TEGL 08-24 (Complete PDF).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 December 5 2024 RESCISSIONS None EXPIRATION DATE Continuing ADVISORY TRAINING AND EMPLOYMENT GUIDANCE LETTER NO. 08-24 TO STATE WORKFORCE AGENCIES STATE WORKFORCE ADMINISTRATORS WORK OPPORTUNITY TAX CREDIT COORDINATORS FROM JOS JAVIER RODR GUEZ Assistant Secretary SUBJECT Work Opportunity Tax Credit WOTC Initial Funding Allotments for Fiscal Year 2025 1.Purpose. To convey the Fiscal Year FY 2025 initial funding allotments for WOTC application requirements for State Workforce Agencies SWA based on funding appropriated through a continuing resolution through December 20 2024. 2.Action Requested. Grantees must meet the application requirements detailed in section 4 within 30 calendar days from the date of this Training and Employment Guidance Letter TEGL issuance. 3.Summary and Background. a.Summary On September 26 2024 the President signed into law H.R. 9747 a continuing resolution CR known as the Continuing Appropriations and Extensions Act 2025 Pub. L. 118-83 . The continuing resolution CR provides for incremental FY 2025 grant funding for states administration of the WOTC prorated based on the CR s expiration date of December 20 2024. The appropriation for WOTC under this CR is 4 101 822. Once Congress authorizes final appropriations for FY 2025 or additional incremental funding under a subsequent CR the Employment and Training Administration ETA will publish a change to this TEGL to announce the incremental or full-year allotments and state balances. If applicable ETA will also announce any additional funding appropriated to reduce processing backlogs and assist states in adopting or modernizing information technology for processing of certification requests. ETA requests that SWAs submit applications for funding as allotted in Attachment I of this TEGL. b.Background The WOTC is set forth under section 51 of the Internal Revenue Code of 1986 as amended 26 U.S.C. 51 and is authorized until December 31 2025 under the Consolidated Appropriations Act 2021 Pub. L. 116-260 Division EE Title I Section 113.The U.S. Department of the Treasury through the Internal Revenue Service IRS 2 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 WOTC. 4.Details. States must enter their state-specific allotment amount provided in Attachment I on their SF-424 Form Application for Federal Assistance OMB Control No. 4040-0004 as their request for initial FY 2025 funding. Allotment Formula. ETA determined initial FY 2025 state allotments provided in Attachment I for normal WOTC operations by calculating each state s relative share of FY 2024 funding and multiplying each state s relative share by the total FY 2025 WOTC CR prorated funding amount through December 20 2024. ETA determines FY 2025 state allotments for normal WOTC operations according to the following methodology After allocating 36 000 to the U.S. Virgin Islands ETA distributes the remaining funds to the SWAs by administrative formula with a 94 957 minimum allotment and a 95 percent stop-loss 120 percent stop-gain from the previous year allotment percentage. We calculate the administrative formula as follows a.40 percent based on each State s relative share of certifications issued for the most recently completed fiscal year s available data October 1 through September 30 b.40 percent based on each State s relative share of the denials issued for the most recently completed fiscal year s available data October 1 through September 30 and c.20 percent is based on each state s relative share of Civilian Labor Force CLF averages for the 12-month period of the most recently completed FY s available data October 1 through September 30 . Application Requirements for FY 2025 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-08-24 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 number available and it must be registered in the System for Award Management 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 2025 expenditures 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 2024 WOTC grant as an approximate for FY 2025 indirect cost expenditures. For example 3 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. 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 funding opportunity applicants may also follow the Search Grants link and enter ETA-WOTC- TEGL-08 -24 in the Keyword s field to search for the formula funding opportunity. If applicants encounter a problem with Grants.gov and do not find 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 effort to describe grant activities consistently and accurately ETA uses 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 SWAs to administer WOTC per ETA guidance and provisions set forth in the IRS Code of 1986 Section 51 as amended. Law designates the SWAs as the only agencies that can issue a Certification 26 U.S.C. 51 d 12 . The statute refers 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 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 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. General Administration. With their FY 2025 grant award SWAs are responsible for conducting the WOTC activities outlined in the WOTC Statement of Work Attachment II . 4 As noted above this TEGL provides incremental funding proportional to funds appropriated through the December 20 2024 expiration date in the Continuing Resolution the timing and amount s of subsequent incremental funding depends on future 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 funds. 