TEGL_03-21_Change_2.pdf

ETA Advisory File Text

EMPLOYMENT AND TRAINING ADMINISTRATION ADVISORY SYSTEM U.S. DEPARTMENT OF LABOR Washington D.C. 20210 CLASSIFICATION WOTC C ORRESPONDENCE SYMBOL OWI DATE April 29 2022 RESCISSIONS None EXPIRATION DATE Continuing ADVISORY TRAINING AND EMPLOYMENT GUIDANCE LETTER NO. 3 -21 CHANGE 2 TO STATE WORKFORCE AGENCIES STATE WORKFORCE ADMINISTRATORS WORK OPPORTUNITY TAX CREDIT COORDINATORS FROM ANGELA HANKS Acting Assistant Secretary SUBJECT Change 2 to Training and Employment Guidance Letter No. 3-21 Work Opportunity Tax Credit WOTC Initial Funding Allotments for Fiscal Year 2022 1. Purpose. This Change 2 to Training and Employment Guidance Letter TEGL No. 3 -21 conveys the remaining balance for Fiscal Year FY 2022 WOTC funding allotments and explains application requirements for State Workforce Agencies SWAs based on appropriated funding. Additionally this Change 2 TEGL announces 1 8 states selected to receive additional FY 2022 backlog award funding and provides instructions to those states on how to proceed. The rest of TEGL No. 3-21 remains the same. 2. Action Requested. Grantees must meet the application requirements detailed in section 4 within 30 calendar days from the date of this TEGL issuance.3. Summary and Background. a.Summary - On November 15 2021 the Employment and Training Administration ETA issued TEGL No. 3-21 which announced the initial WOTC funding allotments of 3 240 420 under the Extending Government Funding and Delivering Emergency Assistance Act 2022 Public Law 117-43 . On December 3 2021 the Further Extending Government Funding Act of 2022 P.L. 117 -70 provided a second continuing resolution CR in the amount of 3 900 335 through February 18 2022. ETA issued a Change 1 TEGL on December 27 2021 which announced additional FY 2022 WOTC funding authorized under CR 2. The Consolidated Appropriations Act of 2022 P.L. 117-103 was signed into law on March 15 2022 authorizing the full FY 2022 appropriations. This Change 2 TEGL announces the FY 2022 full-year allotment and state balances for funding. ETA has available grant funds totaling 18 485 000 for normal operations in FY 2022. This Change 2 TEGL announces the remaining balance of 11 344 245 for normal operations in FY 2022. The state allotment amounts are listed on Attachment I Work Opportunity Tax Credits FY 2 2022 State Allotments and Balance after Dissemination to States under Continuing Resolutions CR 1 and 2. Additionally the Consolidated Appropriations Act of 2022 authorized an additional 3 500 000 in funding to support efforts to reduce WOTC processing backlogs and assist states in adopting and or modernizing information technology for processing of certification requests. This Change 2 TEGL announces the 18 states selected to receive FY 2022 backlog awards and their respective award amounts in Section 4. ETA requests that SWAs submit application s for funding according to the instructions in Section 4 of this TEGL. b. Background The WOTC is set forth under section 51 of the Internal Revenue Code of 1986 and is effective until December 31 2025 under Section 113 of Division EE Title 3 -- Consolidated Appropriations Act 2021 P.L. 116-260 . The U.S. Department of the Treasury through the Internal Revenue Service IRS administers all tax-related provisions and requirements of the tax credit. The U.S. Department of Labor through ETA awards grants to states for administration of the WOTC. 4. Details. Allotment Formula. ETA determines state allotments for normal WOTC operations according to the following methodology. After allocating 20 000 to the U.S. Virgin Islands ETA distributes the remaining funds to the SWAs by administrative formula with a 66 000 minimum allotment and a 95 percent stop-loss 120 percent stop-gain from the previous year allotment-share percentage. The administrative formula is calculated as follows a. 50 percent is based on each state s relative share of total WOTC certifications issued from October 1 2020 through September 30 2021 b. 30 percent is based on each state s relative share of the Civilian Labor Force averages