FY 2020 Work Opportunity Tax Credit state funding

Official attachments: Attachment 1, Attachment 2.

CLASSIFICATION
   EMPLOYMENT AND TRAINING ADMINISTRATION                 WOTC
               ADVISORY SYSTEM                            CORRESPONDENCE SYMBOL
          U.S. DEPARTMENT OF LABOR                        OWI
             Washington, D.C. 20210                       DATE
                                                          March 19, 2020

ADVISORY:         TRAINING AND EMPLOYMENT GUIDANCE LETTER NO. 13-19

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

FROM:             JOHN PALLASCH /s/
                  Assistant Secretary

SUBJECT:          Work Opportunity Tax Credit Funding Allotments for Fiscal Year 2020

1. Purpose. To convey the Work Opportunity Tax Credit (WOTC) Fiscal Year (FY)
   2020 funding allotments, including remaining balance to states, and application
   requirements for State Workforce Agencies (SWA).

2. Action Requested. Grantees must meet the application requirements detailed in section 5
   within 30 calendar days from the date of this Training and Employment Guidance Letter
   (TEGL) issuance.

3. Summary and Background. The Work Opportunity Tax Credit (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 Employment and Training Administration (ETA), awards
   grants to states for administration of WOTC.

   ETA has available grant funds totaling $18,485,000 for normal WOTC operations in FY
   2020. The Department awarded $2,626,719 under the first Continuing Resolution (P.L. 116-
   59 -- Continuing Appropriations Act, 2020, and Health Extenders Act of 2019) and awarded
   $1,464,012 under the second Continuing Resolution (P.L. 116-69 -- Further Continuing
   Appropriations Act, 2020, and Further Health Extenders Act of 2019). Therefore, the
   remaining balance to the states is $14,394,269. See Attachment I for the remaining balance
   amounts to each state.

   In addition to $18,485,000 in base funds, Congress appropriated $2,500,000 to reduce the
   processing backlog for WOTC. ETA plans to distribute these additional funds to
   approximately 6-12 states with the most critical need to alleviate their backlogs. The award
   of the $2,500,000 will be informed by a combination of ETA’s data on backlogs and states’
   input. ETA will issue a change to this TEGL to publicly announce the additional awards.
 RESCISSIONS                                             EXPIRATION DATE
 None                                                    Continuing

4. Details. States must enter the remaining balance to state amount, which is provided in
   Attachment I, on their SF-424 Form - Application for Federal Assistance (OMB Control
   No. 4040-0004) as their request for FY 2020 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, 2018 through September 30, 2019;
   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, 2018 through September 30, 2019;
      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, 2017 through September
      30, 2018.

   Application Requirements for FY 2020 Funding. In an effort to achieve greater efficiency
   and as part of ETA’s ongoing effort to streamline the grant award process, ETA requires
   grantees to submit an electronically signed copy of a SF-424 Form through Grants.gov
   for the ETA-WOTC-TEGL-13-19-2020 at: 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: 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 remaining FY 2020
  funding allotments to conduct the following WOTC activities through
  September 30, 2020:

        1. Implementing the certification process and issuing final determination to
     employers or their authorized representatives;
        2. Promoting WOTC to employers;
        3. Reducing and eliminating existing backlogs; and
        4. Reporting performance data on a quarterly basis.

   In addition, SWAs must administer the WOTC in accordance with the policies and
   procedural guidance set forth by ETA and requirements outlined in Attachment II.

   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 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;
    P.L.116-94 -- Further Consolidated Appropriations Act, 2020;
    P.L. 116-59 -- Continuing Appropriations Act, 2020, and Health Extenders Act of 2019;
    P.L. 116-69 -- Further Continuing Appropriations Act, 2020, and Further Health
      Extenders Act of 2019.
7. Attachments.
   Attachment I: FY 2020 State Allotments and Balance after Dissemination to States under
                  Continuing Resolutions (CR) 1 through 2
   Attachment II: Work Opportunity Tax Credit (WOTC) Statement of Work

                                 U. S. Department of Labor                                     Attachment I
                           Employment and Training Administration
                            Work Opportunity Tax Credits
 FY 2020 State Allotments and Balance after Dissemination to States under Continuing
                            Resolutions (CR) 1 through 2

                        FY 2020 Full     Obligated under     Obligated under     Balance to
                       Year Allotment     CR# 1 (10/1/19     CR# 2 (11/22/19       States
                          Amount        through 11/21/19)   through 12/20/19)
        State

Total                    $18,485,000          $2,626,719            $1,464,012   $14,394,269

