WOTC Processing Time and the 2026 Hiatus: Employer Guide

You hired a veteran in February. Your payroll team asks if you can claim the Work Opportunity Tax Credit. You go to file the paperwork and hit a wall. The credit lapsed at the start of 2026. So now what?

This is the question landing on a lot of HR desks right now. The WOTC is a real dollar credit, up to $9,600 for a single qualified veteran hire. When it goes quiet, employers freeze. They stop screening. They stop filing. And that is the exact mistake that costs them money later.

This article is about timing. It covers two things most employers get wrong during a lapse. First, how long the certification actually takes through your state. Second, what to do right now while Congress sorts out the 2026 status. If you want the full how-WOTC-works breakdown, read our Work Opportunity Tax Credit employer guide first. This piece picks up where that one leaves off.

What is the current WOTC status in 2026?

Here is the plain version. As of June 2026, the WOTC has lapsed. The authority to claim it expired at the end of 2025.

The Congressional Research Service puts it directly. "On January 1, 2026, authority lapsed for employers to claim the credit on the basis of wages paid after December 31, 2025." That language comes from the CRS report on the WOTC, last updated May 13, 2026. The IRS WOTC page says the same thing. The credit applies to workers who "begin work on or before December 31, 2025."

So a veteran you hired in 2025 can still qualify. A veteran who started in January 2026 sits in a gray zone. The law does not currently cover that hire. But it might, later. That is the part most employers miss.

Why a lapse does not mean the program is dead

The WOTC is a temporary part of the tax code. It has lapsed before. Many times. And it has been brought back every single time, often with the gap covered after the fact.

The CRS report tracks this history. The credit "has lapsed and then been extended retroactively as part of broader legislation." One clear example: the WOTC lapsed after December 31, 2013. Congress reauthorized it retroactively the next year. It happened again after 2014. The credit came back in December 2015, again reaching back to cover the gap.

Congress is also still funding the program during this lapse. The CRS Report R43729 on the Work Opportunity Tax Credit put $17.5 million toward state agency administration of the WOTC. You do not fund the staff for a program you plan to kill. That money is a signal the machinery stays warm.

How long does WOTC certification take?

People say "the WOTC" like it is one step. It is two. There is the certification, run by your state. Then there is the tax claim, run through the IRS. The timing on each is very different.

Certification is the slow part. You send a request to your State Workforce Agency. They confirm the new hire belongs to a target group, like a qualified veteran. Then they issue a certification. Only after that can you claim the credit on your tax return.

There is no single national turnaround time. Each state runs its own queue. Some states certify in a few weeks. Others take many months, especially when volume is high or staff is short. Treat the certification as a slow-moving piece of paper that can sit in a state queue for a long stretch. Plan around that, not around a best-case week.

Why the timeline matters more during a lapse

Here is the timing trap. During a lapse, states keep taking your paperwork. But many of them pause the actual certification decisions until Congress acts.

The CRS report quotes Department of Labor guidance on exactly this. "States can continue to review and prepare WOTC certification requests when there is a WOTC authorization lapse but may not issue a certification." The April 2026 DOL guidance goes further. States may accept, date-stamp, log, and retain your request, but they cannot issue a certification or a denial until Congress acts and ETA clears them to resume. Your request sits in the queue, fully protected, waiting on the law.

So your real timeline in 2026 has two clocks. The state's normal processing time, plus however long the lapse runs. That makes filing on time even more important. You want to be at the front of the prepared pile the day Congress restores the credit, not at the back.

What is the Form 8850 deadline, and does it still apply?

Yes, it still applies. This is the most important deadline in the whole program, and a lapse does not switch it off.

You must send IRS Form 8850, the Pre-Screening Notice and Certification Request, to your State Workforce Agency within 28 calendar days of the new hire's start date. Note three things. It goes to the state, not the IRS. The clock starts on the start date, not the offer date. And 28 days is calendar days, not business days.

Note: The IRS updated its Form 8850 page on March 19, 2026 to reflect that the form is no longer in use. That mirrors the lapse. The form was retired because the credit behind it expired, not because the program was eliminated. When Congress reauthorizes the WOTC, the prior precedent (IRS Notice 2016-22 after the 2015 PATH Act) is that the agency issues transition relief so employers can certify gap-period hires retroactively. Complete the most recent available version of the pre-screening form, submit it to your state agency on the 28-day clock, and keep your date-stamped copy. That submission is what protects the hire.

Miss that 28-day window and you usually lose the credit for that hire. No appeal, no second chance. That single deadline is the number one reason employers leave WOTC money on the table.