for the 12-month period from October 1 2020 through September 30 2021 and c. 20 percent is based on each state s relative share of adult recipients of Temporary Assistance for Needy Families averages from October 1 2019 through September 30 2020. Application Requirements for FY 2022 Funding. ETA requires grantees to submit an electronically signed copy of the SF-424 Form through Grants.gov for funding opportunity number ETA-WOTC-TEGL-3-21-22-C2 at https www.grants.gov within 30 calendar days from the issuance date of this TEGL. The official electronically signed SF-424 Form must reflect the remaining balance to the state amount listed in Attachment I for the requested estimated funding total in item 18 the Catalog of Federal Domestic Assistance Number 17.271 for item 11 and the grantee s 12-character Unique Entity Identifier listed for item 8c on the SF-424 Form. Also Item 18e of the SF-424 must indicate the amount of Indirect Costs claimed by the recipient if any. 3 States selected for FY 2022 WOTC Backlog Award funding must enter the award amount for their state on a separate SF -424 Form Application for Federal Assistance OMB Control No. 4040 -0004 and submit an electronically signed copy of the SF -424 through Grants.gov for Funding Opportunity Number ET A-WOTC -TEGL -3-21 -22 -C2 at www.grants.gov within 30 calendar days from the date of this TEGL s issuance. Starting on April 4 2022 the DUNS Number will be replaced by a new non -proprietary identifier requested in and assigned by SAM.gov . This new identifier is being called the Unique Entity Identifier UEI or the Entity ID. Each applicant must have a UEI number available and it must be registered with the System for Award Management SAM at https www.sam.gov before submitting an application. To submit the required documents applicants must follow the Apply for Grants link on Grants.gov and download the links for the grant application package. For this grant opportunity applicants should not follow the Find Grants link as this is not a competitive funding opportunity. If applicants encounter a problem with Grants.gov and do not find an answer in any of the other available resources they should call 1 -800 -518 -4726 or 1 -606 -545 -5035 to speak to a Customer Support Representative or send an email to support grants.gov . Please note Effective June 2017 applicants can no longer access SAM using Internet Explorer IE web browser versions older than IE11. Revised Award Descriptions . As part of a Federal governm ent -wide effort to describe grant activities consistently and accurately ETA is revising its standard grant award descriptions. States may see the following text in the grant award or in online descriptions of the WOTC grants Purpose The purpose of this grant is to allow state workforce agencies SWAs to administer WOTC per ETA guidance and provisions of the Internal Revenue Code of 1986 Section 51 as amended. Law designates the SWAs as the only agencies that can issue a Certifica tion 26 USC sec. 51 d 12 . Activities to be performed SWAs must use funds to implement the requirements set forth in the WOTC Statement of Work including to Designat e a state coordinator who oversee s the administration of WOTC for each state grant Determ ine eligibility of individuals as members of targeted groups on a timely basis and issue employer certifications denials or notices of invalidation for tax credits on a timely basis and in accorda nce with the policies and procedures set forth by ETA and Establish and maintain appropriate forms quality review process record keeping and reporting capability related to the orderly management of WOTC certification requests. . Expected Outcomes For WOTC grants SWAs will issue determinations certifications or denials for employers certification requests which facilitate tax credits determined by the U.S. Department of the Treasury. For WOTC backlog awards SWAs will increase efficiency in processing employers certification requests and develop plans that include an estimated timeline to eliminate existing backlogs of certification requests . Intended Beneficiaries