TEGL_06-20_Change_1.pdf

ETA Advisory File Text

EMPLOYMENT AND TRAINING ADMINISTRATION ADVISORY SYSTEM U.S. DEPARTMENT OF LABOR Washington D.C. 20210 CLASSIFICATION WOTC CORRESPONDENCE SYMBOL OWI DATE March 31 2021RESCISSIONS None EXPIRATION DATE Continuing ADVISORY TRAINING AND EMPLOYMENT GUIDANCE LETTER NO. 06-20 CHANGE 1 TO STATE WORKFORCE DEVELOPMENT AGENCIES STATE WORKFORCE ADMINISTRATORS WORK OPPORTUNITY TAX CREDIT COORDINATORS FROM SUZAN G. LEVINE Principal Deputy Assistant Secretary SUBJECT Change 1 to Training and Employment Guidance Letter No. 06-20 Work Opportunity Tax Credit WOTC Funding Allotments for Fiscal Year 2021 1.Purpose. This Change 1 to the Training and Employment Guidance Letter TEGL 06-20 conveys the remaining balance for WOTC and explains application requirements for State Workforce Agencies SWA based on funding appropriated for Fiscal Year FY 2021 through September 30 2022. Additionally this TEGL announces 12 states selected to receive additional FY 2021 backlog funding and provides instructions to those states on how to proceed. The remainder of TEGL No. 06-20 remains the same. 2.Action Requested. Grantees must meet the application requirements detailed in section 4 of this TEGL within 30 calendar days from the date of this TEGL issuance. Additionally for the 12 states selected to receive additional FY 2021 backlog awards grantees must meet the application requirements and submit the required application material detailed in section 4 within 15 calendar days from the date of this TEGL issuance. 3.Summary and Background. a.Summary On November 16 2020 the Department issued TEGL No. 06-20 which announced the initial funding allotments of 3 647 090 under the Continuing Appropriations Act 2021 and Other Extensions Act Public Law 116-159 . This Change 1 provides the full year allotments and state balances for FY 2021 as authorized under the Consolidated Appropriations Act 2021 P.L. 116-260 . The amounts are listed on Attachment I Work Opportunity Tax Credit FY 2021 State Allotments and Balance after Dissemination to States under Continuing Resolution CR 1. ETA has available grant funds totaling 18 485 000 for normal operations in FY 2021. This Change 1 announces the remaining balance of 14 837 910 for normal operations in FY 2021. Additionally the Consolidated Appropriations Act 2021 authorized an additional 2 500 000 in funding to support WOTC efforts to reduce processing backlogs and assist states in adopting or modernizing information technology for processing of certification requests. This Change 1 announces the 12 states selected to receive FY 2021 backlog awards. b. Background The U.S. Departments of Labor and Treasury jointly administer WOTC. The Department of Treasury through the Internal Revenue Service IRS administers all tax-related provisions and requirements of the Federal tax credit. The Department of Labor through the Employment and Training Administration ETA awards grants to states for administration of WOTC. WOTC is authorized until December 31 2025 under Section 113 of Division EE Title 3 -- Consolidated Appropriations Act 2021. 4. Details. States must enter the remaining balance to state amount provided in Attachment I on their SF-424 Form - Application for Federal Assistance OMB Control No. 4040- 0004 as their request for FY 2020 funding. After allocating 20 000 to the 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 2019 through September 30 2020 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 2019 through September 30 2020 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 2018 through September 30 2019. Application Requirements for FY 2021 Funding. ETA requires grantees to submit an electronically signed copy of the SF-424 through Grants.gov for the Change 1 ETA- WOTC-TEGL-06-20-2021 at https www.grants.gov within 30 calendar days from the date of this TEGL s issuance. The official electronically signed SF-424 Form must reflect the remaining balance to state amount listed in Attachment I for the requested estimated funding total in item 18 and the Catalog of Federal Domestic Assistance Number 17.271 for item 11. Each applicant must have a Dun and Bradstreet Data Universal Numbering System DUNS number available and 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 resources call 1-800-518-4726 or 1-606-545-5035 to speak to a Customer Support Representative or email support grants.gov. General Administration. SWAs are responsible for using the FY 2021 funds to conduct the WOTC activities outlined in Attachment II Statement of Work