Tax credits for hospitality businesses come and go — some expire, some go into legislative limbo, and one has quietly been permanent the entire time. Here's where things stand right now.
The ERC was a pandemic-era payroll tax credit for wages paid in 2020 and 2021. The filing deadlines have passed — April 15, 2024 for 2020 quarters, April 15, 2025 for 2021 quarters — so new claims aren't an option anymore. What's left is the backlog: the IRS has been working through existing claims, audits and appeals, with most non-examined claims closed out by the end of 2025.
If your business filed an ERC claim and is still waiting, that's a separate conversation with a CPA about your specific case — not something a new filing can fix at this point.
WOTC rewards employers for hiring from certain target groups — veterans, long-term unemployed workers, SNAP recipients, and others. It's a genuinely useful credit when it's active, but it's also a temporary provision that Congress has to periodically reauthorize, and its latest authorization lapsed on January 1, 2026.
Congress has reauthorized WOTC more than a dozen times since 1996, often retroactively, so a restart is plausible. Employers who keep screening new hires and filing paperwork during the hiatus are the ones positioned to benefit if and when it comes back. But as of right now, it's not something a restaurant can bank on for this year.
This is the one that's easy to miss precisely because it doesn't make news — there's no expiration date, no reauthorization fight, no hiatus. IRC Section 45B has been part of the tax code without a sunset provision since it was created, which means it's available every single year a tip-driven business pays employer FICA tax on reported tips.
The catch isn't eligibility — it's awareness. Most restaurants, bars, cafés and hotels that qualify have simply never filed for it, in some cases missing several years' worth before anyone catches it. Unlike ERC or WOTC, there's no legislative clock running out on this one; the only clock that matters is the standard three-year look-back window for amending prior returns.
See How the FICA Tip Credit WorksNew claims are no longer possible. Existing claims are in audit, appeal, or backlog processing.
Lapsed January 1, 2026. Reauthorization is possible but not guaranteed or scheduled.
No sunset provision. Available every year, plus a three-year look-back on unfiled prior years.
Time spent tracking legislative hiatuses is time not spent on the credit that's sitting there, permanently available, waiting on a filing. For most tip-driven businesses, that's the FICA Tip Credit.