Work Opportunity Tax Credit Program (WOTC) and Welfare-to-Work Tax Credit (WtWTC) (17.271)

 

Program

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

 

Federal Agency

EMPLOYMENT AND TRAINING ADMINISTRATION, DEPARTMENT OF LABOR

 

Authorization

Small Business Job Protection Act of 1996, as amended, Public Law 104-188 (for WOTC); Tax payer Relief Act of 1997, as amended Public Law 105-34 (for WtWTC); Working Families Tax Relief Act of 2004, Public Law 108-311; and Internal Revenue Code Sections 51 and 51 (A).

 

Program Number

17.271

 

Last Known Status

Active

 

Objectives

The two tax credits were designed to help individuals from 10 target groups who consistently have faced significant barriers to employment move from economic dependency to self-sufficiency by encouraging businesses in the private sector to hire target group members and be eligible to claim tax credits against the wages paid to the new hires during the fist year of employment.

 

Types of Assistance

Formula Grants.

 

Uses and Use Restrictions

States are to use these formula grants for: determining eligibility of individuals as members of targeted groups; issuing employer certifications or denials; developing working agreements with partner agencies in the One-Stop Service Delivery system and coordinating efforts to promote WOTC and WtWTC to employers and job seekers and other Workforce Investment Act (WIA) partners. The federal government provides general direction, funding, and oversight.

 

Eligibility Requirements

Applicant Eligibility

States (not individuals) and the District of Columbia, the Virgin Islands, and Puerto Rico.

Beneficiary Eligibility

All employers seeking WOTC and/or WtWTC target group workers and target group members seeking employment. The members of the different target groups have statutory definitions (per P.L. 104-188 for the WOTC and P.L. 105-34 for the WtWTC) with specific eligibility requirements that must be verified by the state workforce agencies before a certification can be issued to an employer or his representatives. Participating employers and their representatives must file their certification requests using IRS Form 8850 and ETA Form 9061 or 9062 within 21 days after the employment-start day of the new hires. This timeliness requirement cannot be waived and must be met before a state can issue a certification for eligible target group members.

Credentials/Documentation

Cost will be determined in accordance with OMB Circular No. A-87 as codified in 41 CFR 1-15.7 for state and local governments.

 

Application and Award Process

Preapplication Coordination

This program is excluded from coverage under E.O. 12372.

Application Procedure

State workforce agencies (SWAs) must submit an annual grant plan and statement of work to ETA according to the requirements issued in the Guidance for Work Opportunity Tax Credit (WOTC) and Welfare-to-Work Tax Credit (WtWTC) Allotments and Grant Plan Submission Training Guidance and Employment Letter. SWAs may request extensions through ETA regional offices.

Award Procedure

Review of State Plans occurs at Employment and Training Administration national office. WOTC and WtWTC grant funds for approved state plans are provided under separate annual funding agreements for each program year with the designated SWA.

Deadlines

Established each year (contact federal agency for deadline for application submission).

 

Range of Approval/Disapproval Time

Appeals

As provided in regulations.

Renewals

Not applicable.

 

Assistance Considerations

Formula and Matching Requirements

Under the WOTC Program and the WtW Tax Credit, funds are allotted to each SWA by administrative formula based on each state's relative share of: total certifications issued for the WOTC and WtWTC Program in the previous year, civilian labor force, and adult recipients of Temporary Assistance for Needy Families. There are no matching requirements.

Length and Time Phasing of Assistance

Funding is provided throughout the year as appropriated funds become available to meet immediate cash requirements.

 

Post Assistance Requirements

Reports

Quarterly financial reports and reports on certifications, workload, and characteristics of certified individuals.

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; non-federal 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. Non-federal 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 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

Data can be obtained by contacting Carmen Ortiz, WOTC National Coordinator, Office of Workforce Investment, Division of Adult Services, Employment and Training Administration, Department of Labor, Washington, DC 20210. Telephone: (202) 693-2786.

 

Financial Information

Account Identification

16-0179-0-1-999.

Obligations

(Formula Grants) FY 05 $18,000,000; FY 06 est $18,000,000; and FY 07 est $18,000,000.

Range and Average of Financial Assistance

No established range.

 

Regulations, Guidelines and Literature

ETA Handbook No. 408, Third Edition, November 2002. An e-copy can be obtained at: http://www.ows.doleta.gov/employ/tax.asp. The report may be obtained from the Division of Adult Services 200 Constitution Ave, N.W. Room C 4512, Washington, D.C. 20210 or on the Employment and Training Administration Web page at http://www.doleta.gov.

 

Related Programs

10.551, Food Stamps; 93.558, Temporary Assistance for Needy Families; 64.116, Vocational Rehabilitation for Disabled Veterans; 27.002, Federal Employment Assistance for Veterans; 27.003, Federal Student Temporary Employment Program; 27.005, Federal Employment for Individuals With Disabilities; 53.001, Employment Promotion of People with Disabilities.

 

Information Contacts

Regional or Local Office

Contact the nearest office of the Regional or state workforce agencies by checking the local telephone directory or obtaining directories of WOTC Regional and State Coordinators at: http://www.ows.doleta.gov/employ/tax.asp.

Headquarters Office

Office of Workforce Investment, Employment and Training Administration, Department of Labor, 200 Constitution Avenue, N. W, Washington, DC 20210. Contact: Christine Kulick, Division Chief, Adult Services, Room C-4510. Telephone: (202) 693-3937.

Web Site Address

http://www.ows.doleta.gov/employ/tax.asp

 

Examples of Funded Projects

Not applicable.

 

Criteria for Selecting Proposals

Not applicable.