New Recovery Act WOTC target groups

Accessible letter PDF: https://www.dol.gov/sites/dolgov/files/ETA/advisories/TEGL/2009/TEGL03-09acc.pdf

CLASSIFICATION
 EMPLOYMENT AND TRAINING ADMINISTRATION                WOTC
            ADVISORY SYSTEM                            CORRESPONDENCE SYMBOL
               U.S. DEPARTMENT OF LABOR
                    Washington, D.C. 20210             OWI
                                                       DATE
                                                       September 1, 2009
TRAINING AND EMPLOYMENT GUIDANCE LETTER NO. 3-09

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

FROM:              JANE OATES /s/
                   Assistant Secretary

SUBJECT:           Information and Guidance on the Two New Work Opportunity Tax
                   Credit (WOTC) Targeted Groups Introduced by the American
                   Recovery and Reinvestment Act of 2009

l. Purpose. The purpose of this advisory is to inform the State Workforce
   Agencies (SWAs) of two new WOTC targeted groups and to provide
   guidance for the effective and timely implementation of eligibility
   certification for these new groups.

2. References. The American Recovery and Reinvestment Act of 2009 (Public
   Law 111-5, Recovery Act); Internal Revenue Code of 1986, Section 51, as
   amended; Paperwork Reduction Act of 1995; Notice 2009-28, 2009-24 I.R.B.
   1082, dated June 15, 2009; Notice 2009-69, which will be published in the
   Internal Revenue Bulletin on August 31, 2009; the Job Creation and Worker
   Assistance Act of 2002 (Public Law 107-147); the Tax Relief and Health Care
   Act of 2006 (Public Law 109-432); the Working Families Tax Relief Act of
   2004 (Public Law 108-311); the Small Business and Work Opportunity Tax
   Credit Act of 2007 (Public Law 110-28); TEGL No. 19-05, dated March 7, 2006,
   New Streamlined Reporting Requirements and Extension of the Information
   Collection for the Work Opportunity and Welfare-to-Work Tax Credits;
   TEGL No. 20-06, dated April 3, 2007, Reauthorization of the Work
   Opportunity Tax Credit and Other Program Changes; TEGL No. 05-07, dated
   September 11, 2007, Reauthorization of the Work Opportunity Tax Credit and
   Other Program Changes; TEGL No. 11-08, dated February 19, 2009, Extension
   of the Information Collection for the Consolidated Work Opportunity Tax
   Credit Program: Revised Reporting and Processing Forms; Training and
   Employment Guidance Letter (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

RESCISSIONS None                             EXPIRATION DATE: Continuing

                                         -2-

   Program Processing Forms; ETA Handbook No. 408, November 2002, Third
   Edition (the Handbook); and the updated November 2008 Addendum to the
   Handbook (Addendum, OMB No. 1205-0371).

3. Background. On February 17, 2009, the President signed into law the
   American Recovery and Reinvestment Act of 2009 (Recovery Act). Section
   1221 of the Recovery Act, (P. L. No. 111-5), amended § 51 of the Internal
   Revenue Code (IRC) to add two new targeted groups for purposes of the
   WOTC. The amended Section 51 (d) (14) provides that: unemployed veterans
   and disconnected youth who begin work for an employer during 2009 or 2010
   shall be treated as members of a targeted group for purposes of the WOTC.
   The June 15, 2009, Notice 2009-28 and Notice 2009-69 that was published on
   August 31 provide guidance on the statutory definitions of “unemployed
   veteran” and “disconnected youth,” and provide transition relief for
   employers who hire unemployed veterans or disconnected youth after
   December 31, 2008, and before September 17, 2009, if the employer submits
   the pre-screening notice to the designated local agency to request certification
   no later than October 17, 2009. Notice 2009-28 and Notice 2009-69 are
   provided as Attachments A1. and A2.

4. Program Administration. The Recovery Act did not change the SWAs’
   certification and program operation responsibilities from those described in
   the November 2002, Third Edition of ETA Handbook 408 (The Handbook)
   and the most recently updated Addendum. These include procedures for:
   a) determining targeted group eligibility by conducting verification activities
   and issuing certifications and denials; b) establishing working partnerships
   with different participating agencies at the state and local levels for resolving
   technical issues and issuing conditional certifications; c) complying with
   quarterly report responsibilities; d) complying with records retention time
   periods; and e) at the regional level, providing technical assistance and
   conducting oversight visits.

5. Eligibility Certification for Unemployed Veterans and Disconnected
   Youth. New § 51(d)(14) of the IRC provides that unemployed veterans and
   disconnected youth who begin work for an employer during 2009 or 2010
   shall be treated as members of a targeted group for purposes of the WOTC.

   Members of the unemployed veterans targeted group are veterans who are
   certified as: 1) having been discharged or released from active duty at any
   time during the five-year period ending on the hiring date; and 2) being in
   receipt of unemployment compensation under a state or federal law for not
   less than four weeks during the one-year period ending on the hiring date.
   The term veteran is defined in sec. 51(d)(3)(B)(i) as: (1) having served on

                                      -3-

active duty for a period of more than 180 days; or (2) having been discharged
or released from active duty for a service-connected disability.

Members of the disconnected youth targeted group are individuals who are
certified as: (1) having attained age 16 but not age 25 on the hiring date; (2)
not regularly attending any secondary, technical, or post-secondary school
during the six-month period preceding the hiring date; (3) not regularly
employed during such six-month period; and (4) not readily employable by
reason of lacking a sufficient number of basic skills.

To certify the eligibility of the Recovery Act targeted groups, ETA revised
Form 9061 by adding the two new targeted groups and the appropriate
documentary evidence and/or collateral contacts required for the new
targeted group’s eligibility determination. The required documentation has
been added to page 3 of the form. A copy of the updated Form 9061 is
provided as Attachment B. Key changes to ETA Form 9061 are discussed
below:

•   Unemployed Veterans. Questions to identify unemployed veterans have
    been added in Box 20. The individual must meet all three criteria to be
    certified as an unemployed veteran. Criteria and documentary evidence
    are provided below.

    (I)     To determine that the individual satisfies the definition of veteran
            (having served on active duty for a period of more than 180 days
            or having been discharged or released from active duty for a
            service-connected disability):
            • DD-214, or
            • FL 21-802 (Issued only by DVA, certifies a Veteran with a
                service-connected disability), or
            • Discharge papers.

