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FY 2023 initial Work Opportunity Tax Credit allotments
Summary ETA gave state workforce agencies initial FY 2023 funds to administer the Work Opportunity Tax Credit under a continuing resolution through December 16, 2022. It listed state allotments and required grant applications within 30 days. Change 1 later announced the remaining full-year funds and separate backlog awards.
Document
Federal guidance
Agency
U.S. Department of Labor, Employment and Training Administration (ETA)
Document number
TEGL No. 06-22
Date issued
November 14, 2022
Status
Active
ETA lists this base letter as active. It prints an expiration date of Continuing and no rescissions; Change 1 adds later FY 2023 funds without rescinding it.
Status last verified October 24, 2026
Topics
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About this page: The full text below is the official document from U.S. Department of Labor, Employment and Training Administration (ETA). Ezel adds the plain-English summary and tracks the document's status. The official source linked on this page is authoritative for any reliance.
CLASSIFICATION
EMPLOYMENT AND TRAINING ADMINISTRATION WOTC
ADVISORY SYSTEM CORRESPONDENCE SYMBOL
U.S. DEPARTMENT OF LABOR OWI
Washington, D.C. 20210 DATE
November 14, 2022
ADVISORY: TRAINING AND EMPLOYMENT GUIDANCE LETTER NO. 06-22
TO: STATE WORKFORCE AGENCIES
STATE WORKFORCE ADMINISTRATORS
WORK OPPORTUNITY TAX CREDIT COORDINATORS
FROM: BRENT PARTON
Acting Assistant Secretary
SUBJECT: Work Opportunity Tax Credit (WOTC) Initial Funding Allotments for Fiscal
Year 2023
1. Purpose. To convey the Fiscal Year (FY) 2023 initial funding allotments for WOTC and the
application requirements for State Workforce Agencies (SWA) based on funding
appropriated through a continuing resolution (CR) through December 16, 2022.
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 September 30, 2022, the Continuing Appropriations and Ukraine
Supplemental Appropriations Act, 2023 (Pub. L. 117-180) was signed into law, providing
a continuing resolution, which allows for incremental FY 2023 grant funding for states’
administration of WOTC, pro-rated based on the CR's end date of December 16, 2022.
The allotment for WOTC under this CR is $3,900,335. Once Congress authorizes final
appropriations for FY 2023, the Employment and Training Administration (ETA) will
publish a change to this TEGL to announce the full year allotments and state balances. If
applicable, ETA will also announce any additional funding appropriated to reduce
processing backlogs and assist states in adopting or modernizing information technology
for processing of certification requests. ETA requests that SWAs submit applications for
funding as allotted in Attachment I to this TEGL.
b. Background – The WOTC is set forth under section 51 of the Internal Revenue Code of
1986, as amended (26 U.S.C. sec. 51), and is effective until December 31, 2025, under
Consolidated Appropriations Act, 2021 (Pub. L. 116-260), Division EE, Title 1, Section
113. The U.S. Department of the Treasury, through the Internal Revenue Service (IRS),
administers all tax-related provisions and requirements of the Federal tax credit. The
RESCISSIONS EXPIRATION DATE
None Continuing
U.S. Department of Labor, through the ETA, awards grants to states for administration of
WOTC.
4. Details. States must enter the state allotment amount (provided in Attachment I) on their SF-
424 Form, Application for Federal Assistance (OMB Control No. 4040-0004), as their
request for FY 2023 funding.
Allotment Formula. ETA determines state allotments for normal WOTC operations
according to the following methodology. 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 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, 2021 through September 30, 2022;
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, 2021 through September 30, 2022; 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, 2020 through September 30,
2021.
Application Requirements for FY 2023 Funding. ETA requires grantees to submit an
electronically signed copy of the SF-424 Form, Application for Federal Assistance (OMB
Control No. 4040-0004), as their official request for funding opportunity number ‘ETA-
WOTC-TEGL-06-22-2023’ at https://www.grants.gov, within 30 calendar days from the
issuance date of this TEGL. The official, electronically signed SF-424 Form must reflect
the amount listed in Attachment I as the state’s requested estimated funding total in item
#18, and the Catalog of Federal Domestic Assistance Number ‘17.271’ for item #11, and the
grantee’s 12-character Unique Entity Identifier (UEI number) listed for item #8c.
