FY 2021 initial 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
                                                         November 16, 2020

ADVISORY:       TRAINING AND EMPLOYMENT GUIDANCE LETTER NO. 6-20

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

FROM:           JOHN PALLASCH
                Assistant Secretary

SUBJECT:        Work Opportunity Tax Credit (WOTC) Initial Funding Allotments for
                Fiscal Year 2021

1. Purpose. To convey the WOTC Fiscal Year (FY) 2021 initial funding allotments and
   application requirements for State Workforce Agencies (SWA) based on funding
   appropriated through a continuing resolution (CR) through December 11, 2020.

2. Action Requested. Grantees must meet the application requirements detailed in section 4
   within 30 calendar days from the date of this Training and Employment Guidance Letter
   (TEGL) issuance.

3. Summary and Background.

        a. Summary – On October 1, 2020, the Continuing Appropriations Act, 2021 (Public
           Law 116-159) was signed into law and provides a continuing resolution (CR), which
           allows uninterrupted administration of WOTC through December 11, 2020. Through
           this CR, the congressional allotment is for $3,647,090. Once Congress authorizes
           final appropriations for FY 2021, ETA will publish a change to this TEGL to
           announce the full year allotments and state balances. With this TEGL, the
           Employment and Training Administration (ETA) requests that SWAs submit
           applications for funding.
        b. Background – The WOTC is authorized until December 31, 2020 (Section 143 of
           Division Q of P.L.116-94 -- Further Consolidated Appropriation Act, 2020). The
           U.S. Departments of Labor and Treasury jointly administer WOTC. The Department
           of Treasury, through the Internal Revenue Service (IRS), administers all tax-related
           provisions and requirements of the Federal tax credit. The Department of Labor,
           through the ETA, awards grants to states for administration of WOTC.

 RESCISSIONS                                             EXPIRATION DATE
 None                                                    Continuing

4. Details. States must enter the state amount (provided in Attachment I) on their SF-424
   Form - Application for Federal Assistance (OMB Control No. 4040-0004) as their request for
   FY 2021 funding.
   After allocating $20,000 to the Virgin Islands, ETA distributes the remaining funds to the
   SWAs 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. The
   administrative formula is calculated as follows:
   a. 50 percent is based on each state’s relative share of total WOTC certifications issued
      from October 1, 2019 through September 30, 2020;
   b. 30 percent is based on each state’s relative share of the Civilian Labor Force averages for
      the 12-month period from October 1, 2019 through September 30, 2020; and
   c. 20 percent is based on each state’s relative share of adult recipients of Temporary
      Assistance for Needy Families averages from October 1, 2018 through September 30,
      2019.
   Application Requirements for FY 2021 Funding. ETA requires grantees to submit an
   electronically signed copy of a SF-424 Form through Grants.gov for the [fill in Funding
   Opportunity Number] at: https://www.grants.gov/, within 30 calendar days from the
   date of this TEGL’s issuance. The official, electronically signed SF-424 Form must reflect
   the remaining balance to state amount listed in Attachment I for the requested estimated
   funding total in item #18 and the Catalog of Federal Domestic Assistance Number, 17.271
   for item #11.
   Each applicant must have a Dun and Bradstreet Data Universal Numbering System (DUNS)
   Number available and must be registered with the System for Award Management (SAM) at:
   https://www.sam.gov before submitting an application. Please note: Effective June 2017,
   you can no longer access SAM using Internet Explorer (IE) Versions older than IE11. You
   either need to upgrade to an Internet Explorer version of IE11 or higher, or access SAM with
   another supported browser type (Chrome, Firefox, Safari, etc.).
   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 grant
   opportunity, applicants should not follow the “Find Grants” link, as this is not a competitive
   funding opportunity. If applicants encounter a problem with Grants.gov and do not find an
   answer in any of the other resources, call 1-800-518-4726 or 1-606-545-5035 to speak to a
   Customer Support Representative or email: [email protected].
   General Administration. SWAs are responsible for using the FY 2021, CR funding
   allotments to conduct the WOTC activities outlined in Attachment II. Statement of Work
   through December 11, 2020.

   Reporting Requirements.
   a) Quarterly Financial Report – SWAs must report expenditures quarterly using ETA
      Form 9130. Financial reports are due no later than 45 days following the end of each
      quarter. Timely submission of these reports is important to ensure proper accounting of
      funds.
   b) Quarterly Performance Report – SWAs must use the web-based Enterprise Business
      Support System (EBSS) Tax Credit Reporting System to report quarterly activities and
      outcomes using ETA Form 9058. Performance reports are due no later than 45 days
      following the end of each quarter. Timely submission of these reports is important for
      administration purposes.
5. Inquiries. Please direct all questions to the appropriate Regional WOTC Coordinator listed
   on the WOTC website at:
   https://www.doleta.gov/business/incentives/opptax/contact/regional-offices.cfm.

