Fiscal Year 2016 WOTC state funding allotments

CLASSIFICATION
   EMPLOYMENT AND TRAINING ADMINISTRATION
                                                        WOTC
               ADVISORY SYSTEM
                                                        CORRESPONDENCE SYMBOL
          U.S. DEPARTMENT OF LABOR
                                                        OWI
             Washington, D.C. 20210
                                                        DATE
                                                        April 29, 2016

ADVISORY:       TRAINING AND EMPLOYMENT GUIDANCE LETTER NO. 20-15

TO:             STATE WORKFORCE ADMINISTRATORS
                STATE WORKFORCE AGENCIES
                STATE WORKFORCE LIAISONS

FROM:           PORTIA WU /s/
                Assistant Secretary

SUBJECT:        Work Opportunity Tax Credit Funding Allotments for Fiscal Year 2016

1. Purpose. To provide the State Workforce Agencies (SWAs) with final funding allotments for
the remainder of Fiscal Year 2016 for the administration of the Work Opportunity Tax Credit
(WOTC) program.

2. References.
• Consolidated Appropriations Act, 2016 (Pub. L. 114-113);
• Sections 119 and 139 of the Tax Increase Prevention Act of 2014 (Pub. L. 113-295);
• Sections 309 and 327 of the American Taxpayer Relief Act of 2012 (Pub. L. 112-40);
• Section 261 of the VOW to Hire Heroes Act of 2011 (Pub. L. 112-56);
• Section 51 of the Internal Revenue Code of 1986, as amended;
• Wagner-Peyser Act, Section 7;
• Training and Employment Guidance Letter (TEGL) No.21-14, Work Opportunity Tax Credit
(WOTC) Funding Allotments for Fiscal Year (FY) 2015 (March 17, 2015);
• ETA Handbook No. 408, November 2002, Third Edition (the Handbook);
• August 2009 Addendum to Handbook 408.

3. Background. On December 18, 2015, President Obama signed into law the Protecting
Americans from Tax Hikes Act of 2015 (the PATH Act), which retroactively reauthorizes the
WOTC program for a 5-year period, after December 31, 2014 to December 31, 2019. Also, on
December 18, 2015, the Consolidated Appropriations Act, 2016 (Pub. L. 114-113) was signed
into law, which provides Department of Labor funding appropriations for the remainder of FY
2016.

4. Funding. ETA is now issuing the balance of FY 2016 funding in the amount of $14,856,665
to the SWAs for the implementation of WOTC program activities through September 30, 2016.
The appropriated level for FY 2016 totals $18,485,000.

 RESCISSIONS                                           EXPIRATION DATE
 None                                                  Continuing

After allocating $20,000 for the Virgin Islands, ETA distributes the remaining funds to the states
by administrative formula with a $66,000 minimum allotment. No states receive an allotment
below 95 percent or more than 120 percent of the allotment share percentage it received in FY
2015. For FY 2016, the formula allotment data factors and percentages are as follows:

1) Fifty percent is based on each state’s relative share of total certifications issued from October
1, 2014 through September 30, 2015 for the WOTC Program;

2) Thirty percent is based on each state’s relative share of the Civilian Labor Force averages for
the 12-month period from October 1, 2014 through September 30, 2015;

3) Twenty percent is based on each state’s relative share of adult recipients of Temporary
Assistance to Needy Families averages from October 1, 2013 through September 30, 2014.

The table in Attachment I is divided into three columns. The first column shows the full FY
2016 allotments by state; the second column shows the funding sent to the SWAs from the
Continuing Resolution for the period October 1, 2015 through December 11, 2015; and the
third column shows the final distribution of the balance of FY 2016 WOTC funds allotted by
state.

5. General Administration. With these funds, SWAs are responsible for administering the
WOTC program, including the certification process, promoting the program to employers,
reducing and eliminating existing backlogs, and reporting program data on a quarterly basis. In
addition, SWAs must administer the WOTC in accordance with the policies and procedural
guidance set forth in the November 2002, Third Edition of ET Handbook 408 (the Handbook);
the August 2009 Addendum to the Handbook; Section 51 of the Internal Revenue Code of 1986,
as amended; and the current Federal regulations which cover the job service complaint
procedures at 20 CFR 658.400.

6. Action Requested. Please provide this TEGL to all WOTC State Coordinators and related
program staff, participating agencies and all other interested partners.

7. Inquiries. Please direct all questions to the appropriate Regional WOTC Coordinator, listed
on the WOTC program Web site at:
http://www.doleta.gov/business/incentives/opptax/Regional_Contacts.cfm.

