1. Work Opportunity Tax Credit (WOTC) & Work Opportunity Tax Credit (WOTC) & the VOW Act of 2011 National Training Webinar for Employers and Their Representatives Date: July 12, 2012 Time: 2:00 – 3:00 PM

2. 2 Work Opportunity Tax Credit (WOTC) & the VOW Act of 2011 Welcome to Workforce 3 One! Welcome to Workforce 3 One!

3. 3 Work Opportunity Tax Credit (WOTC) & the VOW Act of 2011 Submitting Questions: Open Chat Drop-Down Menu  To submit a question, type the question in the text field and press your Enter/Return key. ‒ Please enter the name to whom the question is directed.  To send questions only to the presenters, select Presenters from the drop-down menu before pressing your Enter/Return key.  Change Text Size and Chat Color… Text Field

4. 4 Work Opportunity Tax Credit (WOTC) & the VOW Act of 2011  To submit a question, type the question in the text field and press your Enter/Return key. ‒ Please enter the name to whom the question is directed.  Your name and your question will appear on your screen, indicating successful submission.  Questions are directly transmitted to presenters—no other participants will see your questions. Submitting Questions: Closed Chat Text Field Gary, where can I find today’s PPT?

5. 5 Work Opportunity Tax Credit (WOTC) & the VOW Act of 2011Practice In the Chat Room, please type the name of your organization, your location, and how many people are attending with you today.

6. 6 Work Opportunity Tax Credit (WOTC) & the VOW Act of 2011 How To Participate in a Poll

7. 7 Work Opportunity Tax Credit (WOTC) & the VOW Act of 2011 Access to Webinar Resources WEBINAR RESOURCES: Recordings and transcripts are available within 2 business days after the event.

8. 8 Work Opportunity Tax Credit (WOTC) & the VOW Act of 2011 Moderator Amy Young Unit Chief, Specialty National Programs Office of Workforce Investment (OWI) Employment and Training Administration (ETA)

9. 9 Work Opportunity Tax Credit (WOTC) & the VOW Act of 2011 Featured Speakers Presenters  Carmen Ortiz, WOTC National Coordinator OWI/ETA ▪ Elizabeth Purcell, Senior Technician Reviewer, Office of Chief Counsel IRS, Department of Treasury Moderator  Amy Young, Specialty National Programs, Unit Chief, OWI/ETA

10. 10 Work Opportunity Tax Credit (WOTC) & the VOW Act of 2011 Presenter Carmen Ortiz WOTC National Coordinator OWI/ETA

11. 11 Work Opportunity Tax Credit (WOTC) & the VOW Act of 2011 What’s in It for You?  Answers directly from IRS on Frequently Asked Questions;  Final interpretation & clarification on e-filing, “e-signatures” vs. “wet signatures” and by whom and faxing. Submitting IRS Form 8850…

12. 12 Work Opportunity Tax Credit (WOTC) & the VOW Act of 2011  Provide an overview of the VOW Act Provisions and WOTC;  Explain Interim Instructions & OMB approved ETA revised program forms; and  Discuss ”documentation” required for all veterans. Agenda/Objectives (Cont.)

13. 13 Work Opportunity Tax Credit (WOTC) & the VOW Act of 2011 Work Opportunity Tax Credit - Overview  What is WOTC? –A Federal tax credit available to employers for hiring individuals from certain target groups who have consistently faced significant barriers to employment.  The WOTC only applies to new employees.  Before claiming WOTC on a federal tax return, employers must first apply for and receive certification from a State Workforce Agency that the new hire meets the required qualifications for the target group.

14. 14 Work Opportunity Tax Credit (WOTC) & the VOW Act of 2011 VOW to Hire Heroes Act (the VOW Act) of 2011 (P.L. 112-56) Section 261 and WOTC…  The bill was signed into law by President Obama on November 21, 2011.  Applies to Veterans hired on or after Nov. 22, 2011 and before January 1, 2013.  Extended & amended the Veteran receiving Supplemental Nutrition Assistance Program (SNAP) benefits & the Disabled Veteran groups, created 2 new unemployed veteran categories and increased certain wages & credits.

