FY 2017 Work Opportunity Tax Credit allotments

CLASSIFICATION
   EMPLOYMENT AND TRAINING ADMINISTRATION                WOTC
               ADVISORY SYSTEM                           CORRESPONDENCE SYMBOL
          U.S. DEPARTMENT OF LABOR                       OWI
             Washington, D.C. 20210                      DATE
                                                         August 30, 2017


ADVISORY:        TRAINING AND EMPLOYMENT GUIDANCE LETTER NO. 2-17

TO:              STATE WORKFORCE AGENCIES
                 STATE WORKFORCE ADMINISTRATORS
                 WORK OPPORTUNITY TAX CREDIT COORDINATORS

FROM:            BYRON ZUIDEMA /s/
                 Deputy Assistant Secretary

SUBJECT:         Work Opportunity Tax Credit (WOTC) Funding Allotments for Fiscal Year
                 (FY) 2017

1. Purpose. To provide the State Workforce Agencies (SWAs) with final funding allotments
   for the administration of the WOTC program through September 30, 2017.

2. References.

   •    Consolidated Appropriations Act, 2017 (Pub. L. 115-31);
   •    Sections 142 and 171 of the Protecting Americans from Tax Hikes (PATH) Act of 2015
        (Pub. L. 114-113);
   •    Section 51 of the Internal Revenue Code of 1986, as amended;
   •    November 2002, Third Edition of ETA Handbook 408 (the Handbook);
   •    August 2009 Addendum to the Handbook, and
   •    Workforce Innovation and Opportunity Act, part 658.

3. Background. For WOTC, the Consolidated Appropriations Act, 2017, Public Law 115-31,
   enacted May 5, 2017 (from this point forward, referred to as “the Act”) provides $18,485,000
   for FY 2017 funds. In December 2016, Employment and Training Administration (ETA)
   issued program funds to State Workforce Agencies (SWAs) for Continuing Resolutions 1
   and 2 for FY 2017 to maintain uninterrupted administration of the WOTC program. ETA is
   issuing the remaining balance of FY 2017 funds to the SWAs for the operation of authorized
   activities of the WOTC Program through September 30, 2017.

   The WOTC program is currently authorized through December 31, 2019.

4. Funding. After dissemination of funding to states under Continuing Resolution (CR) 1 and
   CR 2, the balance of funding for the remainder of FY 2017 totals $7,879,796. See
   Attachment I to see the FY 2017 full year allotment amount, total amounts obligated under


 RESCISSIONS                                            EXPIRATION DATE
 None                                                   Continuing


   CR 1 and CR 2, and balance to the states. After allocating $20,000 for the Virgin Islands,
   Employment and Training Administration (ETA) distributes the remaining funds to states by
   administrative formula with a $66,000 minimum allotment and a 95 percent stop-loss/120
   percent stop-gain from the previous year allotment share percentage. For FY 2017, the
   formula allotment data factors and percentages are as follows:

       1) Fifty percent is based on each state’s relative share of total certifications issued from
          October 1, 2015 through September 30, 2016 for the WOTC Program;
       2) Thirty percent is based on each state’s relative share of the Civilian Labor Force
          averages for the 12-month period from October 1, 2015 through September 30, 2016;
          and
       3) Twenty percent is based on each state’s relative share of adult recipients of
          Temporary Assistance for Needy Families averages from October 1, 2014 through
          September 30, 2015.

5. General Administration. With these funds, SWAs are responsible for administering the
   WOTC program through September 30, 2017, including the certification process, promoting
   the program to employers, reducing and eliminating existing backlogs, and reporting
   program data on a quarterly basis. In addition, SWAs must administer the WOTC in
   accordance with the policies and procedural guidance set forth in the November 2002, Third
   Edition of ETA Handbook 408 (the Handbook); the August 2009 Addendum to the
   Handbook; Section 51 of the Internal Revenue Code of 1986, as amended; the current
   Federal regulations which cover the job service complaint procedures at 20 CFR part 658,
   subpart E; and with ETA’s policy directives issued to the SWAs, employer community,
   participating agencies and all other partners through Training and Employment Guidance
   Letters (TEGLs). Additionally, Attachment II, the WOTC Statement of Work, provides a list
   of other applicable requirements.

