Work Opportunity Tax Credit Hiatus 2026
The Work Opportunity Tax Credit (WOTC) is administered by the Department of Employment Services (DOES). Effective January 1, 2026, WOTC is in hiatus until a Congressional reauthorization occurs. At this time, the Employment and Training Administration (ETA) has no indication of whether Congress will pass legislation reauthorizing the WOTC or not.
ETA’s WOTC Procedural Guidance, Training and Employment Guidance Letter (TEGL) 16-20, Change 1 specifies that “States can continue to review and prepare WOTC certification requests when there is a WOTC authorization lapse but may not issue a certification.” Consistent with that guidance, if WOTC’s authorization does lapse, State Workforce Agencies (SWA) must only issue certifications for individuals who begin work for an employer on or before December 31, 2025.
During an authorization lapse, DOES will adhere to the following procedures, consistent with ETA’s WOTC Procedural Guidance:
- DOES will accept and fully process (i.e., issue certifications or denials) for all timely submitted WOTC certification requests for individuals with start dates on or before December 31, 2025, based on a properly executed and submitted IRS Form 8850.
- DOES will accept and fully process (i.e., issue certifications or denials) for interstate benefit requests before the WOTC authorization lapse.
- DOES will accept and fully process any WOTC access system requests that align and comply with submission standards for agents or employers, as needed.
- For individuals who begin work on or after January 1, 2026, DOES may accept, date stamp, log, and retain certification requests using the Office of Management and Budget (OMB)-approved IRS and ETA WOTC Processing Forms. DOES may not issue any certifications or denials with respect to requests until otherwise informed by ETA. Please note, like past program authorization lapses, ETA will provide additional guidance if Congress subsequently reauthorizes WOTC and provides certain legislative provisions that allow for retroactive certification of targeted groups for individuals who began work during the lapse.
- DOES will not continue to create or complete any WOTC application processing of the following items within the hiatus period until Congressional reauthorization occurs and the determination of statutory impact to any target group(s) are confirmed:
- Denials Pending More Information, also known as DPMIs or DPIs, Needs Letters, or Request Letters
- Interstate Benefit Requests