through September 30 2022. SWAs must enter the remaining balance to the state amount provided in Attachment I on their SF-424 Form - Application for Federal Assistance OMB Control No. 4040- 0004 as their request for remaining FY 2021 funding and submit an electronically signed copy of the SF-424 through Grants.gov for the Change 1 ETA-WOTC-TEGL-06-20- 2021 at www.grants.gov within 30 calendar days from the date of this TEGL s issuance. States selected for additional backlog funding must enter the award amount for their assigned funding amount on an 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 the Change 1 ETA-WOTC-TEGL-06-20-2021 at www.grants.gov within 15 calendar days from the date of this TEGL s issuance. FY 2021 WOTC Backlog Awards. ETA will distribute a second set of WOTC backlog funds to approximately 12 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 2020 backlog total and the percentage ratio it represents of the state s total workload b. FY 2020 financial reports and c. FY 2020 qualitative data based on states narratives which explain how the states could use this award to make improvements to their existing systems or procedures and reduce their backlog. ETA carefully reviewed these three sources of data to gain an understanding of the states needs and any contributing factors that led to the states backlog. ETA did not consider the states that received backlog funding last year because they are currently still spending FY 2020 backlog funding. ETA examined the remaining states backlogs and information technology modernization needs to identify this second set of selected states. Additionally ETA analyzed FY 2020 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 states previously submitted in FY 2020. 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 systems. Based on these factors ETA identified 12 states with the most critical need to address backlog to receive backlog funding. Based on the availability of 2 500 000 in funds ETA established four funding tiers to distribute these awards to 12 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 100 000 200 000 300 000 Alabama Hawaii Louisiana New Hampshire Illinois Montana Ohio Arizona Oklahoma North Dakota South Dakota Utah Note If a state fails to submit the required application materials timely 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. 5. Inquiries. Please direct all questions to the appropriate Regional WOTC Coordinator listed on the WOTC website at https www.dol.gov agencies eta wotc contact regional-offices. 6. References. Section 51 of the Internal Revenue Code of 1986 as amended Training and Employment Guidance Letter 06-20 P.L. 116-260 -- Consolidated Appropriations Act 2021 and P. L. 116-159 -- Continuing Appropriations Act 2021. 7. Attachments. Attachment I WOTC FY 2021 State Allotments and Balance after Dissemination to States under Continuing Resolution CR 1 Attachment II Work Opportunity Tax Credit Statement of Work Attachment I U.S. Department of Labor Employment and Training Administration Work Opportunity Tax Credits F Y 2021 State Allotments and Balance after Dissemination to States under Continuing Resolution CR 1 FY 2021 Full Obligated under Balance to Year Allotment CR 1 10 1 20 States Amount through 12 11 20 State Total Alabama Alaska Arizona Arkansas California Colorado Connecticut Delaware 18 485 000 282 464 66 000 302 064 143 313 2 511 345 294 952 125 757 71 024 3 647 090 58 663 13 022 62 734 27 875 494 571 54 478 26 118 13 482 14 837 910 223 801 52 978 239 330 115 438 2 016 774 240 474 99 639 57 542 District of Columbia Florida Georgia Hawaii Idaho Illinois Indiana Iowa 66 000 873 808 533 963 66 000 79 200 782 418 302 770 242 410 13 022 181 476 110 896 13 022 13 022 162 496 62 880 50 345 52 978 692 332 423 067 52 978 66 178 619 922 239 890 192 065 Kansas Kentucky Louisiana Maine Maryland M assachusetts M ichigan Minnesota 128 863 392 082 290 187 72 228 352 949 369 066 636 709 261 601 26 763 81 429 60 267 15 001 73 302 70 936 132 234 52 807 102 100 310 653 229 920 57 227 279 647 298 130 504 475 208 794 M ississippi Missouri Montana Nebraska Nevada New Hampshire New Jersey New M exico 217 864 419 524 66 000 147 783 137 465 66 000 337 913 144 769 42 278 81 899 13 022 30 692 22 601 13 022 70 179 27 145 175 586 337 625 52 978 117 091 114 864 52 978 267 734 117 624 New York North Carolina North Dakota Ohio Oklahoma Oregon Pennsylvania Puerto Rico 1 065 362 502 106 66 000 737 637 288 444 265 119 787 374 79 162 190 746 104 279 13 022 141 740 47 425 47 332 158 478 16 441 874 