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A Training Webinar for Regional & State

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1 A Training Webinar for Regional & State
Overview of Recovery Act of 2009, 2007 and 2006 Legislative Changes to the Work Opportunity Tax Credit (WOTC) Program, New Forms, and Extension of Reporting Requirements: A Training Webinar for Regional & State Coordinators & Other Federal/State Partners September 8, 2009 1:00 PM – 3:30 PM A Bridge to the Future… WEBINAR TITLE SLIDE FACILITATOR: (Click to next slide)

2 Webinar Platform: Participant View
Presentation Slide Area Attendee List Chat Room WELCOME SLIDE FACILITATOR: There are 5 areas that I would like to call to your attention: The first is the Presentation Slide area; it’s where the main visual content for the webinar will appear and it will be the main focus of your attention throughout the webinar. The second is the Attendee List; it’s located on the top left of your screen and it displays a list of all attendees of this webinar. The third area is the Chat Room, also at the left of the screen, directly below the attendee list, it allows you to ask questions, or make comments during the webinar. We are using a ONE-WAY conference call for the audio portion of this webinar—you can hear the presenters, but they cannot hear you. Due to the large number of attendees, and to control background noise and interruptions, we’re going to rely on this CHAT feature to solicit your questions throughout the session. Those of you attending with a group will want to designate a “scribe” to represent your group by entering questions as they occur ANY TIME throughout the session. Your questions are automatically transmitted to the presenters and will be answered during dedicated question and answer periods. The fourth area is the Status Options Toolbar located at the bottom left of your monitor. Once you click the drop-down arrow, you’ll be presented with a few options to choose from so that you can give the speakers real-time feedback in a shorthand way. The fifth area is the Full Screen option. If you select the Full Screen option, the PPT will enlarge. If any images or text appear too small, please select the Full Screen option, but please keep in mind that you won’t be able to use the Chat to submit any questions unless you deselect the Full Screen option when you are in Full Screen mode. IF POLLING WILL BE CONDUCTED, INFORM USERS THE POLLING WINDOWS WILL NOT APPEAR IF THE USER IS IN FULL SCREEN MODE. IF SCREEN SHARING WILL BE CONDUCTED, INFORM USERS THAT WHAT IS BEING BROADCAST WILL NOT APPEAR IF THE USER IS IN FULL SCREEN MODE. (Click to next slide) Full Screen Status Options

3 Submitting Questions To submit a question or comment, type the question in the text field and click the arrow button. Please enter the name to whom the question is directed. Your name, the text “Submitted Question,” and your question will appear in red on your screen, indicating successful submission. Questions are directly transmitted to presenters—no other participants will see your questions. Text Field CLOSED CHAT SLIDE FACILITATOR: To submit a question using the Chat feature, type the question in the text box and click the arrow button to submit. When you submit a question, your name, the text “Submitted Question,” and your question will appear in red on your screen, indicating successful submission. Note that questions are directly transmitted to presenters—no other participants will see your questions. Again, please be sure to enter your questions at ANY TIME throughout our session. We’ll make time to answer as many of them as possible during the session. (Click to next slide) Gary, where can I find today’s PPT? Arrow Button

4 Practice In the Chat Room, please type the name of your organization, your location, and how many people are attending with you today. PRACTICE SLIDE FACILITATOR: In order to get an idea of who is attending this webinar with us today, and to give you a chance to practice using the Chat feature, please type the name of your organization, your location, and how many people are attending with you today in the Chat Room, and then click the arrow button to submit your entry. (NOTE: WAIT FOR RESPONSES TO BEGIN APPEARING IN PRESENTER CHAT, ACKNOWLEDGE SOME OF THOSE RESPONSES, AND CLICK TO NEXT SLIDE)

5 Access to Webinar Resources
Recordings and transcripts are available within 2 business days after the event. & Password WEBINAR RESOURCES SLIDE FACILITATOR: To access today’s recording once it’s posted, log in to your Workforce3 One account. Once you log into your account, you’ll automatically be taken to your Dashboard page. Under the Attended Events section of your Dashboard page, you’ll see the titles of the webinar sessions you’ve registered to attend. To access a specific session’s recording, transcript, PPT, and any handouts that were made available before the webinar or any new resources made available after the webinar, “mouse” over and left-click the session title. Please note: The recording and transcript of today’s webinar will be posted within two business days, and other resources for download will be posted as they become available. (Click to next slide)

