TEGL 06-22, Change 1 (Complete Signed PDF).pdf

ETA Advisory File Text

EMPLOYMENT AND TRAINING ADMINISTRATION ADVISORY SYSTEM U.S. DEPARTMENT OF LABOR Washington D.C. 20210 CLASSIFICATION W OTC CORRESPONDENCE SYMBOL OWI DATE RESCISSIONS None EXPIRATION DATE Continuing ADVISORY TRAINING AND EMPLOYMENT GUIDANCE LETTER NO. 06-22 CHANGE 1 TO STATE WORKFORCE AGENCIES STATE WORKFORCE ADMINISTRATORS WORK OPPORTUNITY TAX CREDIT COORDINATORS FROM BRENT PARTON Acting Assistant Secretary S UBJECT Change 1 to Training and Employment Guidance Letter No. 06-22 Work Opportunity Tax Credit WOTC Initial Funding Allotments for Fiscal Year 2023 1.Purpose. This C hange 1 to Training and Employment Guidance Letter TEGL No. 06-22 conveys the remaining balance for Fiscal Year FY 2023 WOTC funding allotments and explains application requirements for State Workforce Agencies SWAs based on appropriated funding. Additionally this Change 1 TEGL announces 14 states selected to receive additional FY 2023 backlog award funding and provides instructions to those states on how to proceed. The rest of TEGL No. 06-22 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 14 2022 the Employment and Training Administration ETA issued TEGL No. 06-22 which announced the initial FY 2023 WOTC funding allotments of 3 900 335 under the Continuing Appropriations and Ukraine Supplemental Appropriations Act 2023 Pub. L. 117-180 . The continuing resolution CR allowed for incremental grant funding for states administration of the WOTC pro-rated based on the CR s end date of December 16 2022. On December 16 2022 the Further Continuing Appropriations and Extensions Act 2023 Pub. L. 117-229 became law providing a second CR CR2 through December 23 2023. The amount of WOTC funding authorized under CR2 was 354 912. On December 23 2022 the President signed the Further Additional Continuing Appropriations and Extensions Act 2023 Pub. L. 117-264 providing a third CR CR3 through December 30 2022 and providing additional WOTC funding in the amount of 354 912. On December 29 2022 the Consolidated Appropriations Act of 2023 Pub. L. 117-328 was signed into law authorizing the full FY 2023 appropriations. ETA has available 2 grant funds totaling 18 485 000 for normal operations in FY 2023. This Change 1 TEGL announces the full-year appropriation and availability of the remaining balance to the states in the amount of 14 584 665 which includes funding authorized under CR2 and CR3. The state allotment amounts are listed in Attachment I Work Opportunity Tax Credit Fiscal Year 2023 State Allotments and Balance after Dissemination to States under Continuing Resolution 1. A dditionally the Consolidated Appropriations Act of 2023 authorized an additional 2 500 000 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 1 TEGL announces the 14 states selected to receive FY 2023 backlog awards and their respective award amounts in Section 4. b. Background The WOTC is set forth under section 51 of the Internal Revenue Code of 1986 as amended 26 U.S.C. sec. 51 and is effective until December 31 2025 under the Consolidated Appropriations Act 2021 Pub. L. 116-260 Division EE Title 1 Subtitle B Section 113. The U.S. Department of the Treasury through the Internal Revenue Service IRS administers all tax-related provisions and requirements of the Federal tax credit. The U.S. Department of Labor through ETA awards grants to states for administration of the WOTC. 4. Details. States must enter the state allotment amount in the Balance to States column provided in Attachment I on their SF-424 F orm Application for Federal Assistance as their request for additional FY 2023 funding. States selected for FY 2023 WOTC Backlog Award funding must enter the state-specific award amount listed in Section 4 of this TEGL on a separate SF-424 Form. All States must submit an electronically signed copy of the SF- 424 through Grants.gov. 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 percentage. The administrative formula is calculated as follows a. 5 0 percent is based on each state s relative share of total WOTC certifications issued from October 1 2021 through September 30 2022 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 2021 through September 30 2022 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 2020 through September 30 2021. 