616 397 827 52 978 595 897 241 019 217 787 628 896 62 721 Rhode Island South Carolina South Dakota Tennessee Texas Utah Vermont Virginia Washington West Virginia Wisconsin Wyoming State Total Virgin Islands 79 200 266 524 66 000 724 388 1 222 663 106 306 66 000 419 190 397 365 131 155 344 514 66 000 18 465 000 20 000 13 022 51 625 13 022 150 444 234 242 22 078 13 022 68 922 82 526 23 964 66 113 13 022 3 643 144 3 946 66 178 214 899 52 978 573 944 988 421 84 228 52 978 350 268 314 839 107 191 278 401 52 978 14 821 856 16 054 Attachment II II-1 Work Opportunity Tax Credit WOTC Statement of Work State Workforce Development Agencies also known as State Workforce Agencies SWA are to use Fiscal Year 2020 funds to realize the following responsibilities 1. Designate a state coordinator who oversees the administration of WOTC for each state grant. 2. Determine eligibility of individuals as members of targeted groups on a timely basis and performing a quality review by a second staff person for each determination within 48 hours of receipt. 3. Issue employer certifications denials or notices of invalidation for tax credits on a timely basis and in accordance with the policies and procedures set forth by the Employment and Training Administration ETA . 4. Develop a backlog reduction plan which includes an estimated timeline to reduce and eliminate existing backlogs based on current policies and procedures and notify your regional coordinator prior to implementation. 5. Develop working agreements with partner agencies in the American Job Center network also known as the One-Stop Career Center system and coordinating efforts to promote WOTC to employers and job seekers and other Workforce Innovation and Opportunity Act WIOA partners. 6. Develop working agreements with other SWAs for the timely and orderly processing of out of state Certification Requests i.e. applications requiring SWAs to provide available documentation and records for WOTC potentially eligible applicants new hires relocating and working in another state. 7. Establish and implement an appeals resolution process in accordance with the guidelines provided by ETA. 8. Establish and maintain appropriate forms review record keeping and reporting capability related to the orderly management of WOTC certification requests. 9. Establish and maintain an orderly system for regularly verifying the eligibility of a random sample of individuals certified under WOTC and initiating effective corrective action when appropriate as indicated by results of such activities. 10. Negotiate formal cooperative agreements with local workforce areas State Vocational Rehabilitation Agencies Veterans Administration and related groups Employment Networks and other state and local agencies and organizations for the purposes of issuing Conditional Certifications where appropriate. Attachment II II-2 11. Negotiate formal cooperative agreements with appropriate state agencies to expedite verification of information provided to the SWA by participating target group members. 12. Train state and parti cipating agency staff and provide monitoring and technical assistance to these agencies as appropriate for conducting target group preliminary eligibility determinations and issuing Conditional Certifications. 13. Cooperate with employment and training organizations already working with the private sector such as veteran organizations employer committees and workforce development boards to inform employers about the tax benefits to be derived from participation and the eligibility requirements under WOTC. 14. Assure that all data exchanges conducted through or during the course of performance of this grant will be conducted in a manner consistent with applicable Federal law and TEGL NO. 39 -11 issued June 28 2012 . All such activity conducted by ETA and or recipient s will be performed in a manner consistent with applicable state and Federal laws. Other Grant Agreement Conditions By entering into this agreement the SWA agrees to the following conditions The SWA must adhere to provisions of the In ternal Revenue Code of 1986 Section 51 as amended in administering WOTC. Law designates the SWAs as the only agencies that can issue a Certification 26 USC sec. 51 d 12 . The SWAs can enter into cooperative agreements with certain participating agenc ies and together provide other WOTC related services e.g. outreach activities . ETA will review funding use against the quarterly spending plan. When expenditures are substantially below plan ETA may de -obligate funds for redistribution.