WOTC Renewal Update: Congress Returns for Year-End Session
Congress is back in Washington for its post-election “lame duck” session, and renewal of the Work Opportunity Tax Credit (WOTC) is on the table. WOTC lapsed for employees who began work after December 31, 2025. Credits for eligible employees hired on or before that date can still be claimed.
Will Congress renew WOTC this year?
Lawmakers must act on government funding by December 11, and must also finish the National Defense Authorization Act and the Farm Bill. WOTC has been renewed in year-end spending bills before, and this year’s funding bill is one of the best chances to renew it before the new Congress takes office on January 3, 2027.
What would the WOTC renewal bill do?
The bipartisan Improve and Enhance the Work Opportunity Tax Credit Act (S. 3265 in the Senate, H.R. 6231 in the House) would:
- Extend WOTC for five years, through 2030
- Raise the credit from 40% to 50% of qualified first-year wages
- Add a larger credit for employees who work 400 hours or more
- Index the credit to inflation
- Add military spouses as a new eligible group
- Remove the age limit for SNAP recipients
Will WOTC be retroactive for 2026 hires?
When WOTC has lapsed before, Congress has usually renewed it retroactively, covering hires made during the gap. Whether this renewal is retroactive will depend on the final bill.
What should employers do now?
Keep screening every new hire for WOTC. If the credit is restored retroactively, you can claim it only for 2026 hires who were screened and whose certification requests were filed on time, generally within 28 days of the start date.
Why does WOTC matter?
WOTC encourages employers to hire people receiving public assistance, veterans and job seekers who have been out of work for more than six months. In fiscal year 2023, nearly 190,000 veterans were certified for WOTC. The WOTC Means Jobs coalition estimates the credit saves about $17.6 billion a year in federal spending and $4.7 billion for states by helping people move from public assistance into private-sector jobs. For employers, WOTC is worth up to $2,400 per eligible hire (40% of up to $6,000 in first-year wages) and up to $9,600 for certain qualified veterans, claimed against federal income tax.
What’s next?
We are working with Congressional leaders in both parties to include WOTC renewal in year-end legislation, and we will post updates as the session moves forward. Contact us with questions about screening your 2026 hires.
