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Work Opportunity Tax Credit – Workforce Alabama Work Opportunity Tax Credit
The Work Opportunity Tax Credit (WOTC) is a federal tax credit available to employers who invest in American job seekers who have consistently faced barriers to employment.
On January 1, 2026, authority lapsed for employers to claim the WOTC for wages paid after December 31, 2025. Employers are still able to claim credits based on wages paid on or before December 31, 2025. Applications for hires following the lapse will be held in a queue pending official federal renewal.
Getting the Credit
With the Work Opportunity Tax Credit (WOTC), employers can meet their business needs and claim a tax credit when they hire an individual in a targeted group, as defined by the Internal Revenue Service and U.S. Department of Labor. These targeted groups often face barriers to employment.
Requirements
Before employers can claim the tax credit, they must apply for and receive a certification verifying that the new hire is a member of a targeted group.
After the required certification is secured, taxable employers can claim the WOTC as a general business credit against their income taxes, and tax-exempt employers can claim the WOTC against their payroll taxes.
Documents
Find resources and documents related to the WOTC.
Contact
Work Opportunity Tax Credit
wotc@workforce.alabama.gov