The Work Opportunity Tax Credit (WOTC) can reduce the cost of hiring drivers from certain targeted groups, but as of October 17, 2026, it is not active for new hires. Congress.gov reports that the authority to claim the credit lapsed for wages paid after December 31, 2025. Congress has not yet reauthorized it. This guide covers what the credit pays, how trucking employers and FedEx Service Providers handle the process, and what to do while the lapse continues.
TL;DR
- The WOTC lapsed for employees hired after December 31, 2025. Reauthorization bills have been introduced, but none is law as of October 17, 2026.
- When active, the standard credit is 40% of up to $6,000 in first-year wages, a maximum of $2,400 per hire. Certain veterans have higher wage caps.
- You must submit Form 8850 and the matching ETA form to your State Workforce Agency within 28 calendar days of the hire's start date.
- Past lapses ended with retroactive extensions, so many employers keep screening and filing during the gap to protect their position.
- High turnover makes tracking the main workload for trucking operations. Build a repeatable process before you need it.
Table of Contents
- What the WOTC is and why trucking employers ask about it
- Is the WOTC still in effect in 2026?
- How much the credit is worth
- Which drivers can qualify
- The filing process step by step
- What to do while the credit is lapsed
- Using WOTC as a recruiting channel, not just a tax line
- Our perspective: treat the credit as a bonus, not a hiring plan
- Post FedEx driver roles where FedEx-experienced drivers look
- Mistakes to avoid
- FAQ
- Sources
What the WOTC is and why trucking employers ask about it
The WOTC is a federal tax credit for employers that hire people from groups with documented barriers to employment. The IRS describes it as a credit for hiring and employing individuals from certain targeted groups. It is not a driver-specific program. It applies to any industry, which is why trucking, delivery and warehousing employers look at it closely.
The fit is practical. Carriers and delivery contractors hire often, and some applicants belong to targeted groups. Veterans are a common example in driving roles. When the credit is active, each qualifying hire can reduce an employer's federal tax liability.
The Congressional Research Service notes that eligible populations include recipients of public benefits such as SNAP and TANF, qualified veterans and ex-felons.
Is the WOTC still in effect in 2026?
No, not for new hires. The credit is a temporary provision of the tax code. CRS states that on January 1, 2026, the authority lapsed for claims based on wages paid after December 31, 2025. Employers can still claim credits on wages paid on or before that date that had to be carried forward because of limits.
A separate CRS summary of provisions that expired in 2025 lists the WOTC among them.
What Congress is considering
Two bills would extend the credit. H.R. 6231 in the House and S. 3265 in the Senate are both titled as acts to improve and enhance the credit. According to CRS, they would extend it through December 31, 2030, and raise the credit rate from 40% to 50% of qualifying wages. Neither bill is law as of this writing, so do not budget around the higher rate.
Why a lapse is not the end of the story
The WOTC has lapsed before. CRS notes that it lapsed after December 31, 2014, and was retroactively reauthorized in December 2015. CRS also says that despite the lapse, Congress has continued to fund state agencies to administer the credit.
Nothing guarantees a retroactive fix this time. But the history explains why many employers keep their process running.
How much the credit is worth
The amounts below describe the credit when it is active. They come from the Department of Labor's filing page.
| Situation | Credit rate | Wage cap | Maximum credit |
|---|---|---|---|
| Employee works 400 hours or more | 40% | $6,000 in first-year wages | $2,400 |
| Employee works 120 to 399 hours | 25% | $6,000 in first-year wages | $1,500 |
| Summer youth employee | Per standard rules | $3,000 | Lower than standard |
| Certain qualified veterans | 40% | Up to $24,000 | Up to $9,600 |
The $1,500 figure is 25% of the $6,000 cap, and $9,600 is 40% of $24,000. Both are our arithmetic from the DOL rates and caps, not separate published claims. Which veterans qualify for the higher caps depends on the veteran category, so confirm with your State Workforce Agency before assuming the top figure.
Some marketing pages quote ranges such as $2,400 to $9,600 per hire. That is the span between the standard maximum and the top veteran maximum. Most hires will not reach the top of it.
Which drivers can qualify
Eligibility is about the individual, not the job title. A driver counts only if a State Workforce Agency certifies that they are a first-time, qualifying member of a targeted group. The program has 10 targeted groups. Those most likely to show up among driver applicants include:
- Qualified veterans, including veterans who received SNAP benefits or who have service-connected disabilities.
- Recipients of SNAP (food stamps).
- TANF recipients.
- Ex-felons.
The Virginia Works WOTC page is a good example of how a state agency lays out the groups and the application path. Each state runs its own intake, so check your state's site.
Two cautions apply to trucking. First, you cannot guess eligibility from a driver's resume. Applicants self-report on the screening form and the state decides. Second, a CDL requirement does not exclude anyone from a targeted group, but your safety and DOT qualification standards still apply to every hire as usual.
The filing process step by step
The procedure is set out on the DOL page for filing a certification request. It has two timing rules that matter more than anything else.
- Screen every applicant. Have each applicant complete IRS Form 8850 on or before the day you make a job offer. Do this for everyone, not only people you suspect are eligible.
- Hire and record the start date. The 28-day clock runs from the new employee's first day of work.
- Complete the matching ETA form. This is ETA Form 9061 or 9062, depending on how the applicant was referred.
- Submit to your State Workforce Agency. Send Form 8850 and the ETA form no later than 28 calendar days after the start date.
- Wait for certification. You cannot claim the credit without a certification from the state.
- Claim the credit on your tax return. Work with your tax preparer on the return itself.
The 28-day rule
The deadline is strict. Per the DOL guidance, the paperwork goes in by the 28th calendar day after the start date, and a late submission is typically denied no matter how eligible the driver is. Use the date-stamped receipt or tracking method your state provides.