6 Featured Speakers Presenters Moderator
Carmen Ortiz, WOTC National Coordinator, Department of Labor, Employment and Training Administration, Division of Adult Services Elizabeth Purcell, IRS Counsel, Internal Revenue Service-Department of Treasury Thomas P. Crowley, UI Tax Chief, Department of Labor, Employment and Training Administration, Office of Workforce Security Phil Graham, Community Planning Specialist, Department of Housing and Urban Development Moderator Christine Ollis, Division Chief, Department of Labor, Employment and Training Administration, Division of Adult Services FEATURED PRESENTERS/MODERATOR SLIDE FACILITATOR/MODERATOR NAME HERE: (Click to next slide)

7 Webinar’s & TA Objectives…
At the conclusion of this webinar, Regional and State Coordinators will understand: how to implement the amendments & legislative provisions introduced by Public Laws (Recovery Act), and in a effective manner; the statutory definitions and requirements for the two new target groups introduced by the Recovery Act; the documentation required from employers and/or consultants to conduct timely target group eligibility determinations in these two new groups; become familiar with the changes made (to update) and use all OMB approved August 2009 processing, administrative and reporting forms; learn how to use the new information to develop effective outreach and promotional tools to educate employers and jobseekers; and how to use the newly updated Addendum & TA and Compliance Review Guide and Outreach Tool Kit: (1 Fact Sheet and 2 Brochures)

8 Legislative Background
The Work Opportunity Tax Credit (WOTC) Program - created by the Small Business Job Protection Act of 1996. The Welfare-to-Work Tax Credit (WtWTC) - created by the Taxpayer Relief Act of 1997 Department of Labor, Employment and Training Administration The WOTC & the WtWTC continued as separate tax credits until Dec P.L repealed Sec. 51A of the IRC by merging the WtWTC into the WOTC Program as another target group.

9 The Consolidated WOTC Program…
What is the WOTC Program?  A tax credit incentive created in 1996 to:  encourage private sector employers - to create jobs and training opportunities for disadvantaged individuals from 12 target groups with significant barriers to employment.  WOTC Program was recently extended – through August 31, 2011 (w/o an authorization lapse)  WOTC focuses on: basic entry-level skills training, long-term employment, and retention.

10 WOTC Target Groups… WOTC 7 (1996) 1 (1997) Total 8 WtWTC Total 9

11 WOTC Target Groups… WOTC Today… Total - 12 7 (1996) 1 (1997) 1 (2005)*
2 (2009) Total

12 WOTC Target Groups Qualified Long-term TANF Recipient (WtWTC)*
Qualified IV-A (TANF) Recipient Qualified Veteran* Qualified Ex-felon* Designated Community Resident (HR Youth)* Vocational Rehabilitation Referral Qualified Summer Youth Qualified Food Stamp Recipient Qualified SSI Recipient Hurricane Katrina Employee (Does not require certification) Unemployed Veteran* Disconnected Youth* (* - denotes legislative change)

13 Current Legislative Changes…
Elizabeth Purcell IRS Counsel Internal Revenue Service-Department of Treasury PRESENTER/MODERATOR I.D. SLIDE (NOTE: USE THIS SLIDE TO TRANSITION BETWEEN SPEAKERS AND INTRODUCE NEW SPEAKERS/PRESENTERS DURING THE PRESENTATION.) FACILITATOR: (Click to next slide)

14 Current Legislative Changes…
American Recovery and Reinvestment Act (ARRA) of (Recovery Act) 2009 (P.L ) – signed into law on February 17, § 1221 amends § 51 of IRC by adding two new target groups: Unemployed Veterans, and Disconnected Youth Note. Members of these two groups can begin work for an employer during 2009 and 2010. IRS Notice – provides for a Transition Rule Period. Currently, under Notice … Any employer who hires a member of any of the 2 new grps. after December 31/08 & before September 17/09, will meet the timely filing requirement, if the employer submits IRS Form 8850 (& ETA 9061) to the SWA not later than Oct. 17/09

15 Reinvestment Act of 2009 (Cont’d)
American Recovery & Reinvestment Act of 2009 (Cont’d) Who is a Veteran? Sec. 51 of the IR Code defines a Veteran as an individual who: Served on active duty for a period of more than 180 days, or Was discharged or released from active duty for a service connected disability. Who qualifies as a member of the Unemployed Veteran group? All individuals certified by a SWA as: having been discharged or released from active duty at any time during the 5-yr., period ending on the hiring date; and having received UI benefits for not less than 4 weeks during the 1-yr. period ending on the hiring date.

