Work Opportunity Tax Credit Program (WOTC)
EMPLOYMENT AND TRAINING ADMINISTRATION, DEPARTMENT OF LABOR
Small Business Job Protection Act of 1996, as amended, Public Law 104-188; Tax Payer Relief Act of 1997, as amended Public Law 105-34; Working Families Tax Relief Act of 2004, Public Law 108-311; Tax Relief and Health Care Act of 2006, Public Law 109-432); Internal Revenue Code Sections 51 and 51 (A).
The tax credit was designed to help individuals from nine 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
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.
States (not individuals), the District of Columbia, the Virgin Islands, and Puerto Rico.
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 109-432 ) 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.
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
This program is excluded from coverage under E.O. 12372.
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) Allotments and Grant Plan Submission Training Guidance and Employment Letter. SWAs may request extensions through ETA regional offices.
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.
Established each year (contact Federal agency for deadline for application submission).
Range of Approval/Disapproval Time
As provided in regulations.
As provided in regulations.
Formula and Matching Requirements
Under the WOTC Program, funds are allotted to each SWA by administrative formula based on each state's relative share of: total certifications issued for the WOTC 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
Quarterly financial reports and reports on certifications, workload, and characteristics of certified individuals.
In accordance with the provisions of OMB Circular No. A-133 (Revised, June 27, 2003), Audits of states, local governments, and nonprofit 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.
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.
(Formula Grants) FY 07 $17,000,000; FY 08 est $17,000,000; and FY 09 est $18,000,000.
Range and Average of Financial Assistance
No established range.
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, 200 Constitution Avenue N.W., Room S-4209, Washington, DC 20210. Telephone: (202) 693-2786.
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 S-4209 Washington, DC 20210 or on the Employment and Training Administration Web page at http://www.doleta.gov
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
Office of Workforce Investment, Employment and Training Administration, Department of Labor, 200 Constitution Avenue, N.W., Washington, DC 20210. Contact: Christine Ollis, Division Chief, Adult Services, Room S-4209. Telephone: (202) 693-3046.
Web Site Address
10.551, Supplemental Nutrition Assistance Program
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.
Examples of Funded Projects
Criteria for Selecting Proposals