For HR professionals, finance teams, and business leaders, inclusive hiring has evolved from a “nice-to-have” into a strategic advantage. Yet, turning good intentions into measurable results often stalls due to limited budgets, unclear ROI, and complex processes.
The Work Opportunity Tax Credit (WOTC) bridges that gap—offering employers a structured, federally backed incentive to hire individuals who have historically faced barriers to employment. When strategically applied, the WOTC transforms socially responsible hiring into tangible financial and operational value.
Building a diverse and resilient workforce is essential for business growth and compliance alike. But implementing equitable hiring practices takes resources—resources many HR and finance leaders struggle to secure.
Certification data from the U.S. Department of Labor (DOL) illustrates this gap. In FY 2022, 2,569,056 WOTC certifications were issued nationwide, but that number dropped to 1,982,858 in FY 2023 and 1,577,683 in FY 2024 (Source: DOL). This decline signals that organizations may be missing opportunities to claim valuable incentives already available to them.
For employers, the WOTC offers more than tax relief—it’s a way to fund inclusive hiring, strengthen retention, and align workforce goals with measurable economic outcomes.
Formerly known as the Targeted Jobs Tax Credit (1978–1994), the Work Opportunity Tax Credit was enacted in 1994 to encourage employers to hire individuals from specific targeted groups that face significant barriers to employment.
Employers may qualify for a federal tax credit of up to $9,600 per eligible hire, depending on the employee’s classification, hours worked, and wages earned. The base program credit averages around $1,100 per hire, while higher-tier categories such as qualified veterans or long-term TANF recipients can reach the $9,600 ceiling. Unused credits may be carried forward for up to 20 years.
Targeted groups include:
The WOTC’s purpose is straightforward: to reduce hiring risk for employers while helping individuals gain meaningful, long-term employment.
Since its inception, the WOTC has been extended 13 times, highlighting its bipartisan support and ongoing relevance. Most recently renewed under the Taxpayer Certainty and Disaster Tax Relief Act of 2020, the WOTC is currently authorized through December 31, 2025 (Source: IRS).
Pending legislation—such as the Smucker-Horsford Bill (H.R. 1177) and Cassidy-Hassan Bill (S.B. 492)—seeks to extend and modernize the program to strengthen its reach and efficiency.
However, with its expiration date approaching, many employers remain uncertain about future provisions. Acting now ensures your organization can capture available credits, lock in compliance, and prepare for any upcoming reforms.
The WOTC delivers measurable results—for both employers and the broader economy:
These outcomes demonstrate how the WOTC simultaneously supports economic mobility and delivers real ROI to participating businesses.
Too often, HR and finance teams operate in silos—missing opportunities to maximize available credits. Leading organizations are breaking down those barriers by:
This integration turns the WOTC from a tax compliance task into a strategic growth driver.
Capturing WOTC credits is valuable—but communicating their impact is equally important.
For organizations ready to simplify and scale their incentive strategy, Ryze Incentives Navigator by HRlogics offers a powerful way to discover, estimate, and capture WOTC and other federal and state tax credits.
Key features include:
Backed by over a century of combined tax credit expertise, Ryze Incentives Navigator turns complex incentive management into a clear, data-driven strategy.
The Work Opportunity Tax Credit isn’t just a federal incentive—it’s a strategic advantage that turns everyday hiring decisions into measurable business and social outcomes. By identifying eligible candidates, aligning tax and HR functions, and tracking results through smart tools, organizations can turn compliance into opportunity.
WOTC helps employers do more than fill roles—it helps them invest in people, strengthen communities, and unlock real financial value that supports long-term workforce stability.
Take Action Now - Schedule a demo today to discover how Ryze Incentives Navigator by HRlogics helps you uncover and optimize tax credit opportunities that fund inclusive growth and long-term success.
Launch or continue WOTC screening in your hiring process so that you can take advantage of retroactive credits when WOTC comes out of hiatus.
Piggyback state credits where applicable.
Screen locations for Federal Empowerment Zones through the Ryze Incentives Navigator to ensure every credit is being found and processed before the end of the year.
Tell your legislator that you want them to make WOTC and FEZ permanent credits and the impact doing so will have on your business: Find your legislator here. Sample letter can be found here.