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ETA Form to Be Short Lived – Empowerment Zone Omitted from New WOTC Characteristics Form

Friday, August 3rd, 2012

It is quite sad.  Just 2 days before the Senate Finance Committee completed its markup of the Family and Business Tax Cut Certainty Act of 2012, the Department of Labor issued Training and Guidance Letter (TEGL) 04-2012.

TEGL 04-2012 introduces the Department’s updated Form ETA 9061, which is the Individual Characteristics Form included in the WOTC program’s employee-application for certification.

Why is it sad?

  • TEGL 04-2012 intentionally omitted the WOTC programs’ Empowerment Zone element for the Designated Community Member target group.
  • It also completely omitted the Summer Youth target group because by definition a Summer Youth is someone who lives within an Empowerment Zone.

These omissions make some sense, given the fact that the Empowerment Zone program expired on December 31, 2011.  However, the Family and Business Tax Cut Certainty Act of 2012 (aka tax extenders bill) now proposes to retroactively renew the Empowerment Zone program for 2 years through December 31, 2013.

In other words, when the tax-extenders bill becomes law, the updated Form ETA 9061, which omits all reference to Empowerment Zones, will have been rendered retroactively obsolete before it was even published.

There is a potentially BIG administrative hassle hiding in this little mess.  TEGL 04-2012 gives employers and their representatives 90 days to complete their transition from the old ETA 9061 to the updated version.  It doesn’t make sense, however, to use the new form now or in the future if the tax extender bill will have rendered it obsolete retroactively to January 1, 2012.

Depending on when Congress is able to pass the tax-extenders, employers who transition in time for the current 90-day deadline will almost certainly face another transition as the Department of Labor issues a second update to reverse the omissions of the recent form.

Let us suggest to the Department of Labor that it should temporarily suspend the transition requirements of TEGL 04-2012. Allow employers and State Workforce Agencies to continue using the current versions of their ETA Forms until all of the pending tax-extender issues affecting WOTC have been fully settled by Congress and the President.

Posted in Work Opportunity Tax Credit | No Responses »
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DOL (Also) Issues New WOTC Instructions for Vow to Hire Heroes Act

Monday, December 12th, 2011

The following instructions are copied directly from the document recently published by the US Department of Labor.

Vow to Hire Heroes Act – Work Opportunity Tax Credit Provisions: Interim Instructions for State Workforce Agencies and Employers

On November 21, 2011, the President signed into law the “Vow to Hire Heroes Act”, which amends and expands the definition of Veteran target groups for the Work Opportunity Tax Credit (WOTC). These provisions became effective the day after the President signed the Act into law (November 22, 2011).

The Employment and Training Administration (ETA) is working to revise and issue ETA Forms 9061 and 9058, and update all other program-related materials, to reflect changes to the Veteran target groups. During this transition period until revised forms are issued, employers are instructed to continue to use the current ETA Form 9061.

When requesting certification for the Veteran target groups using ETA Form 9061, employers and consultants should do the following:

1) When using the hard copies of Form 9061, indicate in red at the top margin of the form the Veteran target group for which they are requesting certification.

2) When using an electronic form for the 9061 with those states that are fully automated, indicate in black at the top margin of the form the Veteran target group for which they are requesting certification.

Note: ETA will notify states with a date for the end of this transition period and the date when employers are to start using only the revised forms and program materials. State Workforce Agencies are to accept the current forms until additional guidance is provided by ETA.

3) Employers and consultants must continue to adhere to the “28-day timely filing” requirement.

4) Employers and consultants should follow any other instructions IRS may issue. States and Participating Agencies should continue to use the current ETA Form 9062 and follow its instructions, which already provide for the Veteran target groups.

State Workforce Agencies should continue to use ETA Form 9058, Report 1, until further ETA guidance.

 

Posted in Veterans, Work Opportunity Tax Credit | No Responses »
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Vow to Hire Heroes Act: DOL Publishes Summary of New WOTC Provisions

Monday, December 12th, 2011

Thank you to Rik Moore of the National Telecommuting Institute, Inc. for bringing this to my attention early last week.

The US Department of Labor has offered new guidance bringing into focus the WOTC provisions of the recently passed Vow to Hire Heroes Act of 2011.   A summary of WOTC-related provisions from the act has been published on the Department of Labor’s website.  The following is copied directly from that document.  Please download the entire document in order to see footnotes and introductory content not included here.

• Extends the current target group for Veterans receiving Supplemental Nutrition Assistance Program (SNAP) benefits with the same qualified wages cap ($6,000) and maximum tax credit ($2,400).

• Extends the current target group for Veterans with a service-connected disability with the same qualified wages cap ($12,000) and maximum tax credit ($4,800).

• Extends the current target group for Veterans with a service-connected disability unemployed for at least 6 months with the qualified wages cap increased to $24,000 and the maximum tax credit increased to $9,600.

• Establishes a new target group for unemployed Veterans, similar to the Recovery Act of 2009 unemployed Veteran group that expired on December 31, 2010:

o Veterans unemployed for at least 4 weeks with a qualified wages cap of $6,000 and maximum tax credit of $2,400.

o Veterans unemployed for at least 6 months with qualified wages cap of $14,000 and maximum tax credit of $5,600.

o State Workforce Agencies will certify veterans as meeting the required periods of unemployment based on receipt of unemployment insurance compensation.

Note: The 5-year period ending on the hiring day requirement that was part of the Recovery Act unemployed veteran group was rescinded.

• Qualified “tax-exempt” (i.e., 501(c)) organizations can now participate by hiring qualified veterans and are now eligible to claim the WOTC.