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 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 extended the authorization for WOTC https www.congress.gov 116 plaws publ260 PLAW- 116publ260.pdf Pub. L. 118-47 Further Consolidated Appropriations Act 2024 https www.congress.gov 118 plaws publ47 PLAW-118publ47.pdf TEGL No. 06-23 Change 2 Change 2 to Training and Employment Guidance Letter No. 06-23 Work Opportunity Tax Credit WOTC Initial Funding Allotments for Fiscal Year 2024 https www.dol.gov agencies eta advisories tegl-06-23-change-2 and Pub. L. 118-83 Continuing Appropriations and Extensions Act 2025 https www.congress.gov 118 plaws . 7. Attachment s . Attachment I Work Opportunity Tax Credit Fiscal Year 2025 Initial State Allotments Attachment II Work Opportunity Tax Credit Statement of Work Work Opportunity Tax Credit Attachment I FY 2025 Funding under Continuing Resolution State CR 1 10 1 24 thru 12 20 24 22.19 Total 4 101 822 Alabama 63 204 Alaska 17 559 Arizona 72 528 Arkansas 34 411 California 518 848 Colorado 63 058 Connecticut 35 810 Delaware 21 541 District of Columbia 17 559 Florida 209 810 Georgia 107 341 Hawaii 22 190 Idaho 19 887 Illinois 153 888 Indiana 57 553 Iowa 46 079 Kansas 30 941 Kentucky 74 530 Louisiana 65 422 Maine 17 559 Maryland 83 976 Massachusetts 80 143 Michigan 121 030 Minnesota 60 663 Mississippi 43 681 Missouri 79 746 Montana 17 559 Nebraska 28 092 Nevada 36 118 New Hampshire 17 559 II-1 Work Opportunity Tax Credit FY 2025 Funding under Continuing Resolution Attachment I New Jersey 78 690 New Mexico 35 779 New York 264 050 North Carolina 115 858 North Dakota 17 559 Ohio 183 143 Oklahoma 54 830 Oregon 54 860 Pennsylvania 149 669 Puerto Rico 21 688 Rhode Island 19 017 South Carolina 59 346 South Dakota 17 559 Tennessee 137 697 Texas 334 613 Utah 26 406 Vermont 17 559 Virginia 87 198 Washington 87 601 West Virginia 26 406 Wisconsin 68 462 Wyoming 17 559 Virgin Islands 7 988 II- Attachment II II-1 Work Opportunity Tax Credit WOTC Statement of Work State Workforce Development Agencies also known as State Workforce Agencies SWA must use funds for the Fiscal Year to conduct the following 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 certification process. Law designates the SWA as the only agency that can issue a Certification 26 U.S.C 51 d 12 . That statute refers 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 for each state grant and attends monthly technical assistance grantee calls hosted by ETA s National and or Regional Offices. 3. Determine eligibility of individuals as members of targeted groups on a timely basis and issue determinations certifications denials or notices of invalidation for invalid certifications that were previously issued on a timely and consistent basis and in accordance with the national guidelines policies and procedures set forth by ETA. 4. Establish and implement a standard operating procedures SOP or operating manual for consistent administration of the WOTC program which includes 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 efforts to modernize information technology for processing certification requests. SWAs must notify their ETA Regional Coordinator of backlog reduction work plans 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 certification requests in accordance with the policies and procedures set forth by ETA. 7. Establish and maintain an orderly system for regularly verifying the eligibility of a random sample of individuals certified under WOTC on a quarterly basis and initiating effective corrective action when appropriate as indicated by results of such quality control activities. Additionally SWAs are strongly encouraged to use the funds to conduct the following activities Adopt information technology i.e. systems applications software etc. to process certification requests more efficiently or make modernization improvements to their existing systems or procedures to increase efficiency and reduce any processing backlog. Develop working agreements such as Memoranda of Understanding MOU or other formal agreements with partner agencies in the American Job Center network also known as the One-Stop Career Center system to coordinate efforts to promote WOTC to employers job seekers and other Workforce Innovation and Opportunity Act partners. Develop working agreements such as MOUs or other formal agreements with other SWAs for the timely and orderly processing of out of state certification requests requiring Attachment II II-2 SWAs to provide available documentation and or records for WOTC applicants new hires working remotely or relocating and working in another state. Develop working agreements such as MOUs or other formal agreements with Federal State or local partnering agencies i.e. Vocational Rehabilitation Agencies Veterans Affairs Administration and related organizations Employment Networks and other local workforce areas for the purposes of expediting verification of targeted group eligibility information submitted in certification requests and issuing Conditional Certifications where appropriate. SWAs are expected to train participating agency staff and provide monitoring and technical assistance to these agencies as appropriate for conducting targeted group preliminary eligibility determinations and issuing Conditional Certifications. Other Grant Agreement Conditions By entering into this agreement the SWA agrees to the following conditions SWAs must 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 on June 28 2012. All such activity conducted by ETA and or recipients will be performed in a manner consistent with applicable state and Federal laws. SWAs must fulfill performance and financial reporting requirements under the grant agreement.