Fiscal year 2018 Work Opportunity Tax Credit grants

CLASSIFICATION
   EMPLOYMENT AND TRAINING ADMINISTRATION                 WOTC
               ADVISORY SYSTEM                            CORRESPONDENCE SYMBOL
          U.S. DEPARTMENT OF LABOR                        OWI
             Washington, D.C. 20210                       DATE
                                                          June 27, 2018


ADVISORY:       TRAINING AND EMPLOYMENT GUIDANCE LETTER NO. 21-17

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

FROM:           ROSEMARY LAHASKY /s/
                Deputy Assistant Secretary

SUBJECT:        Work Opportunity Tax Credit Funding Allotments for Fiscal Year 2018

1. Purpose. To convey the Work Opportunity Tax Credit (WOTC) Fiscal Year (FY) 2018
   grant funding allotments and application requirements for the State Workforce
   Development Agencies, also known as State Workforce Agencies (SWA).

2. References.
   • Consolidated Appropriations Act, 2018 (Pub. L. 115-141);
   • Continuing Appropriations Act, 2018 (Pub. L. 115-96);
   • Continuing Appropriations Act, 2018 (Pub. L. 115-90);
   • Continuing Appropriations Act, 2018 (Pub. L. 115-56);
   • Consolidated Appropriations Act, 2017 (Pub. L. 115-31);
   • Protecting Americans from Tax Hikes (PATH) Act of 2015 (Pub. L. No. 114-113);
   • Section 51 of the Internal Revenue Code (Code) of 1986, as amended;
   • November 2002, Third Edition of ETA Handbook 408 (the Handbook); and
   • August 2009 Addendum to the Handbook.

3. Background. Section 142(a) of the PATH Act amended Section 51(c) of the Code to extend
   WOTC through December 31, 2019. 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 issued grant funds totaling $3,487,623
   for FY 2018 Continuing Resolutions (CR) 1 through 3, Pub. Law 115-96, to maintain
   uninterrupted administration of WOTC. In this Training and Employment Guidance Letter
   (TEGL), ETA requests SWAs submit applications for funding for the remainder of FY 2018
   state balances, which totals $14,997,377 (See Attachment I).


 RESCISSIONS                                             EXPIRATION DATE
 None                                                    Continuing

4. Funding. States must enter the allocations provided in Attachment I on their SF-424 Form -
   Application for Federal Assistance (OMB Control No. 4040-0004) as their request for FY
   2018 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.

   a) 50 percent is based on each state’s relative share of total certifications issued from
      October 1, 2016, through September 30, 2017, for WOTC;
   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, 2016, through September 30, 2017; 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, 2015, through September 30,
      2016.

5. Application Requirements for FY 2018 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 Funding Opportunity Number ETA-WOTC-TEGL-21-17-FY2018 at
   https://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 balance to the
   state amount listed in the FY 2018 State Allotments Funding Table, 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: https://www.sam.gov/portal/SAM/ before submitting an
       application.
      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].

6. General Administration. SWAs are responsible for using the remaining FY 2018
   funding allotments to conduct the following WOTC activities through September 30,
   2018: 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) performance reporting 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 WOTC Statement of
     Work, Attachment II.

7.   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 Enterprise Business
        Service System (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.

8. Action Requested. Grantees must meet the application requirements detailed in section 5
   within 30 calendar days from the date of this TEGL’s issuance.

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

10. Attachments.
    Attachment I:     Fiscal Year (FY) 2018 State Allotments
    Attachment II:    WOTC Statement of Work

Attachment (official PDF: https://www.dol.gov/sites/dolgov/files/ETA/advisories/TEGL/2018/TEGL_21-17_Attachment_I_Acc.pdf)

U. S. Department of Labor                            Attachment I
                  Employment and Training Administration
                    Work Opportunity Tax Credits
 FY 2018 State Allotments and Balance after Dissemination to States
                    under Continuing Resolutions

                        FY 2018 Full        Obligated under   Balance to
                       Year Allotment         Continuing        States
          State           Amount             Resolutions

Total                     $18,485,000            $3,487,623   $14,997,377

Alabama                       329,453                65,099        264,354
Alaska                         66,000                12,389         53,611
Arizona                       325,613                64,340        261,273
Arkansas                      156,543                30,932        125,611
California                  2,461,331               449,104      2,012,227
Colorado                      273,518                54,046        219,472
Connecticut                   130,840                25,853        104,987
Delaware                       67,278                12,389        54,889
District of Columbia           66,000                12,389        53,611
Florida                     1,019,166               201,384       817,782
Georgia                       529,331               104,594       424,737
Hawaii                         66,000                12,657        53,343
Idaho                          66,000                12,683        53,317
Illinois                      769,692               152,089       617,603
Indiana                       353,136                69,778       283,358
Iowa                          257,241                45,506       211,735
Kansas                        150,299                29,698       120,601
Kentucky                      362,033                59,722       302,311
Louisiana                     338,460                66,879       271,581
Maine                          84,243                26,784        57,459
Maryland                      298,992                46,772       252,220
Massachusetts                 329,825                61,085       268,740
Michigan                      679,923               134,350       545,573
Minnesota                     233,686                43,667       190,019
Mississippi                   191,407                37,821       153,586
Missouri                      424,442                66,396       358,046
Montana                        66,000                12,389        53,611
Nebraska                      136,457                21,346       115,111
Nevada                         91,096                18,000        73,096
New Hampshire                  66,000                12,389        53,611
New Jersey                    370,184                66,434       303,750
New Mexico                    132,208                24,750       107,458
New York                      964,562               163,384       801,178
North Carolina                524,353               103,610       420,743
North Dakota                   66,000                19,934        46,066
Ohio                          796,012               157,289       638,723
Oklahoma                      224,618                41,381       183,237
Oregon                        243,780                48,170       195,610
Pennsylvania                  769,991               152,148       617,843
Puerto Rico                    87,111                17,213        69,898
Rhode Island                   66,000                12,389        53,611
South Carolina                289,925                57,288       232,637
South Dakota                   66,000                12,389        53,611
Tennessee                     749,837               117,298       632,539
Texas                       1,168,771               230,945       937,826
Utah                          123,989                24,500        99,489
Vermont                        66,000                12,389        53,611
Virginia                      387,063                76,482       310,581
Washington                    463,467                91,580       371,887
West Virginia                 134,582                26,593       107,989
Wisconsin                     314,542                52,784       261,758
Wyoming                        66,000                12,389        53,611
  State Total              18,465,000             3,483,869    14,981,131
Virgin Islands                 20,000                 3,754        16,246

Attachment (official PDF: https://www.dol.gov/sites/dolgov/files/ETA/advisories/TEGL/2018/TEGL_21-17_Attachment_II_Acc.pdf)

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 2018 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 ETA.

4. 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.

5. 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.

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

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

8. 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.

9. 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.

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

11. 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.

12. 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.

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. 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.