15. 15 Work Opportunity Tax Credit (WOTC) & the VOW Act of 2011 Interim Instructions for SWAs & Employers  On December 2011, ETA issued “Interim Instructions” for SWAs and Employers as follows: –Interim Instructions - permitting them to use the Aug. 2009 ETA Form 9061 to request certification from the SWAs for Veterans hired, and for SWAs to accept and process those forms until ETA and IRS could issue final forms and guidance; and  Those Instructions – –revised and issued again in April 2012, –Extending the “transition period” pending OMB final approval and extension of the revised program forms.  NEW! OMB has approved the updated forms with an expiration date of June 30, 2015. ETA will post the forms to the WOTC national website in July & issue a TEGL with specific guidance for SWAs and interested parties.

16. 16 Work Opportunity Tax Credit (WOTC) & the VOW Act of 2011 VOW Act of 2011 Highlights…  The VOW Act did not extend: –the two ARRA groups that expired on Dec. 2010: 1) Disconnected Youth and 2) Unemployed Veterans; nor –the WOTC non-veteran groups, that expired December 31, 2011. –TEGL 15-11 - provides information on acceptable activities for SWAs and Employers during this authorization lapse.

17. 17 Work Opportunity Tax Credit (WOTC) & the VOW Act of 2011 VOW Act of 2011 Highlights…  TEGL 30-11 - provides policy guidance to the SWAs’ for administration of the new VOW Act changes and provisions, and to employers information on the new provisions and how to submit certification requests effectively.  The VOW Act - –Extended the current Veteran group receiving SNAP benefits (same wages & tax credit); –Extended the current Disabled Veteran group (same wages and tax credit); –Extended the current Unemployed Disabled Veteran for 6 months (with increased wages set at $24,000 and a maximum $9,600 tax credit) ;

18. 18 Work Opportunity Tax Credit (WOTC) & the VOW Act of 2011 VOW Act of 2011 Highlights…  The VOW Act - (Cont.) – Extended the WOTC, for the first time, to certain 501(c) “tax-exempt” organizations; and – Created two “Unemployed Veteran” categories: Veterans unemployed for at least 4 weeks Veterans unemployed for at least 6 months

19. 19 Work Opportunity Tax Credit (WOTC) & the VOW Act of 2011 Documentary Evidence for Periods of Unemployment  To Determine if the Required Unemployment Periods were met, employers or SWAs are to use: – UI Claims Records, or – UI Wage Records.  Next Slide Presents:  percentages based on number of “hours worked” by the veteran, and  the different increased wages and tax credits employers can claim for hiring veterans.

20. 20 Work Opportunity Tax Credit (WOTC) & the VOW Act of 2011 VOW Act Increased Wages and Tax Credits TARGET GROUP Max Tax Credit (25% works 120 hrs) Max Tax Credit (40% works 400 hrs) Wages Vet Receiving SNAP Benefits $1,500$2,400$6,000 Disabled Vet (Hired within 1 yr) $3,000$4,800$12,000 Disabled Vet (unemployed 6 months) $6,000$9,600$24,000 Unemployed Vet (4 weeks) $1,500 $2,400 $6,000 Unemployed Vet (6 months) $3,500$5,600 $14,000

21. 21 Work Opportunity Tax Credit (WOTC) & the VOW Act of 2011 Eligibility Determinations & Documentation…  According to Sec. 51(d)(3) of the Internal Revenue Code a Veteran is an individual who: –Served on active duty for a period of more than 180 days in the Armed Forces of the USA, or –Was discharged from active duty for a service-connected disability, and –Did not have any day during the 60-day period prior to the hiring date, which was a day of “extended active duty” in the Armed Forces of USA  To establish that the new hire is a Veteran, employers may submit to a SWA: − Form DD-214- Letters of Separation* –Discharge Papers - Reserve Unit Contacts

