WOTC Action Center

The HIRE Coalition encourages Congress to pass the Improve and Enhance the Work Opportunity Tax Credit Act (“IEWOTC,” S.3265 and H.R. 6231) and reauthorize the Federal Empowerment Zone Credit.

HIRE urges all WOTC supporters to publicly voice their support for the program. Together with other WOTC advocates, we encourage your organization to sign on to the Fall 2026 WOTC Coalition Support Letter. The deadline to sign the letter is October 16, 2026.

For nearly three decades, the WOTC has served as one of the federal government’s most effective and cost-efficient tools for expanding employment among individuals who face significant barriers to entering the workforce. WOTC is a bipartisan, employer-driven incentive that puts people to work, strengthens businesses, and reduces dependence on government assistance. IEWOTC would extend and modernize this program, delivering even greater benefits to workers, employers, and taxpayers alike.

Recently, HIRE sent the following analysis to Senate Finance Committee and Ways & Means Committee members. Please reach out to admin@hirecoalition.org for a copy of the analysis.

A recent study by Ernst & Young LLP forecasts that the expiration of the WOTC will cost the economy 131,000 direct jobs annually due to increased costs on employers. Congress should reauthorize and improve the WOTC to prevent job losses and help individuals facing barriers to employment get off the sidelines and into the workforce.

WOTC Reduces Unemployment Among Targeted Groups

WOTC creates a direct financial incentive for employers to hire individuals who are most likely to be left behind in a competitive labor market. Target groups include veterans, SNAP and TANF recipients, the long-term unemployed, ex-felons, individuals with disabilities, and — under IEWOTC — military spouses.

• A 2012 RAND Corporation study found that WOTC increased employment among disabled veterans by 2 percentage points, translating to approximately 32,000 additional jobs per year.
• Academic research from 2012 (Ajilore; University of Toledo) found that WOTC increased employment rates for long-term welfare recipients, with no evidence of substitution displacing ineligible workers. Academic research from 2025 (Jain, Mommaerts, Weaver; University of Wisconsin-Madison, University of Southern California) found no evidence that employers WOTC-eligible employees to increase the credit.

WOTC Increases Wages and Economic Stability

WOTC does not just get people hired — it improves the quality and durability of employment. Because the credit is structured to reward full-time retention, employers have a direct incentive to keep workers on the job and advance them.

• The RAND study found that WOTC-eligible veterans saw annual wage income increase by approximately 40 percent — roughly $1,000 per eligible veteran per year.
• DOL wage data (Table 2, FY 2024) show that of 1.58 million WOTC certifications, approximately 1.39 million — 88% — were for jobs starting at $10.00 per hour or above, and approximately 960,000 — 61% — were for jobs starting at $15.00 per hour or above. This directly refutes the notion that WOTC primarily subsidizes minimum-wage work: the overwhelming majority of WOTC-certified jobs deliver meaningful, above-minimum wages to workers who face the greatest barriers to employment.
• IEWOTC would introduce a second-tier credit for longer-tenured employees, further rewarding employers who invest in workforce retention and advancement.

WOTC Reduces the Cost of Government Assistance Programs

Perhaps the most compelling fiscal argument for WOTC is what happens when targeted workers get and keep jobs: their reliance on public assistance falls significantly, generating direct savings for federal and state governments that offset — and often exceed — the cost of the credit itself.

• Research by Dr. Peter Cappelli of the Wharton School found that moving a TANF recipient into employment saves more than $10,000 per worker per year in reduced government assistance costs.
• An Ernst & Young LLP (2025) dynamic revenue analysis found that IEWOTC would reduce federal SNAP outlays by $5.6 billion over 10 years, as newly employed workers earn more and no longer qualify for full benefits.
• The same analysis projects $5.8 billion in additional federal tax revenue from economic growth driven by IEWOTC-supported job creation — significantly reducing the net 10-year policy cost.