TEGL16-01.pdf

ETA Advisory File Text

RESCISSIONS EXPIRATION DATE Continuing CLASSIFICATION AFDC TANF WOTC WtWTC CORRESPONDENCE SYMBOL OWS EMPLOYMENT AND TRAINING ADMINISTRATION ADVISORY SYSTEM U.S. DEPARTMENT OF LABOR Washington D.C. 20210 DATE April 5 2002 TRAINING AND EMPLOYMENT GUIDANCE LETTER NO. 16-01 TO ALL STATE WORKFORCE LIAISONS ALL STATE WORKFORCE AGENCIES ALL STATE WORKER ADJUSTMENT LIAISONS ALL ONE-STOP CENTER SYSTEM LEADS S FROM EMILY STOVER DeROCCO Assistant Secretary SUBJECT Clarification and Guidance on How to Count Months When Verifying Eligibility Under the Aid to Families With Dependent Children AFDC and or Temporary Assistance to Needy Families TANF Target Groups A and I 1. Purpose. To provide State Workforce Agencies SWAs guidance on how to count months when verifying AFDC TANF target group eligibility under the Work Opportunity Tax Credit WOTC and the Welfare-to-Work Tax Credits WtWTC Program. 2. References. The Business Job Protection Act of 1996 P.L. 104-188 the Taxpayer Relief Act of 1997 P.L. 105-34 Ticket to Work and Work Incentive Act of 1999 P.L. 106-170 505 Internal Revenue Code IRC of 1986 26 USC 51 and 51A as amended and ETA Handbook No. 408 Second Edition November 1998. 3. Background. The Small Business Job Protection Act of 1996 P.L. 104-188 created the Qualified IV-A Recipient target group under the Work Opportunity Tax Credit Program. The statutory definition for this target group defines membership in this group as those individuals who are certified by the Designated Local Agency as members of a family receiving AFDC TANF or benefits under a successor program for any nine months during the 18-month period ending on the hiring date. See definition for Qualified IV-A Recipient page II-2 ETA Handbook No. 408 Second Edition November 1998 and in the IRC of 1986 26 USC 51 and 51A as amended . 2 In 1997 The Taxpayer Relief Act P.L. 105-34 created the Welfare-to-Work Tax Credit and defined membership in the new group Long-Term Family Assistance Recipients as those individuals who are certified by the Designated Local Agency or State Employment Security Agencies SESAs as members of a family A receiving AFDC TANF or benefits under a successor program for at least 18 consecutive months ending on the hiring date or B who have received AFDC TANF benefits for a total of at least 18 months whether or not consecutive and who have a hiring date that is not more than two years after the end of the earliest 18-month period or C whose AFDC TANF eligibility expired under a Federal or state law after August 5 1997 for applicants hired within two years after their eligibility expired. See definition for Long-Term Family Assistance Recipient page V-2 ETA Handbook No. 408 Second Edition November 1998 and in the IRC of 1986 26 USC 51 and 51A as amended . 4. Information. SWAs must verify eligibility in a WOTC and or WtW target group before they can issue a certification to a timely filed request for certification by an employer or his her representative. For purposes of the WOTC target group A Qualified IV-A Recipient verification of eligibility means establishing that an individual received AFDC TANF benefits for at least any nine-month period that ends on the hiring date under the WOTC program. For the WtWTC target group I Long-Term Family Assistance Recipient verification of eligibility means that the AFDC TANF benefits were received by the recipient for at least an 18-month period under the WtW tax credit. The Department of Labor consulted with the Department of Health and Human Services HHS seeking an explanation and clarification of their policy for counting months of welfare benefits received for purposes of the time limit under the AFDC TANF target group definition. According to HHS For purposes of the TANF Program or a successor state welfare agencies count as a full month any benefits received in a calendar month. This means that if Jane Smith received AFDC TANF benefits for one or two days in October 2001 and 10 days of benefits in November 2001 the number of months in which welfare benefits were received are considered and counted as two months. As a result the 1-day 1 month method of counting months should be adopted when determining whether or not an individual has met the time eligibility requirements of AFDC TANF benefits required for the WOTC Qualified IV-A Recipient target group category. The same method of counting months applies to the Long-Term Family Assistance Recipient target group under the WtWTC. 3 Under the above interpretation states are requested to continue their WOTC and WtWTC verification activities as usual and to adopt and start implementation of this particular method. guidance. 5. Action Required. State Workforce Agencies are requested to share this information with the WOTC WtW State Coordinators and other related program staff and to ensure that all tax credits related staff adopt and use this practice as part of their verification activities. This guidance becomes effective upon receipt of this advisory. 6. Inquiries. Questions should be directed to Carmen Ortiz National Coordinator by e-mail at ceortiz doleta.gov or by telephone at 202 693-2786.