liability. The credit incentivizes companies to hire veterans, youth ages 16-24 from low-income backgrounds, unemployed individuals receiving government assistance, and more.
The WOTC delivers a win-win for both employers and employees. Companies gain access to a broader talent pool, often finding highly motivated workers eager to prove themselves. And the tax credit can offset the costs of onboarding and training, making it more feasible to give opportunities to those who may lack extensive experience but offer great potential.
The WOTC is set to expire December 31, 2025, so be sure to take advantage of this valuable incentive while you can. To find out how much your company can claim, enter your info below!