TEGL 08-24 Change 2.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 RESCISSIONS None EXPIRATION DATE Continuing ADVISORY TRAINING AND EMPLOYMENT GUIDANCE LETTER NO. 08-24 CHANGE 2 TO STATE WORKFORCE AGENCIES STATE WORKFORCE ADMINISTRATORS WORK OPPORTUNITY TAX CREDIT COORDINATORS FROM LORI FRAZIER BEARDEN Acting Assistant Secretary SUBJECT Change 2 to Training and Employment Guidance Letter TEGL No. 08-24 Work Opportunity Tax Credit WOTC Initial Funding Allotments for Fiscal Year FY 2025 1.Purpose. To convey the remaining Fiscal Year FY 2025 Work Opportunity Tax Credit WOTC funding allotments and explain application requirements for State Workforce Agencies SWA based on appropriated funding. Furthermore this Change 2 TEGL announces 29 states selected to receive additional FY 2025 backlog award funding and provides instructions to those states on how to proceed. The rest of Training and Employment Guidance Letter TEGL No. 08-24 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 December 5 2024 the Employment and Training Administration ETA issued TEGL No. 08-24 which announced the initial FY 2025 WOTC funding allotments of 4 101 822 under the Continuing Appropriations and Extensions Act 2025 Pub. L. 118-83 September 26 2024 . Congress passed a second continuing resolution CR 2 known as the American Relief Act 2025 Pub. L. 118-158 December 21 2024 . CR 2 provided for incremental FY 2025 grant funding for states administration of the WOTC prorated based on CR 2 s expiration date of March 14 2025. The appropriation for WOTC under CR 2 was 4 253 398. On March 15 2025 the President signed the Full- Year Continuing Appropriations and Extensions Act 2025 Pub. L. 119-4 March 15 2025 into law authorizing the full year FY 2025 appropriations. This Change 2 TEGL announces the full-year appropriation and availability of the remaining balance to the states in the amount of 10 129 780. The state allotment amounts are listed in Attachment I Work Opportunity Tax Credit Fiscal Year 2025 State Allotments and Balance after Dissemination to States under Continuing Resolutions 1 through 2. ETA requests that SWAs submit applications for funding as allotted in Attachment I of this TEGL. 2 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 administers all tax-related provisions and requirements of the tax credit. The U.S. Department of Labor through ETA awards grants to states to administer the WOTC. 4. WOTC Allotment Formula and Application Instructions. Allotment Formula. While under a CR for FY 2025 appropriations incremental allotments to states were based on the prior fiscal year s formula and allotment percentage. ETA determined CR1 and CR2 WOTC state allotment amounts for FY 2025 by calculating each state s relative share of full-year FY 2024 funding and multiplying each state s relative share by the total FY 2025 CR prorated funding amounts through December 20 2024 and March 14 2025 respectively. Once Congress passed the full-year FY 2025 appropriation ETA determined FY 2025 state allotments for normal WOTC operations balance after dissemination to states under CR1 and CR2 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. ETA calculates 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 2023 through September 30 2024 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 2023 through September 30 2024 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 fiscal year s available data October 1 2023 through September 30 2024 . 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 within 30 calendar days from the issuance date of this TEGL at https www.grants.gov. The official electronically signed SF-424 Form should be marked as a continuation application for funding and grantees must enter their state-specific allotment amount listed in Attachment I as the state s requested estimated funding total in item 18 as their request for FY 2025 funding. States selected for FY 2025 WOTC Backlog Award funding must enter the state-specific award amount listed in Section 4 of this TEGL on a separate SF-424 Form. 3 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. If grantees previously indicated the estimated amount of Indirect Costs to be claimed by the recipient for FY 2025 expenditures under the SF-424 Form submitted for the CR1 initial funding distribution announced in TEGL No. 08-24 grantees should not resubmit this information again in item 15 Descriptive Title of Applicant s Project as part of this SF424 application request for remaining balances funding. 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. For the remaining balance funding the opportunity number is ETA-WOTC-TEGL-08-24-C2 and for backlog awards funding the opportunity number is ETA-WOTC-TEGL-08-24-C2- BACKLOG. 