2015 Work Opportunity Tax Credit funding allotments

The signed original contains the letter and two attachments. View the signed original.

                                                        CLASSIFICATION
   EMPLOYMENT AND TRAINING ADMINISTRATION               WOTC
               ADVISORY SYSTEM                          CORRESPONDENCE SYMBOL
          U.S. DEPARTMENT OF LABOR                      OWI
             Washington, D.C. 20210
                                                        DATE
                                                         March 17, 2015


ADVISORY:        TRAINING AND EMPLOYMENT GUIDANCE LETTER NO. 21-14

TO:              STATE WORKFORCE AGENCIES
                 STATE WORKFORCE LIAISONS

FROM:            PORTIA WU /s/
                 Assistant Secretary

SUBJECT:         Work Opportunity Tax Credit (WOTC) Funding Allotments for Fiscal Year
                 (FY) 2015

1. Purpose. To provide the State Workforce Agencies (SWAs) with final funding allotments
   for the administration of the WOTC program through September 30, 2015, and reporting
   instructions during the current authorization lapse.

2. References.

   •    Consolidated and Further Continuing Appropriations Act of 2015 (Pub. L. 113-235) (FY
        2015 Omnibus Appropriations Act);
   •    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. 8-13, Work Opportunity Tax
        Credit (WOTC) Procedural Guidance During Authorization Lapse (January 2, 2014);
   •    ETA Handbook No. 408, November 2002, Third Edition (the Handbook);
   •    August 2009 Addendum to Handbook 408.

3. Background. In November 2014, the Employment and Training Administration (ETA)
   issued funds to the SWAs from the Continuing Resolution for FY 2015 covering the October
   1, 2014 – December 11, 2014 time frame. On December 16, 2014, President Obama signed
   into law the Consolidated and Further Continuing Appropriations Act of 2015 (Pub. L. 113-
   235), which provides Department of Labor funding appropriations for the remainder of FY
   2015. Although the WOTC program is currently not authorized, under ETA policy, the
   appropriation allows for a limited set of WOTC activities for the rest of FY 2015.



 RESCISSIONS                                           EXPIRATION DATE
 None                                                  Continuing

4. Funding. ETA is now issuing the balance of FY 2015 funding to the SWAs for the
   implementation of WOTC program activities through September 30, 2015. The appropriated
   level for FY 2015 totals $18,485,000.

   After allocating $20,000 for the Virgin Islands, ETA distributes the remaining funds to states
   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. For FY 2015, the
   formula allotment data factors and percentages are as follows:

       1) Fifty percent is based on each state’s WOTC certifications. This year, ETA is using
          each state’s average certifications over FY 2013 and 2014, due to workload
          fluctuations during the hiatus period of 2014;

       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, 2013 through September 30, 2014;
          and

       3) Twenty percent is based on each state’s relative share of adult recipients of
          Temporary Assistance for Needy Families averages from October 1, 2012 through
          September 30, 2013.

   The table in Attachment I is divided into three columns. The first column shows the full FY
   2015 allotments by state; the second column shows the funding sent to the SWAs from the
   Continuing Resolution for the period October 1, 2014 through December 11, 2014; and the
   third column shows the final distribution of the balance of FY 2015 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. Attachment II, the WOTC Statement of
   Work, lists other applicable requirements.

6. Reporting Requirements. SWAs must report expenditures quarterly using the ETA
   Financial Report (ETA Form 9130). Quarterly financial reports are due within 45 days
   following the end of each quarter, and should cover all WOTC funds. Timely submission of
   these reports is important to ensure proper accounting of funds. ETA will conduct a financial
   reconciliation at the end of the fiscal year and grant period. SWAs must use the Web-based
   Enterprise Business Service System (EBSS), Tax Credit Reporting System to report quarterly
   program activities and outcomes using ETA Form 9058. Quarterly performance reports are
   due within 45 days following the end of each quarter. Timely submission of these reports is

   important for program management purposes, and enables ETA to respond to inquiries on
   program activities from Congress and other stakeholders.

7. Reporting Instructions During Lapse in Program Authorization. ETA is providing the
   following instructions for states to report quarterly workload on the EBSS Web-based ETA
   Form 9058 during the current lapse in legislative authorization for the WOTC program,
   which began on January 1, 2015. To prepare for any retroactive reauthorization of WOTC,
   SWAs are required to include in their quarterly reports the number of certification requests
   (IRS Form 8850s) received for hires made on or after January 1, 2015. Beginning with the
   report for the quarter ending on March 30, 2015, SWAs must enter the total number of
   certification requests (IRS Form 8850s) received under Part I. Certification Workload as “(C)
   New Requests” for each reporting quarter until Congressional action ends the hiatus or ETA
   provides additional reporting guidance. The requests reported in “(C)” will serve, in part, as
   a record of the certification requests received for 2015 hires during the hiatus.