This is the reason turnover matters. If you hire 15 drivers in a month, you have 15 separate clocks.
Conditional certifications
If an applicant arrives with ETA Form 9062 from a local job center or partner agency, they have already been pre-screened as part of a targeted group. DOL's quick reference guide for employers explains the form. It can reduce the documentation your HR team handles for that hire.
What to do while the credit is lapsed
There are three sensible positions, and the right one depends on your volume and your tax advisor's view.
Keep screening and filing
CRS says the 28-day requirement continues during periods of lapsed authorization, though the IRS may waive the deadline. State agencies often still accept applications, but they cannot issue certifications until Congress acts. If you stop filing and the credit returns retroactively, you could miss the window for every hire made in between.
The cost of continuing is mostly staff time. For a small Service Provider, that may be a single form added to your onboarding packet.
Pause and keep records
If your volume is low and you do not want to chase paperwork for a credit that may not come back, keep a clean record of each hire: the start date, the applicant's completed Form 8850 and any referral documents. That gives you something to work from if legislation passes. It does not restore a missed deadline, so understand the tradeoff.
Use a tracking tool or outside help
Practitioners point out that the burden is heavy in high-turnover industries. The DOL's updated procedural guidance.pdf) describes the certification process in detail. Large fleets often use automated tracking or a tax credit service. Whichever you choose, ask your CPA how the credit will be treated on your return and what fees a service charges.
Using WOTC as a recruiting channel, not just a tax line
The DOL frames the WOTC as a recruitment tool as well as a tax incentive. Employers often work with American Job Centers to reach job seekers who are already identified as members of targeted groups. For trucking, that means two practical moves:
- Tell local job centers and veteran employment offices which driver roles you have open.
- Make the applicant's first contact simple, so the Form 8850 step does not delay your offer.
Other sources of drivers outside a traditional job board include gig and delivery communities. Halen's guide to getting started driving and delivering covers the legal, tax and safety basics for people entering delivery work, which helps you understand what part-time and transitioning drivers need to know before they apply to you.
Our perspective: treat the credit as a bonus, not a hiring plan
We built UCEP for FedEx-contracted Service Providers and for the drivers who work with them. The pattern we see is that hiring decisions come down to route fit, pay, terminal location and schedule. A credit that is currently lapsed cannot carry a hiring plan.
Our advice to Service Providers has three parts:
- Run the same screening on every applicant. If Form 8850 is part of your offer process, you do not have to decide later whether to chase the credit.
- Track start dates in one place. The 28-day rule is a calendar problem. Whether the system is a spreadsheet or an applicant tracking system, one list of dates beats several.
- Fill the seat first. Pickup and delivery, CDL-A solo and CDL-A team linehaul roles each draw different applicants. The most reliable savings come from filling a route quickly and keeping the driver.
We do not file WOTC paperwork for you, and the credit decision stays with your State Workforce Agency and your tax advisor. What we offer is the recruiting side: a focused place to list FedEx-related roles and manage applicants.
— Aaron
Post FedEx driver roles where FedEx-experienced drivers look
If you are a FedEx Service Provider building your driver pipeline, UCEP is a job board made only for FedEx-related driving work. You can list pickup and delivery, CDL-A solo linehaul and CDL-A team linehaul roles, and use the built-in applicant tracking system to keep each applicant's status in one place.
- Complimentary Trial Listing: a free trial listing for new recruiters.
- Standard Monthly Plan: 99 $ per month.
See the plans on the UCEP pricing page. Drivers can browse open roles on the UCEP jobs page.
Mistakes to avoid
- Screening only some applicants. The form is due on or before the offer date. Screening after the offer can cost you the credit.
- Miscounting the 28 days. Count calendar days from the start date, not business days.
- Assuming the maximum. The standard cap is $2,400. The 25% rate applies to employees with 120 to 399 hours, and drivers who leave before 120 hours do not qualify.
- Relying on a lapsed credit in your budget. Treat any WOTC savings as upside until Congress acts.
- Skipping tax advice. The credit interacts with your return. A CPA should confirm how it applies to your business structure.
FAQ
Does the WOTC apply to trucking companies?
Yes. The credit is open to employers in any industry that hire certified members of targeted groups, and trucking and delivery employers use it. Drivers must be certified by a State Workforce Agency as eligible, and the credit must be active for the hire date.
Is the WOTC still in effect for 2026?
Not for new hires. The authority lapsed for wages paid after December 31, 2025, and as of October 17, 2026, Congress has not reauthorized it. Bills such as H.R. 6231 and S. 3265 propose extending it through 2030.
Should I keep filing Form 8850 during the lapse?
Many employers do, because the 28-day rule continues and past lapses ended in retroactive extensions. State agencies may accept applications but cannot certify until the law changes. Ask your tax advisor whether the staff time is worth it for your hiring volume.
How do I know if a driver qualifies?
You cannot tell from a resume. The applicant completes Form 8850 and your State Workforce Agency decides whether they belong to a targeted group. Check your state agency's site for its process.
Sources
- The Work Opportunity Tax Credit, Congressional Research Service
- Tax Provisions That Expired in 2025, Congressional Research Service
- H.R. 6231, Improve and Enhance the Work Opportunity Tax Credit Act
- S. 3265, Improve and Enhance the Work Opportunity Tax Credit
- How to File a WOTC Certification Request, U.S. Department of Labor
- WOTC Quick Reference Guide for Employers, U.S. Department of Labor
- Updated WOTC Procedural Guidance, U.S. Department of Labor.pdf)
- Work Opportunity Tax Credit, Internal Revenue Service
- Work Opportunity Tax Credit, Virginia Works