DIRECTIVE	:	EMPLOYMENT SERVICE PROGRAM LETTER NO. 01-99
TO	:	ALL STATE EMPLOYMENT SECURITY AGENCIES
FROM	:	John R. Beverly, III Director U.S. Employment Service
SUBJECT	:	Continuation of the Work Opportunity Tax Credit (WOTC) Program and Welfare-to-Work Tax (WtW) Credit.

1. Purpose. To provide State Employment Security Agencies (SESAs) with guidance with regard to the WOTC program and WtW Tax Credit.

2. References. The Taxpayer Relief Act of 1997 (P.L. 105-34); ESPL No. 10-98, dated June 19, 1998; and ETA Handbook No. 408, Second Edition, October 1998.

3. Background. The current WOTC program's legislative authority expired June 30, 1998, and the authority for the Welfare-to-Work Tax Credit will expire on April 1999. A bill extending the WOTC and WtW for 20 additional months, retroactive to WOTC's expiration date, has been introduced in the House and is pending final passage. The President has signed a Continuing Resolution (CR) which provides funding for the Department's programs through October 9, 1998. Funds for the WOTC and the WtW tax credits have been included in the CR, thus extending the grants for the program through the duration of the Continuing Resolution, i.e, October 9, 1998. Due to the short duration of the continuing resolution, States are advised, to continue to use FYs 1997 and 1998 funds.

4. Information. The instructions and guidance provided to the SESAs in ESPL No. 10-98 are valid until new information becomes available.

5. Action Required. The State Employment Security Agency (SESA) Administrators are to continue their administration and operation of the WtW Tax Credit and the limited activity allowed for the WOTC program under ESPL No. 10-98 through October 9, 1998. The Employment and Training Administration through the U.S. Employment Service will advise the SESAs of further developments as these occur.

6. Inquiries. Direct all questions to the appropriate Regional WOTC/WtW Coordinator.