Job seekers who have access to a higher nu mber of employment opportunities and employers who seek to increase hiring of qualified job applicants. Other beneficiaries include s tate and local partner agencies in the 4 American Job Center network that coordinate efforts to promote WOTC to employers job seekers and other Workforce Innovation and Opportunity Act WIOA partners . Subrecipient Activities SWAs as WOTC grant recipients do not typically subaward funds. States that wish to subaward funds should seek approval from the Grant Officer . FY 202 2 WOTC Backlog Awards . ETA will distribute WOTC backlog awards to approximately 18 new states with the most critical needs to alleviate processing backlogs and assist states in adopting or modernizing information technology for processing of certification requests. To inform the selection process ETA analyzed the following data a. FY 2 02 1 backlog total and the percentage ratio it represents of the state s total workload b. FY 202 0 and FY 202 1 financial reports and c. FY 2021 qualitative data based on states narratives. ETA carefully reviewed these three sources of data to gain an unde rstanding of the states needs and any contributing factors that led to the states backlog. ETA did not consider the states that received backlog awards in FY 2020 nor FY 2021 due to the overlapping grant period of performance . ETA examined the remainin g states backlogs and information technology modernization needs to identify this third set of selected states. Additionally ETA analyzed FY 202 0 and FY 202 1 financial reports to determine a state s ability to use additional funding and did not select states with extraordinarily low expenditure rates to receive backlog funds. Finally ETA reviewed the narratives that the states previously submitted in FY 2021 and reconfirmed states information in FY 2022 . The narratives explain the states existing processing systems how the system impacts their ability to efficiently process certification requests and how the states could use this award to make improveme nts to their existing systems or procedures to reduce their backlog . The selected states expressed interest in this additional backlog funding to help them attain staff support enhance their current partial automated systems and develop automated system s. Based on these factors ETA identified 1 8 states with the most critical need to address backlog or system modernization issues and to receive additional funding. Based on the availability of 3 500 000 in funds ETA established three funding tiers to distribute these awards to 1 8 states Tier 1 100 000 Tier 2 200 000 Tier 3 300 000 The selected states and corresponding funding amounts for these awards are as follow s 100 000 200 000 300 000 District of Columbia Massachusetts Nebraska Arkansas Georgia Maine Iowa Maryland Tennessee 5 Puerto Rico Vermont U.S. Virgin Island Michigan Minnesota Mississippi New Mexico Texas Wisconsin Note If a state fails to submit the required application materials in a timely manner or decides to refuse the award ETA reserves the right to either redistribute such funds to the other selected states and or consider additional state s for an award as appropriate. A subsequent Change TEGL will announce these funds after award if applicable. General Administration . SWAs are responsible for using the ir FY 2022 fund ing allotments to conduct WOTC activities outlined in the WOTC Statement of Work . See At tachment II of TEGL No. 3 -21 Work Opportunity Tax Credit WOTC Initial Funding Allotments for Fiscal Year 202 2 for the W ork Opportunity Tax Credit WOTC Statement of Work available here https wdr.doleta.gov directives corr doc.cfm docn 3188 . Reporting Requirements . a Quarterly Financial Report SWAs must report fiscal expend itures quarterly using ETA Form 9130. Financial reports are due no later than 45 days following the end of each quarter. Timely submission of these reports is important to ensure proper accounting of funds. b Quarterly Performance Report SWAs must use t he web -based Enterprise Business Support System EBSS Tax Credit Reporting System to report quarterly activities and outcomes using ETA Form 9058. Performance reports are due no later than 45 days following the end of each quarter. Timely submission o f these reports is important for administration purposes. 