22. 22 Work Opportunity Tax Credit (WOTC) & the VOW Act of 2011 Documentation for Disabled Veterans  Employers/Consultants –No longer can use FL-21-802 - to establish that the Veteran was discharged due to a “service- connected disability & is eligible for compensation. –Document was discontinued by the Department of Veteran Affairs. –Acceptable Documentation Includes: Letters of Separation or related documents (LOS) on Agency letter-head or having an Agency stamp and signed by the individual who verified the disability information (Sec. 7, pp, 4-5, TEGL 30-11); LOS can also be used to establish Veteran status.

23. 23 Work Opportunity Tax Credit (WOTC) & the VOW Act of 2011 Outreach Toolkit & WOTC National Website  SWAs, Partners, PAs, Employers and Their Representatives… –Can now download “free of charge” the following tools for conferences, meetings or recruitment activities of all sizes and types available at: www.doleta.gov/wotc: www.doleta.gov/wotc VOW Act Fact Sheet WOTC Program Fact Sheet WOTC and Veteran Brochure for Employers WOTC Program Brochure for Employers Directories of WOTC Regional and State Coordinators Current Advisories with program guidance (TEGL 30-11 (VOW Act) & TEGL 15-11 (Hiatus)).

24. 24 Work Opportunity Tax Credit (WOTC) & the VOW Act of 2011 Outreach Toolkit & WOTC National Website (Cont.)  Other tools and documents that SWAs and employers can now download “free of charge” include: Application Forms (IRS Form 8850 and ETA Form 9061 or 9062);  Spanish Versions of Forms 8850 and 9061- to help Spanish speaking applicants understand these two forms;  Access to links to: IRS, HUD, HHS, USDA, VA and other related Federal partners;  All available at: www.doleta.gov/wotcwww.doleta.gov/wotc

25. 25 Work Opportunity Tax Credit (WOTC) & the VOW Act of 2011 Updated OMB Approved Program Forms  ETA Forms 9061 – 9063, 9065 and 9058 were approved by OMB with an expiration date of June 30, 2015.  Updates include for: –ETA Forms 9061, 9062 and 9063: 1) Removal of boxes for the two expired ARRA* groups, 2) Removal of Summer Youth box due to expiration of Empowerment Zones, and 3) addition of boxes for all VOW Act categories and related provisions for veterans. Instructions were also updated. –* Note. The SAF is no longer a valid form. –ETA Form 9058 – Report 1: Besides the revisions above mentioned, the Instructions to this report include a simple yet uniform “alpha-numeric” classification system developed to help the SWAs and employers communicate and identify the extended veteran groups, the 2 new unemployed categories and the quarterly program data reported for each group.

26. 26 Work Opportunity Tax Credit (WOTC) & the VOW Act of 2011 Alpha-Numeric Classification ETA Form 9058 – Report 1 (See Instructions for this form) Part II. CHARACTERISTICS OF CERTIFIED INDIVIDUALS I.) By Target Group (a) No. of Certifications from CCs (b) No. of Certified Individuals J) By Occupation (a) No. Certified Individuals K) By Starting Hourly Wage 1. IV-A TANF Recipient 2Ba. Veteran Receiving SNAP Benefits (V) 2Bb. Disabled Veteran (DV) 2Bc. DV Unemployed for 6 months 2Bd. V Unemployed for 4 weeks 2Be. V Unemployed for 6 months 3. Ex-Felon 4. Designated Community Resident 5a. Voc. Rehab Referral

27. 27 Work Opportunity Tax Credit (WOTC) & the VOW Act of 2011 Internal Revenue Service (IRS) Notice 2012-13  On Feb. 9, 2012 IRS published Notice 2012-13 It is available at: –www.irs.gov, orwww.irs.gov –www.doleta.gov/wotcwww.doleta.gov/wotc  Notice 2012-13 provides –SWAs, employers, and “tax-exempt” organizations information and interpretation of the VOW Act provisions and new filing options for certification requests to the SWAs.