   Certification requests for hires made on or after January 1, 2015, and entered as New
   Requests, will then be calculated within the quarterly report as any other certification request
   – i.e. New Requests are included in the auto-calculation for “(D) Total Requests to be
   Processed” field. In the quarterly report, these certification requests would then be included
   in the auto-calculation for “(H) Requests Needing Action.” Since SWAs are not permitted to
   issue certifications or denials for hires made on or after January 1, 2015, during the
   authorization lapse, these certification requests would not be reflected in (E) Certified
   Requests, (F) Denied Requests, or (G) Incomplete Requests.

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

9. 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.

10. Attachments.
    I. FY 2015 WOTC State Allotments
    II. WOTC Statement of Work

Attachment I: https://www.dol.gov/sites/dolgov/files/ETA/advisories/TEGL/2015/TEGL_21-14_Attachment_I_Acc.pdf

                       U. S. Department of Labor                        Attachment I
                 Employment and Training Administration
                   Work Opportunity Tax Credits
FY 2015 State Allotments and Balance after Dissemination to States
               under Continuing Resolutions (CR) 1

                        FY 2015 Full   Obligated under    Balance to
                       Year Allotment CR# 1 (10/1/14        States
        State             Amount      through 12/11/14)

Total                    $18,485,000         $3,645,070   $14,839,930

Alabama                      384,258             70,061       314,197
Alaska                        66,000             13,015        52,985
Arizona                      379,779             78,830       300,949
Arkansas                     180,493             37,465       143,028
California                 2,420,358            397,726     2,022,632
Colorado                     231,252             43,921       187,331
Connecticut                  152,605             31,676       120,929
Delaware                      66,000             13,015        52,985
District of Columbia          66,000             13,015        52,985
Florida                      967,245            200,770       766,475
Georgia                      534,379            110,920       423,459
Hawaii                        66,000             13,015        52,985
Idaho                         74,863             15,539        59,324
Illinois                     652,880            135,518       517,362
Indiana                      399,201             80,582       318,619
Iowa                         268,608             47,333       221,275
Kansas                       175,301             34,987       140,314
Kentucky                     352,523             71,015       281,508
Louisiana                    327,821             68,046       259,775
Maine                         98,257             20,395        77,862
Maryland                     270,940             56,239       214,701
Massachusetts                305,593             55,396       250,197
Michigan                     567,837            117,865       449,972
Minnesota                    247,272             50,123       197,149
Mississippi                  179,429             36,490       142,939
Missouri                     391,914             77,675       314,239
Montana                       66,000             13,015        52,985
Nebraska                     125,999             26,154        99,845
Nevada                       106,249             22,054        84,195
New Hampshire                 66,000             13,015        52,985
New Jersey                   353,501             73,376       280,125
New Mexico                   115,655             24,006        91,649
New York                     930,066            175,454       754,612
North Carolina               484,167            100,498       383,669
North Dakota                  66,000             13,015        52,985
Ohio                         925,008            192,003       733,005
Oklahoma                     244,258             50,700       193,558
Oregon                       261,374             42,950       218,424
Pennsylvania                 762,876            158,349       604,527
Puerto Rico                   91,829             16,635        75,194
Rhode Island                  66,000             13,015        52,985
South Carolina               312,603             64,887       247,716
South Dakota                  66,000             13,015        52,985
Tennessee                    692,370            143,714       548,656
Texas                      1,363,197            282,957     1,080,240
Utah                         144,615             30,018       114,597
Vermont                       66,000             13,015        52,985
Virginia                     403,586             79,561       324,025
Washington                   390,304             80,511       309,793
West Virginia                156,969             32,582       124,387
Wisconsin                    311,566             62,980       248,586
Wyoming                       66,000             13,015        52,985
  State Total             18,465,000          3,641,126    14,823,874
Virgin Islands                20,000              3,944        16,056

Attachment II: https://www.dol.gov/sites/dolgov/files/ETA/advisories/TEGL/2015/TEGL_21-14_Attachment_II_Acc.pdf

                                                                               Attachment II

                      Work Opportunity Tax Credit (WOTC) Program
                                  Statement of Work


State Workforce Agencies (SWAs) are to use Fiscal Year 2015 funds 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 Investment Act
      (WIA) 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 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, 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).

    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; when expenditures are
      substantially below plan, ETA may de-obligate funds for redistribution.