Work Opportunity Tax Credit Program (WOTC) and Welfare-to-Work Tax Credit (WtWTC)

This federal tax credit was designed to help individuals from certain target groups who consistently face significant barriers to employment move from economic dependency to self-sufficiency by encouraging businesses to hire target group members and be eligible to claim tax credits against the wages paid to the new hires during the first year of employment.

Last Known Status
Active
Program Number
17.271
Federal Agency
Agency: Department of Labor
Office: Employment Training Administration
Types of Assistance
FORMULA GRANTS
Uses and Use Restrictions
States are to use these formula grants for: accepting WOTC applications from employers; determining eligibility of individuals as members of the target groups; issuing employer certifications or denials; developing working agreements with partner agencies in American Job Centers (also called One-Stop Career Centers) or other State agencies to document eligibility of new hires and issue Conditional Certifications; and coordinating efforts to promote WOTC with employers, job seekers and other Workforce Investment Act (WIA) partners. The Federal government provides general direction, funding, and oversight to the states. See above.
Authorization
Internal Revenue Code of 1986, as amended, Section 51 , Title 26, Part IV, Section 51, 26 U.S.C 51; The American Taxpayer Relief Act of 2012, Public Law 126-112-240.
Eligibility Requirements
Applicant Eligibility
States (not individuals), the District of Columbia, the Virgin Islands, and Puerto Rico.
Beneficiary Eligibility
All employers seeking WOTC target group workers and target group members seeking employment. The members of the different target groups have statutory definitions (per Public Law 104-188, as amended ) with specific eligibility requirements that must be verified by the state workforce agencies before a certification can be issued to an employer or his/her representative. Participating employers and their representatives must file their certification requests using IRS Form 8850 and ETA Form 9061 or 9062 within 28 days after the employment start day of the new hires.
Credentials/Documentation
No Credentials or documentation are required. OMB Circular No. A-87 applies to this program.
Application and Award Process
Preapplication Coordination
Preapplication coordination is not applicable. Environmental impact information is not required for this program. This program is eligible for coverage under E.O. 12372, "Intergovernmental Review of Federal Programs." An applicant should consult the office or official designated as the single point of contact in his or her State for more information on the process the State requires to be followed in applying for assistance, if the State has selected the program for review.
Application Procedure
OMB Circular No. A-102 applies to this program. This program is excluded from coverage under OMB Circular No. A-110.
Award Procedure
WOTC grant funds are provided to State Workforce Agencies (SWAs) on an annual basis. Grant amounts are determined by formula.
Deadlines
Not Applicable.
Range of Approval/Disapproval Time
From 60 to 90 days. As provided in policy guidance issued by ETA and IRS.
Appeals
Not Applicable.
Renewals
Not Applicable.
Assistance Considerations
Formula and Matching Requirements
This program has no statutory formula.
This program has no matching requirements.
This program does not have MOE requirements.
Length and Time Phasing of Assistance
Funding is provided by annual formula allotments. Method of awarding/releasing assistance: by letter of credit.
Post Assistance Requirements
Reports
Program performance reporting by quarterly data submission is required. No cash reports are required. Quarterly program reports are required. Quarterly financial reports are required. No performance monitoring is required.
Audits
In accordance with the provisions of OMB Circular No. A-133 (Revised, June 27, 2003), "Audits of States, Local Governments, and Non-Profit Organizations," nonfederal entities that expend financial assistance of $500,000 or more in Federal awards will have a single or a program-specific audit conducted for that year. Nonfederal entities that expend less than $500,000 a year in Federal awards are exempt from Federal audit requirements for that year, except as noted in Circular No. A-133.
Records
Standard records for audits are required. The Internal Revenue Service (IRS) requires that the SWAs keep and maintain certification records for four years, and denial records for one year in the event of an employer audit by IRS or an employer appeal to the SWAs.
Program Accomplishments
Not Applicable.
Financial Information
Account Identification
16-0179-0-1-999.
Obligations
(Formula Grants) FY 13 $18,000,000; FY 14 est $18,000,000; and FY 15 est $18,000,000
Range and Average of Financial Assistance
FY 2013 grants to states ranged from $ 66,000 to $ 2,018,297.
Regulations, Guidelines and Literature
Section 51 of the Internal Revenue Code, Title 26 U.S.C. ETA Handbook No. 408, Third Edition, November 2002, as amended. The hanbook is available on the WOTC program website at www.doleta.gov/wotc.
Information Contacts
Regional or Local Office
See Regional Agency Offices. Contact information for regional and state WOTC coordinators is available on the WOTC program website at www.doleta.gov/wotc.
Headquarters Office
Kimberly Vitelli 200 Constitution Ave. NW, Rm C-4510, Washington, District of Columbia 20210 Email: vitelli.kimberly@dol.gov Phone: 202-693-3639
Website Address
http://www.doleta.gov/wotc
Examples of Funded Projects
Not Applicable.
Criteria for Selecting Proposals
Not Applicable.
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