TEGL 6-20 Change 1.pdf

EMPLOYMENT AND TRAINING ADMINISTRATION

ADVISORY SYSTEM

U.S. DEPARTMENT OF LABOR

Washington, D.C. 20210

CLASSIFICATION

WOTC

CORRESPONDENCE SYMBOL

OWI

DATE

RESCISSIONS

None

EXPIRATION DATE

Continuing

ADVISORY: TRAINING AND EMPLOYMENT GUIDANCE LETTER NO. 06-20,

CHANGE 1

TO: STATE WORKFORCE DEVELOPMENT AGENCIES

STATE WORKFORCE ADMINISTRATORS

WORK OPPORTUNITY TAX CREDIT COORDINATORS

FROM: SUZAN G. LEVINE

Principal Deputy Assistant Secretary

SUBJECT: Change 1 to Training and Employment Guidance Letter No. 06-20, Work Opportunity Tax Credit (WOTC) Funding Allotments for Fiscal Year 2021

1. Purpose. This Change 1 to the Training and Employment Guidance Letter (TEGL) 06-20 conveys the remaining balance for WOTC and explains application requirements for State Workforce Agencies (SWA) based on funding appropriated for Fiscal Year (FY) 2021 through September 30, 2022. Additionally, this TEGL announces 12 states selected to receive additional FY 2021 backlog funding and provides instructions to those states on how to proceed. The remainder of TEGL No. 06-20 remains the same.

2. Action Requested. Grantees must meet the application requirements detailed in section 4 of this TEGL within 30 calendar days from the date of this TEGL issuance. Additionally, for the 12 states selected to receive additional FY 2021 backlog awards, grantees must meet the application requirements and submit the required application material detailed in section 4 within 15 calendar days from the date of this TEGL issuance.

3. Summary and Background.

a. Summary On November 16, 2020, the Department issued TEGL No. 06-20, which announced the initial funding allotments of $3,647,090 under the Continuing Appropriations Act, 2021 and Other Extensions Act (Public Law 116-159). This Change 1 provides the full year allotments and state balances for FY 2021, as authorized under the Consolidated Appropriations Act, 2021 (P.L. 116-260). The amounts are listed on Attachment I Work Opportunity Tax Credit FY 2021 State Allotments and Balance after Dissemination to States under Continuing Resolution

ETA has available grant funds totaling $18,485,000 for normal operations in FY 2021. This Change 1 announces the remaining balance of $14,837,910 for normal operations in FY 2021. Additionally, the Consolidated Appropriations Act, 2021 authorized an additional $2,500,000 in funding to support WOTC efforts to reduce processing backlogs and assist states in adopting or modernizing information technology for processing of certification requests. This Change 1 announces the 12 states selected to receive FY 2021 backlog awards.

b. Background 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. WOTC is authorized until December 31, 2025 under Section 113 of Division EE, Title 3 -- Consolidated Appropriations Act, 2021.

4. Details. States must enter the remaining balance to state amount (provided in Attachment I) on their SF-424 Form - Application for Federal Assistance (OMB Control No. 4040- 0004) as their request for FY 2020 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. The administrative formula is calculated as follows:

a.

certifications issued from October 1, 2019 through September 30, 2020;

b. ivilian Labor Force averages for the 12-month period from October 1, 2019 through September 30, 2020; and c.

Assistance for Needy Families averages from October 1, 2018 through September 30, 2019.

Application Requirements for FY 2021 Funding. ETA requires grantees to submit an electronically signed copy of the SF-424 through Grants.gov for the Change 1, ETA- WOTC-TEGL-06-20-2021 at https://www.grants.gov/, within 30 calendar days from

The official, electronically signed SF-424 Form must reflect the remaining balance to state amount listed in 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 before submitting an application. To submit the required download the links for the grant application package. For this grant opportunity, applicants

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: support@grants.gov.

General Administration. SWAs are responsible for using the FY 2021 funds to conduct the WOTC activities outlined in Attachment II, Statement of Work through September 30, 2022. SWAs must enter the remaining balance to the state amount (provided in Attachment I) on their SF-424 Form - Application for Federal Assistance (OMB Control No. 4040- 0004), as their request for remaining FY 2021 funding, and submit an electronically signed copy of the SF-424 through Grants.gov for the Change 1, ETA-WOTC-TEGL-06-20- 2021 at www.grants.gov, within 30 calendar days issuance.

States selected for additional backlog funding must enter the award amount for their assigned funding amount on an separate SF-424 Form - Application for Federal Assistance (OMB Control No. 4040-0004), and submit an electronically signed copy of the SF-424 through Grants.gov for the Change 1, ETA-WOTC-TEGL-06-20-2021 at www.grants.gov, within 15 calendar days

FY 2021 WOTC Backlog Awards. ETA will distribute a second set of WOTC backlog funds to approximately 12 new states with the most critical needs to alleviate processing backlogs and assist states in adopting or modernizing information technology for processing of certification requests. To inform the selection process, ETA analyzed the following data:

a.

total workload;

b. FY 2020 financial reports; and

c. FY 2020 qualitative data , which explain how the states could use this award to make improvements to their existing systems or procedures and reduce their backlog.

