Work Opportunity Credit at Risk as End-of-Year Deadline Looms

Tax attorney Joshua Odintz was quoted in a Tax Notes article on the future of the work opportunity tax credit (WOTC), set to expire at the end of the year. The provision provides tax incentives for businesses to hire individuals who historically have experienced difficulty finding employment, such as veterans and those with disabilities, in the form of a credit equal to 40 percent of an employee's first-year wages. According to the U.S. Department of Labor, state workforce development agencies administered more than 1.9 million WOTC certificates in fiscal year 2023. Mr. Odintz commented on why the One Big Beautiful Bill Act did not include a WOTC extension, observing that it is not as popular as other measures such as research and development and net interest expensing. He added that although lawmakers could compile another reconciliation bill to extend other tax credits also expiring in 2025 – most notably the Affordable Care Act premium tax credits – the list of provisions to address is short, decreasing the chances for renewal.

"Now it's riding with a much smaller group of provisions that need to be extended or could be extended, which I think is unfortunate," he said.

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