The Work Opportunity Tax Credit is about to expire – why employers can’t afford to miss it

For more than 25 years, the Work Opportunity Tax Credit (WOTC) has quietly rewarded businesses for doing what’s good for both their bottom line and their communities. Yet despite its longevity and bipartisan support, the credit remains underutilized, misunderstood, and on track to expire at the end of this year.

Employers who overlook WOTC are missing a valuable opportunity. But the bigger loss could come if the credit vanishes altogether.

A proven but underused incentive

At its core, WOTC is straightforward. Employers can claim a federal tax credit for hiring people from certain targeted groups, including qualified veterans, recipients of long-term unemployment assistance, individuals receiving SNAP benefits, and those living in designated empowerment zones. The credit can range from $2,400 up to $9,600 per eligible new hire, depending on the employee’s category and hours worked.

It’s a classic “win-win.” Businesses lower hiring costs, and individuals who often struggle to find work get meaningful employment opportunities. Over the past two decades, WOTC has helped millions of Americans enter or re-enter the workforce.

So why have so many employers failed to take advantage of it?

Why employers miss out

There are three common reasons.

Complexity: Employers must file paperwork within 28 days of a new hire’s start date, and many miss the deadline or find the process burdensome.

Awareness: Despite being around for decades, WOTC isn’t well known outside industries like hospitality and staffing.

Misconceptions: Some assume it’s only worthwhile for large employers, when even one or two hires can make a big difference for small businesses.

Year after year, countless businesses leave money on the table, while individuals who could benefit from employers actively seeking WOTC hires remain overlooked.

The clock is ticking

As of now, WOTC is authorized only through December 31, 2025. Unless Congress acts, employers will not be able to claim the credit for workers who begin employment after that date.

Historically, Congress has repeatedly extended the credit, often at the last minute. There have also been bipartisan proposals to expand WOTC to cover new categories of workers or to make it permanent. But as of today, none of those proposals has passed. Employers should operate under the assumption that WOTC will expire at the end of this year unless Washington steps in.

That uncertainty is one more reason businesses hesitate to build WOTC into their hiring strategies. But with the deadline looming, now is precisely the time to act.

How employers can fix it

Employers who want to benefit from WOTC before its potential expiration should take three steps immediately:

Prioritize screening: Integrate WOTC screening questions into your onboarding process so that new hires can be assessed for eligibility right away.

Submit paperwork on time: Forms must be submitted to your state workforce agency within 28 days of the employee’s start date.

Leverage technology or partners: Many payroll and HR systems now integrate WOTC screening and filing. Employers can partner with a trusted provider for compliance and maximum credit capture.

By tightening these practices, employers can turn WOTC from a missed opportunity into a strategic advantage.

A policy worth keeping

The question of WOTC’s future is ultimately in the hands of Congress. The program is a cost-effective tool for promoting employment, reducing dependence on public assistance, and helping businesses offset the real costs of hiring and training. It has long gained bipartisan support precisely because it aligns incentives across the board. Employers gain tax relief, workers gain access to jobs, and communities gain stronger local economies. That’s why many policy experts argue for extension, or for making WOTC permanent.

Don’t wait for Congress

The fate of WOTC is uncertain, but one thing isn’t: Employers who fail to act now will miss out on a powerful opportunity to strengthen their workforce and bottom line. If the program expires, those who delayed will find themselves shut out entirely.

Businesses – take advantage before the deal is off the table by screening your candidates, filing the paperwork, and capturing the benefits while you still can. Policymakers – the opportunity is here to extend, and perhaps even make permanent, a program that has demonstrated its worth for more than 25 years.