WOTC certification requests for Empowerment Zone residents

CLASSIFICATION
   EMPLOYMENT AND TRAINING ADMINISTRATION                WOTC
               ADVISORY SYSTEM                           CORRESPONDENCE SYMBOL
          U.S. DEPARTMENT OF LABOR                       OWI
             Washington, D.C. 20210                      DATE
                                                         November 18, 2015

ADVISORY:       TRAINING AND EMPLOYMENT GUIDANCE LETTER NO. 28-14,
                CHANGE 1

TO:             STATE WORKFORCE ADMINISTRATORS
                STATE WORKFORCE AGENCIES
                STATE WORKFORCE LIAISONS

FROM:           BYRON ZUIDEMA /s/ for PORTIA WU
                Assistant Secretary

SUBJECT:        Processing of Work Opportunity Tax Credit (WOTC) Certification Requests for
                Target Group Members Residing in Empowerment Zones (EZs)

1. Purpose. To provide the State Workforce Agencies (SWAs) information on the extension of
   the EZs’ new expiration date, the date when SWAs can start processing certification requests
   for the two target groups which require its members to reside in EZs, and a new EZ locator
   tool.

2. References.
   • Sections 119 and 139(b) of the Tax Increase Prevention Act (TIPA) of 2014 (Pub. L. 113-
      295);
   • Sections 309 and 327 of the American Taxpayer Relief Act of 2012 (Pub. L. 112-240);
   • Section 261 of the VOW to Hire Heroes Act of 2011 (Pub. L. 112-56) (VOW Act);
   • Internal Revenue Code of 1986, Section 51, as amended;
   • Internal Revenue Service (IRS) Notice 2015-26 (March 30, 2015);
   • IRS Notice 2013-14 (March 7, 2013);
   • IRS Notice 2012-13 (February 27, 2012);
   • ETA Handbook No. 408, November 2002, Third Edition (the Handbook); and
   • August 2009 Addendum to the Handbook.

3. Background. On December 19, 2014, President Obama signed into law the Tax Increase
   Prevention Act (TIPA) of 2014. Section 119 reauthorized retroactively the WOTC program
   with all its target groups and Section 139(b) retroactively extended the Empowerment Zones,
   both through December 31, 2014. This retroactive extension applies to individuals who
   began to work for an employer on or after December 31, 2013, and before January 1, 2015.

   On December 31, 2014, the legislative authority for all WOTC target groups and EZs
   expired. The Employment and Training Administration (ETA) provided guidance in

 RESCISSIONS                                            EXPIRATION DATE
 None                                                   Continuing

   Training and Employment Guidance Letter ((TEGL) No. 28-14 regarding requests for
   certifications for all WOTC target groups submitted to the SWAs during the authorization
   lapse. The guidance directed states to continue accepting applications for employees in these
   two groups hired on or after December 31, 2013, and before January 1, 2015, but to postpone
   final processing of those certification requests pending further legislative action and guidance
   from ETA.

   TEGL No. 28-14, Section 8, p. 4, explained that while TIPA provided legislative
   reauthorization for the extension of all the EZ designations, state and local governments had
   to amend their nominations for designation have a termination date of December 31, 2014.
   As a result, ETA instructed the SWAs to continue to accept timely filed certification requests
   for the Summer Youth and Designated Community Resident (DCR) target groups (since both
   groups require residence in EZs), but to hold off on processing those requests pending further
   guidance from ETA. ETA also instructed SWAs to continue to process all timely filed
   certification requests for eligible members of the DCR target group who reside in Rural
   Renewal Counties (RRCs).

4. Empowerment Zone Designation Extension. IRS worked with the U.S. Departments of
   Agriculture and Housing and Urban Development (HUD) to provide guidance to state and
   local governments on how to amend the nomination of an EZ designation through December
   31, 2014. According to IRS Notice 2015-26 (available at: http://www.irs.gov/irb/2015-
   13_IRB/ar18.html), any nomination for an EZ that was in effect on December 31, 2009, is
   deemed to be amended to provide for a new termination date of December 31, 2014, unless
   the nominating entity sent written notification to the IRS by May 11, 2015.

5. Processing Guidance for State Workforce Agencies. SWAs should process all timely filed
   certification requests for the following two target groups which require its eligible members
   to reside in EZs: 1) Summer Youth, and 2) DCRs. As of the date of this TEGL, none of the
   local nominating entities had declined the nomination for any of the EZs. Please note the EZ
   for the District of Columbia was not reauthorized by TIPA, Pub. L. 113-295 and as such, is
   no longer an EZ-designated area for the Summer Youth or DCR target groups.

6. EZ Locator Tool. The IRS lists EZs and Rural Renewal Counties in its instructions for
   Form 8850 (available at http://www.irs.gov/pub/irs-pdf/i8850.pdf). The list of active EZs,
   that have a new termination date of December 31, 2014, is also available on the HUD’s
   EZ/Renewal Communities Address Locator at: www.hud.gov/crlocator. HUD’s Address
   Locator tool can verify if a particular property address location is eligible for the tax
   incentives or other benefits offered in EZ areas. HUD has created a GoogleMaps tool to
   supplement the Census data used in the Locator Tool. Please see www.doleta.gov/wotc for
   detailed up-to-date instructions on how to use the Address Locator and GoogleMaps tool.
   HUD created a short video tutorial to provide SWAs, employers and their representatives
   specific instructions on how to use the GoogleMaps tool at
   https://www.youtube.com/watch?v=t3r7DGs06TA. A link to the video is also available from
   www.doleta.gov/wotc.

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7.   Action Requested. SWA administrators are requested to:

     •   Provide this information to all appropriate WOTC program State Coordinators, related
         staff, employers and their representatives, participating agencies and other interested
         partners; and

     •   Ensure that the WOTC State Coordinators and participating agencies implement the
         requirements outlined in this TEGL effective the date this guidance is issued.

8. Inquiries. Please direct questions regarding this guidance to the appropriate WOTC
   Regional Coordinator listed on the WOTC program Website at:
   http://www.doleta.gov/business/incentives/opptax/Regional_Contacts.cfm.

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