TEGL 06-23.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 DNPTTA DATE November 14 2023RESCISSIONS None EXPIRATION DATE Continuing ADVISORY TRAINING AND EMPLOYMENT GUIDANCE LETTER NO. 06-23 TO STATE WORKFORCE AGENCIES STATE WORKFORCE ADMINISTRATORS WORK OPPORTUNITY TAX CREDIT COORDINATORS FROM BRENT PARTON Principal Deputy Assistant Secretary SUBJECT Work Opportunity Tax Credit WOTC Initial Funding Allotments f or Fiscal Year 2024 1. Purpose. To convey the Fiscal Year FY 2024 initial f unding allotments f or WOTC application requirements f or State Workf orce A gencies SWA based on f unding appropriated through a continuing resolution through November 17 2023. 2.Action Requested. Grantees must meet the application requirements detailed in section 4 within 30 calendar days f rom the date of this Training and Employment Guidance Letter TEGL issuance. 3.Summary and Background. a.Summary On September 30 2023 the President signed into law H.R. 5860 a continuing resolution CR known as the Continuing Appropriations Act 2024 and Other Extensions Act which became Public Law 118-15. The CR provides f or incremental FY 2024 grant f unding f or states administration of the WOTC prorated based on the CR s expiration date of November 17 2023. The appropriation f or WOTC under th is CR is 2 423 384. Once Congress authorizes f inal appropriations f or FY 202 4 or additional incremental f unding under a subsequent CR the Employment and Training Administration ETA will publish a change to this TEGL to announce the incremental or f ull-year allotments and state balances. If applicable ETA will also announce any additional f unding appropriated to reduce processing backlogs and assist states in adopting or modernizing inf ormation technology f or processin g of certif ication requests. ETA requests that SWAs submit applications f or f unding as allotted in Attachment I of this TEGL. b.Background The WOTC is set f orth under section 51 of the Internal Revenue Cod e of 1986 as amended 26 U.S.C. 51 and is authorized until December 31 2025 under the 2 Consolidated Appropriations Act 2021 Pub. L. 116-260 Division EE Title 1 Section 113.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 f or administration of WOTC. 4.Details. States must enter their state-specif ic allotment amount provided in Attachment I on their SF-424 Form Application for Federal Assistance OMB Control No. 4040-0004 as their request f or FY 2024 f unding. Allotment Formula. In February 2023 ETA published a Request f or Comment in the Federal Register 88 FR 10540 requesting public comment on proposed modif ications to WOTC procedural guidance and the administrative f ormula used to calculate annual state allotments. The proposed f ormula changes included an inf lation-adjusted increase to state minimum f unding allotments and revised metrics used in the f ormula methodology. ETA will use the revised administrative f ormula to calculate states remaining balances f or FY 2024 allotments once Congress passes the FY 2024 f ull-year appropriation. ETA will announce the f ull-year FY 2024 allotments and revised administrative f ormula in a subsequent Change TEGL. ETA determined initial FY 2024 state allotments provided in Attachment I f or normal WOTC operations by calculating each state s relative share of FY 2023 f ull-year funding and multiplying each state s relative share by the total FY 2024 WOTC CR prorated f unding amount through November 17 2023. ETA determined FY 2023 state allotments f or normal WOTC operations according to the f ollowing methodology Af ter allocating 20 000 to the U.S. Virgin Islands ETA distributes the remaining f unds to the SWAs by administrative formula with a 66 000 minimum allotment and a 95 percent stop-loss 120 percent stop-gain f rom the previous year allotment percentage. We calculate the administrative f ormula as f ollows a.50 percent is based on each state s relative share of total WOTC certif ications issued f rom October 1 2021 through September 30 2022 b.30 percent is based on each state s relative share of the Civilian Labor Force averages f or the 12-month period f rom 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 f or Needy Families averages from October 1 2020 through September 30 2021. Application Requirements for FY 20 24 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-06-23-2024 at https www.grants.gov within 30 calendar days from the issuance date of this TEGL. The official electronically signed SF-424 Form should be marked as a new application for funding and must reflect the amount listed in Attachment I as the state s requested estimated funding total in item 18. Grantees must enter the Catalog of Federal Domestic Assistance Number 17.271 for item 11 and the grantee s 12-character Unique Entity Identifier UEI number for item 8c. Each applicant must have a UEI 3 number available and it must be registered in the System f or Award Management SAM.gov bef ore submitting an SF-424 application. Grantees should indicate the estimated amount of Indirect Costs to be claimed by the recipient f or FY 