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Important: The Work Opportunity Tax Credit (WOTC) does not apply to employees who began work for an employer after December 31, 2025, according to the IRS. Form 8850 is no longer in use for new hires. The steps below explain the former process for eligible employees who began work on or before that date and for employers reviewing those claims.
First, check the employee’s start date
The IRS states that “The work opportunity credit does not apply to employees who begin work for the employer after December 31, 2025.” An employee who started in 2026 therefore cannot qualify under the current IRS guidance. Form 8850 is no longer in use. IRS Form 8850 status
For an employee whose start date was on or before December 31, 2025, the following steps describe the process that applied. The deadline to submit the certification request was tied to the employee’s start date, so employers reviewing an older hire should check whether the request was submitted on time.
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How the claim process worked for an eligible hire
- Prescreen and complete Form 8850 by the job-offer date. The applicant provided information on or before the date of the job offer; the employer completed its portion no later than that date. Both parties signed the form by the time it was submitted.
- Send Form 8850 to the state workforce agency. Submit it to the agency for the state where the employee worked, generally no later than the 28th calendar day after the employee began work. Do not send Form 8850 to the IRS. See the IRS Form 8850 instructions and the relevant state agency’s instructions.
- Include any required supporting information. The IRS instructions describe ETA Form 9061 when the applicant did not have a conditional certification, ETA Form 9062 when the applicant did, and ETA Form 9175 for a qualified long-term unemployment recipient. Follow the state workforce agency’s submission requirements.
- Wait for state certification. Form 8850 requested certification; submitting it did not establish eligibility by itself. The state workforce agency had to certify that the employee belonged to a targeted group before the employer could claim the related credit.
- Use the tax form for the employer’s situation. Taxable employers generally calculated the credit on Form 5884 and claimed it on Form 3800. A qualifying tax-exempt employer could use Form 5884-C only for a qualified veteran who began work before 2026, subject to the employer’s Social Security tax limit.
Which employees could qualify?
WOTC applied to certified hires in specific statutory targeted groups, not to anyone who faced a general barrier to employment. The IRS lists these categories:
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Meeting a category’s definition did not by itself allow an employer to claim the credit; state workforce agency certification was required. The IRS Form 8850 instructions describe the prescreening and certification process.
How much could the credit be?
In the IRS’s described general case, the credit was 40% of up to $6,000 in qualified first-year wages, for a maximum of $2,400 per qualifying employee. The maximum was not guaranteed: the amount depended on the applicable targeted-group rules and the employer’s tax situation. IRS Work Opportunity Tax Credit guidance
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How the employer type affected the tax claim
| Employer type | Claim form route | Tax limitation |
|---|---|---|
| Taxable employer | Generally calculate on Form 5884 and claim on Form 3800 | Limited by the business’s income-tax liability; unused amounts follow general business credit carryback and carryforward rules. IRS Form 5884 instructions |
| Qualifying tax-exempt employer hiring a qualified veteran who began work before 2026 | Form 5884-C | Limited to the employer’s share of Social Security tax on wages paid to qualifying employees. IRS Form 5884-C instructions |
Because the credit has ended for employees starting after December 31, 2025, the tax-form routes above are relevant to earlier eligible hires, not a new employee beginning work in 2026.
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