The current law limits to 65,000 the number of aliens who may be issued a visa or otherwise provided H1B status. (The numerical limitation was temporarily raised to 195,000 in FY2001, FY2002 and FY2003.)

In addition, laws also provide up to 20,000 foreign nationals holding a master's or higher degree from U.S. universities from the cap on H-1B visas.

In addition, excluded from the annual quota are all H1B non-immigrants who work at (but not necessarily for) universities and non-profit research facilities. This means that contractors working at, but not directly employed by the institution may be exempt from the cap.

Free Trade Agreements allow a carve out from the numerical limit of 1,400 for Chilean nationals and 5,400 for Singapore nationals.

Visa renewals do not count towards the annual limits. Transfers among employers only count when changing jobs from an employer exempt from the limits (academia or research) to one that is not exempt.

The number of new H1B visas issued each year in the United States is subject to an annual congressionally-mandated quota. Each H1B quota applies to a particular Financial year which begins on October 1.

Applications for the upcoming Financial Year are accepted beginning on the preceding April 1 (or the first working day after that date). Those beneficiaries not subject to the annual quota are those who currently hold H1B status or have held H-1B status at some point in the past six years and have not been outside the United States for more than 365 consecutive days. This annual quota has had a significant impact on the IT industry. It has generally been set at 65,000 visas per year, with some exceptions for workers at exempt organizations like universities and colleges (note: contrary to popular belief, non-profit organizations are not automatically exempt, but may be so if affiliated with a university or college). In 2000, Congress permanently exempted H1B visas going to Universities and Government Research Laboratories from the quota.

During the early years of this quota in the early 1990s, this quota was rarely actually reached. By the mid-1990s, however, the quota tended to be filled each year on a first come, first served basis, resulting in new H-1Bs often being denied or delayed because the annual quota was already filled. In 1998 the quota was increased first to 115,000 and then, in 2000, to 195,000 visas per year. During the years the quota was 195,000, it was never reached.

In FY 2004, the quota reverted to 90,000 when the temporary increase passed by Congress in 1999 expired. Since then, the quota is again filling up rapidly every year, making H1B's again increasingly hard to get. More recently, the basic quota was left at 65,000 but with an additional 20,000 visas possible for foreign workers with U.S. advanced degrees.

For FY 2007, beginning on October 1, 2006, the entire quota of visas for the year was exhausted within a span of less than 2 months on May 26, 2006, well before the beginning of the financial year concerned. The additional 20,000 Advanced Degree H1B visas were exhausted on July 26. For FY 2008, the entire quota was exhausted before the end of the first day on which applications were accepted, April 2. Under USCIS rules, the 123,480 petitions received on April 2 and 3 that were subject to the cap were pooled, and then 65,000 of these were selected at random for further processing. The additional 20,000 Advanced Degree H-1B visas for FY 2008 was exhausted on April 30.

In its annual report on H1B visas released in November 2006, USCIS stated that it approved 131,000 H1B visas in FY 2004 and 117,000 in FY 2005. The inflation in numbers is because H-1B visas can be exempt from the caps if the employer is a University or Research Lab.

For FY 2009, USCIS announced on April 8, 2008 that the entire quota for visas for the year has been reached, for both 20,000 Advanced and the 65,000 quota. USCIS would complete initial data entry for all filing received during April 1 to April 7, 2008 before running the lottery.