2024 expenditures if any as a sentence f or item 15 Descriptive Title of Applicant s Project. Grantees may use the amount of indirect costs reported against their FY 2023 WOTC grant as an approximate f or FY 2024 indirect cost expenditures. For example Indirect Costs for this award are estimated at 19 000. If there is no estimated Indirect Costs the f ollowing statement must be entered Indirect Costs for this award are estimated at 0.00. To submit the required documents applicants must f ollow the Apply f or Grants link on Grants.gov and download the links f or the grant application package. For this f unding opportunity applicants should not follow the Find Grants link as this is not a competitive f unding opportunity. If applicants encounter a problem with Grants.gov and do not f ind an answer in 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. Award Descriptions. As part of a Federal government-wide ef f ort to describe grant activities consistently and accurately ETA uses standard grant award descriptions. States may see the f ollowing text in the grant award or in online descriptions of the WOTC grants Purpose The purpose of this grant is to allow SWAs to administer WOTC per ETA guidance and provisions set f orth in the IRS Code of 1986 Section 51 as amended. Law designates the SWAs as the only agencies that can issue a Certif ication 26 U.S.C. 51 d 12 . The statute ref ers to SWAs as State employment security agencies established in accordance with the Wagner-Peyser Act 29 U.S.C. 49 et seq. Activities to be performed SWAs must use f unds to implement the requirements set f orth in the WOTC Statement of Work including to Designate a state coordinator who oversees the administration of WOTC f or each state grant Determine eligibility of individuals as members of targeted groups on a timely basis and issue employer certif ications denials or notices of invalidation for tax credits on a timely basis and in accordance with the policies and procedures set f orth by ETA and Establish and maintain appropriate f orms quality review process record keeping and reporting capability related to the orderly management of WOTC certif ication requests. Expected Outcomes For WOTC grants SWAs will issue determinations certif ications or denials f or employers certif ication requests which f acilitate tax credits determined by the U.S. Department of the Treasury. SWAs will increase ef ficiency in processing employers certif ication requests and develop plans that include an estimated timeline to eliminate existing backlogs of certif ication 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 benef iciaries include state and local partner agencies in the American Job Center network that coordinate ef f orts to promote WOTC to employers job seekers and other Workf orce Innovation and Opportunity Act WIOA partners. 4 Subrecipient Activities SWAs as WOTC grant recipients do not typically subaward f unds. States that wish to subaward funds should seek approval f rom their Grant Of f icer. General Administration. With their FY 2024 grant award SWAs are responsible f or conducting the WOTC activities outlined in the WOTC Statement of Work Attachment II . As noted above this TEGL provides incremental f unding proportional to f unds appropriated through the November 17 2023 expiration date in the Continuing Resolution the timing and amount s of subsequent incremental f unding depends on f uture appropriations. 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 f unds. 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. Perf ormance reports are due no later than 45 days f ollowing the end of each quarter. Timely submission of these reports is important f or 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-of f ices. 6.References. Section 51 of the Internal Revenue Code of 1986 as amended 26 U.S.C. 51 https uscode.house.gov view.xhtml path prelim title26 subtitleA chapter1 subchapt erA part4 subpartF edition prelim Chapter 4B of Title 29 of the United States Code Labor https uscode.house.gov view.xhtml path prelim title29 chapter4B edition prelim Pub. L. 116-260 Consolidated Appropriations Act 2021 which authorizes WOTC https www.congress.gov 116 plaws publ260 PLAW-116publ260.pdf Pub. L. 117-328 Consolidated Appropriations Act 2023 https www.congress.gov 117 plaws publ328 PLAW-117publ328.pdf Pub. L. 118-15 Continuing Appropriations Act 2024 and Other Extensions Act https www.congress.gov 118 plaws publ15 PLAW-118publ15.pdf and Federal Register Work Opportunity Tax Credit Request f or Comments Regarding Proposed Modif ications to Procedural Guidance and Administrative Formula 88 FR 10540 . 