The Work Opportunity Tax Credit expired on December 31, 2025. As of January 1, 2026, the program is in hiatus. Congress has not yet reauthorized it. State workforce agencies are still accepting Form 8850 submissions, but they are holding them in queue. 

If your finance team treated the hiatus as a pause button, the math will hurt later. Every retroactive renewal in WOTC's history has paid out credits to employers who kept their screening and filing discipline intact during the gap. The employers who let the program lapse internally walked away from credits they were eligible to claim.

A 2026 strategy for the hiatus is not wait and see. It is keep screening, keep filing, document everything. The checklist below is what discipline looks like.

What the hiatus actually means

WOTC's authorization ended at the close of 2025. The IRS Work Opportunity Tax Credit page confirms that credits cannot be certified for hires made on or after January 1, 2026, unless and until Congress reauthorizes the program. State workforce agencies, following Department of Labor guidance, continue to accept Form 8850 within the 28-day deadline and hold the applications until the program returns.

This is not new ground. WOTC has lapsed and been retroactively reauthorized multiple times. Past reauthorizations have included credits earned during the hiatus period, as documented in the Congressional Research Service report on the program. The question for finance and HR leaders is whether your processes survive the gap intact.

Why the discipline matters more in 2026

Three factors raise the stakes this cycle.

First, hiring volume in the targeted-group categories continues to climb. Veterans, long-term unemployment recipients, SNAP recipients, and ex-felons remain a substantial share of new-hire pools across staffing, healthcare, manufacturing, and hospitality. The credit per eligible hire ranges from $2,400 to $9,600. The aggregate at scale is significant.

Second, the 28-day Form 8850 deadline does not move during a hiatus. A late filing forfeits the credit even if reauthorization is retroactive. Internal teams that pause screening lose those credits permanently.

Third, the documentation expectations on retroactive claims tend to tighten. Past hiatus periods have seen state agencies request cleaner supporting documentation when the credit returns. ETA Forms 9061 or 9062 with DD-214s for veterans, conviction records for ex-felons, SNAP verification, and other supporting materials become audit triggers later if filed sloppily now.

How to run the hiatus

This is the six-step framework for the 2026 hiatus period.

1. Keep WOTC screening live in onboarding. Every new hire still completes the screening questionnaire on or before the day of the offer. The data has to be captured at hire, not reconstructed later.

2. File Form 8850 within 28 days, every time. State workforce agencies are accepting and date-stamping. Filing on schedule preserves credit eligibility if Congress reauthorizes the program retroactively. Skipping the filing forfeits the credit.

3. Hold supporting documentation by target group. DD-214s, conviction documents, SNAP records, EAD information, and other category-specific materials should be filed under the employee record and indexed for retrieval. The retroactive claim window is short. The packet has to be ready.

4. Reconcile your hire population by month. A monthly count of eligible hires by target group lets you forecast the credit recovery the moment reauthorization passes. Surprises at year-end are how credits get left behind.

5. Brief finance leadership on the deferred liability. Treat the captured 8850s as a contingent asset. CFOs reading the forecast deserve to see the recovery number, not a footnote.

6. Watch for state-level credit alternatives. State workforce credits, enterprise zone hiring credits, and industry-specific programs do not depend on WOTC reauthorization. The hiatus is a good moment to map state opportunities you may have under-claimed, a point our partner webinar on beyond-WOTC strategy covers in operational detail.

A practical note for staffing and high-volume employers: the screening discipline that survives a hiatus tends to be the screening discipline that survives a year. The vendor question becomes whether your platform persists the data and the forms when the program is paused. If your screening pipeline goes idle when WOTC pauses, you have already lost.

Where Ryze fits

We built Ryze to run through the gaps. Embedded WOTC screening stays live in onboarding throughout the hiatus, and the platform holds the 8850 packets in retrieval-ready form. When reauthorization passes, the credits are filed without your team rebuilding the data trail.

For PEOs and multi-EIN employers, the Incentives Navigator inside Ryze also maps the state and federal credits that do not depend on WOTC, so the hiatus does not idle your tax-credit motion.

What's next

Congress has reauthorized WOTC every previous time it lapsed. The political calendar makes another retroactive reauthorization plausible in 2026. The question is timing, not existence.

The employers who recover the most credit when the program returns are the ones who treated the hiatus as an operations test, not a vacation. A monthly count, a clean packet, and a vendor that did not flinch.

Walk through your WOTC vendor evaluation against the hiatus reality before the next hire cycle ends.