    (II)    To determine that the veteran was discharged or released from
            active duty in the Armed Forces at any time during the five-year
            period ending on the hiring date:
            • DD-214, or
            • Discharge papers.

    (III)   To determine if a veteran has been in receipt of unemployment
            compensation:
            • Unemployment Insurance claims records

•   Disconnected Youth. Questions to identify disconnected youth are
    provided in Box 21. The individual must meet all four criteria provided

                                     -4-

    to be certified as a disconnected youth. Criteria and documentary
    evidence are provided below:

   (I)     To determine that the youth is at least age 16 but under 25 on the
           hiring date:
            • Birth Certificate
            • Driver’s License
            • Work Permit
            • Copy of Hospital Record of Birth
            • School I.D. Card/School Records
            • Federal/State/Local Government ID

           Where the document listed above does not contain age or birth
           date, another valid document must be obtained to verify an
           individual’s age.

   (II)    To determine whether the youth has not been regularly attending
           any secondary, technical or post-secondary school during the 6-
           month period before hiring date:
            • Signed letter from parent/guardian (if minor) attesting to the
               information above, and/or
            • Self-Attestation explaining that the applicant is not attending
               or has not attended any secondary, technical, or post-secondary
               school for more than 10 hours per week during the 6-month
               period before the hiring date.

   (III)   To determine whether the youth has not been regularly employed
           during the 6-month period before hiring date:
            • Unemployment Insurance Wage Records

   (IV)    To determine whether the youth was not readily employable due to
           lack of basic skills:
            • Self-Attestation that the individual does not have a high school
               diploma or GED, or
            • Self-Attestation that the individual has a certificate of
               graduation from a secondary school or GED that was awarded
               no less than 6 months preceding the hiring date and has not
               held a job (other than occasionally) or been admitted to a
               technical school or post-secondary school since receiving the
               certificate.

Although self-attestation is allowed to document (II) Not regularly attending
school, and (IV) Not readily employable due to lack of basic skills, it is the

                                         -5-

    responsibility of the SWA to take reasonable steps to ensure that it has the
    documentation needed to make a determination to issue a Certification or
    Denial for all other target groups where self-attestation is not required. While
    SWAs may accept documentation provided by an employer, for the majority
    of the WOTC target groups, they may not rely solely on an employer’s efforts.
     The SWAs are strongly encouraged to obtain adequate documentation from
    participating and other welfare or benefit agencies. If the SWAs’ efforts fail to
    secure needed documentation after a reasonable effort conducted over a
    reasonable period of time, the SWAs must deny Certification and inform the
    employer/representative of the reason(s) for the Denial (Handbook, pp. VII-8
    and 9).

6. Determining Not Regularly Employed Status for Disconnected Youth. IRS
   Notice 2009-28 defines the legal standard to meet the not regularly employed
   criteria in the definition of a disconnected youth. A youth meets the
   unemployment criteria if, during each consecutive three-month period within
   the six months preceding his or her hiring date, the youth earned less than an
   amount equal to the gross amount he or she would have been paid at the
   minimum wage if he or she worked 30 hours every week during the three-
   month period. This would mean that, if the individual was hired June 1, he
   or she must pass the test for each of the following periods: December –
   February, January – March, February – April, and March – May.

    To minimize the burden on the state agencies, the IRS and the Department of
    Labor (DOL) have determined that SWAs need not test an individual’s
    eligibility in each of the three month periods. Instead, SWAs must test the
    most recent completed calendar quarter. If the individual fails to meet the
    criteria for the tested quarter, he or she will fail the legal standard. If the
    individual passes for the tested quarter, he or she will qualify, even though
    we recognize that he or she could possibly fail the test in another three month
    period that the SWA did not test. The IRS believes that this modified check is
    sufficient to identify a substantial proportion of the individuals who are not
    qualified for the credit.

7. Accessing Unemployment Insurance Claim and Wage Information. As
   discussed in section 5, SWAs will need to use Unemployment Insurance (UI)
   Claims Records to verify receipt of UI compensation by unemployed veterans,
   and UI wage records to verify that disconnected youth have not been regularly
   employed. SWAs must negotiate with their state UI agency to determine the
   most efficient and effective way to access the UI claims records and wage data.

   Claim and wage information is required to be kept confidential by the state UI
   agency, and may only be disclosed under certain circumstances. State UI
   agencies may disclose data to public officials, such as the SWAs, in the

                                           -6-

     performance of their public duties. Depending on the volume of anticipated
     requests and whether SWAs can provide the state UI agency with an informed
     consent release, SWAs may have to enter into a data exchange agreement that
     provides for safeguarding the claim and wage information, provides for
     reimbursement for the costs to the UI agency of providing the information,
     and provides penalties for the misuse or unauthorized redisclosure of the
     information. If only a few requests for claim or wage data are anticipated, it
     may be easier to obtain an informed consent release from the employee. State
     UI agencies are not required to obtain reimbursement for providing the
     requested information if the amount of staff time in responding to the request
     is incidental and only nominal processing costs are involved in making the
     disclosure. SWAs choosing to use informed consent releases from employees
     will need to work with employers to ensure that informed consent releases are
     collected at the time of hire. Because confidentiality laws vary by state, SWAs
     should work with their state UI agencies to determine the necessary form and
     content of the informed consent release.

     If the SWA anticipates a greater volume of data requests, the agreement with
     the state UI agency will include a description of the specific information to be
     furnished, the purposes for which the information is sought, and information
     on the method and timing of requests, as well as the format to be used for the
     requests and responses. To obtain information from the state UI agency,
     SWAs must provide a Social Security Number for each participant for whom
     claim or wage data is sought. In those instances where the SWA anticipates a
     large volume of requests for data, the state UI agency may require that the
     request be made electronically.

8.   Revised Forms. Please note that the forms and program materials described
     below have been updated recently to reflect Recovery Act provisions and
     other program updates.

      •   IRS Form 8850. IRS Form 8850, Pre-Screening Notice and Certification
          Request for the Work Opportunity Tax Credit and the instructions for Form
          8850 have been revised. The August 2009 updated form and the revised
          Instructions are available at: www.irs.gov.
      •   ETA Form 9061. In addition to the changes discussed above, ETA added
          new examples of documentary evidence for all veterans. The August
          2009 revised form is attached and available online at:
          http://www.doleta.gov/business/Incentives/opptax.
      •   Reporting Instructions and Requirements. Pursuant to the Paperwork
          Reduction Act of 1995, OMB recently approved the information collection
          requested for the updated WOTC reporting and administrative forms
          without substantial changes. Current OMB No. 1205-0371 data collection
          approval covers ETA Form 9058 – Report 1 and ETA administrative and

                                         -7-

        processing forms 9057, 9059, 9061-9063, and 9065 through November 30,
        2011. The updated reporting and administrative/processing forms, Fact
        Sheet, the revised Spanish versions of IRS Form 8850 and ETA Form 9061,
        the revised April 2009 Addendum to the November 2002, Third Edition
        of ETA Handbook 408, and a revised Technical Assistance and
        Compliance Review Guide are available at:
        http://www.doleta.gov/business/Incentives/opptax.

