Department of Labor Guidance on Disconnected Youth and Unemployed Veterans
Tax Credits and Incentives
Part of The American Recovery and Reinvestment
act of 2009 (Public Law 111-5, Recovery Act) included the introduction of two new
categories to the list of work opportunity tax credit (WOTC) target groups – Unemployed
Veteran and Disconnected Youth. These additional
categories have since expired as the original legislation only provided for these
additions until December 31st, 2010. It
had been the hope of TALX and our industry that these categories would be extended
or rolled into other currently viable categories. However,
on March 31, 2011 the Department of Labor issued a Training and Employment Guidance
Letter (TEGL) advising the state workforce agencies to stop certifying WOTC credit
applications for employees hired after the first of the year. The
Department of Labor’s guidance can be summarized as follow:
instructs the agencies to accept and retain all requests for certification for employees
hired after Jan 1st, 2011 for the categories in question – but not to certify
state agencies should process all requests for certifications for hires through Decembers
31, 2010 that were filed on time.
agencies should accept appeals of denied request for certifications if the original
request was previously filed in a timely manner but subsequently denied.
Speaking on the guidance to accept but not
certify WOTC certification applications, says the TEGL:
Even though the authorization for the Unemployed
Veteran and Disconnected Youth target groups has ended, it is not uncommon for legislation
to be passed reauthorizing WOTC credits and allowing retroactive certifications. During
prior “hiatus periods,” the Employment and Training Administration (ETA) has instructed
States to accept applications (certification requests) in anticipation of a retroactive
reauthorization. To accommodate a potential
retroactive reauthorization for these two Recovery Act groups, ETA is instructing
the SWAs to continue to accept applications for the two expired target groups after
December 31, 2010, but to hold off on processing the requests pending further legislative
action and guidance from ETA.
Full text of the TEGL can be found here.
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