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

Agency: Department of Labor
Office: Employment Training Administration

Authorization

Small Business Job Protection Act of 1996, as amended, Public Law 104-188; The Small Business and Work Opportunity Tax Act of 2007 , Public Law 110-28; Tax Relief and Health Care Act of 2006, Public Law 109-432; Internal Revenue Code, Section 51; The American Recovery and Reinvestment Act of 2009, Public Law 111-5; Tax Payer Relief Act of 1997, as amended , Public Law 105-34; Working Families Tax Relief Act of 2004, Public Law 108-311.

Program Number

17.271

Last Known Status

Active

Objectives

The tax credit was designed to help individuals from twelve 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 first 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 to employers and job seekers and other Workforce Investment Act (WIA) partners. The Federal government provides general direction, funding, and oversight. See above.

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 109-188, 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 representatives. 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. 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. OMB Circular No. A-87 applies to this program.

Application and Award Process

Preapplication Coordination

Preapplication coordination is required. 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. State workforce agencies (SWAs) must submit an annual grant plan and statement of work to ETA according to the requirements issued in policy guidance. SWAs may request extensions through ETA regional offices.

Award Procedure

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

Deadlines

Contact the headquarters or regional office, as appropriate, for application deadlines.

Range of Approval/Disapproval Time

From 60 to 90 days. As provided in regulations.

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

Quarterly program reports are required. No cash reports are required. No progress 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 08 $17,000,000; FY 09 est $19,000,000; FY 10 est $19,000,000

Range and Average of Financial Assistance

FY 2009 Allotments ranged from $ 66,863 to $ 2,216,782. The average is not computed.

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. An e-copy can be obtained at: www.doleta.gov/business/incentives/opptax. The report may be obtained from the Division of Adult Services, 200 Constitution Ave, N.W., Room S-4209, Washington, DC 20210, or on the Employment and Training Administration Web page at http://www.doleta.gov.

Related Programs

10.551 Supplemental Nutrition Assistance Program; 27.002 Federal Employment Assistance for Veterans; 27.003 Federal Student Temporary Employment Program; 27.005 Federal Employment for Individuals With Disabilities; 64.116 Vocational Rehabilitation for Disabled Veterans; 93.558 Temporary Assistance for Needy Families

Information Contacts

Regional or Local Office

See Regional Agency Offices. Contact the nearest Regional Office or state workforce agencies by checking the local telephone directory or obtaining directories of WOTC Regional and State Coordinators at: www.doleta.gov/business/Incentives/opptax/.

Headquarters Office

Carmen Ortiz 200 Constitution Ave, NW
Room S-4209, Washington, District of Columbia 20210 Email: ortiz.carmen@dol.gov Phone: 202-693-2786 Fax: 202-693-3587

Web Site Address

http://www.doleta.gov/business/Incentives/opptax/ .

Examples of Funded Projects

Not Applicable.

Criteria for Selecting Proposals

Not Applicable.