9. Effective Date of Revised Forms. Training and Employment Guidance
   Letter (TEGL) 11-08, Change 1, granted SWAs an indefinite extension period
   for the use of previously OMB-approved June 2007 ETA Forms 9061 or 9062.
   This TEGL terminates that extension period. For the two new groups added
   under the Recovery Act, employers and their representatives are required to
   start using the August 2009 OMB-approved ETA Form 9061 two weeks
   following the publication of this TEGL. SWAs are expected to also transition
   to using all revised forms and program materials at the end of this two-week
   period. After that date, other versions of ETA Forms 9061 and 9062 are not to
   be accepted by the SWAs.

10. Technical Assistance. Webinars focused on the two new targeted groups
    introduced by the Recovery Act and the amendments of 2006 and 2007 are
    scheduled for September 2009. The webinars will feature an entire session on
    the revised and updated reporting requirements.

11. Action Requested. SWA administrators are requested to:

    •   provide this information to appropriate program staff, employers and
        their representatives, participating agencies (PAs), and other interested
        partners. They are to ensure that the SWAs and PAs administer the two
        new targeted group provisions in accordance with the guidance in this
        TEGL, the Handbook, the May 2009 Addendum to the Handbook, IR
        Notice 2009-28 and IR Notice 2009-69, and Section 51 of the IRC of 1986, as
        amended; and

    •   ensure that state coordinators receive a copy of Section 1221 of the
        American Recovery and Reinvestment Act of 2009, P.L. 111-5, 123 Stat. 115
        (2009), which is attached to this TEGL as Attachment C, and copies of the
        updated and OMB-approved report, processing and administrative forms
        and all other updated program materials at:
        http://www.doleta.gov/business/incentives/opptax.

12. Inquiries. Direct all questions to the appropriate Regional WOTC
    Coordinator.

                                        -8-



13. Attachments.

      •   Attachment A1. Notice 2009-28
      •   Attachment A2. Notice 2009-69
      •   Attachment B. ETA Form 9061
      •   Attachment C. Section 1221 of the American Recovery and
          Reinvestment Act of 2009, P.L. 111-5, 123 Stat. 115 (2009) (to be
          codified at 26 U.S.C. 51, 26 C.F.R. Pt. 1)

Linked official document 1: https://www.dol.gov/sites/dolgov/files/ETA/advisories/TEGL/2009/TEGL03-09a1.pdf

Part III - Administrative, Procedural, and Miscellaneous

Section 51 - Work Opportunity Tax Credit

Notice 2009-28

PURPOSE

Section 51 of the Internal Revenue Code (the Code) provides for a Work Opportunity
Tax Credit (WOTC) for employers who hire individuals who are members of targeted
groups. Section 1221 of the American Recovery and Reinvestment Tax Act of 2009
(ARRTA), enacted February 17, 2009, Div. B, Tit. I of Pub. L. No. 111-5, amended § 51
to add two new targeted groups for purposes of the WOTC. New § 51(d)(14) provides
that unemployed veterans and disconnected youth who begin work for an employer
during 2009 or 2010 shall be treated as members of a targeted group for purposes of
the WOTC.

This notice provides sets forth the statutory definitions of “unemployed veteran” and
“disconnected youth,” and provides guidance on the definition of “disconnected youth.”
It also provides transition relief for employers who hire unemployed veterans or
disconnected youth after December 31, 2008, and before July 17, 2009.

I. STATUTORY DEFINITION OF UNEMPLOYED VETERAN

For purposes of § 51(d)(14), the term “veteran” means any individual who is
certified by the designated local agency (as defined in § 51(d)(12) as a State
employment security agency established in accordance with the Act of June 6, 1933, as
amended (29 U.S.C. § 49-49n)) as:

(1) having served on active duty (other than active duty for training) in the Armed Forces
of the United States (Armed Forces) for a period of more than 180 days; or

(2) having been discharged or released from active duty in the Armed Forces for a
service-connected disability.

Section 51(d)(14)(B)(i) provides that the term “unemployed veteran” means any veteran
who is certified by the designated local agency as:

(1) having been discharged or released from active duty in the Armed Forces at any
time during the 5-year period ending on the hiring date; and
(2) being in receipt of unemployment compensation under State or Federal law for not
less than four weeks during the one-year period ending on the hiring date.

II. DISCONNECTED YOUTH

A. Statutory Definition

Section 51(d)(14)(B)(ii) provides that the term “disconnected youth” means any
individual who is certified by the designated local agency:

(I) as having attained age 16 but not age 25 on the hiring date;

(II) as not regularly attending any secondary, technical, or post-secondary school during
the 6-month period preceding the hiring date;

(III) as not regularly employed during such 6-month period; and

(IV) as not readily employable by reason of lacking a sufficient number of basic skills.

The Conference Agreement on ARRTA, H.R. Rep. No. 111-16, at 554, states:

       For purposes of the disconnected youths, it is intended that a low level of
       formal education may satisfy the requirement that an individual is not
       readily employable by reason of lacking a sufficient number of skills.
       Further, it is intended that the Internal Revenue Service, when providing
       general guidance regarding the various new criteria, shall take into
       account the administrability of the program by the State agencies.

B. Not regularly attending any secondary, technical or post-secondary school

For purposes of § 51(d)(14)(B)(ii)(II), the term “not regularly attending” means that the
individual states in writing that during the six months preceding his or her hiring date, he
or she has not attended a secondary, technical or postsecondary school for more than
an average of 10 hours per week, not counting periods during which the school is
closed for scheduled vacations.

For purposes of § 51(d)(14)(B)(ii), the term “secondary school” means:

(1) A secondary school as defined in 20 U.S.C. § 7801(38); or

(2) a for-profit secondary school that otherwise meets the definition in 20 U.S.C. §
7801(38).

A General Education Development (GED) program is not a secondary school for
purposes of § 51(d)(14)(B)(ii).

