You want to hire a veteran. Good call. But hiring is a cost, and you run a budget. So here is a fair question: does the government help pay for it?

The answer is yes, through a federal tax credit called the Work Opportunity Tax Credit (WOTC). When you hire a qualified veteran, you can claim a credit worth up to $9,600 per person. That is a real dollar-for-dollar cut to your federal tax bill. Not a deduction. A credit.

This guide walks through how the veteran WOTC works. Who qualifies, how much you get, and the exact forms and deadlines to claim it. It is written for the person who signs off on the hire. A small or midsize business owner, a hiring manager, or a finance lead. One thing up front, and we cover it in full below. The credit lapsed on January 1, 2026. Congress has a bill to bring it back. So read the timing section before you plan around it.

What is the Work Opportunity Tax Credit?

The WOTC is a federal tax credit for employers. You get it when you hire someone from a group the government wants to help find work. Veterans are one of those groups. So are SNAP recipients, ex-felons, and the long-term unemployed.

The credit is run jointly by the IRS and the U.S. Department of Labor. The Labor Department sets the rules through state workforce agencies. The IRS handles the actual tax claim. You deal with both, but the steps are simple once you know them.

Here is the part that matters for your budget. A tax credit is not the same as a tax deduction. A deduction lowers the income you pay tax on. A credit lowers the tax itself, dollar for dollar. So a $9,600 credit cuts your federal tax bill by $9,600. That is why this one is worth the paperwork.

Which veterans qualify for the WOTC?

Not every veteran you hire counts. The credit targets veterans who face the hardest time getting back to work. The IRS lists five qualified veteran groups. Your new hire needs to fit one of them on the day they start.

Here are the five groups, straight from IRS guidance:

• SNAP veteran: A veteran whose family got SNAP food benefits for at least 3 months in the 15 months before the hire date.
• Short-term unemployed veteran: Unemployed for at least 4 weeks, but less than 6 months, in the year before the hire date.
• Long-term unemployed veteran: Unemployed for at least 6 months in the year before the hire date.
• Recently separated disabled veteran: A veteran with a service-connected disability, hired within 1 year of being discharged or released from active duty.
• Long-term unemployed disabled veteran: A veteran with a service-connected disability who was unemployed at least 6 months in the year before the hire.

The weeks of unemployment do not have to be in a row. They just have to add up over the year. A disability has to be service-connected and rated by the VA. The veteran does not tell you all this. The state confirms it during the certification step we cover below.

How much is the credit worth per veteran?

The credit amount depends on the veteran group, how many hours they work, and how much you pay them in the first year. Veterans get a bigger wage cap than most other WOTC groups. That is why the veteran credit can run so high.

The math has two parts. First, the hours rule. If your new hire works at least 400 hours in their first year, you get 40% of their qualified first-year wages. If they work at least 120 hours but less than 400, you get 25%. Under 120 hours and you get nothing. So this rewards real, sustained hires, not a quick two-week trial.

Second, the wage cap. Each veteran group has a limit on how much wage counts. The wage cap is what drives the size of the credit. Here is how it breaks down by group, based on IRS figures.

So the top credit is $9,600. That goes to employers who hire a disabled veteran who was out of work at least 6 months. For that group, up to $24,000 of first-year wages counts toward the credit. The IRS confirms the credit can be as high as $9,600 per veteran for for-profit employers.

Tax-exempt employers can also claim it, but the rate is lower. For a nonprofit, the top veteran credit is up to $6,240. Same groups, smaller percentage. We cover the nonprofit form below.

What is the current status of the WOTC in 2026?

This is the part you have to read before you plan around the credit. Under current law, the WOTC applies to hires made on or before December 31, 2025. The authority to claim it on new hires lapsed on January 1, 2026.

So as of today, you cannot claim the credit for a veteran you hire right now. That is the law as written. It does not mean the program is dead. The WOTC has lapsed before and been brought back many times, often with the new dates applied to hires going back to the lapse.