5. Inquiries . Please direct inquiries to the appropriate WOTC Regional Coordinator listed on the WOTC website at https www.dol.gov agencies eta wotc contact regional -offices . 6. References . Training and Employment Guidance Letter TEGL No . 03 -21 Work Opportunity Tax Credit WOTC Initial Funding Allotments for Fiscal Year 2022 https wdr.doleta.gov directives corr doc.cfm DOCN 3188 Change 1 to TEGL No. 03 -21 Work Opportunity Tax Credit WOTC Initial Funding Allotments for Fiscal Year 2022 https wdr.doleta.gov directives corr doc.cfm DOCN 6032 Section 51 of the Internal Revenue Code of 1986 as amended https uscode.house.gov view.xhtml path prelim title26 subtitleA chapter1 subchapt erA part4 subpartF edition prelim P.L. 117 -43 -- Extending Government Funding and Delivering Emergency Assistance Act of 2022 https www.congress.gov 117 plaws publ43 PLAW -117publ43.pdf P.L. 117 -70 -- Further Extending Government Funding Act of 2022 https www.congress.gov 117 plaws publ70 PLAW -117publ70.pdf 6 P.L. 117 -86 -- Further Additional Extending Government Funding Act of 2022 https www.congress.gov 117 plaws publ86 PLAW -117publ86.pdf and P.L. 117 -103 -- Consolidated Appropriations Act of 2022 https www.congress.gov 117 bills hr2471 BILLS -117hr2471enr.pdf . 7. Attachment s . Attachment I W ork Opportunity Tax Credit s FY 2022 State Allotments and Balance after Dissemination to States under Continuing Resolutions CR 1 through 2 Attachment I State FY 2022 Full Year Allotment Amount Obligated under CR 1 10 1 21 through 12 03 21 Obligated under CR 2 12 04 21 through 02 18 22 Balance to States Total 18 485 000 3 240 420 3 900 335 11 344 245 Alabama290 40249 51659 600 181 286 Alaska66 00011 57013 926 40 504 Arizona286 96152 95263 735 170 274 Arkansas136 14725 12330 239 80 785 California2 423 147 440 238 529 894 1 453 015 Colorado315 14551 70562 235 201 205 Connecticut150 90822 04526 535 102 328 Delaware85 22912 45014 987 57 792 District of Columbia66 00011 57013 926 40 504 Florida830 118 153 178 184 374 492 566 Georgia507 26593 604 112 666 300 995 Hawaii69 50611 57013 926 44 010 Idaho78 68213 88416 711 48 087 Illinois743 297 137 158 165 090 441 049 Indiana287 63253 07663 884 170 672 Iowa230 29042 49451 149 136 647 Kansas122 42022 59027 190 72 640 Kentucky372 47868 73282 729 221 017 Louisiana303 16150 87061 229 191 062 Maine68 61712 66215 240 40 715 M aryland419 68961 87274 472 283 345 M assachusetts400 53064 69777 873 257 960 Michigan604 874 111 615 134 346 358 913 Minnesota292 84545 85955 197 191 789 Mississippi218 30538 19245 969 134 144 M issouri398 54873 54288 520 236 486 Montana66 00011 57013 926 40 504 Nebraska140 39425 90631 183 83 305 Nevada157 76724 09829 005 104 664 New Hampshire66 00011 57013 926 40 504 New Jersey337 88959 23671 300 207 353 New M exico162 67325 37830 546 106 749 New York1 104 812 186 758 224 791 693 263 North Carolina477 00188 019 105 944 283 038 North Dakota66 00011 57013 926 40 504 Ohio700 755 129 308 155 641 415 806 Oklahoma274 02250 56460 862 162 596 Oregon274 17446 47555 940 171 759 Pennsylvania748 005 138 026 166 136 443 843 Puerto Rico77 58513 87716 703 47 005 Rhode Island75 24013 88416 711 44 645 South Carolina263 65046 72256 236 160 692 South Dakota66 00011 57013 926 40 504 Tennessee688 169 126 985 152 846 408 338 Texas1 379 023 214 333 257 982 906 708 Utah114 16718 63522 431 73 101 Vermont66 00011 57013 926 40 504 Virginia435 78973 48488 449 273 856 Washington437 80469 65883 844 284 302 West Virginia124 59722 99127 674 73 932 Wisconsin327 28860 39372 693 194 202 Wyoming66 00011 57013 926 40 504 State Total18 465 000 3 236 914 3 896 115 11 331 971 Virgin Islands20 0003 5064 220 12 274 U. S. Department of Labor Employment and Training Administration Work Opportunity Tax Credits FY 2022 State Allotments and Balance after Dissemination to States under Continuing Resolutions CR 1 through 2 I - 1