For purposes of § 51(d)(14)(B)(ii) and § 51(d)(14)(B)(ii)(IV), the terms “technical school”
and “post-secondary school” mean institutions of higher education as defined in 20
U.S.C. §§ 1001; 1002(a)(1), (b) and (c); and 1059c(b)(3).


                                             2

C. Not regularly employed

For purposes of section 51(d)(14)(B)(ii)(lll), an individual was not regularly employed if,
during each consecutive three-month period within the six months preceding his or her
hiring date, the individual earned less than an amount equal to the gross amount he or
she would have been paid at the minimum wage if he or she worked 30 hours every
week during the three-month period.

For purposes of the preceding sentence, "minimum wage" is the higher of (1) the
federal minimum wage (as defined in 29 U.S.C. section 206(a)(1)) or (2) the generally
applicable State minimum wage (if any).


D. Not readily employable by reason of lacking a sufficient number of basic skills

For purposes of § 51(d)(14)(B)(ii)(IV), an individual is not readily employable by reason
of lacking a sufficient number of basic skills if the individual states in writing that he or
she does not have a certificate of graduation from a secondary school or a GED
Certificate. For purposes of § 51(d)(14)(B)(ii)(IV), an individual also is not readily
employable by reason of lacking a sufficient number of basic skills if the individual
states in writing that he or she has a certificate of graduation from a secondary school
or a GED Certificate that was awarded no less than 6 months preceding his or her hiring
date and has not held a job or been admitted to a technical school or post-secondary
school since receiving the certificate.


EFFECTIVE DATE

New § 51(d)(14) is effective for individuals who begin work for the employer after
December 31, 2008, and before January 1, 2011.

TRANSITION RELIEF

Section 51(d)(13) provides that an individual shall not be treated as a member of a
targeted group unless the employer obtains certification from a designated local agency
on or before the day the individual begins work that the individual is a member of a
targeted group or completes a pre-screening notice (IRS Form 8850) on or before the
day the individual is offered employment and submits such notice to the designated
local agency to request certification not later than 28 days after the individual begins
work. However, under this notice, any employer who hires an unemployed veteran or a
disconnected youth (as defined in § 51(d)(14)) after December 31, 2008, and before
July 17, 2009, will be considered to satisfy the deadline in § 51(d)(13)(A)(ii)(II) if the
employer submits the pre-screening notice to the designated local agency to request
certification not later than August 17, 2009.




                                             3

DRAFTING INFORMATION

The principal author of this notice is Robin Ehrenberg of the Office of Division
Counsel/Associate Chief Counsel (Tax Exempt and Government Entities). However,
other individuals participated in its development. For further information regarding this
notice contact Ms. Ehrenberg at (202) 622-6080 (not a toll-free call).




                                            4

Linked official document 2: https://www.dol.gov/sites/dolgov/files/ETA/advisories/TEGL/2009/TEGL03-09a2.pdf

Part III - Administrative, Procedural, and Miscellaneous

Section 51 - Work Opportunity Tax Credit

Notice 2009-69

PURPOSE

This Notice clarifies Notice 2009-28, 2009-24 I.R.B. 1082, published on June 15, 2009.
As explained in Notice 2009-28, § 51 of the Internal Revenue Code (the Code) provides
for a Work Opportunity Tax Credit (WOTC) for employers who hire individuals who are
members of targeted groups. Section 1221 of the American Recovery and
Reinvestment Tax Act of 2009 (ARRTA), enacted February 17, 2009, Div. B, Tit. I of
Pub. L. No. 111-5, amended § 51 to add two new targeted groups for purposes of the
WOTC. New § 51(d)(14) provides that unemployed veterans and disconnected youth
who begin work for an employer during 2009 or 2010 shall be treated as members of a
targeted group for purposes of the WOTC.

Notice 2009-28 sets forth the statutory definitions of “unemployed veteran” and
“disconnected youth,” and provides guidance on the definition of “disconnected youth.”
With respect to “disconnected youth,” Notice 2009-28 is being revised to clarify
§ 51(d)(14)(B)(ii)(IV), the definition of “not readily employable by reason of lacking a
sufficient number of basic skills.”

Section D of Notice 2009-28 is therefore revised to read as follows:

      For purposes of § 51(d)(14)(B)(ii)(IV), an individual is not readily employable by
      reason of lacking a sufficient number of basic skills if the individual states in
      writing that he or she does not have a certificate of graduation from a secondary
      school or a GED Certificate. For purposes of § 51(d)(14)(B)(ii)(IV), an individual
      also is not readily employable by reason of lacking a sufficient number of basic
      skills if the individual states in writing that he or she has a certificate of
      graduation from a secondary school or a GED Certificate that was awarded no
      less than 6 months preceding his or her hiring date and has not held a job (other
      than occasionally) or been admitted to a technical school or post-secondary
      school since receiving the certificate.

This clarifies that an individual who received a high school diploma or GED certificate at
least six months prior to the hiring date and who otherwise satisfies the requirements for
a disconnected youth will not fail to qualify as a disconnected youth merely because the
individual has been employed at times since graduation, as long as that employment
was no more than occasional.

TRANSITION RELIEF

Section 51(d)(13) provides that an individual shall not be treated as a member of a
targeted group unless the employer obtains certification from a designated local agency
on or before the day the individual begins work that the individual is a member of a
targeted group or completes a pre-screening notice (IRS Form 8850) on or before the
day the individual is offered employment and submits such notice to the designated
local agency to request certification not later than 28 days after the individual begins
work. Notice 2009-28 provides that any employer who hires an unemployed veteran or
a disconnected youth (as defined in § 51(d)(14)) after December 31, 2008, and before
July 17, 2009, will be considered to satisfy the deadline in § 51(d)(13)(A)(ii)(II) if the
employer submits the pre-screening notice to the designated local agency to request
certification not later than August 17, 2009. This notice extends the transition relief in
Notice 2009-28. Specifically, under this notice, any employer who hires an unemployed
veteran or disconnected youth (as defined in § 51(d)(14)) after December 31, 2008, and
before September 17, 2009, will be considered to satisfy the deadline in §
51(d)(13)(A)(ii)(II) if the employer submits the pre-screening notice to the designated
local agency to request certification not later than October 17, 2009.

EFFECT ON OTHER DOCUMENTS

       Notice 2009-28, 2009-24 I.R.B. 1082, is clarified.