Alabama                      297,331              44,474                24,788       228,069
Alaska                        66,000               9,379                 5,227        51,394
Arizona                      317,962              47,560                26,508       243,894
Arkansas                     141,280              21,133                11,778       108,369
California                 2,506,695             356,961               198,955     1,950,779
Colorado                     276,118              41,301                23,020       211,797
Connecticut                  132,376              17,663                 9,844       104,869
Delaware                      68,335              10,222                 5,697        52,416
District of Columbia          66,000               9,379                 5,227        51,394
Florida                      919,798             137,582                76,682       705,534
Georgia                      562,066              71,457                39,827       450,782
Hawaii                        66,000               9,379                 5,227        51,394
Idaho                         66,000               9,379                 5,227        51,394
Illinois                     823,598             103,904                57,912       661,782
Indiana                      318,705              47,671                26,570       244,464
Iowa                         255,168              38,168                21,273       195,727
Kansas                       135,645              20,290                11,308       104,047
Kentucky                     412,718              61,734                34,408       316,576
Louisiana                    305,460              45,690                25,466       234,304
Maine                         76,029              11,372                 6,339        58,318
Maryland                     371,525              44,837                24,991       301,697
Massachusetts                359,536              49,414                27,541       282,581
Michigan                     670,220              91,786                51,158       527,276
Minnesota                    267,646              36,018                20,074       211,554
Mississippi                  214,284              25,839                14,402       174,043
Missouri                     415,097              62,090                34,606       318,401
Montana                       66,000               9,379                 5,227        51,394
Nebraska                     155,561              23,269                12,968       119,324
Nevada                       114,554              13,565                 7,561        93,428
New Hampshire                 66,000               9,379                 5,227        51,394
New Jersey                   355,698              53,205                29,654       272,839
New Mexico                   137,584              19,934                11,111       106,539
New York                     966,783             144,610                80,599       741,574
North Carolina               528,533              79,057                44,063       405,413
North Dakota                  66,000               9,379                 5,227        51,394
Ohio                         718,400             107,457                59,892       551,051
Oklahoma                     240,370              33,697                18,781       187,892
Oregon                       239,901              35,884                20,000       184,017
Pennsylvania                 803,232             103,945                57,934       641,353
Puerto Rico                   83,328              12,464                 6,947        63,917
Rhode Island                  66,000               9,379                 5,227        51,394
South Carolina               261,658              39,138                21,814       200,706
South Dakota                  66,000               9,379                 5,227        51,394
Tennessee                    762,514             114,056                63,570       584,888
Texas                      1,187,238             157,778                87,938       941,522
Utah                         111,901              16,738                 9,329        85,834
Vermont                       66,000               9,379                 5,227        51,394
Virginia                     349,325              52,252                29,122       267,951
Washington                   418,279              62,566                34,871       320,842
West Virginia                121,460              18,168                10,126        93,166
Wisconsin                    335,089              45,759                25,504       263,826
Wyoming                       66,000               9,379                 5,227        51,394
    State Total           18,465,000           2,623,877             1,462,428    14,378,695
Virgin Islands                20,000               2,842                 1,584        15,574

                                                   I -1

                                                                                             Attachment II

                                  Work Opportunity Tax Credit (WOTC)

                                           Statement of Work

State Workforce Development Agencies, also known as State Workforce Agencies (SWA), are to use
Fiscal Year 2020 funds to realize the following responsibilities:

    1. Designate a state coordinator, who oversees the administration of WOTC, for each state grant.

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

    3. 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 the Employment and Training
 Administration (ETA).

    4. Develop a backlog reduction plan which includes an estimated timeline to reduce and eliminate
 existing backlogs based on current policies and procedures, and notify your regional coordinator prior
 to implementation.

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

    6. Develop working 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.

    7. Establish and implement an appeals resolution process in accordance with the guidelines provided
 by ETA.

    8. Establish and maintain appropriate forms’ review, record keeping, and reporting capability related
 to the orderly management of WOTC certification requests.

    9. 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.

    10. Negotiate formal cooperative agreements with local workforce areas, State Vocational
 Rehabilitation Agencies, Veterans Administration and related groups, Employment Networks and
 other state and local agencies, and organizations for the purposes of issuing Conditional Certifications
 where appropriate.

                                                                                          Attachment II

11. Negotiate formal cooperative agreements with appropriate state agencies to expedite verification of
information provided to the SWA by participating target group members.

12. 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.

13. Cooperate with employment and training organizations already working with the private sector such
as: veteran organizations, employer committees, and workforce development boards to inform
employers about the tax benefits to be derived from participation and the eligibility requirements under
WOTC.

14. 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 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.

Other Grant Agreement Conditions

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

       The SWA must adhere to provisions of the Internal Revenue Code of 1986, Section 51, as
        amended, in administering WOTC. Law designates the SWAs as the only agencies that can issue
        a Certification (26 USC sec. 51(d)(12)). The SWAs can enter into cooperative agreements with
        certain participating agencies and together provide other WOTC related services (e.g., outreach
        activities).
       ETA will review funding use against the quarterly spending plan. When expenditures are
        substantially below plan, ETA may de-obligate funds for redistribution.