The IRS has announced that the Work Opportunity Tax Credit (WOTC) will continue to be available to employers through the end of 2025. This federal incentive is designed to encourage businesses to hire individuals who face significant barriers to employment, such as veterans, long-term unemployment recipients, those receiving public assistance, and individuals re-entering the workforce after incarceration. By extending this credit, the IRS seeks to strengthen economic growth and thus create more pathways to employment for those who need it most.
Additionally, employers must first obtain certification that their new hire is a member of one of the eligible groups before claiming the credit. Once approved, businesses may apply the Work Opportunity Credit against their tax liability, generally based on wages paid during the employee’s first year. Further, a special provision allows tax-exempt organizations to claim the credit when hiring qualified veterans. The IRS encourages employers to learn more about this opportunity and take advantage of the program before it expires at the end of 2025.
