January 2026 Potential Federal Government Shutdown

At A Glance

• If the US federal government fails to pass a budget, a partial federal government shutdown will begin at midnight on January 31, 2026, impacting several federal agencies.

Introduction

With federal funding for several agencies set to expire January 30, 2026, the U.S. federal government may shut down if a new budget is not passed by midnight January 31, 2026.

Agencies and functions deemed essential, however, would remain open if they’re self-funded or funded through other types of appropriations. Any agency without such funding will cease operations until Congress approves a new budget.

E-Verify

A federal shutdown impacts several federal agencies, including the Department of Homeland Security (DHS) and its component agency, the United States Citizenship and Immigration Services (USCIS). Because of this, E-Verify services may temporarily become unavailable.

When E-Verify is unavailable due to a federal government shutdown, employers will not be able to access their E-Verify accounts or: 

• Enroll in E-Verify
• Create any E-Verify cases
• View or take action on any case
• Add, delete, or edit any user account
• Reset passwords
• Edit company information
• Terminate accounts
• Run reports or view any information about an account.

However, during an E-Verify outage, employers are still required to complete Form I-9 for new hires, and when E-Verify is available again, employers should process E-Verify cases as required. 

IRS Operations

The IRS continues to collect taxes and accept filings throughout the shutdown. Therefore, Paylocity will continue to make employer deposits and submit tax returns (e.g., forms 940, 941, 943, 945, etc.) and Forms W-2, W-2C, 1094-C, and 1095-C on behalf of clients.

Correspondence and processing at the IRS, including amended returns, may take additional time due to delays caused by the shutdown.