WOTC Legislative Update: What Pending Changes Could Mean for Employers in 2026
Marcel Abandonato, MJA & Associates, CALSAGA Associate Member
As Congress continues discussions around federal workforce and tax policy, the Work Opportunity Tax Credit (WOTC) is once again in focus. Proposed legislation aimed at enhancing and modernizing the program could reshape how employers calculate credits, qualify new hires, and capture savings.
For businesses that rely on hiring incentives to control labor costs, the outcome of this legislation could have a meaningful financial impact.
Now is the time to understand what’s changing — and how to prepare.
Why WOTC Still Matters
For over 25 years, the Work Opportunity Tax Credit has helped employers reduce federal tax liability while expanding opportunities for individuals facing barriers to employment.
Employers may earn credits of up to $2,400–$9,600 per eligible hire, depending on the target group and hours worked.
Common qualifying groups include:
- Veterans
- SNAP recipients
- Long-term unemployed individuals
- Ex-felons
- SSI recipients
- Youth employees in designated areas
For many organizations — especially those in security, staffing, retail, hospitality, manufacturing, and healthcare — WOTC represents six- and seven-figure annual tax savings.
What’s Being Proposed in Congress
While final language is still being negotiated, current proposals suggest several enhancements to strengthen and extend the program:
Expanded eligibility
Additional target groups may be added, allowing more new hires to qualify.
Updated credit structure
Discussions include adjusting wage caps and credit percentages to better reward long-term employment.
Program modernization
Streamlined documentation and certification processes could reduce administrative burdens and improve processing timelines.
Long-term stability
Lawmakers are signaling support for making WOTC a more predictable, long-term workforce incentive rather than a short-term extension.
If enacted, these updates could increase available credits while simplifying compliance — a win for both employers and job seekers.
What Employers Should Do Now
Even before legislation is finalized, proactive businesses can position themselves to maximize savings:
– Review your current WOTC capture rate
Are you screening 100% of new hires? Many companies miss 20–40% of eligible credits due to process gaps.
– Strengthen onboarding workflows
Ensure applications, prescreens, and documentation are completed accurately and on time.
– Align recruiting with incentives
Expanded eligibility may open opportunities to target new workforce segments strategically.
– Prepare for quick implementation
When changes pass, early adopters typically benefit most.
The Opportunity Ahead
Whether the legislation expands credits, simplifies processes, or both, one thing is clear:
WOTC remains one of the most valuable and underutilized tax incentives available to employers.
Organizations that stay informed and optimize their programs stand to gain a significant competitive advantage.
Ready to Maximize Your WOTC Savings?
If you’re unsure whether your current process is capturing every available dollar — or want guidance on how upcoming legislation could affect your business — now is the perfect time for a review.
MJA & Associates has helped employers for over 20 years reduce tax liability through WOTC and other employment-based incentives.
We can help you:
- Evaluate your current WOTC performance
- Identify missed credits
- Improve compliance and documentation
- Prepare for upcoming legislative changes
- Automate and streamline your process
Contact us today for a complimentary WOTC program review or consultation.
For more information or to learn more about WOTC please contact
Marcel Abandonato at marcel@mja-associates.com or call 951.272.8294.
Marcel Abandonato is the President and CEO of MJA & Associates, Inc., a leading provider of Work Opportunity Tax Credit (WOTC) consulting and compliance services. For more than two decades, Marcel has worked with businesses across the country to unlock millions of dollars in federal tax credits by implementing compliant, efficient, and scalable WOTC programs.
Marcel is widely regarded as a subject-matter expert on WOTC legislation, program renewals, and best practices—particularly for security firms,staffing firms, multi-state employers, and organizations with high-volume hiring. Under his leadership, MJA & Associates partners with leading HR and staffing technology platforms to modernize WOTC screening and processing, helping employers improve participation rates and maximize return on investment.