Feb 21 -- The Employment and Training Administration (ETA) is proposing to reissue its Work Opportunity Tax Credit (WOTC) procedural guidance through a Change 1 to Training and Employment Guidance Letter (TEGL) No. 16-20, with some modifications; and modify its WOTC administrative formula for state allotments. ETA is also soliciting broader comments regarding potential improvements to WOTC, including policy and procedural guidance modifications. ETA's current procedural guidance for WOTC is available in TEGL 16-20, Work Opportunity Tax Credit Procedural Guidance, accessible at:
https://wdr.doleta.gov/directives/corr_doc.cfm?DOCN=8395. The administrative formula for WOTC is available in TEGL 03-21, Work Opportunity Tax Credit (WOTC) Initial Funding Allotments for Fiscal Year 2022, accessible at:
https://wdr.doleta.gov/directives/corr_doc.cfm?DOCN=3188.
This Notice solicits comments regarding these proposed changes. Any updated WOTC administrative formula will become effective October 1, 2023. Written comments on this Notice are invited and must be received on or before April 24, 2023.
This Notice represents the first of a two-stage process. ETA is publishing this Notice requesting public comments regarding proposed modifications to its WOTC procedural guidance and administrative formula. In the final stage, ETA will publish any modifications for procedural guidance in a TEGL, and will publish the updated administrative formula, using the most recent fiscal year performance data available, in the Federal Register. Based on Congress' budgetary appropriations for Fiscal Year (FY) 2024, ETA plans to announce WOTC allotments for state grantees by issuing a funding allotment TEGL based on an updated administrative formula. (Note that ETA disbursed FY 2023 WOTC allotments based on the existing administrative formula). Pending comments received through this Notice, ETA plans to issue a Change 1 to TEGL 16-20 to update its procedural guidance for WOTC. The proposed revised guidance will allow State Workforce Agencies (SWAs) to place a greater emphasis on process improvement, program efficiency, and better alignment with the requirements of section 51 of the Internal Revenue Code of 1986, as amended (the Code, available at:
https://uscode.house.gov/view.xhtml?req=(title:26%20section:51%20edition:prelim)).
Although not required by federal statute or regulations, ETA is seeking public comment and opinions on its proposed guidance, including feedback on areas where ETA may need to clarify procedural guidance to address ongoing concerns, such as policies related to authorized representatives, as well as comments on the proposed administrative formula modifications. Additionally, ETA is requesting information on additional means to improve the WOTC as an incentive for employers to hire job seekers with barriers to employment. Stakeholders, including SWAs, employers, researchers and advocates, are encouraged to provide comments on modifications to the WOTC certification process, including suggestions for program improvement, as outlined in sections II, III and IV of this Notice. This Notice includes the following sections:
-- Section I of this Notice provides a background of WOTC procedural guidance, and the current administrative formula used to determine state funding allotments.
-- Section II requests comments on proposed modifications to WOTC procedural guidance.
-- Section III requests recommendations for WOTC program improvements.
-- Section IV describes the proposed modifications to the administrative formula.
-- Section V provides planning estimates and describes the stop-loss/stop-gain provision for the proposed administrative formula implementation year, FY 2024, and subsequent years.
-- Section VI describes formula provisions to address state grantees that would receive less than the minimum state allotment amount in annual funding under the proposed new formula.
-- Section VII is a table detailing the impact of proposed changes on funding amounts for FY 2024 using the modified formula, and a comparison to actual FY 2022 funding allotments.
FRN:
https://www.federalregister.gov/d/2023-03470