The CRS report confirms the deadline holds during a lapse. "This requirement continues during periods of lapsed authorization, though the IRS may waive the deadline." So you keep filing on the 28-day clock, even now, even before the credit is restored.

The retroactive relief precedent

That "the IRS may waive the deadline" line is not theory. It happened in the last big lapse.

After the 2014 lapse, Congress brought the WOTC back in December 2015. The IRS then issued Notice 2016-22. It gave employers extra time. Firms that filed Form 8850 for workers who started between January 1, 2015, and May 31, 2016, were treated as on time if they submitted by June 29, 2016. That is the model. When the credit comes back, the IRS often opens a transition window so employers can catch up on the gap-period hires.

But you cannot count on a perfect catch-up window covering everything. The safe play is to file on the normal 28-day clock for every eligible hire, lapse or not. Then any retroactive relief is a bonus, not your only hope.

How much is the credit worth for a veteran hire?

The veteran credit is worth more than most of the other target groups. That is the whole reason to protect your filing during the lapse. The dollars are real.

The credit is based on first-year wages and hours worked. A new hire who works at least 400 hours earns the 40% rate. A hire who works at least 120 but fewer than 400 hours earns 25%. Under 120 hours and you get nothing. The wage cap depends on which veteran subgroup the person falls into.

Those caps and amounts come straight from the IRS and the CRS report. For a for-profit company, the top veteran credit is $9,600 per hire. Tax-exempt organizations can claim a veteran-only version of the credit using Form 5884-C. The rate is 26 percent rather than the 40 percent that for-profit employers use, and the credit applies only to veterans, not other target groups. At the top wage cap of $24,000 for a qualifying disabled veteran, the maximum credit for a tax-exempt employer is $6,240.

Run the math on a few hires and the stakes are clear. Three qualified veterans at the top tier is nearly $29,000 in credit. That is why "we will skip WOTC this year" is an expensive shrug. You are not skipping a small perk. You are skipping real money you may still get.

What should employers do during the hiatus?

Do not stop. That is the short answer. The employers who keep their process running are the ones who collect when the credit returns. The ones who pause lose the gap-period hires for good.

Here is the practical playbook for a lapse.

That last point matters during a lapse. The federal WOTC may be paused, but other veteran hiring incentives are not. Some run through the VA, some through individual states. If you want the full list of what is still on the table, read our guide on veteran hiring incentives beyond WOTC. State-level hire credits often stack on top of the federal one, so you can find more detail in our breakdown of state tax incentives for hiring veterans.

Which forms do you actually need to file?

Three forms cover most veteran hires. Keep them straight and the process is simple.

IRS Form 8850 is the pre-screening notice and the certification request. It goes to your State Workforce Agency, on the 28-day clock. Then you add an ETA form from the Department of Labor. ETA Form 9061 is the standard one most employers use. If a state agency already gave the applicant a conditional certification, you use ETA Form 9062 instead. There is also ETA Form 9175, a self-attestation form used only for the long-term unemployment group.

You can pull the current versions from the Department of Labor WOTC filing page. After the state certifies the hire, a for-profit company claims the credit on Form 5884, which then rolls into the general business credit on Form 3800. It rolls into the general business credit, so unused amounts follow the standard carryforward rules rather than expiring the year you earn them. That is part of why filing the 8850 on time now still pays off later. Check with a tax advisor on the exact window for your situation.

Where do qualified veterans come from in the first place?

The credit only matters if you are actually hiring veterans. That is the part the tax conversation skips. You cannot claim a credit on a veteran you never reached.

This is where the pipeline comes in. Best Military Resume adds over 1,000 new veteran and military spouse profiles every month, and the platform has built more than 71,892 resumes. That is a steady, growing pool of candidates who are already job-searching and already translating their military experience into civilian terms. A WOTC-eligible veteran is far easier to hire when you are sourcing from a group that is built to be hired.

If your team is screening for WOTC but struggling to find qualified veteran candidates to screen in the first place, that is the real bottleneck. The credit is the reward. The pipeline is the work.

Keep the machine running

The WOTC lapse will end. Every prior lapse has, and Congress is still funding the program through this one. The only real question is whether your records are ready when the credit comes back.

So keep screening. Keep filing Form 8850 on the 28-day clock. Hold your requests in the state queue. When the credit is restored, and the past lapses say it will be, you collect on the hires you protected. The employers who paused will be starting from zero.

A lapse is not a reason to stop hiring veterans. It is a reason to stay organized. The dollars are still there for the teams who keep the paperwork moving.