3 Application Requirements for FY 2023 Funding. ETA requires grantees to submit an electronically signed copy of the SF-424 Form Application for Federal Assistance OMB Control No. 4040-0004 as their official request for funding opportunity number ETA- WOTC-TEGL-06-22-23-C1 at https www.grants.gov within 30 calendar days from the issuance date of this TEGL. T he official electronically signed SF-424 Form must reflect the amount listed in Attachment I as the state s requested estimated funding total in item 18 the Catalog of Federal Domestic Assistance Number 17.271 for item 11 and the grantee s 12-characer Unique Entity Identifier UEI number listed for item 8c. Each applicant must have a UEI number assigned by the System for Award Management and it must be registered at SAM.gov before submitting an SF-424 application. Grantees should indicate the estimated amount of Indirect Costs to be claimed by the recipient for FY 2023 if any as a sentence for item 15 Descriptive Title of Applicant s Project. Grantees may use the amount of indirect costs reported against their FY 2022 WOTC grant as an approximation of FY 2023 indirect cost expenditures. For example Indirect Costs for this award are estimated at 19 000. If there is no estimated Indirect Costs the following statement must be entered Indirect Costs for this award are estimated at 0.00. T o 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. Revised Award Descriptions. As part of a Federal government-wide effort to describe grant activities consistently and accurately ETA revised its standard grant award descriptions. States may see the following text in the grant awards or online descriptions of WOTC grants Purpose The purpose of this grant is to allow SWAs to administer WOTC per ETA guidance and provisions of the IRS Code of 1986 Section 51 as amended. Law designates the SWAs as the only agencies that can issue a Certification 26 USC 51 d 12 . That statute refers to SWAs as State employment security agencies established in accordance with 29 U.S.C. 49. Activities to be performed SWAs must use funds to implement the requirements set forth in the WOTC Statement of Work including to Designate a state coordinator who oversees the administration of WOTC for each state grant Determine 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 accordance 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 4 credits determined by the U.S. Department of the Treasury. 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 number of employment opportunities and employers who seek to increase hiring of qualified job applicants. Other beneficiaries include state and local partner agencies in the 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 their Grant Officer. F Y 2023 WOTC Backlog Awards. ETA intends to distribute WOTC backlog awards to 14 states with the most critical needs for assistance in alleviating processing backlogs and adopting or modernizing information technology for processing of certification requests. To inform the selection process ETA analyzed the following data a. FY 2022 backlog total and percentage ratio it represents of the state s total workload b. FY 2022 and FY 2021 financial reports and c. FY 2022 qualitative data based on states and or regional coordinators 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 awards in FY 2022 nor did it extend FY 2021 grantees due to the overlapping grant period of performance. ETA examined the remaining states backlogs and information technology modernization needs to identify this set of selected states. Additionally ETA analyzed FY 2022 and FY 2021 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 narratives that states submitted. The selected states expressed interest in this additional backlog funding to help them attain staff support enhance their current partially automated systems and develop automated systems. Based on these factors ETA identified 14 states with the most critical need to address backlog or system modernization issues and to receive additional funding. Based on the availability of 2 500 000 in funds ETA established three funding tiers to distribute these awards to 14 states Tier 1 100 000 Tier 2 200 000 Tier 3 300 000 5 The selected states and corresponding funding amounts for these awards are as follow 100 000 Alabama Alaska Illinois Montana Rhode Island Virginia 200 000 Connecticut Hawaii New Hampshire North Carolina Ohio 300 000 California Indiana New Jersey N ote 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. General Administration. With their FY 2023 grant award SWAs are responsible for conducting the WOTC activities outlined in the WOTC Statement of Work. See Attachment II of TEGL 06-22 Work Opportunity Tax Credit WOTC Initial Funding Allotments for Fiscal Year 2023 available here https www.dol.gov agencies eta