DRAFTING INFORMATION

The principal author of this notice is Robin Ehrenberg of the Office of Division
Counsel/Associate Chief Counsel (Tax Exempt and Government Entities). However,
other individuals participated in its development. For further information regarding this
notice contact Ms. Ehrenberg at (202) 622-6080 (not a toll-free call).

Linked official document 3: https://www.dol.gov/sites/dolgov/files/ETA/advisories/TEGL/2009/TEGL03-09b.pdf

Individual Characteristics Form (ICF)                                        U.S. Department of Labor
Work Opportunity Tax Credit                                          Employment and Training Administration

1. Control No. (For Agency use only)                                       OMB No. 1205-0371
                                         APPLICANT INFORMATION             Expiration Date: November 30, 2011
                                         (See instructions on reverse)     2. Date Received (For Agency Use only)



                                           EMPLOYER INFORMATION
3. Employer Name                       4. Employer Address and Telephone   5. Employer Federal ID Number (EIN)




                                           APPLICANT INFORMATION
6. Applicant Name (Last, First, MI)    7. Social Security Number           8. Have you worked for this employer
                                                                              before? Yes ____ No ____

                                                                              If YES, enter last date of
                                                                              employment: ____________

                APPLICANT CHARACTERISTICS FOR WOTC TARGET GROUP CERTIFICATION
9. Employment Start Date               10. Starting Wage                   11. Position




12. Are you at least age 16, but under age 40?                                                 Yes ___ No ___
    If YES, enter your date of birth _____________________
13. Are you a Veteran of the U.S. Armed Forces?                                                Yes ___ No ___
    If NO, go to Box 14.
    If YES, are you a member of a family that received Supplemental Nutritional Assistance
    Program (SNAP) (Food Stamps) benefits for at least a 3-month period during the 15-month period
    ending on your hire date?                                                                   Yes ___ No ___
    If YES, enter name of primary recipient _______________________ and
    city and state where benefits were received _________________.
    OR, are you a veteran entitled to compensation for a service-connected disability?          Yes ___ No ___
    If YES, were you discharged or released from active duty within the year before you
    were hired?                                                                                 Yes ___ No ___
    OR, were you unemployed for a combined period of at least 6 months during the
    year before you were hired?                                                                 Yes ___ No ___
14. Are you a member of a family that received SNAP (Food Stamps) benefits for the 6-month period
    before you were hired?                                                                       Yes ___ No___
    OR, received SNAP benefits for at least a 3-month period within the last 5 months
    But you are no longer receiving them?                                                        Yes ___ No___
    If YES to either question, enter name of primary recipient _____________________
    and city and state where benefits were received _____________________.



1                                                                                         ETA Form 9061 (August 2009)

15. Were you referred to an employer by a Vocational Rehabilitation Agency approved by
    a state?                                                                                             Yes ___ No___
    OR, by an Employment Network under the Ticket to Work Program?                                       Yes ___ No___
    OR, by the Department of Veterans Affairs?                                                            Yes ___ No___
16. Are you a member of a family that received Temporary Assistance to Needy Families (TANF)
     for at least the last 18 months before you were hired?                                               Yes___ No___
    OR, are you a member of a family that received TANF benefits for any 18 months beginning after
    August 5, 1997, and the earliest 18-month period beginning after August 5, 1997, ended within
    2 years before you were hired?                                                                        Yes___ No___
    OR, did your family stop being eligible for TANF assistance within 2 years before you were hired
    because a Federal or state law limited the maximum time those payments could be made?                 Yes___ No___
    If NO, are you a member of a family that received TANF assistance for any 9 months during
    the 18-month period before you were hired?                                                             Yes___No___
    If YES, to any question, enter name of primary recipient ________________________ and
    the city and state where benefits were received _________________________.
17. Were you convicted of a felony or released from prison after a felony conviction during
    the year before you were hired?                                                                        Yes___No___
    If YES, enter date of conviction ________________ and date of release _________________.
    Was this a Federal ____ or a State _____ conviction? (Check one)
18. Do you live, and plan to continue living, in an Empowerment Zone or Renewal Community?                Yes___ No ___
     OR, in a Rural Renewal County (RRC)?                                                                 Yes___No ___
     If YES, enter name of the RRC: _____________________________
19. Did you receive Supplemental Security Income (SSI) benefits for any month ending within
     60 days before you were hired?                                                                       Yes___ No___
20. Are you an unemployed veteran who served on active duty (other than active duty for training)
     in the Armed Forces of the United States for a period of more than 180 days?                          Yes___ No___
     OR were you discharged or released from active duty in the Armed Forces for a
     service-connected disability?                                                                         Yes___ No___
     If YES, where you discharged or released from active duty in the Armed Forces at any time
     during the 5-year period ending on the hiring date?                                                   Yes___ No___
     If YES, did you receive unemployment compensation for not less than four weeks during the
     one-year period ending on your hiring date?                                                          Yes___ No___
21. Are you at least age 16 but under age 25?                                                             Yes___ No___
     If YES, did you not regularly attend any secondary, technical, or post-secondary school
     during the 6-month period before your hiring date?                                                   Yes___ No___
     If YES, were you not regularly employed during that 6-month period?                                  Yes___ No___
     If YES, were you not employable because you lacked basic skills?                                     Yes___ No___
22. Sources used to document eligibility: (Employers/Consultants: List all documentation provided or forthcoming. SWAs:
List all documentation used in determining target group eligibility and enter your initials and date when determination was made.)




I certify that this information is true and correct to the best of my knowledge. I understand that the
information above may be subject to verification.
23(a). Signature: (See instructions in Box 23b for who signs this signature   23. (b) Indicate with a 9 who signed the form:   24. Date:
block)                                                                          Employer,     Consultant,     SWA,
                                                                                Participating Agency,    Applicant, or
                                                                                Parent/Guardian (if applicant is a minor)



2                                                                                                                           ETA Form 9061 (August 2009)

INSTRUCTIONS FOR COMPLETING THE INDIVIDUAL CHARACTERISTICS FORM (ICF), ETA 9061. This form is used together with IRS Form 8850 to
help state workforce agencies (SWAs) determine eligibility for the Work Opportunity Tax Credit (WOTC) Program. The form may be completed, on behalf of
the applicant, by: 1) the employer or employer representative, the SWA, a participating agency, or by 2) the applicant directly (if a minor, the parent or guardian
must sign the form) and signed by the individual completing the form. This form is required to be used, without modification, by all employers (or their
representatives) seeking WOTC certification.

