End of temporary WOTC target groups

Accessible letter PDF: https://www.dol.gov/sites/dolgov/files/ETA/advisories/TEGL/2011/TEGL21-10acc.pdf

                                                   CLASSIFICATION
   EMPLOYMENT AND TRAINING ADMINISTRATION          WOTC
               ADVISORY SYSTEM                     CORRESPONDENCE SYMBOL
                                                   OWI
          U.S. DEPARTMENT OF LABOR
                                                   DATE
             Washington, D.C. 20210                       March 31, 2011



ADVISORY:        TRAINING AND EMPLOYMENT GUIDANCE LETTER NO. 21-10

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

FROM:            JANE OATES /s/
                 Assistant Secretary

SUBJECT:         End Date for the Work Opportunity Tax Credit (WOTC) American
                 Recovery and Reinvestment Act of 2009 (Recovery Act) Temporary
                 Target Groups

1. Purpose. To inform the State Workforce Agencies (SWAs) of the end date of the
   legislative authority for the two WOTC temporary groups created by the Recovery
   Act, and provide guidance on procedural activities beyond December 31, 2010.

2. References. The American Recovery and Reinvestment Act of 2009 (Public Law
   111-5, Recovery Act); Internal Revenue Code of 1986, Section 51, as amended;
   Internal Revenue Service Notices 2009-69, dated August 31, 2009 and 2009-28, 2009-
   24 I.R.B 1082, dated June 15, 2009; Training and Employment Guidance Letter
   (TEGL) 03-09, Information and Guidance on the Two New Work Opportunity Tax
   Credit (WOTC) Targeted Groups Introduced by the Recovery Act, dated September
   1, 2009 ; TEGL No. 11-08, Extension of the Information Collection for the
   Consolidated Work Opportunity Tax Credit (WOTC) Program: Revised Reporting
   and Processing Forms, dated February 19, 2009; TEGL No. 11-08, Change 1,
   Extension Period Granted to all State Workforce Agencies (SWAs) and Employers
   for the Uninterrupted Use of All 2007 Work Opportunity Tax Credit (WOTC)
   Processing Forms, dated March 25, 2009; ETA Handbook 408, November 2002, Third
   Edition (the Handbook); and the updated August 2009 Addendum to the Handbook
   (Addendum, OMB No. 1205-0371).



 RESCISSIONS                                      EXPIRATION DATE

 None                                             Continuing
                                             2

3. Background. On February 17, 2009, President Obama signed into law the Recovery
   Act. Section 1221 of the Recovery Act amended § 51 of the Internal Revenue Code
   (IRC) by adding a new section § 51(d) (14). This new section added Unemployed
   Veterans and Disconnected Youth as two new WOTC target groups for a temporary
   period of time. On June 15, 2009, the Internal Revenue Service (IRS) published
   Notice 2009-28, announcing these two new groups to the SWAs and the business
   sector and setting forth the statutory definitions and eligibility requirements for
   individuals who began work for an employer after December 31, 2008, and before
   January 1, 2011. On August 31, 2009, the IRS published Notice 2998-69 clarifying the
   definition of eligibility criterion four for the Disconnected Youth group and
   extending the initial transition relief period through October 17, 2009, for employers
   to submit the Pre-Screening Notice (IRS Form 8850) requesting certification for these
   two groups to the SWAs.

4. Information and Processing Guidance. The period in which a new hire could
   qualify for one of the two Recovery Act target groups - Unemployed Veterans and
   Disconnected Youth - ended at midnight, December 31, 2010. The following
   guidance is provided to ensure a smooth and uniform closeout processing
   procedure for certification requests received for these two temporary groups
   through and beyond December 31, 2010.

   Guidance for handling certification requests filed by January 31, 2011 for
   employment that started prior to and up to December 31, 2010.

   SWAs are to continue to process all timely filed certification requests submitted for
   members of these two temporary groups who have an employment start date on or
   before December 31, 2010. Employers and their representatives are required by law
   to submit the pre-screening notice and certification request no later than 28 days
   after the employment start date. The Department has issued special guidance for
   timeliness when the last day of the 28-day period ends on a Saturday, Sunday, or
   legal holiday. This guidance permits employers of target group members with a
   work start date of December 31, 2010, to submit their certification requests no later
   than January 31, 2011. See the special rules for timeliness for weekends and holidays
   in Section G. 1. and 2., Chapter VII of the November 2002, Third Edition of ETA
   Handbook 408 and the deadline for applications in the August 2009 Addendum.

   Guidance for handling certification requests filed any time for employment that
   started after December 31, 2010.

   Even though the authorization for the Unemployed Veteran and Disconnected
   Youth target groups has ended, it is not uncommon for legislation to be passed
   reauthorizing WOTC credits and allowing retroactive certifications. During prior
   “hiatus periods,” the Employment and Training Administration (ETA) has
   instructed States to accept applications (certification requests) in anticipation of a
                                            3

   retroactive reauthorization. To accommodate a potential retroactive reauthorization
   for these two Recovery Act groups, ETA is instructing the SWAs to continue to
   accept applications for the two expired target groups after December 31, 2010, but to
   hold off on processing the requests pending further legislative action and guidance
   from ETA. States must conduct the following program activities in this interim
   period until ETA provides further guidance:

   Mandatory Procedure:

         States must accept, date stamp, log, and retain timely filed certification
          requests for employers’ new hires in the Unemployed Veteran and
          Disconnected Youth target groups with work start dates on or after January 1,
          2011, until informed otherwise by ETA.

         Those States that have issued denials on filed certification requests for these
          two groups for workers who started employment after December 31, 2010,
          are instructed to accept, date stamp, log, and retain all appeals received
          pending further guidance from ETA.

   Voluntary Procedures:

         States with sufficient resources may conduct all steps necessary to process
          certification requests for these two expired groups up to, but not including,
          issuance of the actual certification or denial. States must not issue
          certifications or denials in this interim period.

5. Reporting and Administrative Responsibilities. Pursuant to the Paperwork
   Reduction Act of 1995, the Office of Management and Budget approved the current
   information collection for the WOTC program administrative and reporting forms
   (i.e., ETA Report Form 9058 – Report 1 and ETA Administrative Forms 9061-9063,
   and 9065 (OMB No. 1205-0371)) through November 2011. States are instructed to
   continue to use these processing and reporting forms and accept from employers
   ETA Form 9061 until receipt of further instructions from ETA.

6. Action Requested. State Administrators are requested to:

   a) Provide this information to all appropriate WOTC program staff, employers and
      their representatives, participating agencies (PAs) and other interested partners;

   b) Ensure that the SWAs and PAs administer these provisions in accordance with
      the guidance in this TEGL, ETA Handbook 408, the August 2009 Addendum to
      the Handbook, and the Internal Revenue Code of 1986, Section 51, as amended;
      and
                                          4

   c) Inform employers and their representatives of the procedures for handling
      certification requests of new hires in the Recovery Act’s two temporary target
      groups that began to work for an employer after December 31, 2010, the
      expiration date for these groups. Employers should be notified, however, that
      although Congress has provided for retroactive certification in the past,
      certifications of employers’ new hires for these two groups will not be provided
      by the States unless and until Congress acts.

7. Inquiries. Direct all questions to the WOTC Regional Coordinators.