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. General Administration. With their FY 2025 grant award SWAs are responsible for conducting the WOTC activities outlined in the WOTC Statement of Work See Attachment II of TEGL 08-24 available here https www.dol.gov agencies eta advisories tegl-08-24 . FY 2025 WOTC System Modernization Awards. ETA intends to distribute WOTC System Modernization awards to 29 states with the most critical needs for adopting or modernizing information technology for processing of certification requests and or assistance in alleviating processing backlogs. To inform the selection process ETA analyzed the following data a. FY 2024 backlog total and percentage ratio it represents of the state s total workload and b. FY 2023 and FY 2024 financial reports. ETA also asked all interested states to describe their intended uses of system modernization awards specifically how the states would use this award to make improvements to their existing systems or procedures and reduce their backlog and or how states have used prior backlog awards to make improvements to their systems reduce processing backlog. ETA analyzed FY 2023 and FY 2024 financial reports to determine a state s ability to use additional funding and did not select states with extraordinarily low expenditure rates to receive additional backlog funds. ETA also reviewed states narrative proposals to confirm states backlogs and information technology modernization needs. 29 states expressed interest in additional backlog funding to help them attain staff support enhance or replace their current partially automated systems and or develop automated systems to more efficiently process certification requests. ETA validated the proposed uses and need for 4 funding from the 29 states that applied to ensure funds were allotted to address system modernization issues and or existing backlog to receive additional funding. Based on the availability of 2 500 000 in funds and the relative size of the state and their proposed solutions ETA established three funding tiers to distribute these awards Tier 1 50 000 Tier 2 75 000 Tier 3 100 000 The selected states and corresponding funding amounts for these awards are as follows 50 000 75 000 100 000 Delaware Alaska Arizona Florida Maine Arkansas Georgia Michigan California Louisiana New Hampshire Connecticut Vermont Oklahoma Illinois Wyoming Indiana Maryland Massachusetts Minnesota Montana Nebraska New Jersey North Carolina North Dakota Ohio South Carolina Virginia Wisconsin 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. 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 are important to ensure proper accounting of funds. b. Quarterly Performance Report SWAs must use the web-based State Workforce Agency Reporting and Analysis System SWARAS 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 are important for administration purposes. 5 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 Pub. L. 118-83 Continuing Appropriations and Extensions Act 2025 https www.congress.gov 118 plaws Pub. L. 118-158 American Relief Act 2025 BILLS-118hr10545enr.pdf and Pub. L 119-4 Full-Year Continuing Appropriations and Extensions Act 2025 BILLS- 119hr1968eh.pdf 7. Attachment. Attachment I Work Opportunity Tax Credit Fiscal Year 2025 State Allotments Attachment I State FY 2025 Full Year Allotment Amount Obligated under CR 1 10 1 24 through 12 20 24 Obligated under CR 2 12 21 24 through 3 14 25 Balance to States Total 18 485 000 4 101 822 4 253 398 10 129 780 Alabama 341 798 63 204 65 540 213 054 Alaska 94 957 17 559 18 208 59 190 Arizona 312 637 72 528 75 209 164 900 Arkansas 186 089 34 411 35 682 115 996 California 2 230 506 518 848 538 022 1 173 636 Colorado 271 721 63 058 65 388 143 275 Connecticut 154 199 35 810 37 134 81 255 Delaware 116 492 21 541 22 338 72 613 District of Columbia 94 957 17 559 18 208 59 190 Florida 904 497 209 810 217 563 477 124 Georgia 462 574 107 341 111 308 243 925 Hawaii 119 103 22 190 23 011 73 902 Idaho 107 544 19 887 20 621 67 036 Illinois 662 730 153 888 159 574 349 268 Indiana 311 236 57 553 59 679 194 004 Iowa 198 212 46 079 47 782 104 351 Kansas 133 119 30 941 32 085 70 093 Kentucky 320 813 74 530 77 283 169 000 Louisiana 282 113 65 422 67 839 148 852 Maine 94 957 17 559 18 208 59 190 Maryland 361 672 83 976 87 080 190 616 Massachusetts 344 886 80 143 83 104 181 639 Michigan 521 350 121 030 125 502 274 818 Minnesota 261 123 60 663 62 904 137 556 Mississippi 188 287 43 681 45 295 99 311 Missouri 431 254 79 746 82 693 268 815 Montana 94 957 17 559 18 208 59 190 Nebraska 120 877 28 092 29 129 63 656 Nevada 155 593 36 118 37 452 82 023 New Hampshire 94 957 17 559 18 208 59 190 New Jersey 425 544 78 690 81 598 265 256 New Mexico 153 502 35 779 37 102 80 621 New York 1 135 912 264 050 273 808 598 054 North Carolina 499 537 115 858 120 140 263 539 North Dakota 94 957 17 559 18 208 59 190 Ohio 789 477 183 143 189 910 416 424 Oklahoma 296 509 54 830 56 855 184 824 Oregon 236 118 54 860 56 887 124 371 Pennsylvania 644 156 149 669 155 201 339 286 Puerto Rico 117 286 21 688 22 490 73 108 Rhode Island 102 839 19 017 19 719 64 103 South Carolina 255 868 59 346 61 539 134 983 South Dakota 94 957 17 559 18 208 59 190 Tennessee 591 445 137 697 142 785 310 963 Texas 1 440 358 334 613 346 978 758 767 Utah 142 800 26 406 27 382 89 012 Vermont 94 957 17 559 18 208 59 190 Virginia 471 551 87 198 90 420 293 933 Washington 376 940 87 601 90 838 198 501 West Virginia 119 644 26 406 27 382 65 856 Wisconsin 294 476 68 462 70 991 155 023 Wyoming 94 957 17 559 18 208 59 190 State Total 18 449 000 4 093 834 4 245 114 10 110 052 Virgin Islands 36 000 7 988 8 284 19 728 U.S. Department of Labor Employment and Training Administration Work Opportunity Tax Credit FY 2025 State Allotments and Balance after Dissemination to States under Continuing Resolutions CR 1 through 2