28. 28 Work Opportunity Tax Credit (WOTC) & the VOW Act of 2011 Next Trainer: Elizabeth Purcell, Senior Technician Reviewer, Office of Chief Counsel IRS/Department of Treasury

29. 29 Work Opportunity Tax Credit (WOTC) & the VOW Act of 2011 WOTC for qualified tax-exempt organizations WOTC for qualified tax-exempt organizations which hire qualified veterans --  Qualified tax-exempt organizations (501(c))  Credit = 16.25% of qualified 1 st year wages for at least 120 hours of service  Credit = 26% of qualified 1 st year wages for at least 400 hours of service  Credit is against payroll taxes.

30. 30 Work Opportunity Tax Credit (WOTC) & the VOW Act of 2011 Form 8850 filed electronically or by fax IRS guidance:  Ann. 2002-44 (2004) (electronic)  Notice 2012-13 (February 2010) (electronic and fax)

31. 31 Work Opportunity Tax Credit (WOTC) & the VOW Act of 2011 Announcement (Ann.) 2002-44 Ann. 2002-44 – SWA must be willing and able to accept electronic filing of Form 8850. Ann. 2002-44 – overview of the 5 requirements: 1. Reliability of electronic system 2. Same information as paper Form 8850 3.Jurat and signature of applicant and employer – electronic signature: ID applicant and employer and authenticate and verify submission.

32. 32 Work Opportunity Tax Credit (WOTC) & the VOW Act of 2011 Ann. 2002-44 (Cont’d) 5 requirements cont’d: 4.Employer must be able to provide IRS w/ hard copy of form and establish that employer sent form to the SWA. 5.Retention of Forms 8850 by employer and SWAs. Ann. 2002-44 still in effect.

33. 33 Work Opportunity Tax Credit (WOTC) & the VOW Act of 2011 Notice 2012-13 Form 8850 with electronic signatures Employer can follow Ann. 2002-44 or follow alternate procedure in Notice 2012-13 Overview of Notice 2012-13: 1. Applicant signs Form 8850 electronically, then sends electronically to employer; 2. Employer prints out Form 8850, and then employer signs Form 8850 in ink; 3. Employer sends hard copy of Form 8850 to SWA by mail or by fax (if SWA accepts faxed Forms 8850).

34. 34 Work Opportunity Tax Credit (WOTC) & the VOW Act of 2011 Notice 2012-13 Form 8850 with electronic signatures (Cont’d) Notice 2012-13 – specifics 1.Applicant’s electronic signature- same 5 reliability, verification, and record retention requirements as in Ann. 2002- 44. 2.Printed-out Form 8850 will show “signed electronically” for applicant’s signature.

35. 35 Work Opportunity Tax Credit (WOTC) & the VOW Act of 2011 Frequently Asked Questions  Q. Do states need prior approval to implement electronic submission of Form 8850?  No. SWAs may implement electronic filing as long as all of the requirements in IRS Announcement 2002-44 and IRS Notice 2012-13 are met. SWAs do not need prior approval from either ETA or the IRS for electronic submission of Form 8850.

36. 36 Work Opportunity Tax Credit (WOTC) & the VOW Act of 2011 Frequently Asked Questions  Q. Can SWAs return a Form 8850 to an employer, that was submitted in paper copy or by fax, because it says “electronically signed” in the signature block?  A. No. SWAs cannot return timely-filed 8850s that say “electronically filed” on the signature block.  An employer may print out a paper copy of the 8850 that was signed electronically and transmit the paper copy to the SWA by mail or fax.  The name of the new hire or the employer is not required to be printed on the signature block when the 8850 is “e- signed” by either party.

