Is There a Tax Credit for Hiring Veterans in 2026?

Not a federal one for new 2026 hires, at least not yet. The federal credit for hiring veterans is part of the Work Opportunity Tax Credit (WOTC), which only covers people who began work on or before December 31, 2025, and as of November 9, 2026, Congress had not extended it.

40%When the credit applies, it is generally 40% of a veteran's first-year wages up to a cap.
$24,000The cap is as high as $24,000 of wages for certain disabled veterans, which works out to a maximum credit of $9,600 for one hire.
$9,600The cap is as high as $24,000 of wages for certain disabled veterans, which works out to a maximum credit of $9,600 for one hire.
50%VA Special Employer Incentive: reimbursement of as much as 50% of an eligible veteran's salary for up to six months, for veterans in the VA's Veteran Readiness and Employment program.

The federal tax credit for hiring veterans is not a separate program. It is one of the targeted groups inside the Work Opportunity Tax Credit (WOTC), a general business credit under Section 51 of the tax code that the IRS and the Department of Labor run together. Federal law says wages don't count for anyone who begins work for the employer after December 31, 2025, so veterans you hire in 2026 don't qualify under current law. As of November 9, 2026, Congress had not passed an extension. A bill to extend the WOTC through 2030 and apply it back to January 1, 2026 has been introduced, but it had not become law.

When the credit applies, it is generally 40% of a veteran's first-year wages up to a cap. The cap is as high as $24,000 of wages for certain disabled veterans, which works out to a maximum credit of $9,600 for one hire.

Last checked: November 9, 2026. This page explains the rules only. It is general information, not legal, tax, or financial advice.

The short version

2026 hires	not eligible for the federal veteran hiring credit unless Congress extends the WOTC and makes the extension cover them.
2025 and earlier hires	veterans who began work on or before December 31, 2025, and were certified by your state workforce agency can still count. Unused credit can generally be carried back 1 year and forward 20 years.
Past lapses	the WOTC has expired and been brought back retroactively before. That is history, not a promise.
Paperwork	the IRS lists Form 8850, the pre-screening form used to request certification, as no longer in use as of March 19, 2026. State agencies may review requests for 2026 hires but can't certify them unless Congress acts.
Other help	the VA's Special Employer Incentive program, part of Veteran Readiness and Employment, can reimburse employers for part of a veteran's salary. It is a VA payment, not a tax credit.
States	some states have their own credits for hiring veterans. Check with your state's revenue or workforce agency.

Who qualifies

For hires who began work by December 31, 2025, a "qualified veteran" under the WOTC is a veteran certified by the state workforce agency as any of these:
A member of a family that received SNAP (food stamp) benefits for at least 3 months during the 15 months before the hiring date.
Unemployed for at least 4 weeks, but less than 6 months, in the year before the hiring date.
Unemployed for at least 6 months in the year before the hiring date.
Entitled to compensation for a service-connected disability and hired within 1 year of leaving active duty.
Entitled to compensation for a service-connected disability and unemployed for at least 6 months in the year before the hiring date.
Work at least 120 hours for you.
The full 40% rate applies once they work at least 400 hours.
Rehired employees don't count.
Tax-exempt employers can claim the credit only for qualified veterans, and only against payroll taxes.

How to get it

How to get started

If you hired a veteran who began work on or before December 31, 2025, check whether you submitted the certification request to your state workforce agency within 28 days of the start date. Without the state's certification, there is no credit.
Once certified, taxable employers claim the credit on Form 5884 and carry it to Form 3800, the general business credit. Tax-exempt employers use Form 5884-C.
For 2026 hires, keep your hiring records and any screening paperwork in case Congress passes a retroactive extension, and watch for IRS guidance before filing anything.
Ask your local VA Veteran Readiness and Employment office whether a veteran you plan to hire is in that program. If so, you may qualify for the Special Employer Incentive.
Check your state's revenue or workforce agency for a state veteran hiring credit.

Programs that may match

Look beyond

VA Special Employer Incentivereimbursement of as much as 50% of an eligible veteran's salary for up to six months, for veterans in the VA's Veteran Readiness and Employment program.Work Opportunity Tax Credit for 2026 hires.Paid family leave tax credit.Small business health care tax credit.Find other programs you may qualify for with FundPlenty's free match at fundplenty.com.

FAQ

Can I get a tax credit for hiring a veteran in 2026?

Not under current federal law. The WOTC, which includes the veteran credit, only covers people who began work on or before December 31, 2025. As of November 9, 2026, Congress had not extended it. If it is extended retroactively, 2026 hires could qualify, but don't count on it until a law passes.

Is the Work Opportunity Tax Credit coming back?

It might. A bill introduced in November 2025, the Improve and Enhance the Work Opportunity Tax Credit Act (H.R. 6231), would extend the credit through December 31, 2030 for people who begin work after December 31, 2025. As of November 9, 2026, it had been referred to committee and had not become law.

What was the maximum credit for hiring a veteran?

Up to $9,600 for one veteran: 40% of up to $24,000 of first-year wages, for a veteran with a service-connected disability who was unemployed at least 6 months in the year before being hired. Other veteran groups had lower caps of $2,400, $4,800 or $5,600.

How are the wage caps set for each veteran group?

For a veteran certified because of SNAP benefits or 4 weeks of unemployment, the cap is $6,000 of first-year wages. It is $12,000 for a disabled veteran hired within a year of leaving active duty, $14,000 for a veteran unemployed at least 6 months, and $24,000 for a disabled veteran unemployed at least 6 months. The credit is 40% of those wages once the veteran works 400 hours, or 25% for 120 to 399 hours.

Can I still claim the credit for a veteran I hired in 2025?

Yes, if the veteran began work on or before December 31, 2025, and your state workforce agency certified them. State agencies are still processing certification requests for those hires. Unused credit can generally be carried back 1 year and forward 20 years.

Does the VA pay employers to hire veterans?

Through its Special Employer Incentive program, the VA says employers may be reimbursed for as much as 50% of a veteran's salary for up to six months when they hire veterans in its Veteran Readiness and Employment program who face extraordinary obstacles to employment. Contact the VA to see whether a specific hire is eligible.

Can a nonprofit claim the veteran hiring credit?

Certain tax-exempt employers could claim the WOTC only for qualified veterans, and only against payroll taxes, using Form 5884-C. The same December 31, 2025 hiring cutoff applies.