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Under current IRS guidance, employees who begin work after December 31, 2025, do not qualify for the Work Opportunity Tax Credit (WOTC). The IRS also says Form 8850 is no longer in use. The eligibility groups below therefore apply to hires during the credit’s authorized period, unless Congress has since extended it. The IRS status notice was issued March 19, 2026.
Who qualified for WOTC during its authorized period?
A new employee had to be certified as belonging to one of ten statutory target groups. A broad label—such as “veteran” or “former offender”—was not enough by itself: each group had its own requirements involving benefit receipt, age, residence, referral, unemployment, or timing. The IRS’s WOTC program page and Instructions for Form 8850 set out the operative definitions for the authorized period.
1. Qualified IV-A recipient (TANF)
The employee had to be a member of a family receiving assistance under a state program funded under part A of title IV of the Social Security Act relating to Temporary Assistance for Needy Families (TANF). The family had to receive assistance for at least 9 months during the 18-month period ending on the employee’s hire date.
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A veteran had to meet at least one statutory test. These included family SNAP receipt for at least 3 months during the 15-month period ending on the hire date; unemployment totaling at least 4 weeks but less than 6 months in the prior year; or unemployment totaling at least 6 months in the prior year. Other tests involved service-connected disability and the timing of discharge or unemployment. The Form 8850 instructions also specify who counted as a veteran for this credit.
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3. Qualified ex-felon
The employee had to have been convicted of a felony under federal or state law and hired no more than 1 year after the conviction or release from prison for that felony.
4. Designated community resident
Generally, the employee had to be age 18 to under 40 and live in an empowerment zone or rural renewal county on the hire date. Applicable geographic designations should be checked against the relevant Form 8850 instructions.
5. Vocational rehabilitation referral
The employee had to have a physical or mental disability and be referred while receiving, or after completing, qualifying rehabilitation services through an approved state plan, a Ticket to Work employment network plan, or a VA program.
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Generally, the employee had to be age 16 or 17 within the statutory timing rule, perform services for the employer between May 1 and September 15, and reside in an empowerment zone. Specific age and employment conditions also applied.
7. Qualified SNAP recipient
Generally, the employee had to be age 18 to under 40 on the hire date and belong to a family receiving SNAP for the previous 6 months or at least 3 of the previous 5 months.
8. Qualified SSI recipient
The employee had to have received Supplemental Security Income (SSI) for a month ending within the 60-day period ending on the hire date.
9. Long-term family assistance recipient
The employee had to meet specified extended TANF receipt tests, or have recently stopped qualifying because a federal or state time limit ended payments. The alternative tests and applicable two-year periods are detailed in the Form 8850 instructions.
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10. Qualified long-term unemployment recipient
The employee had to be unemployed for at least 27 consecutive weeks at hiring and have received unemployment compensation during some or all of that unemployment period.
Independent reader supportYour contribution helps us test, update, and keep practical guides available for everyone.How employers had to request certification for eligible hires
During the authorized period, having an employee who appeared to meet a target-group description was not enough. The employer needed state workforce agency certification, and submitting the paperwork alone did not establish eligibility.
- Prescreen by the offer date: the employer and applicant had to complete Form 8850 on or before the day a job offer was made.
- Submit after the employee started: the employer generally sent Form 8850 to the state workforce agency for the state where the employee worked no later than the 28th day after the employee began work.
- Provide the required evidence: the state workforce agency reviewed the request for certification. Department of Labor filing guidance describes the process, including use of ETA Form 9175 for the long-term unemployment group.
- Meet the applicable work-hours rule: the employee also had to satisfy the minimum-hours requirement for the credit.
The IRS explains the historical filing and credit rules on its program page and in the Form 8850 instructions; its WOTC FAQ describes the historical deadline and calculation.
Quick Recap
Which eligibility numbers matter?
| Rule | What it means |
|---|---|
| 9 months in 18 months | Minimum family TANF assistance for the qualified IV-A recipient group, measured over the 18 months ending on the hire date. IRS statutory threshold; see IRS program page and Form 8850 instructions. |
| 27 consecutive weeks | Minimum unemployment period at hiring for the qualified long-term unemployment group, with unemployment compensation received during some or all of the period. IRS statutory threshold; see IRS program page and Form 8850 instructions. |
| 28 days after work began | General Form 8850 submission deadline during the authorized period. IRS filing deadline; see the IRS FAQ. |
| 40% of qualified wages for at least 400 hours in the first year | IRS description of the general historical credit calculation; this is not a benefit for employees starting after December 31, 2025. See the IRS FAQ. |
What to check before relying on the rules
- Confirm whether the employee’s start date fell within a period authorized by law; the IRS says post-December 31, 2025 starts are not covered under current guidance.
- Check the specific target-group test rather than relying on a general identity or the employee’s own description.
- For past eligible hires, distinguish target-group eligibility from agency certification: both the prescribed timing and certification process mattered.
- Use the applicable IRS instructions and agency guidance for the relevant hire date. Older forms or instructions may not reflect later legal changes.
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