6. References.
    Section 51 of the Internal Revenue Code (Code) of 1986, as amended; and
    P.L. 116-159 -- Continuing Appropriations Act, 2021.

7. Attachment(s).
    Attachment I: Work Opportunity Tax Credit Fiscal Year 2021 State Allotments
    Attachment II: Work Opportunity Tax Credit Statement of Work

                                                                     Attachment I

                       Work Opportunity Tax Credits
                    Fiscal Year 2021 State Allotments
                         Continuing Resolution #1
        State          10/1/20 thru 12/11/20 (19.73%)

Total                                                   $3,647,090

Alabama                                                    58,663
Alaska                                                     13,022
Arizona                                                    62,734
Arkansas                                                   27,875
California                                                494,571
Colorado                                                   54,478
Connecticut                                                26,118
Delaware                                                   13,482
Dist. of Columbia                                          13,022
Florida                                                   181,476
Georgia                                                   110,896
Hawaii                                                     13,022
Idaho                                                      13,022
Illinois                                                  162,496
Indiana                                                    62,880
Iowa                                                       50,345
Kansas                                                     26,763
Kentucky                                                   81,429
Louisiana                                                  60,267
Maine                                                      15,001
Maryland                                                   73,302
Massachusetts                                              70,936
Michigan                                                  132,234
Minnesota                                                  52,807
Mississippi                                                42,278
Missouri                                                   81,899
Montana                                                    13,022
Nebraska                                                   30,692
Nevada                                                     22,601
New Hampshire                                              13,022
New Jersey                                                 70,179
New Mexico                                                 27,145
New York                                                  190,746
North Carolina                                            104,279
North Dakota                                               13,022
Ohio                                                      141,740
Oklahoma                                                   47,425
Oregon                                                     47,332
Pennsylvania                                              158,478
Puerto Rico                                                16,441
Rhode Island                                               13,022
South Carolina                                             51,625
South Dakota                                               13,022
Tennessee                                                 150,444
Texas                                                     234,242
Utah                                                       22,078
Vermont                                                    13,022
Virginia                                                   68,922
Washington                                                 82,526
West Virginia                                              23,964
Wisconsin                                                  66,113
Wyoming                                                    13,022
Virgin Islands                                              3,946

                                                                                    Attachment II

                                Work Opportunity Tax Credit
                                      Statement of Work
State Workforce Development Agencies, also known as State Workforce Agencies (SWA), must
use funds for the Fiscal Year to realize the following responsibilities:

1. The SWA must adhere to Employment and Training Administration (ETA) guidance and
   provisions of the Internal Revenue Code of 1986, Section 51, as amended, in administering
   the Work Opportunity Tax Credit (WOTC). Law designates the SWAs as the only agencies
   that can issue a Certification. 26 USC sec. 51(d)(12).
2. Designate a state coordinator, who oversees the administration of WOTC, for each state
   grant.
3. Determine eligibility of individuals as members of targeted groups, on a timely basis, and
   issue employer certifications, denials, or notices of invalidation for tax credits on a timely
   basis and in accordance with the policies and procedures set forth by ETA.
4. Establish and implement an appeals resolution process in accordance with the guidelines
   provided by ETA.
5. Develop a backlog reduction plan which includes an estimated timeline to eliminate existing
   backlogs based on current policies and procedures, and notify your regional coordinator prior
   to implementation.
6. Establish and maintain appropriate forms’ quality review process, record keeping, and
   reporting capability related to the orderly management of WOTC certification requests.
7. Establish and maintain an orderly system for regularly verifying the eligibility of a random
   sample of individuals certified under WOTC and initiating effective corrective action when
   appropriate as indicated by results of such activities.

Additionally, to enhance a SWA’s ability to successfully administer WOTC, SWAs should use
the funds to conduct the following activities below, if necessary:
    Establish and maintain a memorandum of understanding (MOU) or other similar
     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 partners.
    Establish and maintain a memorandum of understanding (MOU) or other similar
     agreements with other SWAs for the timely and orderly processing of “out of state”
     Certification Requests (i.e., applications) requiring SWAs to provide available
     documentation and records for WOTC potentially eligible applicants/new hires relocating
     and working in another state.
    Establish and maintain a memorandum of understanding (MOU) or other similar
     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.

                                                                                         Attachment II

        Train state and participating agency staff and provide monitoring and technical assistance
         to these agencies, as appropriate, for conducting target group preliminary eligibility
         determinations and issuing Conditional Certifications.
Other Grant Agreement Conditions
By entering into this agreement, the SWA agrees to the following conditions:
       SWAs must assure that all data exchanges conducted through or during the course of
        performance of this grant will be conducted in a manner consistent with applicable Federal
        law and TEGL NO. 39-11 Guidance on the Handling and Protection of Personally
        Identifiable Information (PII) (issued June 28, 2012). All such activity conducted by ETA
        and/or recipient/s will be performed in a manner consistent with applicable state and Federal
        laws.
       Fulfill performance and financial reporting requirements under grant agreement.