Revised Work Opportunity Tax Credit forms

Accessible letter PDF: https://www.dol.gov/sites/dolgov/files/ETA/advisories/TEGL/2009/TEGL11-08acc.pdf

CLASSIFICATION
                                                      WOTC
 EMPLOYMENT AND TRAINING ADMINISTRATION
            ADVISORY SYSTEM                           CORRESPONDENCE SYMBOL
               U.S. DEPARTMENT OF LABOR               OWI
                    Washington, D.C. 20210            DATE
                                                      February 19, 2009
TRAINING AND EMPLOYMENT GUIDANCE LETTER NO. 11-08

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

FROM:           DOUGLAS F. SMALL /s/
                Deputy Assistant Secretary

SUBJECT:        Extension of the Information Collection for the Consolidated Work
                Opportunity Tax Credit (WOTC) Program: Revised Reporting and
                Processing Forms

l. Purpose. The purpose of this guidance is to announce receipt of the Office of
   Management and Budget (OMB) approval of the reporting and administrative forms
   for the consolidated WOTC Program and transmit the newly revised forms and on-
   line reporting instructions.

2. References. Small Business and Work Opportunity Tax Credit Act of 2007 (Public
   Law 110-28); Tax Relief and Health Care Act of 2006 (Public Law 109-432); Working
   Families Tax Relief Act of 2004 (Public Law 108-311); Job Creation and Worker
   Assistance Act of 2002 (Public Law 107-147); Paperwork Reduction Act of 1995;
   Internal Revenue Code of 1986, Section 51, as amended; Training and Employment
   Guidance Letter (TEGL) No. 19-05, dated March 7, 2006; TEGL No. 05-07,
   Reauthorization of the Work Opportunity Tax Credit and Other Program Changes, dated
   September 11, 2007; TEGL No. 20-06, Reauthorization of the Work Opportunity Tax
   Credit and Other Program Changes, dated April 3, 2007; TEGL No. 19-07, New
   Streamlined Reporting Requirements and Extension of the Information Collection for the
   Work Opportunity and Welfare-to-Work Tax Credits, dated March 7, 2007; ETA
   Handbook No. 408, November 2002, Third Edition (the Handbook); and the Revised
   Version of the May 2005, Addendum to the Handbook




 RESCISSIONS                                       EXPIRATION DATE:

 NONE                                              Continuing

                                           -2-

3. Background. Legislation enacted in late 2006 and early 2007, reauthorized,
   amended, and expanded the WOTC Program. As a result, the Individual
   Characteristics Form, all administrative and processing forms, and related program
   materials have been revised to reflect the legislative changes.

   On December 20, 2006, the Tax Relief and Health Care Act of 2006 (P.L. 109-432) was
   signed into law. This Act extended the WOTC Program for a two-year period
   through December 31, 2007, effective retroactively to January 1, 2006, and merged
   the Welfare-to-Work Tax Credit (WtWTC) into WOTC. This Act introduced certain
   statutory amendments and new provisions with respect to individuals who begin
   work for an employer on or after January 1, 2007. For additional information, see
   TEGL No. 20-06, dated April 3, 2007.

   On May 25, 2007, the Small Business and Work Opportunity Tax Act of 2007 (P.L. 110-
   28) was signed into law. This Act extends the WOTC Program through August 31,
   2011. This Act and the Tax Relief and Health Care Act of 2006 (P.L. 109-432) amend
   certain target groups and introduced new provisions that streamline the WOTC
   program and make it easier for the business sector to participate. For additional
   information, see TEGL No. 5-07, dated September 11, 2007.

   To address the changes and new provisions introduced by these two pieces of
   legislations, ETA updated the WOTC administrative and processing forms and other
   program related materials, and developed a modified automated reporting system
   and procedure. On September 6 and 7, 2007, ETA provided to the regions and the
   states a two-session training Webinar on the new reporting requirements. These
   two training Webinars are archived and can be accessed by visiting the
   Workforce3One Web site at: http://www.workforce3one.org and searching for WOTC.

   The revised and updated forms and program materials have received OMB
   approval through November 30, 2011 (see section 5, below). The approval covers
   annual planning, reporting, and record-keeping burdens for Report 1 – Certification
   Workload and Characteristics of Certified Individuals (ETA Form 9058). Also, OMB’s
   data collection approval includes ETA Forms 9061– 9063, 9065, 9057, and 9059. The
   revised forms incorporate the latest amendments and provisions introduced by P.L.
   110-28 for new hires who begin to work for an employer after May 25, 2007.

