2011 WOTC and empowerment zone extensions

Accessible letter PDF: https://www.dol.gov/sites/dolgov/files/ETA/advisories/TEGL/2011/TEGL1-11ACC.pdf

                                                       CLASSIFICATION
   EMPLOYMENT AND TRAINING ADMINISTRATION              WOTC
               ADVISORY SYSTEM                         CORRESPONDENCE SYMBOL
                                                       OWI
          U.S. DEPARTMENT OF LABOR
                                                       DATE
             Washington, D.C. 20210                    July 13, 2011


ADVISORY:       TRAINING AND EMPLOYMENT GUIDANCE LETTER NO. 1-11

TO:             ALL STATE WORKFORCE AGENCIES
                ALL STATE WORKFORCE LIAISONS
                ALL REGIONAL COORDINATORS

FROM:           JANE OATES /s/
                Assistant Secretary

SUBJECT:        Extension of the Work Opportunity Tax Credit (WOTC) Program and
                Department of Housing and Urban Development (HUD) Empowerment Zones

l. Purpose. To provide information and procedural guidance to the state workforce agencies
   (SWAs) on legislative program extensions through December 31, 2011.

2. References. The Tax Relief, Unemployment Insurance Reauthorization and Job Creation
   Act of 2010 (P.L. 111-312); the American Recovery and Reinvestment Act of 2009 (Public
   Law 111-5, Recovery Act); Internal Revenue Code of 1986, Section 51, as amended; Internal
   Revenue Service Notices 2009-69, dated August 31, 2009 and 2009-28, 2009-24 I.R.B 1082,
   dated June 15, 2009; TEGL 03-09, Information and Guidance on the Two New Work
   Opportunity Tax Credit (WOTC) Targeted Groups Introduced by the American Recovery
   and Reinvestment Act of 2009, dated September 1, 2009; TEGL No. 11-08, Extension of the
   Information Collection for the Consolidated Work Opportunity Tax Credit Program: Revised
   Reporting and Processing Forms, dated February 19, 2009; TEGL No. 11-08, Change 1,
   Extension Period Granted to the State Workforce Agencies and Employers for the
   Uninterrupted Use of All 2007 and 2008 Work Opportunity Tax Credit (WOTC) Program
   Processing Forms; ETA Handbook No. 408, November 2002, Third Edition (the Handbook);
   and the updated August 2009 Addendum to the Handbook (Addendum, OMB No. 1205-
   0371).

3. Background. The WOTC program’s current legislative authority was due to expire on
   August 31, 2010. In addition, the legislative authority for HUD’s urban Enterprise
   Communities and Renewal Communities along with the U.S. Department of Agriculture
   (USDA) rural Empowerment Zones expired on December 31, 2009.

4. Information on Extensions. President Obama signed the Tax Relief, Unemployment
   Insurance Reauthorization and Job Creation Act of 2010 (the Act) P.L. 111-312 on
   December 17, 2010. Sections 753 (Empowerment Zones) and 757 (WOTC) of this Act made
   the following changes:

   a) Extend the WOTC program for four additional months through December 31, 2011, and



 RESCISSIONS                                           EXPIRATION DATE
 None                                                  Continuing
                                               2

   b) Extend each HUD-designated urban Empowerment Zone (EZ) and each USDA-
      designated rural EZ through December 31, 2011.

   c) The Renewal Communities’ tax incentive was not extended past December 2009.

   Note. HUD has updated its Empowerment Zone (EZ) and Renewal Community (RC)
   Address Locator Web site to help SWAs and employers more easily determine eligibility of
   addresses and it includes an alert about the new law provisions. The EZ/RC Address Locator
   Web site can be found at: www.hud.gov/crlocator/.

5. Program Administration. SWAs’ certification and overall program operation
   responsibilities remain the same as those described in the November 2002, Third Edition of
   ETA Handbook 408 and its 2009 Addendum. In line with similar WOTC program
   legislative authority expiration in the past, no one could qualify under the Summer Youth or
   Designated Community Resident target groups after 12/31/09. With the extensions of these
   target groups, states can now process timely filed claims for hires of these targeted groups
   between January 1, 2010, and December 31, 2011. Based on the recent new provisions,
   SWAs are instructed to conduct the following program activities:

   a) States must accept and fully process timely filed WOTC certification requests and related
      backlogs for the Summer Youth and Designated Community Resident target groups
      received prior to- or up-to December 31, 2009; and

   b) States are to process all timely filed certification requests for the above mentioned two
      groups received and logged after December 31, 2009 for new employees that began to
      work for an employer on or after January 1, 2010 under the above two groups. States are
      to issue all final determinations (certifications or denials) to employers and /or their
      representatives, effective upon receipt of this TEGL.

6. Reporting Information. Pursuant to the Paperwork Reduction Act of 1995, the Office of
   Management and Budget (OMB) extended the current information collection for the WOTC
   program administrative and reporting forms through November 2011. SWAs are to continue
   using all administrative, processing and reporting forms (ETA Form 9058 – Report 1 and
   ETA Forms 9061-9063 and 9065) until further guidance from ETA. These forms are
   approved under OMB No. 1205-0371. SWAs are expected to end all processing of
   certification requests including any related backlogs and reporting activities effective
   February 15, 2012. This date is based on the 45-day period after the closing of each quarter
   that SWAs have to report program data to EBSS/TCRS.

7. Action Requested. State workforce agency (SWA) Administrators are requested to:

   a. Provide this information to all appropriate WOTC program staff, employers and their
      representatives, participating agencies (PAs) and other interested partners;

   b. Ensure SWAs and PAs administer these provisions in accordance with the guidance in
      this TEGL, the Handbook, the August 2009 Addendum to the Handbook, and Section 51
      of the Internal Revenue Code of 1986, as amended; and
                                               3

   c. Ensure WOTC state coordinators receive a copy of the new legislation, Title VII,
   Subtitle C., Sections 753 and 757 of the Tax Relief, Unemployment Insurance
   Reauthorization and Job Creation Act of 2010 (P.L. 111-312). The text version of P.L. 111-
   312 is available at: http://www.gpo.gov/fdsys/pkg/PLAW-111publ312/html/PLAW-
   111publ312.htm.

8. Inquiries. Questions regarding these instructions should be directed to the appropriate
   WOTC Regional Coordinator.