6. Reporting Requirements. SWAs must report expenditures quarterly using ETA Form
   9130. Quarterly financial reports are due within 45 days following the end of each quarter,
   and should cover all WOTC funds. Timely submission of these reports is important to ensure
   proper accounting of funds. ETA will conduct a financial reconciliation at the end of the
   fiscal year and grant period. SWAs must use the Web-based Enterprise Business Service
   System (EBSS), Tax Credit Reporting System to report quarterly program activities and
   outcomes using ETA Form 9058. Quarterly performance reports are due within 45 days
   following the end of each quarter. Timely submission of these reports is important for
   program management purposes, and enables ETA to respond to inquiries on program
   activities from Congress and other stakeholders.

7. Action Requested. ETA requests that Regional Administrators and SWA administrators
   provide this TEGL to all WOTC State Coordinators and related program staff, participating
   agencies and all other interested partners.


8. Inquiries. Please direct all questions to the appropriate Regional WOTC Coordinator, listed
   on the WOTC program Website at:
   http://www.doleta.gov/business/incentives/opptax/Regional_Contacts.cfm.

9. Attachments.
    I. FY 2017 WOTC State Allotments and Balance After Dissemination to States under CR 1
        and 2
   II. WOTC Statement of Work

Attachment (official PDF: https://www.dol.gov/sites/dolgov/files/ETA/advisories/TEGL/2017/TEGL_2-17_Attachment_I.pdf)

U. S. Department of Labor                                      Attachment I
                           Employment and Training Administration
                            Work Opportunity Tax Credits
 FY 2017 State Allotments and Balance after Dissemination to States under Continuing
                              Resolutions (CR) 1 and 2

                        FY 2017 Full     Obligated under     Obligated under     Balance to
                       Year Allotment     CR# 1 (10/1/16     CR# 2 (12/10/16       States
          State           Amount        through 12/09/16)   through 04/28/17)

Total                    $18,485,000          $3,527,838            $7,077,366    $7,879,796

Alabama                       346,793             69,668              139,766        137,359
Alaska                         66,000             12,596               25,270         28,134
Arizona                       342,751             68,856              138,136        135,759
Arkansas                      164,782             33,104               66,411         65,267
California                  2,392,454            480,628              964,212        947,614
Colorado                      287,914             46,168               92,621        149,125
Connecticut                   137,726             27,668               55,507         54,551
Delaware                       66,000             12,596               25,270         28,134
District of Columbia           66,000             12,596               25,269         28,135
Florida                     1,072,806            175,368              351,813        545,625
Georgia                       557,191             96,886              194,369        265,936
Hawaii                         67,426             13,545               27,175         26,706
Idaho                          67,564             13,573               27,230         26,761
Illinois                      810,202            138,988              278,831        392,383
Indiana                       371,722             74,676              149,812        147,234
Iowa                          242,419             48,700               97,701         96,018
Kansas                        158,209             31,783               63,762         62,664
Kentucky                      318,152             63,915              128,222        126,015
Louisiana                     356,274             71,573              143,586        141,115
Maine                          88,677             17,815               35,738         35,124
Maryland                      249,160             49,123               98,548        101,489
Massachusetts                 325,411             55,406              111,152        158,853
Michigan                      715,708            129,350              259,494        326,864
Minnesota                     232,624             44,832               89,939         97,853
Mississippi                   201,481             32,532               65,263        103,686
Missouri                      353,702             71,056              142,550        140,096
Montana                        66,000             12,596               25,269         28,135
Nebraska                      113,714             22,844               45,830         45,040
Nevada                         95,890             19,264               38,646         37,980
New Hampshire                  66,000             12,596               25,269         28,135
New Jersey                    353,906             71,097              142,633        140,176
New Mexico                    131,846             20,969               42,067         68,810
New York                      870,376            174,286              349,643        346,447
North Carolina                551,950            110,883              222,448        218,619
North Dakota                   66,000             12,596               25,269         28,135
Ohio                          837,907            167,710              336,451        333,746
Oklahoma                      220,443             44,286               88,843         87,314
Oregon                        256,610             47,915               96,123        112,572
Pennsylvania                  810,517            138,314              277,479        394,724
Puerto Rico                    91,696             18,317               36,747         36,632
Rhode Island                   66,000             12,596               25,269         28,135
South Carolina                305,184             56,677              113,702        134,805
South Dakota                   66,000             12,596               25,269         28,135
Tennessee                     624,864            125,531              251,834        247,499
Texas                       1,230,285            247,156              495,832        487,297
Utah                          130,515             26,220               52,600         51,695
Vermont                        66,000             12,596               25,269         28,135
Virginia                      407,435             77,043              154,559        175,833
Washington                    487,860             89,387              179,323        219,150
West Virginia                 141,665             28,460               57,094         56,111
Wisconsin                     281,189             56,489              113,325        111,375
Wyoming                        66,000             12,596               25,269         28,135
  State Total              18,465,000          3,524,021             7,069,709      7,871,270
Virgin Islands                 20,000              3,817                 7,657          8,526

