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For hires starting in 2026, the federal Work Opportunity Tax Credit (WOTC) is in an authorization lapse as of October 4, 2026. The U.S. Department of Labor says Congress has not extended authority beyond December 31, 2025, and state agencies may not issue certifications for hires who start on or after January 1, 2026 while the lapse continues. Historically, WOTC offered eligible employers a credit tied to a certified worker’s targeted-group status and wages. Other federal tax benefits sometimes discussed alongside it—including the Disabled Access Credit—are not general hiring credits: they apply to qualifying business accessibility costs instead.
Is WOTC available for hires in 2026?
Not under the authority described in current federal guidance. The Department of Labor’s Employment and Training Administration says Congress has not extended WOTC for employees who begin work after December 31, 2025. During the lapse, state workforce agencies may review and prepare requests for later-starting employees, but may not issue certifications for hires starting January 1, 2026 or later. An agency’s acceptance or retention of a request is not certification and does not guarantee a future credit. See the DOL FY 2026 guidance and check for changes before relying on this status.
The IRS describes WOTC as a federal credit for employers hiring and employing people from certain targeted groups who have faced significant barriers to employment. The program’s historical calculation and application process remain relevant to eligible hires who began work by December 31, 2025, subject to applicable deadlines and rules. The IRS WOTC page is the primary source for program details and forms.
How the credits and related tax benefits differ
These programs do not all reward the same activity. WOTC historically rewarded qualifying hires; the Disabled Access Credit and barrier-removal deduction address accessibility expenses. The federal comparison below reflects the status and amounts described by the IRS and DOL as of October 4, 2026.
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| Program | What can qualify | Amount or calculation | Key eligibility or timing point |
|---|---|---|---|
| Work Opportunity Tax Credit (WOTC) | A hire in a specified targeted group, with state-agency certification and qualifying wages and service hours | Historically, generally 40% of up to $6,000 in first-year wages, for a maximum of $2,400 with at least 400 service hours; 25% for 120–399 hours. For certain qualified veterans, up to $24,000 in wages could be considered, for a stated maximum of $9,600. | Authority is in a lapse for starts after December 31, 2025 as of October 4, 2026. The figures are statutory maximum calculations, not guaranteed savings. |
| Disabled Access Credit | Eligible small-business spending on qualifying disability-access improvements or services | Up to $5,000, as described by the IRS; the credit calculation is based on eligible expenditures, not a per-hire amount. | IRS eligibility includes prior-year gross receipts of $1 million or less or no more than 30 full-time employees. The credit is nonrefundable. |
| Barrier-removal deduction | Qualifying expenses to remove access barriers | Deduction of up to $15,000 per year, as described by the IRS; it is not a hiring credit. | May be available to businesses of any size. If the same qualifying expenses support the Disabled Access Credit, the deduction must be reduced by the credit claimed. |
The WOTC amounts and service-hour thresholds are stated on the IRS WOTC page. The access-credit and deduction descriptions are on the IRS page about tax benefits for businesses who have employees with disabilities. Confirm current form instructions and expense limits when preparing a return.
How much WOTC could an eligible employer claim?
For the general category described by the IRS, the historical maximum was 40% of up to $6,000 in first-year wages—up to $2,400—if the certified worker completed at least 400 hours of service. If the worker completed 120 to 399 hours, the stated rate was 25%. Certain qualified veterans had a higher wage base: up to $24,000, producing a potential maximum of $9,600.
Those are maximum calculations, not typical or guaranteed savings. The amount depends on the worker’s qualifying category, eligible wages, hours worked, certification, and the employer’s tax circumstances. As of October 4, 2026, these amounts do not establish that an employer can claim WOTC for someone whose start date is in 2026.
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Who benefits from each option?
WOTC: employers with a qualifying, certifiable hire
WOTC’s distinctive feature was its connection to a worker’s targeted-group status. An employer needed the required state workforce agency certification, and the credit calculation depended on eligible wages and service hours. It was not a general credit for every new employee.
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Disabled Access Credit: qualifying small businesses with accessibility costs
The Disabled Access Credit is relevant when a qualifying small business incurs eligible costs to improve access for people with disabilities. The IRS describes eligibility as a business with prior-year gross receipts of $1 million or less or no more than 30 full-time employees. It is nonrefundable and is based on eligible access expenses rather than hiring.
Barrier-removal deduction: qualifying access costs, with no business-size limit
The IRS describes a deduction of up to $15,000 per year for qualifying costs to remove architectural or transportation barriers. Unlike the access credit, the deduction may apply to businesses of any size. A qualifying expense may support both the credit and deduction, but the deduction is reduced by the credit claimed for that expense.
What was the WOTC application process for hires by December 31, 2025?
WOTC required action before the employer could know whether a hire would be certified. For eligible hires who started by the cutoff, the IRS-described sequence was:
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- Complete Form 8850 with the applicant on or before the job-offer date. This is the pre-screening step; completing it after the offer does not meet the stated timing requirement.
- Submit Form 8850 to the designated local agency within 28 calendar days after the employee’s start date. Send it to the state-designated agency, not the IRS.
- Obtain certification. A qualifying group claim depended on certification by the relevant state workforce agency.
- Calculate the credit on Form 5884. The amount depends on eligible wages, service hours, and category.
- Claim the credit on the appropriate return. Taxable employers generally use Form 3800 along with Form 5884. Eligible tax-exempt organizations may claim WOTC only for qualified veterans, using Form 5884-C against payroll taxes.
The IRS explains the process and forms on its WOTC page and its employer certification guidance. Taxable employers claim WOTC against income tax and are subject to general business-credit rules, including carryback and carryforward provisions described by the IRS.
Independent reader supportYour contribution helps us test, update, and keep practical guides available for everyone.Can WOTC be combined with other hiring credits?
Do not assume the same wages can support multiple credits. The IRS says wages used to calculate WOTC generally cannot also be used to calculate other wage-based credits. Employers considering overlapping incentives need to identify which wages are allocated to each credit and follow current forms and instructions. This wage-coordination rule is separate from the accessibility-cost rules: qualifying expenses may support both the Disabled Access Credit and barrier-removal deduction, with the deduction reduced by the credit claimed.
Federal programs are not the full universe of hiring incentives. State and local credits vary by jurisdiction; check the relevant state workforce agency and revenue department for programs that may apply to a specific location and hire.
Quick Recap
How to decide which benefit to investigate
- The employee began work by December 31, 2025: Check whether the hire met a targeted-group category, whether Form 8850 was timely completed and submitted, and whether certification was obtained. Follow the IRS instructions for calculating and claiming any allowable credit.
- The employee began work on or after January 1, 2026: Do not treat a pending WOTC request as an approved credit. Confirm whether Congress has changed the authorization and whether updated IRS, DOL, or state guidance applies.
- Your business paid accessibility-related costs: Review the Disabled Access Credit and barrier-removal deduction independently of hiring incentives, including the small-business eligibility conditions and expense rules.
- You are looking for a location-based hiring incentive: Consult the state and local agencies for the place of employment; availability cannot be determined without the jurisdiction.
- More than one credit may use the same wages or expense: Check allocation and reduction rules in current IRS forms and instructions, or consult a tax professional before filing.
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