Grantees should indicate the estimated amount of Indirect Costs to be claimed by the
recipient for FY 2023, if any, as a sentence for item #15, Descriptive Title of Applicant's
Project. Grantees may use the amount of indirect costs reported against their FY 2022
WOTC grant as an approximate for FY 2023 indirect cost expenditures. For example:
“Indirect Costs for this award are estimated at $19,000.” If there is no estimated Indirect
Costs, the following statement, must be entered: “Indirect Costs for this award are estimated
at $0.00.”
Effective April 2022, the Dun and Bradstreet Data Universal Numbering System (DUNS)
number was replaced by a new, non-proprietary identifier requested in and assigned by the
System for Award Management (SAM.gov). This new identifier is called the Unique Entity
Identifier (UEI), or the Entity ID. Each applicant must have a UEI number available, and it
must be registered at https://www.sam.gov, before submitting an SF-424 application. 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 available resources, they should call 1-800-518-4726 or 1-606-
545-5035 to speak to a Customer Support Representative, or send an email to
[email protected].
Revised Award Descriptions. As part of a Federal government-wide effort to describe grant
activities consistently and accurately, ETA is revising its standard grant award descriptions.
States may see the following text in the grant award or in online descriptions of the WOTC
grants:
• Purpose: The purpose of this grant is to allow SWAs to administer WOTC per ETA
guidance and provisions of the IRS Code of 1986, Section 51, as amended. Law
designates the SWAs as the only agencies that can issue a Certification (26 USC
§51(d)(12)). That statute refers to SWAs as State employment security agencies,
established in accordance with 29 U.S.C. 49.
• Activities to be performed: SWAs must use funds to implement the requirements set
forth in the WOTC Statement of Work, including to: Designate a state coordinator
who oversees the administration of WOTC for each state grant; 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; and Establish and
maintain appropriate forms’ quality review process, record keeping, and reporting
capability related to the orderly management of WOTC certification requests.
• Expected Outcomes: For WOTC grants, SWAs will issue determinations
(certifications or denials) for employers’ certification requests, which facilitate tax
credits determined by the U.S. Department of the Treasury. SWAs will increase
efficiency in processing employers’ certification requests and develop plans that
include an estimated timeline to eliminate existing backlogs of certification requests.
• Intended Beneficiaries: Job seekers who have access to a higher number of
employment opportunities, and employers who seek to increase hiring of qualified job
applicants. Other beneficiaries include state and local partner agencies in the
American Job Center network that coordinate efforts to promote WOTC to
employers, job seekers, and other Workforce Innovation and Opportunity Act
partners.
• Subrecipient Activities: SWAs, as WOTC grant recipients, do not typically
subaward funds. States that wish to subaward funds should seek approval from their
Grant Officer.
General Administration. With their FY 2023 grant award, SWAs are responsible for
conducting the WOTC activities outlined in the WOTC Statement of Work (Attachment II).
As noted above, this TEGL provides incremental funding proportional to funds appropriated
through the December 16, 2022 Continuing Resolution; the timing and amount(s) of
subsequent incremental funding depend on future appropriations.
Reporting Requirements.
a) Quarterly Financial Report – SWAs must report fiscal expenditures quarterly using
ETA Form 9130. Financial reports are due no later than 45 days following the end of
each quarter. Timely submission of these reports 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 inquiries to the appropriate Regional WOTC Coordinator listed on
the WOTC website at https://www.dol.gov/agencies/eta/wotc/contact/regional-offices.
6. References.
• Section 51 of the Internal Revenue Code of 1986, as amended
(https://uscode.house.gov/view.xhtml?path=/prelim@title26/subtitleA/chapter1/subchapt
erA/part4/subpartF&edition=prelim);
• Section 49 of Title 29 of the United States Code (Labor)
(https://uscode.house.gov/view.xhtml?req=(title:29%20section:49%20edition:prelim));
• Pub. L. 116-260, Consolidated Appropriations Act of 2021
(https://www.congress.gov/116/plaws/publ260/PLAW-116publ260.pdf); and
• Pub. L. 117-180, Continuing Appropriations and Ukraine Supplemental Appropriations
Act of 2023 (https://www.congress.gov/117/bills/hr6833/BILLS-117hr6833enr.pdf).
