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CA · Tax Credit

California Workforce Training Tax Credits: What Employers Can Claim

Two familiar hiring credits have lapsed. The federal Work Opportunity Tax Credit (WOTC) expired on December 31, 2025, and California's New Employment Credit covers only tax years before January 1, 2026. California's EDD still accepts WOTC applications for 2026 hires and holds them in case Congress renews the credit. The one state credit still taking applications is California Competes, a negotiated credit for job creation, with its next window on January 4, 2027.

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  • State pre-filled: CA
  • Program type pre-filled: tax_credit
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HOW IT WORKS

Four steps, in this order.

  1. 1

    Check whether WOTC has been renewed

  2. 2

    File Form 8850 within 28 days of each start date

  3. 3

    Reserve state credits before you claim

  4. 4

    Claim on your tax return only for authorized periods

3 VERIFIED PROGRAMS

Where the California money comes from.

Run by EDD (WOTC); Franchise Tax Board (New Employment Credit); GO-Biz (California Competes). Every figure is from an official page, linked on each card.

Work Opportunity Tax Credit (WOTC), federal

Up to $2,400 per hire, expired Dec 31, 2025
EXPIRED, APPLICATIONS HELD
WHAT YOU GET

A credit for hiring people from targeted groups. It covers hires within its authorization period.

HOW MUCH

40% of up to $6,000 of first-year wages, a $2,400 maximum per hire at 400 or more hours. EDD cites up to $9,600 for some target groups.

WHO RECEIVES THE MONEY

You, as a reduction in federal income tax.

WHO QUALIFIES
  • The hire belongs to a WOTC target group
  • You submit Form 8850 within 28 days of the start date
  • The hire starts inside an authorized period
Before you start: You must submit forms and get certification. Submit for any 2026 hire in case the credit is renewed.
HOW TO APPLY
  1. 1Screen new hires with Form 8850
  2. 2Submit both forms to the EDD WOTC Center within 28 days of the start date
  3. 3Claim the credit only if certified and the credit is authorized

Deadlines and windows: Authorization ended December 31, 2025, and as of September 30, 2026 we found no extension. EDD accepts 2026 applications and holds them pending federal reauthorization.

SOURCE: EDD.CA.GOV

California New Employment Credit

35% of wages, taxable years before 2026
CLOSED FOR 2026 UNLESS EXTENDED
WHAT YOU GET

35% of qualified wages for up to 60 months per qualifying full-time hire, scaled by your net job growth.

HOW MUCH

Qualified wages times 35%, then an applicable percentage based on net increase in full-time employees. Unused credit carries forward 5 years.

WHO RECEIVES THE MONEY

You, as a nonrefundable California income or franchise tax credit.

WHO QUALIFIES
  • Work in a designated geographic area
  • Hire full-time, paid more than 150% of California minimum wage
  • The hire was unemployed 6 months or more, a recent veteran, an EITC recipient, an ex-offender or a CalWORKs or general assistance recipient
  • Get a tentative credit reservation
Before you start: Yes. Reserve within 30 days of completing EDD new hire reporting.
HOW TO APPLY
  1. 1Reserve online with the Franchise Tax Board within 30 days
  2. 2File annual certifications
  3. 3Claim on a timely filed return

Deadlines and windows: The credit applies to taxable years before January 1, 2026. A 2026 bill, AB 2205, proposed extending it to 2031. As of September 30, 2026 we could not confirm it became law, so treat the credit as ended unless FTB says otherwise.

SOURCE: FTB.CA.GOV

California Competes Tax Credit

Negotiated credit, next window Jan 4, 2027
CLOSED AS OF SEPT 2026; NEXT WINDOW JAN 4, 2027
WHAT YOU GET

A credit awarded on a competitive basis to businesses that create jobs and invest in California. The amount is set in a contract with the state.

HOW MUCH

More than $180 million in credits are available each year. The award depends on your proposal.

WHO RECEIVES THE MONEY

You, as a negotiated California tax credit.

WHO QUALIFIES
  • Businesses of any industry, size or location can apply
  • Evaluated on factors including full-time jobs created and amount of investment
Before you start: Yes. You apply and the committee awards credits first.
HOW TO APPLY
  1. 1Apply in a scheduled window through GO-Biz
  2. 2Committee scores applications
  3. 3Sign the agreement and claim as you meet commitments

Deadlines and windows: 2026-27 windows: July 20 to August 10, 2026 (closed), January 4 to 25, 2027, and March 1 to 15, 2027.

SOURCE: BUSINESS.CA.GOV
AVOID THESE

What gets California Tax Credit claims denied.

  • WOTC: missing the 28-day Form 8850 deadline.
    SOURCE: IRS.GOV
  • WOTC: claiming the credit for hires after authorization ended.
    SOURCE: DOL.GOV
  • New Employment Credit: no tentative credit reservation within 30 days of new hire reporting.
    SOURCE: FTB.CA.GOV
  • New Employment Credit: starting wage must exceed 150% of California minimum wage.
    SOURCE: FTB.CA.GOV
STRAIGHT ANSWERS

California Tax Credit questions.

Is WOTC available for 2026 hires?

Authorization expired December 31, 2025. EDD says it will accept and hold applications for 2026 starts pending reauthorization. As of September 30, 2026 we found no extension. Check the IRS page before you claim.

SOURCE: EDD.CA.GOV
Should I still file Form 8850?

Yes, in case Congress renews the credit. File within 28 days of each start date.

SOURCE: EDD.CA.GOV
Is the New Employment Credit still open?

The FTB page limits it to taxable years before January 1, 2026. A bill to extend it (AB 2205) was in the legislature in 2026, but as of September 30, 2026 we could not confirm it became law. Check the FTB page before relying on it.

SOURCE: FTB.CA.GOV
How much is the WOTC?

40% of up to $6,000 in wages, so $2,400 at most for a standard hire with 400 or more hours. A 25% rate applies at 120 to 399 hours.

SOURCE: IRS.GOV

How we checked. Every fact on this page comes from a state agency, a local workforce board or federal regulation, read on . Where a board publishes nothing, we say so instead of guessing. Programs and funding change often; confirm with the program before you commit. Written by Jason Meehl, founder of Reimbursa. Found an error? Email hello@reimbursa.com.

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