Attachment (official PDF: https://www.dol.gov/sites/dolgov/files/ETA/advisories/TEGL/2017/TEGL_2-17_Attachment_II.pdf)

Attachment II

                      Work Opportunity Tax Credit (WOTC) Program
                                  Statement of Work


State Workforce Agencies (SWAs) are to use Fiscal Year 2017 funds for:

    1. Determining eligibility of individuals as members of targeted groups, on a timely basis,
      and performing a “quality review” by a second staff person for each determination within
      48 hours of receipt.

    2. Issuing employer certifications, denials, or notices of revocations for tax credits on a
      timely basis and in accordance with the policies and procedures set forth in the ETA
      Handbook No. 408, Third Edition, November 2002 (the Handbook) and the August 2009
      Addendum to the Handbook.

    3. Developing working agreements with partner agencies in the American Job Center
      network (also known as the One-Stop Career Center system) and coordinating efforts to
      promote WOTC to employers and job seekers and other Workforce Innovation and
      Opportunity Act (WIOA) partners.

    4. Establishing and implementing an Appeals Resolution and Policy Clarification System in
      accordance with the guidelines provided in the Handbook (Chapter VIII, Section F,
      pp.VIII-5-8).

    5. Establishing and maintaining appropriate procedures and capabilities related to the
      orderly management of WOTC certification requests, including reviewing forms, record
      keeping, and reporting.

    6. Establishing and maintaining an orderly system for regularly verifying the eligibility of a
      random sample of individuals certified under the WOTC Program and initiating effective
      corrective action when appropriate as indicated by results of such activities.

    7. Negotiating formal cooperative agreements with local workforce areas, State Vocational
      Rehabilitation Agencies, Veterans Administration and related groups, Employment
      Networks and other state and local agencies, and organizations for the purposes of issuing
      Conditional Certifications where appropriate, and/or augmenting WOTC outreach
      activities.

    8. Negotiating formal cooperative agreements with appropriate state agencies, including the
      Departments of Health and Human Services, Agriculture, Housing and Urban
      Development and the Social Security Administration to expedite verification of
      information provided to the SWA by participating target group members.

    9. Training state and participating agency staff and providing monitoring and technical
      assistance to these agencies, as appropriate, for conducting target group preliminary
      eligibility determinations and issuing Conditional Certifications.

    10. Cooperating with employment and training organizations already working with the
       private sector such as: veteran organizations, employer committees, and workforce


       investment boards to inform employers about the tax benefits to be derived from
       participation and the eligibility requirements under the WOTC Program.

Grant Agreement Conditions.

By entering into this agreement, the SWA agrees to the following conditions:

    1. The SWA must adhere to provisions of the Internal Revenue Code of 1986, Section 51,
      as amended, in conducting the program. Public Law 104-188 designates the SWAs as the
      only agencies that can issue a Certification. The SWAs can enter into cooperative
      agreements with certain participating agencies and together provide other WOTC related
      program services (e.g., issuing Conditional Certifications, outreach activities).

    2. The most current edition of the WOTC program Handbook and its updated August 2009
      Addendum shall guide conditions and standards of performance for the administration
      and operation of the program. The SWAs shall maintain a verification and quality
      control process in accordance with guidance in this Handbook.

    3. ETA will review funding use against the quarterly spending plan; when expenditures are
      substantially below plan, ETA may de-obligate funds for redistribution.