This is the third article in our 90-Day WOTC Watch Series of articles, exploring the impact of how the SNAP changes affect WOTC activity and whether Congress moves to extend the credit into 2026. Click here for the first and second articles in the series.

Summary

• Employment is down in December 2025 compared to December 2024, while internally SNAP WOTC applications have increased.
• The Work Opportunity Tax Credit is in a Hiatus status effective January 1, 2026.

SNAP Program Changes & Their Impact on hiring in the last 30 days

Our internal data shows almost a 20% increase in the number of WOTC applications received for the SNAP category in December 2025 compared with December 2024.  During this same period, overall hiring growth slowed dramatically.  Per the Bureau of Labor Statistics, +256,000 jobs were added in December 2024, while only +50,000 jobs were added in December 2025.  Despite this trend, our data shows a rise in the number of SNAP recipients being hired, which may be a benefit to employers who participate in the WOTC program.  Additionally, as the available labor pool expands and SNAP work requirements increase, employers may see an increase in the amount of the credit employers receive for hiring qualified SNAP recipients.

Employment up 256,000 in December 2024; average gain of 186,000 jobs per month in 2024: The Economics Daily: U.S. Bureau of Labor Statistics

Current Employment Statistics – CES (National): U.S. Bureau of Labor Statistics

Current Status of the Federal Work Opportunity Tax Credit

The Work Opportunity Tax Credit, a federal tax credit for employers who hire individuals who face barriers to employment, is currently in “Hiatus” status effective January 1, 2026.  The program expired on December 31, 2025, and hasn’t been reauthorized by Congress at the time of publication of this article.  When a Hiatus occurs, the State Workforce Agencies, as the program’s administrators, can continue to accept WOTC applications for Certification for employees hired on or after the start date of the Hiatus.  Understanding how a hiatus and lapse work will help employers be prepared and avoid missing potential tax credits.

What Employers Need To Know

• WOTC Hiatuses and lapses are not unusual.  Lapses have occurred six times since 1998, and the program has been continually reauthorized.
• There is a substantial investment in the WOTC infrastructure, and many industries are actively lobbying Congress to reauthorize WOTC.
• WOTC is a key component of many businesses’ financial and tax strategies.
• For the current Hiatus, applications are being accepted for employees hired on or after January 1, 2026.  WOTC determinations for these employees will be released when the program is reauthorized.
• You can claim WOTC Certificates issued in 2026 for employees hired on or before December 31, 2025, if the program isn’t reauthorized, even if the credit will be claimed in the 2026 tax year.

What Employers Need To Do:

• Continue your WOTC new hire screening process so you don’t miss out on any potential tax credits.
• Ensure that the US DOL 28-days from start date submission requirement is still being met – State Workforce Agencies are still accepting applications for Certification.
• Do not pause your new hire screening process – if you do, you may not be able to submit those paused applications if the program isn’t retroactively reauthorized. 

The Future of WOTC

Congress is currently considering the Improve and Enhance the WOTC Act (S. 3265 / H.R. 6231), introduced by Rep. Lloyd Smucker’s (PA-11).  If approved, this will extend the credit for five years, through December 31, 2030.  The proposed enhancements are:

• Increase the credit percentage from 40% to 50% of qualified wages
• Removal of the current age restriction for SNAP recipients (it’s currently limited to ages 18–39)
• Incentivize employee retention by expansion of the credit for those who work 400 or more hours
• Expand eligibility to include military spouses
• Index the credit to inflation

When the government reopened, it set a January 30, 2026, deadline to finalize funding for the rest of the fiscal year.  Tax credits, including WOTC, could be renewed then.  Learn more about the proposal here:

US Congress House Bill 6231

Rep. Lloyd Smucker’s (PA-11) proposed WOTC Act enhancements

Why You Should Start Participating In WOTC Now

WOTC rewards employers who hire employees who face barriers to employment and gives those individuals an opportunity to enhance their lives.  If you’re not claiming the tax credit, now is a great time to start.  Even though the program is in a hiatus status, employers can start their WOTC process now to ensure they don’t miss out on any potential tax credits. 

• Begin your WOTC new hire screening process now to protect your eligibility
• The US DOL 28-days from start date submission requirement is still in effect and applications are being accepted by the State Workforce Agencies
• If the program is retroactively renewed, you won’t have to go back to your employees and have them complete the screening process.  Additionally, you’ll avoid missing out on those who are no longer employed
• If you need a WOTC partner, McMillian & Associates is ready to help you integrate WOTC into your onboarding process

Learn more here: 

US DOL Work Opportunity Tax Credits

Learn About Tax Credits and Incentives

WOTC History

The Federal Work Opportunity Tax Credit, or WOTC, is a general business credit provided under section 51 of the Internal Revenue Code (Code) that is jointly administered by the Internal Revenue Service (IRS) and the Department of Labor (DOL). The WOTC is available for wages paid to certain individuals who begin work on or before December 31, 2025. The WOTC may be claimed by any employer who hires and pays or incurs wages to certain individuals who are certified by a designated local agency (sometimes referred to as a State Workforce Agency) as being a member of one of 10 targeted groups. In general, the WOTC amount is equal to 40% of up to $6,000.00 wages paid to, or incurred on behalf of, an individual who:

• is in their first year of employment;
• is certified as being a member of a targeted group; and
• performs at least 400 hours of services for that employer.

The maximum tax credit is $2,400.00. A 25% rate applies to wages for individuals who perform fewer than 400 but at least 120 hours of service for the employer. Up to $24,000.00 in wages may be taken into account when determining the WOTC for certain qualified veterans. An employer cannot claim the WOTC for employees who are rehired or the employer’s family members. 

Learn about WOTC here:
Federal Work Opportunity Tax Credit (WOTC)
5 Tips for Maximizing the Federal Work Opportunity Tax Credit
IRS Work Opportunity Tax Credit

Key Takeaways

• WOTC expired December 31, 2025. The program is in Hiatus effective January 1, 2026 and will be in Hiatus until it’s reauthorized.
• Employers should stay proactive and continue submitting applications because the US DOL 28-days-from-start-date submission requirement is still in effect.
• Now is a great time to begin participating in WOTC so you secure your future eligibility for this Federal tax credit.

Connect With Us

To learn more about how McMillian & Associates can help you get started with the Work Opportunity Tax Credit, connect with us here.