2026 Budget Boosters: The Most Overlooked Tax Credits That Reward Inclusive Hiring and Workforce Support

The Overlooked Tax Credits Shaping 2026 Budgets

As 2025 comes to a close, HR, Finance, and executive teams face mounting pressure to deliver more with less. Budgets are tightening. Labor markets remain competitive. And expectations around inclusive hiring, accessibility, paid leave, and workforce support continue to grow.

Yet, as organizations finalize their 2026 workforce plans, most are overlooking some of the most powerful tools available to them: federal and state tax credits designed to reward inclusive hiring, strengthen workforce stability, and reduce the financial burden of offering essential employee supports.

WOTC is often the only incentive teams consider, but even that program remains massively underutilized. Beyond it lies an entire ecosystem of incentives that most employers never tap into — even though they directly support priority HR initiatives.

This article highlights the overlooked tax credits your organization should be planning for in 2026, backed by the most current publicly available federal data.

WOTC: Still Underutilized — Especially for Certain Target Groups

The Work Opportunity Tax Credit (WOTC) continues to be one of the most financially impactful federal hiring incentives — yet it remains underused across targeted groups that many employers actively recruit, including ex-offenders, veterans, long-term family assistance recipients, and long-term unemployed job seekers.

According to the U.S. Department of Labor WOTC Performance Report:

• FY 2022: 2,569,056 WOTC certifications
• FY 2023: 1,982,858 certifications
• FY 2024: 1,577,683 certifications

That is nearly a 1 million certification drop in just two years — a clear indication that many businesses are missing savings they could claim.

Veteran hiring offers another window into underuse. The National Employment Opportunity Network (NEON) reported that 191,000 veterans were certified for WOTC in FY 2023, a 52% increase from FY 2015, but still far below the number of veterans entering or reentering the workforce.

Groups HR tends to overlook — yet offer some of the largest credits

• Ex-offenders
• Long-term TANF recipients
• Long-term unemployed individuals
• SNAP recipients
• Certain high-value veteran categories (such as those with service-connected disabilities)

Many hires qualify for up to $2,400, while eligible veterans may generate up to $9,600 per hire.

Going into 2026, organizations with consistent hiring volume or frontline turnover will leave substantial money unclaimed if they do not improve their WOTC processes.

Beyond WOTC: The Underused Credits Your Business Should Prioritize for 2026

1. Disabled Access Credit: A High-ROI Complement to Accessibility and ADA Initiatives

Workplace accessibility investment continues to grow in importance — and federal incentives help cover those costs.

The IRS notes that eligible small businesses can claim up to $5,000 annually through the Disabled Access Credit, which covers 50% of qualified accessibility expenditures up to $10,250 (after excluding the first $250). Businesses of any size may also benefit from the Architectural Barrier Removal Deduction, which allows up to $15,000 per year for removing physical or transportation barriers that improve access for people with disabilities or seniors.

This credit commonly offsets costs such as:

• Physical accessibility improvements
• Adaptive technologies
• Accessible communication materials
• Removing architectural and digital barriers

As organizations finalize 2026 accessibility budgets, the Disabled Access Credit should be a central part of the planning discussion — yet most organizations still fully self-fund their compliance initiatives.

2. Employer-Provided Childcare Credit (Section 45F): A Major Opportunity for 2026 Retention Strategies

Across every industry, childcare access directly affects employee attendance, retention, and recruiting. Section 45F remains one of the most generous and underused federal credits for employer-sponsored childcare.

According to the IRS, with the Employer-Provided Childcare Credit:

• Businesses may claim up to $150,000 annually
• The credit equals 25% of qualified childcare facility expenditures plus
• 10% of childcare resource and referral service expenditures

Despite widespread workforce shortages tied to childcare gaps, few employers take advantage of this program.

For 2026, HR and Finance teams planning benefits and retention strategies should prioritize evaluating their eligibility for 45F — especially those with frontline workforces or hourly roles highly affected by absenteeism.

3. Employer Credit for Paid Family and Medical Leave (Section 45S): A Critical 2026 Planning Window

As businesses finalize 2026 leave policies, Section 45S remains a powerful tool that continues through wages paid for leave taken before January 1, 2026.

According to the IRS, eligible employers may claim a credit between 12.5% and 25% of wages paid during qualifying periods of paid family and medical leave (with higher wage replacement rates qualifying for higher credit percentages). Download the IRS’s Instructions for Form 8994 here.

For organizations planning 2026 leave policies or updating employee handbooks, Section 45S should be a discussion point now — not after benefit design is finalized.

Why These Credits Keep Getting Overlooked

As organizations prepare for the new year, several recurring barriers cause tax credits to remain underutilized:

• HR and Finance often operate in separate systems
• Eligibility varies by location, employee group, and program, making manual tracking difficult
• Rules and deadlines shift, creating uncertainty
• Credit stacking requires compliance safeguards
• Year-end planning cycles focus on cost control, not tax strategy
• Most teams rely on outdated methods like spreadsheets or static onboarding questionnaires

This creates a perfect storm where opportunities exist, but processes fail to capture them consistently.

Organizations that proactively integrate tax incentives into their 2026 hiring, accessibility, leave, and childcare planning will have a measurable advantage.

How HR and Finance Can Turn Tax Credits Into a 2026 Funding Strategy

To fully leverage overlooked incentives in 2026, organizations should:

1. Map credits to strategic workforce priorities

• Veteran hiring → WOTC veteran categories
• Second-chance hiring → Ex-offender credit categories
• Accessibility → Disabled Access Credit
• Childcare support → Section 45F
• Paid leave → Section 45S
• High-turnover roles → Multiple WOTC categories

2. Establish shared HR–Finance workflows

Integrate pre-screening, policy evaluation, and payroll data into a unified process that identifies credit opportunities early.

3. Use technology to eliminate manual gaps

This is where Ryze Incentives Navigator provides a future-ready advantage for 2026 planning.

Ryze Incentives Navigator: Your Tool for Maximizing Underutilized Tax Credits

As businesses enter 2026, the challenge is no longer finding the credits — it’s operationalizing them.

Ryze Incentives Navigator provides HR, Finance, and Tax teams a unified platform for turning overlooked incentives into measurable savings.

Key capabilities for your 2026 tax strategy include:

Real-Time Incentive Discovery Across 3,000+ Credits
Scan federal and state programs tied to hiring, accessibility, childcare, leave, and workforce development.

Location, Hiring, and Workforce Mapping
Visualize how your 2026 hiring and site plans intersect with incentive eligibility.

Built-In Savings Estimations and Forecasts
Get instant calculations that help Finance model ROI before budget approval.

Unified HR–Finance Collaboration
Integrate with HRIS, payroll, and financial systems to replace manual research, paperwork, and disconnected processes.

Compliance-Ready Documentation
Ensure WOTC submissions, accessibility expenditures, childcare investments, and leave-related credits are validated and audit-ready.

Start 2026 With a Strategic Advantage

Underutilized tax credits represent one of the most powerful — and most ignored — sources of funding for workforce programs. As you finalize your 2026 hiring, retention, accessibility, and paid leave plans, these incentives offer a direct path to lowering labor costs, strengthening benefits, supporting inclusive hiring, improving retention in high-turnover roles, and advancing accessibility and family-care priorities—all while generating measurable ROI across HR and Finance.

Ready to discover the savings you’ve been missing?

Schedule a demo today and uncover the overlooked tax credits that will optimize your 2026 budget and workforce strategy.