Boxes 1 and 2. SWA. For agency use only.

Boxes 3-5.      Employer Information. Enter the name, address including ZIP code, telephone number, and employer Federal ID number (EIN) of the
                employer requesting the certification for the WOTC. Do not enter information pertaining to the employer’s representative, if any.

Boxes 6-11.     Applicant Information. Enter the applicant’s name and social security number as they appear on the applicant’s social security
                card. In Box 8, indicate whether the applicant previously worked for the employer, and If Yes, enter the last date or approximate last
                date of employment. This information will help the “48-hour” reviewer, early in the verification process, to eliminate requests for
                former employees and to issue denials to these type of requests, or certifications in the case of “qualifying rehires” during valid
                “breaks in employment” (see pages III-12 and III-13, Nov. 2002, Third Ed., ETA Handbook 408) during the first year of employment.

Boxes 12-21. Applicant Characteristics. Read questions carefully, answer each question, and provide additional information where requested.

Box 22          Sources to Document Eligibility. The applicant or employer is requested to provide documentary evidence to substantiate the YES answers on
                page 1. List or describe the documentary evidence that is attached to the ICF or that will be provided to the SWA. Indicate in parentheses next to
                each document listed whether it is attached (A) or forthcoming (F). Some examples of acceptable documentary evidence are provided below.
                Employers: A letter from the agency that administers a relevant program may be furnished specifically addressing the question to which the applicant
                answered YES. For example, if an applicant answers YES to either question in Box 14 and enters the name of the primary recipient and the city and
                state in which the benefits were received, the applicant could provide a letter from the appropriate Food Stamp agency stating to whom Food Stamp
                benefits were paid, the months for which they were paid, and the names of the individuals included on the grant for each month. SWAs will use this
                box to document the sources used when verifying target group eligibility, followed by their initials and the date the determination was completed.


Examples of Documentary Evidence and Collateral Contacts. Employers/Consultants: You may check with
your SWA to find out what other sources you can use to prove target group eligibility. (You are encouraged to provide
copies of documentation or names of collateral contacts for each question for which you answered YES.)

QUESTION 123                                                                             QUESTION 17

                                                                                         ƒ Parole Officer’s Name or
ƒ Birth Certificate
                                                                                           Statement
ƒ Driver’s License
                                                                                         ƒ Correction Institution Records
ƒ School I.D. Card1
                                                                                         ƒ Court Records Extracts
ƒ Work Permit1
                                1
ƒ Federal/State/Local Gov’t I.D.
                                                                                         QUESTION 18
ƒ Copy of Hospital Record of Birth
                                                                                         ƒ Driver’s License
QUESTION 13                                                                              ƒ Work Permit
                                                                                         ƒ Utility Bills
ƒ DD-214 or Discharge Papers                                                             ƒ W-4
ƒ Reserve Unit Contacts                                                                  ƒ Lease Papers or Landlord’s Statement
ƒ FL 21-802 (Issued ONLY by DVA, certifies a Veteran with a                              ƒ School1 or Library Card2
              service connected disability)                                              ƒ Voter Registration Card
ƒ UI claims records (for unemployed status)                                              ƒ SNAP (Food Stamp) Award Letter
                                                                                         ƒ Selective Service Registration Card
QUESTIONS 14 & 16                                                                        ƒ Social Security Letter
                                                                                         ƒ To determine if a Designated Community Resident lives in
ƒ TANF/SNAP (Food Stamp) Benefit                                                           a RRC, visit the site: www.usps.com. Click on Find Zip
  History                                                                                  Code; Enter & Submit Address/Zip Code; Click on
ƒ Signed Statement from Authorized Individual with Specific                                Mailing Industry Information; Download and Print the
  Description of the Months Benefits Were Received                                         Information, then compare the county of the address to
ƒ Case Number Identifier                                                                   the list in the June 2007 Instructions to IRS 8850.

                                                                                         QUESTION 19
QUESTION 15
                                                                                         ƒ SSI Record or Authorization
ƒ Vocational Rehabilitation Agency Contact                                               ƒ SSI Contact
ƒ Veterans Administration                                                                ƒ Evidence of SSI Benefits
ƒ Signed Statement from Authorized Individual
  With Specific Description of Months Benefits Received                            Notes. 1. Where a Federal/State/Local Gov’t., School I.D. Card, or Work Permit
ƒ For SWAs: To determine Ticket Holder (TH) eligibility,                           does not contain age or birth date, another valid document must be obtained to
                                                                                   verify an individual’s age.
  Fax page 1 of Form 8850 to MAXIMUS to 703-683-1051 to                            2. Where a Library Card does not contain the holder’s address another document,
  verify if applicant:                                                             issued in the jurisdiction where the EZ/RC or RR County is located, must be
  1) is a TH, and 2) has an Individual Work Plan from an                           obtained showing the holder’s address.
  Employment Network.                                                              3. ESPL No. 05-98, dated 3/18/98, officially rescinded the authority to use Form I-9
                                                                                   as proof of age and residence. Therefore, the I-9 is no longer a valid
                                                                                   piece of documentary evidence.


3                                                                                                                                ETA Form 9061 (August 2009)

QUESTION 20

ƒ DD-214
ƒ FL 21-802 (Issued ONLY by DVA, certifies a Veteran with a service connected disability)
ƒ Discharge Papers
ƒ UI claims records (for unemployed status)

QUESTION 21

To determine age:
ƒ Birth Certificate
ƒ Driver’s License
ƒ Work Permit
ƒ Copy of Hospital Record of Birth
ƒ School I.D. Card/School Records
ƒ Federal/State/Local Government I.D.
To determine youth has not regularly attended any secondary, technical or post secondary school:
ƒ Self-Attestation
ƒ Signed letter from parent/guardian (if minor)
To determine unemployed status during the 6-month period before hiring date:
ƒ UI Wage Records
To determine unemployable status due to lack of basic skills:
ƒ Self-Attestation that he/she has a high school (HS) or GED Certificate that was awarded no less than
  6 months preceding his or her hiring date and has not held a job (other than occasionally) or been admitted to a technical school
  or post-secondary school since receiving the certificate.


Box 23. Signature.    The person who completes the form signs the signature block. Options: (a) Employer or Authorized Representative, (b) SWA staff,
                      (c) Participating Agency staff, or (d) Applicant (If applicant is a minor, the parent or guardian must sign).

Box 24: Date.         Enter the month, day and year when the form was completed.



