WOTC's history dates to 1996, when it was established under the Small Business Job Protection Act. Since its inception, this credit has been repeatedly extended — most recently through a COVID relief bill in 2021. Because it was not a part of a larger tax extension bill (The Tax Cuts and Jobs Act), WOTC was not included in the tax provisions extended via the "One Big Beautiful Bill" Act which was signed into law earlier this year.  As a result, WOTC expired on 12/31/25.

Upon expiration, employers will face significantly higher costs to develop and retain the WOTC-eligible workers listed above. In fact, a recent study estimates that increased costs on employers due to WOTC’s expiration will cost the economy 131,000 direct jobs a year.

The Critical Labor Coalition supports the "Improve and Enhance the Work Opportunity Tax Credit Act" (S. 3265/H.R. 6231) - a bipartisan, bicameral bill which (1) extends WOTC for five years, (2) increases the credit amount from 40% to 50% of qualified wages, (3) indexes the credit to address inflation, (4) adds a second level of credit for employees who work 400 or more hours, and (5) makes employers of spouses of military personnel who are currently serving eligible for the credit.  In addition to extending WOTC, this important piece of legislation would help target communities with lower workforce participation rates and provide relief to essential industries that are facing workforce shortages.

Ask your members of Congress to cosponsor the "Improve and Enhance the WOTC Act" and retroactively extend WOTC!