Work Opportunity Tax Credit Program (WOTC)
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.
General information about this opportunity
Last Known Status
Agency: Department of Labor
Office: Employment Training Administration
Type(s) of Assistance Offered
Internal Revenue Code of 1986, as amended, Section 51; , Title 26, Part IV, Section 51, Public Law 104-188, 26 U.S.C 51-52; Tax Increase Prevention Act of 2014 (The Act), Public Law 113-295.
Who is eligible to apply/benefit from this assistance?
States (not individuals), the District of Columbia, the Virgin Islands, and Puerto Rico.
Beneficiaries are all employers seeking WOTC target group workers and members of those target groups 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 new hire certification can be issued to an employer or his/her representative. Participating employers and their representatives must file their certification requests with State Workforce Agencies using IRS Form 8850 and ETA Form 9061 or 9062 within 28 days after the employment start day of the new hires.
No Credentials or documentation are required. 2 CFR 200, Subpart E - Cost Principles applies to this program.
What is the process for applying and being award this assistance?
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.
2 CFR 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards applies to this program.
WOTC grant funds are provided to State Workforce Agencies (SWAs) on an annual basis. Grant amounts are determined by formula.
Approval/Disapproval Decision Time
As provided in funding allotment and policy guidance issued by ETA and IRS.
How are proposals selected?
How may assistance be used?
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 verify or document eligibility of new hires, including issuing 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.
What are the requirements after being awarded this opportunity?
Program performance reporting by quarterly data submission is required. No cash reports are required. No progress reports are required. Quarterly financial reports are required. No performance monitoring is required.
In accordance with the provisions of 2 CFR 200, Subpart F - Audit Requirements, non-Federal entities that expend financial assistance of $750,000 or more in Federal awards will have a single or a program-specific audit conducted for that year. Non-Federal entities that expend less than $750,000 a year in Federal awards are exempt from Federal audit requirements for that year, except as noted in 2 CFR 200.503. See below.
Standard records for periodic internal audits are required. The Internal Revenue Service (IRS) also requires that the State Workforce Agencies (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.
Other 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.
Who do I contact about this opportunity?
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.
Kimberly Vitelli 200 Constitution Avenue NW, Room C-4510, Washington, District of Columbia 20210 Email: firstname.lastname@example.org
(Formula Grants) FY 14 $18,000,000; FY 15 est $18,000,000; and FY 16 est $18,000,000
Range and Average of Financial Assistance
Fiscal Year (FY) 2015 grants to states ranged from $66,000 to $2,420,358.
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 Handbook and applicable U.S. Department of Labor, Employment and Training Administration policy directives are available on the WOTC program website at www.doleta.gov/wotc.
Examples of Funded Projects