Understanding What’s Ahead for One of America’s Most Impactful Tax Credits

The Work Opportunity Tax Credit (WOTC) has long been a valuable incentive for businesses and a powerful tool for inclusive hiring across the U.S. But with its current expiration date looming on December 31, 2025, many employers are asking the same question: What happens next?

In this article, we explore what the future may hold for WOTC, including possible legislative changes, new eligibility expansions, and what employers can do now to stay ahead.

A Brief History: From TJTC to WOTC

WOTC traces its roots back to the Targeted Jobs Tax Credit (TJTC) created under the Revenue Act of 1978. That early program focused on helping underrepresented individuals access good jobs by incentivizing employers through tax relief.

By 1996, Congress restructured the program, launching the WOTC as we know it today, with simplified eligibility and an expanded list of qualifying groups. Since then, WOTC has become a cornerstone of federal employment and tax policy, supporting veterans, SNAP recipients, long-term unemployed individuals, and others facing barriers to employment.

The Current Landscape: WOTC in 2025

As of now, the WOTC is authorized through December 31, 2025, thanks to the Consolidated Appropriations Act of 2021. That’s less than 18 months away.



Recent IRS notices (such as Notice 2021-43 and Notice 2020-78) have extended submission deadlines and provided relief for employers hiring from empowerment zones, further demonstrating the program’s adaptability. Still, uncertainty about long-term authorization remains.

By the Numbers: WOTC’s Economic Impact

• Nearly 2 million certifications issued in FY 2023.
  
  
• Average credit per eligible hire: $2,400, based on IRS guidelines for employees who work 400+ hours.

• Around $4.7 billion in federal tax savings claimed by employers in 2024 (The actual amount may vary due to claim timing, utilization rates, and carryforwards).

By 2025, those numbers are expected to grow based on historical trends, increased automation, and broader adoption of screening tools:

• 2.5+ million certifications projected with the broader adoption of WOTC screening during onboarding and its integration into HR platforms.

• $6.5 billion in total tax credit savings estimated, assuming increased participation rates and average credits with expanded awareness.

Note: The 2025 projections are based on historical data trends from the U.S. Department of Labor and the IRS, along with industry benchmarks. These estimates assume continued WOTC program authorization beyond its current expiration on December 31, 2025, and increased adoption of automated screening tools during hiring processes.

What’s Next? Key Possibilities After 2025

1. Permanent Reauthorization
   There’s growing bipartisan interest in removing WOTC’s “temporary” status and making it permanent. This would eliminate year-to-year renewal concerns and give employers long-term confidence.
   
   
2. Expanded Eligibility
   New categories—such as caregivers, formerly incarcerated individuals, or those displaced by climate-related events—may be added to reflect modern workforce needs.
   
   
3. Increased Awareness and Participation
   Many mid-sized companies and small businesses still don’t take advantage of WOTC due to a lack of awareness or confusing processes. Modern platforms are changing that, making screening, documentation, and compliance easier than ever.
   
   
4. Integration with Workforce Development

There’s potential for WOTC to integrate more closely with federal and state training initiatives, aligning tax credits with upskilling and career development programs.

How HRlogics Helps You Maximize WOTC

HRlogics helps businesses identify, screen, and certify eligible hires under WOTC, so you never miss out on credits your workforce qualifies for.

Total WOTC, our full-service solution, streamlines every step of the WOTC lifecycle:

• Automated Eligibility Screening
  Instantly flag qualifying new hires through digital WOTC surveys and integrations.
  
  
• State-Specific Submissions
  Submit documentation through state portals using our automated API, reducing turnaround time and improving certification rates.
  
  
• Documentation Management
  Let our team handle follow-ups, supporting documents, and deadlines—so you stay compliant and audit-ready.
  
  
• Real-Time Tracking & Reports
  Monitor credit progress in real-time and schedule custom reports for your finance or HR team.

With 20% of new hires typically qualifying for WOTC, the savings can be substantial, especially when automated and optimized.

Don’t wait until it’s too late. Future-proof your tax strategy today

With December 2025 fast approaching, it’s time to capture the credits your business qualifies for.

Let HRlogics help you turn everyday hiring into lasting tax savings and workforce impact.