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March 31, 2021, Employment and Training Administration Advisory System, U.S. Department of Labor releases TRAINING AND EMPLOYMENT GUIDANCE LETTER (TEGL) NO. 06-20. This Change 1 announces the 12 states selected to receive FY 2021 backlog awards totaling $2,500,000.

 

Subject: Change 1 to Training and Employment Guidance Letter No. 06-20, Work Opportunity Tax Credit (WOTC) Funding Allotments for Fiscal Year 2021

 

Purpose: This Change 1 to the Training and Employment Guidance Letter (TEGL) 06-20 conveys the remaining balance for WOTC and explains application requirements for State Workforce Agencies (SWA) based on funding appropriated for Fiscal Year (FY) 2021 through September 30, 2022. Additionally, this TEGL announces 12 states selected to receive additional FY 2021 backlog funding.

 

Summary: On November 16, 2020, the Department issued TEGL No. 06-20, which announced the initial funding allotments of $3,647,090 under the Continuing Appropriations Act, 2021 and Other Extensions Act (Public Law 116-159). This Change 1 provides the full-year allotments and state balances for FY 2021, as authorized under the Consolidated Appropriations Act, 2021 (P.L. 116-260). ETA has available grant funds totaling $18,485,000 for normal operations in FY 2021. This Change 1 announces the remaining balance of $14,837,910 for normal operations in FY 2021. Additionally, the Consolidated Appropriations Act, 2021 authorized an additional $2,500,000 in funding to support WOTC efforts to reduce processing backlogs and assist states in adopting or modernizing information technology for processing of certification requests. This Change 1 announces the 12 states selected to receive FY 2021 backlog awards.

 

Background: The U.S. Departments of Labor and Treasury jointly administer WOTC. The Department of Treasury, through the Internal Revenue Service (IRS), administers all tax-related provisions and requirements of the Federal tax credit. The Department of Labor, through the Employment and Training Administration (ETA), awards grants to states for the administration of WOTC. WOTC is authorized until December 31, 2025 under Section 113 of Division EE, Title 3 – Consolidated Appropriations Act, 2021. After allocating $20,000 to the Virgin Islands, ETA distributes the remaining funds to the SWAs by administrative formula with a $66,000 minimum allotment and a 95 percent stop-loss/120 percent stop-gain from the previous year allotment share percentage. The administrative formula is calculated as follows:

 

  1. 50 percent is based on each state’s relative share of total WOTC certifications issued from October 1, 2019 through September 30, 2020;
  2. 30 percent is based on each state’s relative share of the Civilian Labor Force averages for the 12-month period from October 1, 2019, through September 30, 2020; and
  3. 20 percent is based on each state’s relative share of adult recipients of Temporary Assistance for Needy Families averages from October 1, 2018, through September 30, 2019.

 

ETA will distribute a second set of WOTC backlog funds to approximately 12 new states with the most critical needs to alleviate processing backlogs and assist states in adopting or modernizing information technology for processing of certification requests. To inform the selection process, ETA analyzed the following data:

 

  1. FY 2020 backlog total and the percentage ratio it represents of the state’s total workload;
  2. FY 2020 financial reports; and
  3. FY 2020 qualitative data based on states’ narratives, which explain how the

states could use this award to make improvements to their existing systems or

procedures and reduce their backlog.

 

ETA carefully reviewed these three sources of data to gain an understanding of the states’ needs and any contributing factors that led to the states’ backlog. ETA did not consider the states that received backlog funding last year because they are currently still spending FY 2020 backlog funding. ETA examined the remaining states’ backlogs and information technology modernization needs to identify this second set of selected states. Additionally, ETA analyzed FY 2020 financial reports to determine a state’s ability to use additional funding and did not select states with extraordinarily low expenditure rates to receive backlog funds. Finally, ETA reviewed the narratives that states previously submitted in FY 2020. The selected states expressed interest in this additional backlog funding to help them attain staff support, enhance their current partial automated systems, and develop automated systems. Based on these factors, ETA identified 12 states with the most critical need to address backlog to receive backlog funding. Based on the availability of $2,500,000 in funds, ETA established four funding tiers to

distribute these awards to 12 states. Tier 1 = $100,000, Tier 2 = $200,000, Tier 3 = $300,000

The selected states and corresponding funding amounts for these awards are as follow:

 

$100,000

Alabama

Hawaii

Louisiana

New Hampshire

 

$200,000

Illinois

Montana

Ohio

 

$300,000

Arizona

Oklahoma

North Dakota

South Dakota

Utah

 

Details for Change 1 to Training and Employment Guidance Letter No. 06-20 can be found at this link.https://wdr.doleta.gov/directives/corr_doc.cfm?DOCN=4186

 

WOTC FY 2021 State Allotments and Balance after Dissemination to States under Continuing Resolution (CR) 1

https://wdr.doleta.gov/directives/attach/TEGL/TEGL_06-20_Change_1_Attachment_1.pdf


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