advisories tegl-06-22 . Reporting Requirements. a Quarterly Financial Report SWAs must report fiscal expenditures 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. As part of ETA s transition away from legacy systems the new Payment Management System PMS Financial Reporting System will go live for ETA grant recipients submission of the quarterly ETA-9130 financial reports on April 3 2023. PMS is operated by the U.S. Department of Health and Human Services which will conduct training for ETA grant recipients on the use of the new reporting system. Additional guidance and information on the access and use of the PMS Financial Reporting System for the submission of future ETA-9130 quarterly financial reports is provided in Training and Employment Notice No. 16-22. The PMS Financial Reporting System training sessions will be recorded and available for future reference. b Quarterly Performance Report SWAs must use the 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 of these reports is important for administration purposes. 5. Inquiries. Please direct inquiries 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 https uscode.house.gov view.xhtml path prelim title26 subtitleA chapter1 subchapt erA part4 subpartF edition prelim 6 Section 49 of Title 29 of the United States Code Labor Pub. L. 117-180 Continuing Appropriations and Ukraine Supplemental Appropriations Act of 2023 Pub. L. 117-229 Further Continuing Appropriations and Extensions Act 2023 Pub. L. 117-264 Further Additional Continuing Appropriations and Extensions Act 2023 Pub. L. 117-328 Consolidated Appropriations Act of 2023 7. Attachment s . Attachment I Work Opportunity Tax Credit FY 2023 State Allotments and Balance after Dissemination to States under Continuing Resolution CR htt ps uscode.house.gov view.xhtml req title 29 20section 49 20edition prelim htt ps www.congress.gov 117 bills hr6833 BILLS-117hr6833enr.pdf htt ps www.congress.gov 117 bills hr1437 BILLS-117hr1437enr.pdf htt ps www.congress.gov 117 bills hr4373 BILLS-117hr4373enr.pdf htt ps www.congress.gov 117 bills hr2617 BILLS-117hr2617enr.pdf and Training and Employment Guidance Letter No. 06-22 Work Opportunity Tax Credit WOTC Work Opportunity Tax Credit Initial Funding Allotments for Fiscal Year 2023 an d Attachments https www.dol.gov agencies eta advisories tegl-06-22 . Training and Employment Notice No. 16- 22 Th e Employment and Training Ad ministratio n is Implementing GrantSolutions for Grant Award Processing and the Payment Management System for Financial Reporting https www.dol.gov agencies eta advisories ten-1 6-22 . Attachme nt I U. S. De pa rtme nt of La bor Employme nt a nd Tra ining Administra tion Work Opportunity Tax Credits FY 2023 State Allotments and Balance after Dissemination to States under Continuing Resolution CR 1 State FY 2023 Full Ye ar Allotme nt AmountObligate d unde r CR 1 10 1 22 through 12 16 22 Balance to States Total 18 485 000 3 900 335 14 584 665 Alabama275 88261 275214 607 Alaska66 00013 92652 074 Arizona344 35360 549283 804 Ar kansas129 34028 727100 613 C alifornia2 463 406511 2831 952 123 Colorado299 38866 496232 892 Connecticut170 02131 842138 179 Delaware80 96817 98362 985 D istrict of C olumbia66 00013 92652 074 Florida996 142175 155820 987 Georgia481 902107 033374 869 Hawaii83 40714 66668 741 Idaho74 74816 60258 146 Illinois 706 132 156 836549 296 Indiana273 25060 690212 560 Iow a218 77648 591170 185 Kansas146 90425 831121 073 Kentucky353 85478 593275 261 Louisiana288 00363 967224 036 Maine66 00014 47851 522 Maryland398 70588 554310 151 Massachusetts380 50484 512295 992 Michigan574 630127 628447 002 Minnesota288 01661 790226 226 Mississippi207 39046 062161 328 Missouri378 62184 094294 527 Montana66 00013 92652 074 Nebraska133 37429 623103 751 Nevada166 33333 289133 044 New Hampshire66 00013 92652 074 New Jersey326 81771 295255 522 New Mexico169 87434 324135 550 N ew Yo r k1 253 665233 1151 020 550 North C arolina510 810100 647410 163 North Dakota66 00013 92652 074 Ohio720 311147 859572 452 Oklahoma260 32157 819202 502 Oregon260 46557 851202 614 Pennsylvania710 605157 829552 776 Puerto Rico81 51916 37065 149 Rhode Island71 47815 87655 602 South Carolina250 46855 630194 838 South Dakota66 00013 92652 074 Tennessee653 761145 204508 557 Texas1 310 072290 9741 019 098 Utah108 45924 08984 370 Vermont66 00013 92652 074 Vir ginia414 00091 951322 049 Washington415 91492 377323 537 West Virginia118 36726 29092 077 Wisconsin320 04569 058250 987 Wyoming66 00013 92652 074 State Total18 465 0003 896 11514 568 885 Virgin Islands20 0004 22015 780 I-1