ETA carefully reviewed these three sources of data to gain an understanding of ETA did not consider the states that received backlog funding last year because they are currently still spending FY 2020 backlog funding. ETA examined the remaining states backlogs and information technology modernization needs to identify this second set of selected states. Additionally, ETA analyzed FY 2020 financial reports to determine ty to use additional funding, and did not select states with extraordinarily low expenditure rates to receive backlog funds. Finally, ETA reviewed the narratives that states previously submitted in FY 2020. The selected states expressed interest in this additional backlog funding to help them attain staff support, enhance their current partial automated systems, and develop automated systems. Based on these factors, ETA identified 12 states with the most critical need to address backlog to receive backlog funding. Based on the availability of $2,500,000 in funds, ETA established four funding tiers to distribute these awards to 12 states:

Tier 1 = $100,000 Tier 2 = $200,000

Tier 3 = $300,000

The selected states and corresponding funding amounts for these awards are as follow:

$100,000 $200,000 $300,000 Alabama Hawaii Louisiana New Hampshire

Illinois Montana Ohio

Arizona Oklahoma North Dakota South Dakota Utah

Note: If a state fails to submit the required application materials timely, or decides to refuse the award, ETA reserves the right to either redistribute such funds to the other selected states and/or consider additional state(s) for an award, as appropriate. A subsequent Change TEGL will announce these funds after award, if applicable.

5. Inquiries. Please direct all questions to the appropriate Regional WOTC Coordinator listed on the WOTC website at: https://www.dol.gov/agencies/eta/wotc/contact/regional-offices.

6. References.

Section 51 of the Internal Revenue Code of 1986 as amended;

Training and Employment Guidance Letter 06-20;

P.L. 116-260 -- Consolidated Appropriations Act, 2021; and P. L. 116-159 -- Continuing Appropriations Act, 2021.

7. Attachments.

Attachment I: WOTC FY 2021 State Allotments and Balance after Dissemination to States under Continuing Resolution (CR) 1 Attachment II: Work Opportunity Tax Credit Statement of Work

Attachment I U. S. Department of Labor Employment and Training Administration

Work Opportunity Tax Credits FY 2021 State Allotments and Balance after Dissemination to States under Continuing Resolution (CR) 1

FY 2021 Full Obligated under Balance to Year Allotment CR# 1 (10/1/20 States

Amount through 12/11/20) State

Total

Alabama

Alaska

Arizona

Arkansas

California

Colorado

Connecticut

Delaware

$18,485,000

282,464

66,000

302,064

143,313

2,511,345

294,952

125,757

71,024

$3,647,090

58,663

13,022

62,734

27,875

494,571

54,478

26,118

13,482

$14,837,910

223,801

52,978

239,330

115,438

2,016,774

240,474

99,639

57,542

District of Columbia

Florida

Georgia

Hawaii

Idaho

Illinois

Indiana

Iowa

66,000

873,808

533,963

66,000

79,200

782,418

302,770

242,410

13,022

181,476

110,896

13,022

13,022

162,496

62,880

50,345

52,978

692,332

423,067

52,978

66,178

619,922

239,890

192,065

Kansas

Kentucky

Louisiana

Maine

Maryland

Massachusetts

Michigan

Minnesota

128,863

392,082

290,187

72,228

352,949

369,066

636,709

261,601

26,763

81,429

60,267

15,001

73,302

70,936

132,234

52,807

102,100

310,653

229,920

57,227

279,647

298,130

504,475

208,794

Mississippi

Missouri

Montana

Nebraska

Nevada

New Hampshire

New Jersey

New Mexico

217,864

419,524

66,000

147,783

137,465

66,000

337,913

144,769

42,278

81,899

13,022

30,692

22,601

13,022

70,179

27,145

175,586

337,625

52,978

117,091

114,864

52,978

267,734

117,624

New York

North Carolina

North Dakota

Ohio

Oklahoma

Oregon

Pennsylvania

Puerto Rico

1,065,362

502,106

66,000

737,637

288,444

265,119

787,374

79,162

190,746

104,279

13,022

141,740

47,425

47,332

158,478

16,441

874,616

397,827

52,978

595,897

241,019

217,787

628,896

62,721

Rhode Island

South Carolina

South Dakota

Tennessee

Texas

Utah

Vermont

Virginia

Washington

West Virginia

Wisconsin

Wyoming

State Total

Virgin Islands

79,200

266,524

66,000

724,388

1,222,663

106,306

66,000

419,190

397,365

131,155

344,514

66,000

18,465,000

20,000

13,022

51,625

13,022

150,444

234,242

22,078

13,022

68,922

82,526

23,964

66,113

13,022

3,643,144

3,946

66,178

214,899

52,978

573,944

988,421

84,228

52,978

350,268

314,839

107,191

278,401

52,978

14,821,856

16,054

Attachment II

II-1

Work Opportunity Tax Credit (WOTC)

Statement of Work

State Workforce Development Agencies, also known as State Workforce Agencies (SWA), are to use Fiscal Year 2020 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 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 the Employment and Training Administration (ETA).

4. Develop a backlog reduction plan which includes an estimated timeline to reduce and eliminate existing backlogs based on current policies and procedures, and notify your regional coordinator prior to implementation.

5. 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.

6. Develop working agreements with other SWA and records for WOTC potentially eligible applicants/new hires relocating and working in another state.

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

to the orderly management of WOTC certification requests.

9. 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.

10. 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.

Attachment II

II-2

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

12. 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.

13. 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.

14. Assure that all data exchanges conducted through or during the course of performance of this grant will be conducted in a manner consistent with applicable Federal law and TEGL NO. 39-11 (issued June 28, 2012). All such activity conducted by ETA and/or recipient/s will be performed in a manner consistent with applicable state and Federal laws.

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 (26 USC sec. 51(d)(12)). 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.