7. Attachment(s).
• Attachment I: Work Opportunity Tax Credit Fiscal Year 2023 Initial State Allotments
• Attachment II: Work Opportunity Tax Credit Statement of Work
Work Opportunity Tax Credit Attachment I
FY 2023 Funding under Continuing Resolution
CR #1
10/1/22 thru 12/16/22
State (21.10%)
Total $3,900,335
Alabama 61,275
Alaska 13,926
Arizona 60,549
Arkansas 28,727
California 511,283
Colorado 66,496
Connecticut 31,842
Delaware 17,983
District of Columbia 13,926
Florida 175,155
Georgia 107,033
Hawaii 14,666
Idaho 16,602
Illinois 156,836
Indiana 60,690
Iowa 48,591
Kansas 25,831
Kentucky 78,593
Louisiana 63,967
Maine 14,478
Maryland 88,554
Massachusetts 84,512
Michigan 127,628
Minnesota 61,790
Mississippi 46,062
Missouri 84,094
Montana 13,926
Nebraska 29,623
Nevada 33,289
New Hampshire 13,926
New Jersey 71,295
New Mexico 34,324
New York 233,115
North Carolina 100,647
North Dakota 13,926
Ohio 147,859
Oklahoma 57,819
Oregon 57,851
Pennsylvania 157,829
Puerto Rico 16,370
Rhode Island 15,876
South Carolina 55,630
South Dakota 13,926
Tennessee 145,204
Texas 290,974
Utah 24,089
Vermont 13,926
Virginia 91,951
Washington 92,377
West Virginia 26,290
Wisconsin 69,058
Wyoming 13,926
Virgin Islands 4,220
I -1
Attachment II
Work Opportunity Tax Credit (WOTC)
Statement of Work
State Workforce Development Agencies, also known as State Workforce Agencies (SWA), must
use funds for the Fiscal Year to conduct the following mandatory activities:
1. 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) certification process. Law designates the SWA as the only
agency that can issue a Certification (26 USC §51(d)(12)). (That statute refers to SWAs as
State employment security agencies, established in accordance with 29 U.S.C. 49).
2. Designate a State Coordinator who oversees the WOTC administration for each state grant
and attends monthly technical assistance grantee calls hosted by ETA’s National and/or
Regional Offices.
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 that includes an estimated timeline to eliminate the state’s
existing backlog based on current policies and procedures and notify their ETA Regional
Coordinator prior to plan implementation.
6. Establish and maintain appropriate forms’ quality review process, record keeping, and
reporting capability related to the orderly management of WOTC certification requests in
accordance with the policies and procedures set forth by ETA.
7. Establish and maintain an orderly system for regularly verifying the eligibility of a random
sample of individuals certified under WOTC on a quarterly basis, and initiating effective
corrective action when appropriate, as indicated by results of such quality control activities.
Additionally, SWAs are strongly encouraged to use the funds to conduct the following activities:
• Adopt information technology (i.e., systems applications, software, etc.) to process
certification requests more efficiently, or make modernization improvements to their
existing systems or procedures to increase efficiency and reduce any processing backlog.
• Develop working agreements, such as Memoranda of Understanding (MOU) or other
formal agreements, with partner agencies in the American Job Center network (also known
as the One-Stop Career Center system) to coordinate efforts to promote WOTC to
employers, job seekers and other Workforce Innovation and Opportunity Act partners.
• Develop working agreements such as MOUs or other formal agreements with other SWAs
for the timely and orderly processing of “out of state” certification requests requiring
SWAs to provide available documentation and/or records for WOTC potentially eligible
applicants (new hires) relocating and working in another state.
Attachment II
• Develop working agreements, such as MOUs or other formal agreements, with state or
local partnering agencies (i.e., state Vocational Rehabilitation Agencies, Veterans Affairs
Administration and related organizations, Employment Networks, and other local
workforce areas), for the purposes of expediting verification of targeted group eligibility
information submitted in certification requests, and issuing Conditional Certifications,
where appropriate. SWAs are expected to train state and participating agency staff, and
provide monitoring and technical assistance to these agencies, as appropriate, for
conducting targeted 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, issued on 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.
• SWAs must fulfill performance and financial reporting requirements under the grant
agreement.
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