PA · Tax Credit

Pennsylvania Workforce Training Tax Credits: What Employers Can Claim

The federal Work Opportunity Tax Credit has lapsed for people hired after December 31, 2025, and Pennsylvania is holding 2026 requests without certifying them. Pennsylvania's own hiring credit is the Manufacturing Tax Credit: 5% of new payroll for manufacturers that add at least $1,000,000 in payroll through new full-time jobs, capped at $4 million statewide a year. We found no current Pennsylvania job training tax credit.

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State pre-filled: PA
Program type pre-filled: tax_credit

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HOW IT WORKS

Four steps, in this order.

1
Check the credit's status before you count on it
2
For the Manufacturing Tax Credit, apply in eGrants before you add the jobs
3
Create and keep the new full-time jobs for five years
4
Claim the certificate against your state taxes

2 VERIFIED PROGRAMS

Where the Pennsylvania money comes from.

Run by PA DCED (Manufacturing Tax Credit) and PA Department of Labor & Industry (WOTC certification). Every figure is from an official page, linked on each card.

Work Opportunity Tax Credit (WOTC, federal, certified by PA L&I)

Lapsed for 2026 hires

LAPSED

WHAT YOU GET

A credit for hiring people from certain targeted groups. It is currently not available for new 2026 hires.

HOW MUCH

When in force: 25% or 40% of first-year wages, up to the maximum for the worker's group, per PA L&I. IRS: 40% of up to $6,000 of wages for the general case.

WHO RECEIVES THE MONEY

The employer, as a reduction in federal income tax.

WHO QUALIFIES

Worker must be certified as in a targeted group before you claim
File Form 8850 within 28 days of the start date
Applies only to workers who began work on or before December 31, 2025

Before you start: Yes. Certification is required, but PA is not issuing certifications for 2026 start dates.

Manufacturing Tax Credit (DCED)

5% of new payroll, $1M minimum

OPEN, FIRST-COME

WHAT YOU GET

A credit for adding a large block of new full-time payroll.

HOW MUCH

5% of the increase in annual taxable payroll, if it rises at least $1,000,000 above the base year through new jobs. Total credits capped at $4,000,000 per fiscal year.

WHO RECEIVES THE MONEY

The manufacturer, as a non-refundable state tax credit that can be assigned or carried forward.

WHO QUALIFIES

Engaged in manufacturing
New full-time jobs paying at least the county average wage and with employer health benefits
Keep the jobs and payroll increase for at least five years
State tax clearance for the applicant and owners of 20% or more

Before you start: Yes. Apply and get a commitment letter before you rely on the credit.

AVOID THESE

What gets Pennsylvania Tax Credit claims denied.

Filing WOTC paperwork late. The 28-day deadline from the start date still applies to 2025 hires.
SOURCE: IRS.GOV
Expecting WOTC on 2026 hires. The authority lapsed.
SOURCE: CONGRESS.GOV
New jobs that pay under the county average wage or lack employer health benefits (Manufacturing Tax Credit).
SOURCE: DCED.PA.GOV
Not keeping the jobs for five years.
SOURCE: DCED.PA.GOV
Out-of-compliance state taxes for the applicant or a 20% owner.
SOURCE: DCED.PA.GOV

STRAIGHT ANSWERS

Pennsylvania Tax Credit questions.

Is the WOTC available in 2026?

Not for people who start on or after January 1, 2026. The IRS page covers wages for hires who begin on or before December 31, 2025, and the Congressional Research Service says authority lapsed. Check the IRS page for any renewal.

SOURCE: IRS.GOV

What is Pennsylvania doing with 2026 WOTC requests?

L&I accepts, date stamps and keeps them, but will not issue certifications until the U.S. Department of Labor says otherwise.

SOURCE: PA.GOV

Does Pennsylvania have a hiring or job creation tax credit?

The Manufacturing Tax Credit, for manufacturers only. DCED lists the older Job Creation Tax Credit as archived.

SOURCE: DCED.PA.GOV

Can I sell or carry forward the credit?

Yes. The Manufacturing Tax Credit can be passed through, carried forward, sold or assigned, but it is not refundable.

SOURCE: DCED.PA.GOV

How we checked. Every fact on this page comes from a state agency, a local workforce board or federal regulation, read on September 30, 2026. 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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