8. Attachments.
• Attachment I. Work Opportunity Tax Credits FY 2016 State Allotments and Balance after
Dissemination to States under Continuing Resolutions (CR) 1
• Attachment II. Work Opportunity Tax Credit (WOTC) Program Statement of Work

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Attachment 1

Official attachment: https://www.dol.gov/sites/dolgov/files/ETA/advisories/TEGL/2016/TEGL_20-15_Attachment_A_Acc.pdf

U. S. Department of Labor                          Attachment I
                   Employment and Training Administration
                    Work Opportunity Tax Credits
 FY 2016 State Allotments and Balance after Dissemination to States
                under Continuing Resolutions (CR) 1

                        FY 2016 Full      Obligated under    Balance to
                       Year Allotment      CR# 1 (10/1/15      States
           State          Amount         through 12/11/15)

Total                      $18,485,000          $3,628,335   $14,856,665

Alabama                        365,045              75,424       289,621
Alaska                          66,000              12,955        53,045
Arizona                        360,790              74,545       286,245
Arkansas                       173,455              35,428       138,027
California                   2,518,373             475,081      2,043,292
Colorado                       241,911              45,391       196,520
Connecticut                    144,975              29,954       115,021
Delaware                        66,000              12,955        53,045
District of Columbia            66,000              12,955        53,045
Florida                        918,883             189,856       729,027
Georgia                        507,660             104,891       402,769
Hawaii                          70,975              12,955        58,020
Idaho                           71,120              14,695         56,425
Illinois                       728,264             128,151       600,113
Indiana                        391,286              78,357       312,929
Iowa                           255,178              52,724       202,454
Kansas                         166,536              34,409       132,127
Kentucky                       334,897              69,195       265,702
Louisiana                      375,025              64,346       310,679
Maine                           93,344              19,286        74,058
Maryland                       257,393              53,182       204,211
Massachusetts                  290,313              59,983       230,330
Michigan                       677,760             111,458       566,302
Minnesota                      234,908              48,536       186,372
Mississippi                    170,458              35,219       135,239
Missouri                       372,318              76,927       295,391
Montana                         66,000              12,955         53,045
Nebraska                       119,699              24,732         94,967
Nevada                         100,937              20,855         80,082
New Hampshire                   66,000              12,955         53,045
New Jersey                     372,533              69,387       303,146
New Mexico                     109,872              22,701        87,171
New York                       913,214             182,558       730,656
North Carolina                 581,000              95,035       485,965
North Dakota                    66,000              12,955        53,045
Ohio                           878,758             181,565       697,193
Oklahoma                       232,045              47,944       184,101
Oregon                         251,060              51,304       199,756
Pennsylvania                   724,732             149,741       574,991
Puerto Rico                     95,978              18,025        77,953
Rhode Island                    66,000              12,955        53,045
South Carolina                 296,973              61,359       235,614
South Dakota                    66,000              12,955        53,045
Tennessee                      657,752             135,902       521,850
Texas                        1,295,037             267,576     1,027,461
Utah                           137,384              28,386       108,998
Vermont                         66,000              12,955        53,045
Virginia                       403,685              79,218       324,467
Washington                     468,365              76,611       391,754
West Virginia                  149,121              30,811       118,310
Wisconsin                      295,988              61,156       234,832
Wyoming                         66,000              12,955        53,045
  State Total               18,465,000           3,624,409    14,840,591
Virgin Islands                  20,000               3,926        16,074

Attachment 2

Official attachment: https://www.dol.gov/sites/dolgov/files/ETA/advisories/TEGL/2016/TEGL_20-15_Attachment_B_Acc.pdf

Attachment II
                      Work Opportunity Tax Credit (WOTC) Program
                                  Statement of Work

State Workforce Agencies (SWAs) are to use Fiscal Year 2016 funds announced herein for:

    1. Determining 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.

    2. Issuing employer certifications, denials, or notices of invalidation for tax credits on a
      timely basis and in accordance with the policies and procedures set forth in the ETA
      Handbook No. 408, Third Edition, November 2002 (the Handbook) and the August 2009
      Addendum to the Handbook.

    3. Developing 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.

    4. Establishing and implementing an Appeals Resolution and Policy Clarification System in
      accordance with the guidelines provided in the Handbook (Chapter VIII, Section F,
      pp.VIII-5-8).

    5. Establishing and maintaining appropriate forms review, record keeping, and reporting
      capability related to the orderly management of WOTC certification requests.

    6. Establishing and maintaining an orderly system for regularly verifying the eligibility of a
      random sample of individuals certified under the WOTC Program and initiating effective
      corrective action when appropriate as indicated by results of such activities.

    7. Negotiating formal cooperative agreements with local WIOA 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, and/or augmenting WOTC outreach
      activities.

    8. Negotiating formal cooperative agreements with appropriate state agencies, including the
      Departments of Health and Human Services, Agriculture, Housing and Urban
      Development and the Social Security Administration to expedite verification of
      information provided to the SWA by participating target group members.

    9. Training state and participating agency staff and providing monitoring and technical
      assistance to these agencies, as appropriate, for conducting target group preliminary
      eligibility determinations and issuing Conditional Certifications.

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

Grant Agreement Conditions.

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

    1. The SWA must adhere to provisions of the Internal Revenue Code of 1986, Section 51,
      as amended, in conducting the program. Law designates the SWAs as the only agencies
      that can issue a Certification. The SWAs can enter into cooperative agreements with
      certain participating agencies and together provide other WOTC related program services
      (e.g., issuing Conditional Certifications, outreach activities only).

    2. The most current edition of the WOTC program Handbook and its updated August 2009
      Addendum shall guide conditions and standards of performance for administration and
      operation of the program. The SWA shall maintain a verification and quality control
      process in accordance with guidance in this Handbook

    3. ETA will review funding use against the quarterly spending plan and when expenditures
      are substantially below plan; ETA may de-obligate funds for redistribution.

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