1. Purpose. To announce the reauthorization of the Work Opportunity Tax Credit Program and the Welfare-to-Work Tax Credit under the Job Creation and Worker Assistance Act of 2002 (P.L. 107-147).
2. References. The Job Creation and Worker Assistance Act of 2002 (P.L. 107-147); the Ticket to Work and Work Incentives Improvement Act of 1999 (P.L. 106-170); TEGL No. 09-01, dated January 7, 2002, Internal Revenue Code of 1986, Sections 51 and 51A, as amended; and ETA Handbook No. 408, Second Edition, November 1998.
3. Background. The current legislative authority for the WOTC program and the WtW Tax Credit expired December 31, 2001.
4. Authorization. The Job Creation and Worker Assistance Act of 2002 (P.L. 107-147),
was signed into law on March 9, 2002. This legislation extends the WOTC program and the WtW Tax Credit for a 24-month period beginning January 1, 2002, and ending December 31, 2003, and makes the program's authority retroactive to its expiration date, December 31, 2001. The reauthorization applies to new hires who begin work for an employer on January 1, 2002, and before January 1, 2004. Also, this law created a new target group category under the WOTC program, the "New York Liberty Zone Business Employee." This targeted group applies only to those workers and employers (located in the New York City Liberty Zone, South of Canal Street in the Borough of Manhattan) affected by the September 11, 2001, terrorist attack.
5. Program Administration. Under the reauthorizing legislation, State Workforce Agencies' (SWAs) certification and program operation responsibilities for these two tax credits remain the same as those described in the November 1998, Second Edition of ETA Handbook No. 408. These include procedures for: a) determining target group eligibility and issuing certifications, b) establishing working partnerships with different participating
agencies at the state and local levels for resolving technical issues and issuing Conditional Certifications, c) conducting verification activities, d) complying with quarterly reporting responsibilities, and e), conducting record retention.
| RESCISSIONS | EXPIRATION DATE |
| | Continuing |
6. Funding. Twenty-one million dollars were appropriated for administration of the WOTC and WtW tax credits in FY 2002. Of this total, $456,000 has been withheld to pay estimated WOTC and WtWTC postage costs. During the time the Congress deliberated over the nation's budget, several Continuing Resolutions were passed to support program administration. The national office issued advanced funds to the SWAs for program implementation activities through December 31, 2001, and elimination of existing backlogs. An additional advanced allocation was recently issued to the states to cover program activities for the period that ended on March 31, 2002. The remaining balance of funds, $10,255,024, will be issued to the SWAs on a quarterly basis. Attached for your information is a copy of the table illustrating "FY 2002 Funding Balance for April - September" allocations by states. Planning guidance instructions will be issued under separate cover. States may continue to use penalty mail.
7. Reporting Authority. Pursuant to the Paperwork Reduction Act of 1995, the Office of
Management and Budget (OMB) has approved the information collection requested for the WOTC/WtWTC administrative and reporting forms. ETA Reporting Forms 9057 - 9059 and ETA Administrative Forms 9061, 9062, 9063, and 9065 are approved under OMB No. 1205-0371, through June 30, 2002. State Workforce Agencies should continue to use the current certification and reporting forms until further notice. An OMB extension of this reporting authority is being requested.
8. Action Required. State Workforce Agency Administrators are requested to:
a) provide this information to appropriate program staff, employers and their contractors, participating agencies, and other interested partners. They are to ensure that the SWAs and participating agencies administer the WOTC and WtW tax credits in accordance with the guidance provided in the November 1998, Second Edition of ETA Handbook No. 408, and the Internal Revenue Code of 1986, as amended; and
b) ensure the States' WOTC/WtWTC Coordinators receive a copy of the new legislation and the newly reauthorized forms.
9. Inquiries. Direct all questions to the appropriate Regional WOTC/WtWTC Coordinator.
10. Attachments.
- Copy of the "Job Creation and Worker Assistance Act of 2002" (P.L. 107-147), Sections 604, 605 and 1400L
- FY 2002 Funding Balance for April-September Allocation Table
- ETA Quarterly Reporting Forms 9057
- ETA Quarterly Reporting Forms 9058
- ETA Quarterly Reporting Forms 9059
- ETA Administrative Forms 9061
- ETA Administrative Forms 9062
- ETA Administrative Forms 9063
- ETA Administrative Forms 9065