Persons are not required to respond to this collection of information unless it displays a currently valid OMB Control Number. Respondent’s obligation to reply to these
questions is required to obtain and retain benefits per public law 104-188. Public reporting burden for this collection of information is estimated to average 20 minutes
per response including the time for reading instructions, searching existing data sources, gathering and maintaining the data needed, and completing and reviewing.
the information. Send comments regarding this burden estimate or any other aspect of this collection of information, including suggestions for reducing burden to the
U.S. Department of Labor, Employment and Training Administration, Division of Adult Services, Room S-4209, Washington, D.C. 20210 (Paperwork Reduction
Project Control No. 1205-0371).




………………………………………………………………………………………………………………………………………………………………………………......
                                                        (Cut along dotted line and keep in your files)



             TO: THE JOB APPLICANT OR EMPLOYEE,

             THE INFORMATION AND THE SUPPORTING DOCUMENTATION YOU HAVE PROVIDED IN
             COMPLETING THIS FORM —OR IN SOME CASES OTHER INFORMATION THAT COULD
             VERIFY THE RESPONSES YOU HAVE GIVEN TO THE ITEMS/QUESTIONS IN THIS FORM—
             WILL BE DISCLOSED BY YOUR EMPLOYER TO THE STATE WORKFORCE AGENCY (SWA).
             ENTER THE SWA’s NAME BELOW:
            ________________________________________________________________________________________________
            _______________________________________________________________________________________
            IN ORDER TO QUALIFY FOR A FEDERAL EMPLOYER TAX CREDIT, PROVISION OF THIS
            INFORMATION IS VOLUNTARY. HOWEVER, THE INFORMATION IS REQUIRED FOR YOUR
            EMPLOYER TO RECEIVE THE FEDERAL TAX CREDIT. IF THE INFORMATION YOU
            PROVIDE IS ABOUT A MEMBER OF YOUR FAMILY, YOU SHOULD PROVIDE HIM or HER A
            COPY OF THIS NOTICE.



4                                                                                                                                 ETA Form 9061 (August 2009)

Linked official document 4: https://www.dol.gov/sites/dolgov/files/ETA/advisories/TEGL/2009/TEGL03-09c.pdf

Attachment C.

123 STAT. 306                  PUBLIC LAW 111–5—FEB. 17, 2009

                   DIVISION B—TAX, UNEMPLOYMENT,
                   HEALTH, STATE FISCAL RELIEF, AND
                          OTHER PROVISIONS

                           TITLE I—TAX PROVISIONS

American
Recovery and
Reinvestment
Tax Act of 2009, Section 1221

26 USC 1 et seq.

26 USC 1 note.

SEC. 1000. SHORT TITLE, ETC.
(a) SHORT TITLE.—This title may be cited as the ‘‘American
Recovery and Reinvestment Tax Act of 2009’’.
(b) REFERENCE.—Except as otherwise expressly provided, whenever
in this title an amendment or repeal is expressed in terms
of an amendment to, or repeal of, a section or other provision,
the reference shall be considered to be made to a section or other
provision of the Internal Revenue Code of 1986.
(c) TABLE OF CONTENTS.—The table of contents for this title
is as follows:

                               TITLE I—TAX PROVISIONS

Sec. 1000. Short title, etc.

                    Subtitle A—Tax Relief for Individuals and Families
                            PART I—GENERAL TAX RELIEF

Sec. 1001. Making work pay credit.
Sec. 1002. Temporary increase in earned income tax credit.
Sec. 1003. Temporary increase of refundable portion of child credit.
Sec. 1004. American opportunity tax credit.
Sec. 1005. Computer technology and equipment allowed as a qualified higher education
expense for section 529 accounts in 2009 and 2010.
Sec. 1006. Extension of and increase in first-time homebuyer credit; waiver of
requirement
to repay.
Sec. 1007. Suspension of tax on portion of unemployment compensation.

                                                                           Attachment C.

Sec. 1008. Additional deduction for State sales tax and excise tax on the purchase
of certain motor vehicles.

                 PART II—ALTERNATIVE MINIMUM TAX RELIEF

Sec. 1011. Extension of alternative minimum tax relief for nonrefundable personal
credits.
Sec. 1012. Extension of increased alternative minimum tax exemption amount.

                              Subtitle B—Energy Incentives

                   PART I—RENEWABLE ENERGY INCENTIVES

Sec. 1101. Extension of credit for electricity produced from certain renewable resources.
Sec. 1102. Election of investment credit in lieu of production credit.
Sec. 1103. Repeal of certain limitations on credit for renewable energy property.
Sec. 1104. Coordination with renewable energy grants.

PART II—INCREASED ALLOCATIONS OF NEW CLEAN RENEWABLE ENERGY
        BONDS AND QUALIFIED ENERGY CONSERVATION BONDS

Sec. 1111. Increased limitation on issuance of new clean renewable energy bonds.
Sec. 1112. Increased limitation on issuance of qualified energy conservation bonds.

                PART III—ENERGY CONSERVATION INCENTIVES

Sec. 1121. Extension and modification of credit for nonbusiness energy property.
Sec. 1122. Modification of credit for residential energy efficient property.
Sec. 1123. Temporary increase in credit for alternative fuel vehicle refueling property.

         PART IV—MODIFICATION OF CREDIT FOR CARBON DIOXIDE
                         SEQUESTRATION

Sec. 1131. Application of monitoring requirements to carbon dioxide used as a tertiary
injectant.

                                                                          Attachment C.

n POQ96SHH1PUBLIC LAW 111–5—FEB. 17, 2009                           123 STAT. 307

PART V—PLUG-IN ELECTRIC DRIVE MOTOR VEHICLES

Sec. 1141. Credit for new qualified plug-in electric drive motor vehicles.
Sec. 1142. Credit for certain plug-in electric vehicles.
Sec. 1143. Conversion kits.
Sec. 1144. Treatment of alternative motor vehicle credit as a personal credit allowed
against AMT.

         PART VI—PARITY FOR TRANSPORTATION FRINGE BENEFITS

Sec. 1151. Increased exclusion amount for commuter transit benefits and transit
passes.

                        Subtitle C—Tax Incentives for Business

                PART I—TEMPORARY INVESTMENT INCENTIVES

Sec. 1201. Special allowance for certain property acquired during 2009.
Sec. 1202. Temporary increase in limitations on expensing of certain depreciable
business assets.

                     PART II—SMALL BUSINESS PROVISIONS

Sec. 1211. 5-year carryback of operating losses of small businesses.
Sec. 1212. Decreased required estimated tax payments in 2009 for certain small
businesses.