Congress is working on it. A bill called the Improve and Enhance the Work Opportunity Tax Credit Act (H.R. 1177) would bring the credit back and raise it. That bill has not passed. So treat any future hire as a "maybe" until Congress acts. There is one sign the program is not going away. The Consolidated Appropriations Act of 2026 gave the Department of Labor $17.5 million to keep running WOTC certifications at the state level.

Why does this matter for you now? Because the hire still makes sense on its own. The credit is a bonus, not the reason to hire a veteran. And if Congress restores the WOTC the way it has before, the employers who kept their paperwork clean get paid. The ones who skipped it miss out.

How do you claim the veteran WOTC? The forms and deadlines

The process is short, but the deadline is strict. Miss the 28-day window and you lose the credit for that hire. So build this into your onboarding the day someone starts.

There are two stages. First you get the worker certified by the state. Then you claim the credit on your tax return. Here is the order.

The 28-day rule trips up more employers than anything else. Form 8850 has to reach your state workforce agency within 28 calendar days of the start date. Not the offer date. The start date. If you wait until tax season, it is already too late.

The forms split by employer type. A for-profit business claims the credit with Form 5884, then rolls it into the general business credit on Form 3800. A tax-exempt organization uses Form 5884-C instead and claims it against payroll taxes. Both still start with Form 8850 and the 28-day deadline.

Is the WOTC worth the paperwork for a small business?

Fair question. You are not a tax department. You have a business to run. So is a few forms worth it for one hire?

Run the math on one hire. Say you bring on a disabled veteran who was out of work for 8 months. You pay them well in year one. If the credit is in force, that single hire can be worth up to $9,600 off your federal taxes. That is more than the cost of an hour of paperwork. By a lot.

Now scale it. Hire four qualified veterans in a year and the credit can stack into the tens of thousands. For a midsize company filling steady roles, that adds up fast. And the WOTC has no cap on how many qualified workers you can claim in a year. Veterans are also a market employers compete for. Our look at the top companies hiring veterans in 2026 shows how the best firms treat veteran hiring as a real strategy.

The catch is the same one every time. You have to file Form 8850 within 28 days. The cleanest fix is to bake it into onboarding. Make WOTC pre-screening part of day-one paperwork for every new hire, the same way you handle the I-9. Then you never miss the window, and you sort out who qualifies after the fact.

Where do you find qualified veteran candidates?

The credit only helps if you actually hire a veteran. And veterans are some of the best hires you can make. They show up, they lead, and they solve problems under pressure. The research backs this up too. Read more on why veterans make great employees and on how skills-based hiring works in their favor.

The hard part is finding them. Veterans do not always show up in your normal applicant pool. Their resumes use military terms, and many are still on active duty when they start looking. The data on where veterans are getting hired in 2026 shows which fields they move into most. That is where a veteran-focused talent source pays off.

Best Military Resume is built for this. More than 1,000 new veteran profiles join the platform every month, and over 60,000 resumes have been built on it. That is a steady, growing pool of veterans who have already translated their military experience into civilian terms. They are job-ready and looking now.

Want to try a veteran before you commit to a full hire? The SkillBridge program lets you host a transitioning service member for free. We break down the full process in our guide on how to become a SkillBridge host company. It pairs well with the WOTC, since many SkillBridge interns convert into qualified veteran hires.

What to do next

Here is the short version. The WOTC can pay you up to $9,600 for hiring a qualified veteran. The credit lapsed for new hires on January 1, 2026, and a bill to bring it back is moving through Congress. So check the live IRS page before you plan around it. Keep filing Form 8850 within 28 days so you are ready either way.

The bigger move is to build a steady pipeline of veteran talent. The tax credit is the icing. A reliable hire who stays and leads is the cake. To find vetted, job-ready veterans for your open roles, partner with us to source veteran talent. We will connect you with veterans who have already done the hard work of translating their service into the skills your business needs.