As manufacturers and other industrial employers — including biofuels and food and beverage processors — continue to navigate workforce shortages, rising labor costs, and margin pressure, tax incentives like the Work Opportunity Tax Credit (WOTC) have played an important role in offsetting hiring costs. That’s why news of the credit’s expiration at the end of 2025 has raised questions across these industries.

While the WOTC officially sunset on December 31, 2025, history suggests this may not be the end of the story. In fact, many employers are choosing to stay the course — continuing to screen and file as they always have. Here’s why that approach may be the most prudent path forward.

Current Status: Expired, but Not Necessarily Gone

As of January 1, 2026, the WOTC is not authorized for employees who begin work on or after that date unless Congress acts. State Workforce Agencies (SWAs) may continue to accept WOTC submissions during this lapse, but they are unable to issue certifications until the program is formally reauthorized.

In practical terms, this means the credit isn’t currently available — but the administrative infrastructure remains in place, and filings are still being accepted.

This “limbo” phase isn’t new. WOTC has lapsed multiple times in the past, only to be reinstated retroactively by Congress. When that happens, only employers who filed timely paperwork are able to claim the credit.

Historical Precedent: Congress Has Revisited WOTC Before

From a policy standpoint, WOTC has long received bipartisan support because it encourages employment among historically underrepresented groups while supporting employers’ hiring efforts. Previous lapses have often been followed by retroactive extensions, allowing businesses to claim credits for qualifying hires made during the gap.

For manufacturers, biofuels producers, and food and beverage processors — who frequently hire for entry-level, production, logistics, and maintenance roles — this precedent matters. Many WOTC-eligible employees fall into categories common across industrial workforces, such as veterans, individuals receiving certain forms of public assistance, or those facing employment barriers.

The key takeaway: employers who stop filing during a lapse may permanently forfeit credits if the program is retroactively extended.

Legislative Outlook: Expansion on the Table

Currently, bipartisan legislation — the Improve and Enhance the WOTC Act — has been introduced in both the House and Senate. While not yet enacted, the proposed bills would:

  • Extend WOTC through December 31, 2030
  • Increase the credit percentage from 40% to 50%
  • Index credit amounts for inflation
  • Expand eligibility (including military spouses)
  • Remove the age cap for SNAP recipients

If passed, these changes would make WOTC more valuable and accessible than ever, particularly for manufacturers competing for labor in tight markets.

The uncertainty today isn’t about whether WOTC has value; it’s about timing.

Why Proactive Compliance Still Matters

Even during a lapse, manufacturers and other qualifying employers are encouraged to maintain their existing WOTC processes without interruption:

  • Complete IRS Form 8850 at or before the job offer
  • Submit Form 8850 and ETA Form 9061 to the appropriate State Workforce Agency within 28 days of the employee’s start date

These steps preserve eligibility if Congress extends the credit retroactively. Missing the filing window, however, eliminates the opportunity entirely.

From an operational standpoint, consistency matters. For organizations with high-volume, multi-location, or shift-based hiring environments, stopping and restarting workflows can lead to errors, missed deadlines, and unnecessary strain on HR teams.

An Industrial Mindset: Control What You Can

Industrial employers are no strangers to planning amid uncertainty. Whether it’s supply chain volatility, regulatory change, or labor availability, the most successful organizations focus on what’s within their control.

With WOTC, that means maintaining compliance discipline, documenting eligibility, and keeping processes intact — even when the credit itself is temporarily unavailable. This approach preserves optionality and positions organizations to act quickly if legislation moves forward.

Looking Ahead

While no one can predict exactly when or how Congress will act, the broader direction is clear: WOTC remains a priority in workforce and tax policy discussions. Employers who continue filing now are better positioned to benefit later.

If you’re unsure whether your current WOTC process is being handled correctly or maximized — particularly in a high-volume or complex hiring environment —an outside review can help identify gaps and ensure filings are timely and complete.

Need a quick audit of your WOTC process? Pinion can help you confirm you’re positioned to take advantage of future developments — without disrupting day-to-day operations.