• These provisions became effective the day after the President signed the Vow to Hire Heroes Act into law, November 22, 2011, through December 31, 2012.

• The Vow to Hire Heroes Act does not extend any of the other (non-Veteran) WOTC target groups, which currently expire on December 31, 2011.

 

Posted in Veterans, Work Opportunity Tax Credit | No Responses »
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FINAL? Final Guidance about Disconnected Youth and Unemployed Veteran WOTC Groups

Monday, May 24th, 2010

Perhaps you remember a post with a very similar title from March of this year? On March 5, 2010, the Department of Labor published TRAINING AND EMPLOYMENT GUIDANCE LETTER NO. 03-09, Change 2, which purported to be

Final Guidance to State Workforce Agencies (SWAs) and Employers for the Implementation of the Two American Recovery and Reinvestment Act (ARRA) of 2009 Work Opportunity Tax Credit (WOTC) Target Groups Requirements

I guess it was not so final after all. 

What appears to the final, final guidance was published earlier today as TRAINING AND EMPLOYMENT GUIDANCE LETTER NO. 03-09, Change 3.  This change letter provides some new “clarification” to the Final Guidance previously received.

In fact, is does provide some very important clarification — not about the substance or definitions of qualifying employees — but rather, about the deadlines and procedures for submitting the official “Disconnected Youth Self Attestation Form” or SAF.  The original SAF, published with Change 2, included instructions that seemed to require the SAF and ETA 9061 to be submitted together all within 28 days of the qualifying employees start date.  Today’s publications clarifies that the 28-day deadline does not apply to the SAF or ETA 9061.  That’s good news.

Earlier, I had in fact noticed the questionable instructions on the SAF and had silently asked myself, “Are they serious?” 

It would be a big deal if they were, since previously the only form with a 28-day deadline attached was the IRS 8850 ”Pre-Screening Notice and Certification Request for the Work Opportunity Credit.”  All other forms, including the Department of Labor’s ETA 9061 Personal Characteristics form and all other supporting documentation could be submitted later without jeopardizing an employee’s eligibility.

The less heartwarming aspect of Change 3 is that a new version of the Disconnected Youth SAF has now been published (to accommodate the revised instructions).  Furthermore, after 90 days, WOTC certifying agencies throughout the United States are instructed to no longer accept the old version.  

Here’s where we all say “ugg” in unison.

On a positive note, the actual content of the SAF has not changed at all.  The employee’s statement is identical in both language and appearance to the original form. 

I suspect that we have not yet heard the end of this issue.  In any case, my clients will begin now to incorporate the new SAF form into their processes.  And as always, when the government throws a small boomerang like this, we’ll figure out how to catch it and redirect it to maximize our clients’ WOTC qualifications and tax benefits.

If you have questions about the Work Opportunity Tax Credit, or any aspects of this discussion, please contact me.  I am Vaughn Hromiko.  You can reach me at vah@wotcPlanet.com  or toll free at (800) 655-5281, ext 101.

Posted in Disconnected Youth, Work Opportunity Tax Credit | No Responses »
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Deadline for Use of New WOTC Form ETA 9061

Saturday, September 19th, 2009

As I wrote yesterday, the recent Training and Employment Guidance Letter (TEGL) 3-09 included the revised WOTC form that we’ve been waiting for  — DOL ETA 9061.   TEGL 3-09 also indicated that within two weeks, WOTC centers would be prohibited from accepting the old version of the form.  The last day to use the old form, therefore, was September 16th.

HOWEVER, my contact in California’s WOTC center tells me today that the U.S. Department of Labor seems to be backing down from that deadline (although perhaps only informally at this point). As a result, the California WOTC center is not yet rejecting WOTC applications that use the old forms.

While RestaWOTC is prepared to use the new form, the extremely short notice given by the U.S. Department of Labor creates a hardship for many employers.  Consider, for example, a multi-unit franchise with 300 locations scattered throughout the nation.  Two weeks is simply not enough time for your HR department to become informed, prepare new materials, and then ship and replace the old forms that have already been inventoried at each of your locations.

If you’ve been following best practices and formally integrating the WOTC forms into your hiring process, you might even have to deconstruct and then reconstruct your entire inventories of new employee orientation packets.

WOTC centers in some states, however, have given notice that as instructed by TEGL 3-09, they will not accept the old forms as of September 17th (yesterday).  We will keep you informed as this issue progresses.  Rest assured that if you are one of RestaWOTC’ clients, we have the situation under control.

Posted in Work Opportunity Tax Credit | No Responses »
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New WOTC Form and Guidance from U.S. Department of Labor

Thursday, September 17th, 2009

The long wait is over!

The U.S. Department of Labor has issued a new WOTC-related Training and Employment Guidance Letter (or TEGL) dated September 1, 2009.  TEGL No. 3-09 provides guidance about documentation standards for the two new WOTC eligibility categories created by the February stimulus bill.  It also includes the new Department of Labor Form ETA 9061 - Individual Characteristics Form that we must begin using immediately in order to obtain WOTC employee certifications.

We’ve been awaiting this news for months.  The lack of formal guidance from the Department of Labor had left state WOTC centers in a holding pattern — unable to issue certifications under the new Disconnected Youth and Unemployed Veteran categories.   It’s true that employers have been submitting applications for months now.  What’s been happening is that WOTC centers have been placing these applications into a backlog pile — unable to process them without the further guidance.

Now that the documentation standards and other procedural steps have been formally spelled out to the WOTC centers, we should begin receiving WOTC certifications for employees qualifying under the new categories.  I know that for our restaurant clients, the Disconnected Youth category has become particularly important.

Posted in Disconnected Youth, Veterans, Work Opportunity Tax Credit | No Responses »
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