                      PART III—INCENTIVES FOR NEW JOBS

Sec. 1221. Incentives to hire unemployed veterans and disconnected youth.

             PART IV—RULES RELATING TO DEBT INSTRUMENTS

Sec. 1231. Deferral and ratable inclusion of income arising from business indebtedness
discharged by the reacquisition of a debt instrument.
Sec. 1232. Modifications of rules for original issue discount on certain high yield
obligations.

                 PART V—QUALIFIED SMALL BUSINESS STOCK

Sec. 1241. Special rules applicable to qualified small business stock for 2009 and
2010.

                                                                          Attachment C.

PART VI—S CORPORATIONS

Sec. 1251. Temporary reduction in recognition period for built-in gains tax.

            PART VII—RULES RELATING TO OWNERSHIP CHANGES

Sec. 1261. Clarification of regulations related to limitations on certain built-in
losses following an ownership change.
Sec. 1262. Treatment of certain ownership changes for purposes of limitations on
net operating loss carryforwards and certain built-in losses.

                    Subtitle D—Manufacturing Recovery Provisions

Sec. 1301. Temporary expansion of availability of industrial development bonds to
facilities manufacturing intangible property.
Sec. 1302. Credit for investment in advanced energy facilities.

                         Subtitle E—Economic Recovery Tools

Sec. 1401. Recovery zone bonds.
Sec. 1402. Tribal economic development bonds.
Sec. 1403. Increase in new markets tax credit.
Sec. 1404. Coordination of low-income housing credit and low-income housing
grants.

                       Subtitle F—Infrastructure Financing Tools

       PART I—IMPROVED MARKETABILITY FOR TAX-EXEMPT BONDS

Sec. 1501. De minimis safe harbor exception for tax-exempt interest expense of financial
institutions.
Sec. 1502. Modification of small issuer exception to tax-exempt interest expense
allocation rules for financial institutions.
Sec. 1503. Temporary modification of alternative minimum tax limitations on taxexempt
bonds.
Sec. 1504. Modification to high speed intercity rail facility bonds.

        PART II—DELAY IN APPLICATION OF WITHHOLDING TAX ON
                    GOVERNMENT CONTRACTORS

Sec. 1511. Delay in application of withholding tax on government contractors.
ate Nov

                                                             Attachment C.


PUBLIC LAW 111–5---FEB. 17, 2009            123 STAT. 337

A certification under subclause (II) shall be in such
form and manner and filed at such time as the Secretary
may by regulations prescribe.
‘‘(iii) INCOME FROM A SMALL BUSINESS.—For purposes
of clause (ii), income from a small business
means, with respect to any individual, income from
a trade or business the average number of employees
of which was less than 500 employees for the calendar
year ending with or within the preceding taxable year
of the individual.
‘‘(iv) SEPARATE RETURNS.—In the case of a married
individual (within the meaning of section 7703) who
files a separate return for the taxable year for which
the amount of the installment is being determined,
clause (ii)(I) shall be applied by substituting ‘$250,000’
for ‘$500,000’.
‘‘(v) ESTATES AND TRUSTS.—In the case of an estate
or trust, adjusted gross income shall be determined
as provided in section 67(e).’’.

PART III—INCENTIVES FOR NEW JOBS
SEC. 1221. INCENTIVES TO HIRE UNEMPLOYED VETERANS AND
DISCONNECTED YOUTH.

(a) IN GENERAL.—Subsection (d) of section 51 is amended by
adding at the end the following new paragraph:
‘‘(14) CREDIT ALLOWED FOR UNEMPLOYED VETERANS AND
DISCONNECTED YOUTH HIRED IN 2009 OR 2010.—
‘‘(A) IN GENERAL.—Any unemployed veteran or disconnected
youth who begins work for the employer during
2009 or 2010 shall be treated as a member of a targeted
group for purposes of this subpart.
‘‘(B) DEFINITIONS.—For purposes of this paragraph—
‘‘(i) UNEMPLOYED VETERAN.—The term
‘unemployed veteran’ means any veteran (as defined
in paragraph (3)(B), determined without regard to
clause (ii) thereof) who is certified by the designated
local agency as—
‘‘(I) having been discharged or released from
active duty in the Armed Forces at any time during
the 5-year period ending on the hiring date, and
‘‘(II) being in receipt of unemployment compensation
under State or Federal law for not less

                                                                   Attachment C.



123 STAT. 338         PUBLIC LAW 111–5—FEB. 17, 2009

than 4 weeks during the 1-year period ending on
the hiring date.
‘‘(ii) DISCONNECTED YOUTH.—The term ‘disconnected
youth’ means any individual who is certified
by the designated local agency—
‘‘(I) as having attained age 16 but not age
25 on the hiring date,
‘‘(II) as not regularly attending any secondary,
technical, or post-secondary school during the 6-
month period preceding the hiring date,
‘‘(III) as not regularly employed during such
6-month period, and
‘‘(IV) as not readily employable by reason of
lacking a sufficient number of basic skills.’’.
26 USC 51.

(b) EFFECTIVE DATE.—The amendments made by this section
shall apply to individuals who begin work for the employer after
December 31, 2008.

PART IV—RULES RELATING TO DEBT
         INSTRUMENTS

SEC. 1231. DEFERRAL AND RATABLE INCLUSION OF INCOME ARISING
          FROM BUSINESS INDEBTEDNESS DISCHARGED BY THE
          REACQUISITION OF A DEBT INSTRUMENT.

(a) IN GENERAL.—Section 108 (relating to income from discharge
of indebtedness) is amended by adding at the end the following
new subsection:
‘‘(i) DEFERRAL AND RATABLE INCLUSION OF INCOME ARISING
FROM BUSINESS INDEBTEDNESS DISCHARGED BY THE REACQUISITION
OF A DEBT INSTRUMENT.—
‘‘(1) IN GENERAL.—At the election of the taxpayer, income
from the discharge of indebtedness in connection with the
reacquisition after December 31, 2008, and before January
1, 2011, of an applicable debt instrument shall be includible
in gross income ratably over the 5-taxable-year period beginning
with—
‘‘(A) in the case of a reacquisition occurring in 2009,
the fifth taxable year following the taxable year in which
the reacquisition occurs, and
‘‘(B) in the case of a reacquisition occurring in 2010,
the fourth taxable year following the taxable year in which

                            Attachment C.

the reacquisition occurs.