4. Reporting Instructions and Clarifications. All four administrative and reporting
   forms have been revised and updated to reflect the changes and new provisions
   introduced by Public Laws 110-28 and 109-432. The following reporting and
   administrative forms are all required forms: ETA Form 9058 – Report 1, Certification
   Workload and Characteristics of Certified Individuals; ETA Form 9061 – Individual
   Characteristics Form (ICF); ETA Form 9062 - Conditional Certification; and ETA Form
   9063 – Employer Certification (Optional Format). The remaining former reporting and
   processing forms have also been cleared by OMB, but as ETA indicated in TEGL

                                         -3-

No. 19-05, dated March 7, 2006, these forms are for internal use by the state
workforce agencies (SWAs) as follows: ETA Form 9057 – Conditional Certifications
Issued Summary Worksheet; ETA Form 9059 –Verification Results Audit Worksheet; and
ETA Form 9065 – Declaration of Verification Results Audit Summary Worksheet.

The instructions to each form have also been updated. ETA Form 9061 – Individual
Characteristics Form (ICF), Work Opportunity Tax Credit Program has been revised to
accommodate all the new changes and provisions and reformatted in a user-friendly
and easy-to-use style. Comments received during the Federal Register Notice
comment period, which expired on March 10, 2008, were considered and
incorporated.

Termination of Previous Transition Period. Please note that due to the legislative
changes in 2006 and 2007, ETA Form 9061 was revised twice: first in December 2006
(expiration August 2009); and again in May 2007 (expiration April 2008). When the
second revision received emergency OMB approval, ETA provided a transition
period that allowed continued use of the December 2006 version of the ETA Form
9061 for the target categories it lists. This transition period ends two weeks from the
date of issuance of this TEGL. Since the transition period ends two weeks from the
date of issuance of this TEGL, employers are required to start using the OMB-
approved ETA Form 9061 as soon as the two-week transition period ends. After this
date, other versions of ETA Form 9061 are not to be accepted by the SWAs.
Previously filed requests for certification that are part of a state’s backlog do not
have to be resubmitted on the new form.

Internal Revenue Service (IRS) Clarification for Use of Form W-4. Recently,
questions regarding the use of IRS Form W-4 as documentary evidence to prove
residential address for potential members of the Summer Youth and Designated
Community Resident target groups were brought to ETA’s attention. To clarify,
employers seeking certification requests for potential members of these two WOTC
target groups may continue to use IRS Form W-4 as documentation to show that the
applicant resides in an Empowerment Zone, Enterprise Community, or Renewal
Community. SWAs are instructed to: 1) continue to accept this form as valid
documentation to prove the address where these applicants reside; and 2) revisit
and honor any certification requests denied on the basis of a rejected IRS Form W-4.

Electronic Reporting Process. With the 2002 implementation of the Internet-based
Tax Credit Reporting System (TCRS), through ETA’s Enterprise Business Support
System (EBSS), SWAs have sole control over data entry. Passwords have been
assigned to each state coordinator that permit them access to the appropriate screens
for the quarterly TCRS report, ETA Form 9058 – Report 1. Personal Identification
Numbers (PINs) have been assigned to the regional coordinators granting them
access to review each state’s quarterly report and issue the final report certification.

                                           -4-

   New regional and state coordinators in need of passwords and PINs should contact
   Carmen Ortiz at [email protected].

   Since many states have backlogs and are expected to continue processing all WOTC
   and WtWTC timely filed and eligible certification requests, the EBSS WOTC TCRS
   contains a modified ETA Form 9058 – Report 1 to facilitate the reporting phase-out
   period of all WtWTC program data. The modified report permits states to, on a
   quarterly basis, report the following: 1) WOTC and WtWTC program data for
   individuals who began to work for an employer after December 31, 2005, and prior
   to January 1, 2007; and 2) data for the consolidated WOTC for individuals who began
   to work for an employer after December 31, 2006, in the same report. The phase out
   period during which WOTC and, specifically, all WtWTC program data must have been
   reported using the modified ETA Form 9058, ended on September 30, 2007.

5. Reporting Authority. Reporting, program administration and processing forms,
    and all other program related materials for the consolidated WOTC Program are
    approved according to the Paperwork Reduction Act of 1995, under OMB No. 1205-
    0371. This authority is effective through November 30, 2011.

6. Action Requested. SWA administrators are requested to provide this TEGL to all
   WOTC State Coordinators and ensure they comply with the revised reporting
   requirements, the guidance provided, and share this information with the private
   sector businesses and their representatives and all other Federal and state partners.

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

8. Attachments. The updated modified version of ETA Form 9058 and the updated
   User’s Guide for the EBSS WOTC TCRS, which incorporates changes from Public
   Laws 110-28 and 109-432, all other updated administrative and processing forms,
   and other WOTC program related materials are available through the Internet at:
   www.doleta.gov/business/Incentives/opptax.