7.Attachment s . Attachment I Work Opportunity Tax Credit Fiscal Year 2024 Initial State Allotments Attachment II Work Opportunity Tax Credit Statement of Work Attach men t I Work Opportunity Tax Credit FY 2024 Funding under Continuing Resolution CR 1 10 1 23 thru 11 17 23 13.11 State Total 2 423 384 Alabama 36 168 Alaska 8 653 Arizona 45 145 Arkansas 16 956 California 322 953 Colorado 39 250 Connecticut 22 290 Delaware 10 615 District of Columbia 8 653 Florida 130 594 Georgia 63 177 Hawaii 10 935 Idaho 9 799 Illinois 92 574 Indiana 35 823 Iowa 28 682 Kansas 19 259 Kentucky 46 390 Louisiana 37 757 Maine 8 653 Maryland 52 270 Massachusetts 49 884 Michigan 75 334 Minnesota 37 759 Mississippi 27 189 Missouri 49 637 Montana 8 653 Nebraska 17 485 Nevada 21 806 New Hampshire 8 653 New Jersey 42 846 New Mexico 22 270 New York 164 355 North Carolina 66 967 North Dakota 8 653 Ohio 94 433 Oklahoma 34 128 Oregon 34 147 Pennsylvania 93 160 Puerto Rico 10 687 Rhode Island 9 371 South Carolina 32 836 South Dakota 8 653 Tennessee 85 708 Texas 171 750 Utah 14 219 Vermont 8 653 Virginia 54 275 Washington 54 526 West Virginia 15 518 Wisconsin 41 958 Wyoming 8 653 Virgin Islands 2 622 I-1 Attachment II II-1 Work Opportunity Tax Credit WOTC Statement of Work State Workf orce Development Agencies also known as State Workf orce Agencies SWA must use f unds f or the Fiscal Year to conduct the f ollowing mandatory activities 1. Adhere to Employment and Training Administration ETA guidance and provisions of the Internal Revenue Code of 1986 Section 51 as amended in administering the Work Opportunity Tax Credit WOTC certif ication process. Law designates the SWA as the only agency that can issue a Certif ication 26 U.S.C 51 d 12 . That statute ref ers to SWAs as State employment security agencies established in accordance with 29 U.S.C. 49 et seq. . 2. Designate a State Coordinator who oversees the WOTC administration f or each state grant and attends monthly technical assistance grantee calls hosted by ETA s National and or Regional Of f ices. 3. Determine eligibility of individuals as members of targeted groups on a timely basis and issue determinations certif ications denials or notices of invalidation f or invalid certif ications that were previously issued on a timely basis and in accordance with the policies and procedures set f orth by ETA. 4. Establish and implement an appeals resolution process in accordance with the guidelines provided by ETA. 5. Develop a backlog reduction plan that includes an estimated timeline to eliminate the state s existing backlog based on current policies and procedures and notif y their ETA Regional Coordinator prior to plan implementation. 6. Establish and maintain appropriate quality review processes record keeping procedures and reporting capability related to the orderly management of WOTC certif ication requests in accordance with the policies and procedures set f orth by ETA. 7. Establish and maintain an orderly system f or regularly verif ying the eligibility of a random sample of individuals certif ied under WOTC on a quarterly basis and initiating ef f ective corrective action when appropriate as indicated by results of such quality control activities. Additionally SWAs are strongly encouraged to use the f unds to conduct the f ollowing activities Adopt inf ormation technology i.e. systems applications sof tware etc. to process certif ication requests more ef f iciently or make modernization improvements to their existing systems or procedures to increase ef f iciency and reduce any processing backlog. Develop working agreements such as Memoranda of Understanding MOU or other f ormal agreements with partner agencies in the American Job Center network also known as the One-Stop Career Center system to coordinate ef f orts to promote WOTC to employers job seekers and other Workf orce Innovation and Opportunity Act partners. Develop working agreements such as MOUs or other f ormal agreements with other SWAs f or the timely and orderly processing of out of state certif ication requests requiring SWAs to provide available documentation and or records f or WOTC potentially eligible applicants new hires relocating and working in another state. Attachment II II-2 Develop working agreements such as MOU s or other f ormal agreements with state or local partnering agencies i.e. state Vocational Rehabilitation Agencies Veterans Af f airs Administration and related organizations Employment Networks and other local workf orce areas f or the purposes of expediting verif ication of targeted group eligibility inf ormation submitted in certif ication request s and issuing Conditional Certif ications where appropriate. SWAs are expected to t rain state and participating agency staf f and provide monitoring and technical assistance to these agencies as appropriate f or conducting target ed group preliminary eligibility determinations and issuing Conditional Certif ications. Other Grant Agreement Conditions By entering into this agreement the SWA agrees to the f ollowing conditions SWAs must assure that all data exchanges conducted through or during the course of perf ormance of this grant will be conducted in a manner consistent with applicable Federal law and TEGL N o. 39 -11 issued on June 28 2012 . All such activity conducted by ETA and or recipients will be perf ormed in a manner consistent with applicable state and Federal laws. SWAs must f ulf ill perf ormance and f inancial reporting requirements under the grant agreement.