37. 37 Work Opportunity Tax Credit (WOTC) & the VOW Act of 2011 Notice 2012-13 filing Form 8850 by fax SWAs have the option of whether or not to accept Form 8850s sent to the SWA by fax. Requirements for faxed Form 8850: 1.Same information as paper Form 8850; 2.4 signature and transmission requirements

38. 38 Work Opportunity Tax Credit (WOTC) & the VOW Act of 2011 Notice 2012-13 filing Form 8850 by fax (Cont’d)  4 signature and transmission requirements:  1. Original paper Form 8850 signed by applicant and employer.  2. Form 8850 signed by applicant delivered to employer in person, by mail or by fax.

39. 39 Work Opportunity Tax Credit (WOTC) & the VOW Act of 2011 Notice 2012-13 faxed Form 8850 (Cont’d)  4 signature and transmission requirements cont’d :  3. Employer signs Form 8850 signed by applicant (or the fax of that Form 8850)  4. Employer mails Form 8850 to the SWA; or submits by fax to those SWAs accepting faxed Forms 8850.

40. 40 Work Opportunity Tax Credit (WOTC) & the VOW Act of 2011 IRS Forms 5884 and 5884-C  Form 5884 for taxable employers to claim WOTC  Form 5884-C for qualified tax-exempt employers to claim WOTC on payroll taxes  To obtain forms –  www.irs.gov click on “Forms and Publications”, click on “All Forms and Publications – PDF” then enter Form number in search box. www.irs.gov

41. 41 Work Opportunity Tax Credit (WOTC) & the VOW Act of 2011 Frequently Asked Questions  Q3: Is there a restriction as to what combination of e-signatures and wet ink signatures employers and employees are allowed for e-filing, fax filing, or paper filing Form 8850? Are all combinations allowed?  A3: Section IV of IRS Notice 2012-13 (page 8) permits the following combinations of e-signatures and ink signatures:  Both employer and employee sign electronically.  Employee signs electronically and employer signs in ink.  An ink signature by the employee and an e-signature by the employer is not permitted

42. 42 Work Opportunity Tax Credit (WOTC) & the VOW Act of 2011 Frequently Asked Questions  Q4: Are states required to accept Form 8850 submitted by fax?  A4: No. While IRS Notice 2012-13 does permit the submission of Form 8850 by fax, states are not required to accept 8850s through fax filing. Employers/consultants should contact the WOTC coordinator in their state to determine if fax filing is possible. (A Directory of state WOTC coordinators is available at: http://www.doleta.gov/business/incentives/oppta x/contacts.cfm) http://www.doleta.gov/business/incentives/oppta x/contacts.cfm

43. 43 Work Opportunity Tax Credit (WOTC) & the VOW Act of 2011 Frequently Asked Questions  Q5: Does the IRS guidance on Form 8850 regarding electronic signatures and submission by fax apply to all WOTC target groups or just the Veteran categories authorized under the VOW to Hire Heroes Act?  A5: The guidance in IRS Notice 2012-13 for electronic signatures and fax submission for Form 8850 applies to all targets groups authorized under WOTC. Therefore, when the non-veteran WOTC groups are re-authorized by Congress, this part of the guidance will also apply to those target groups as well.

44. 44 Work Opportunity Tax Credit (WOTC) & the VOW Act of 2011 Please enter your questions into the Chat Room! Question and Answer Period

45. 45 Work Opportunity Tax Credit (WOTC) & the VOW Act of 2011 Share Your Ideas with Your Peers! Share your demand-driven strategic plans, models, innovations, resources, and ideas! You have the option to submit content for review by uploading the resource or providing a link to the resource.

46. 46 Work Opportunity Tax Credit (WOTC) & the VOW Act of 2011 Access to Webinar Resources WEBINAR RESOURCES: Recordings and transcripts are available within 2 business days after the event.

47. 47 Work Opportunity Tax Credit (WOTC) & the VOW Act of 2011 Stay Informed, Get Connected!

48. 48 Work Opportunity Tax Credit (WOTC) & the VOW Act of 2011 www.workforce3one.org For more information about the Workforce Investment System:  Visit www.careeronestop.orgwww.careeronestop.org  Call 1-877-US2-JOBS