16 Reinvestment Act of 2009 (Cont’d)
American Recovery & Reinvestment Act of 2009 (Cont’d) Who qualifies as member of the Disconnected Youth group? All individuals certified by a SWA as: having attained age 16 but not age 25 on the hiring date; not regularly attending any secondary, technical, or post-secondary school during the 6-month period before the hiring date; not being regularly employed during such 6-month period; and not readily employable by reason of lacking a sufficient number of basic skills.

17 Reinvestment Act of 2009 (Cont’d)
American Recovery & Reinvestment Act of 2009 (Cont’d) Documentation and/or collateral contacts required for the new target groups’ eligibility determination by the SWAs. Unemployed Veterans. Criteria and documentation required from employers/consultants and new hires: To determine that the individual satisfies the definition of a Veteran (i.e., having served on active duty for a period of more than 180 days, or having been discharged or released from active duty for a service- connected disability: DD-214. and FL (Issued ONLY by DVA. Certifies a veteran’s service-connected disability, or Discharge papers

18 Reinvestment Act of 2009 (Cont’d)
American Recovery & Reinvestment Act of 2009 (Cont’d) Documentation and/or collateral contacts required for the new target groups’ eligibility determination (Continued…). Unemployed Veterans. Criteria and documentation required from employers/consultants and new hires: To determine that the veteran was discharged or released from active duty in the Armed Forces at any time during the 5-year period ending on the hiring date: DD-214, or Discharge papers

19 Reinvestment Act of 2009 (Cont’d)
American Recovery & Reinvestment Act of 2009 (Cont’d) Documentation and/or collateral contacts required for the new target groups’ eligibility determination (Continued…). Unemployed Veterans. Criteria and documentation required from employers/consultants and/or new hires: To determine if a veteran has received UI benefits for the required period: UI Claims Records

20 Reinvestment Act of 2009 (Cont’d)
American Recovery & Reinvestment Act of 2009 (Cont’d) Documentation and/or collateral contacts required for the new target groups’ eligibility determination by the SWAs. Disconnected Youth. Criteria and documentation required from employers/consultants and new hires: Note. The individual must meet all 4 criteria to be certified as a member of the Disconnected Youth group. To determine that the youth is at least age 16 but not yet 25 on the hiring date: Birth Certificate Driver's License Work Permit Copy of Hospital Record of Birth School I.D. Card/School Records Federal/State/Local Government ID

21 Reinvestment Act of 2009 (Cont’d)
American Recovery & Reinvestment Act of 2009 (Cont’d) Documentation and/or collateral contacts required for the new target groups’ eligibility determination by the SWAs. Disconnected Youth. Criteria and documentation required from employers/consultants and new hires: Note. The individual must meet all 4 criteria to be certified as a member of the Disconnected Youth group. To determine whether the youth has been regularly attending a secondary, technical, or post secondary school for more than an average of 10 hours per week, in the past 6 months, not counting periods during which the school was closes due to scheduled vacation: Signed letter from parent/guardian (if minor) attesting to the information above, and/or A signed Self-Attestation form explaining that the applicant is not or has not attended any secondary, technical or post- secondary school for more than 10 hours per week during the 6-month period prior to the hiring date.

22 Reinvestment Act of 2009 (Cont’d)
American Recovery & Reinvestment Act of 2009 (Cont’d) Documentation and/or collateral contacts required for the new target groups’ eligibility determination by the SWAs (cont)… Disconnected Youth. Criteria and documentation required from employers/consultants and new hires: Note. The individual must meet all 4 criteria to be certified as a member of the Disconnected Youth group. To determine whether the youth has not been regularly employed during the 6-month period before the hiring date: UI Wage Records To determine whether the youth is not readily employable due to lack of basic skills: Self-Attestation that the youth does not have a High School Diploma or GED, or Self-Attestation that the youth has a certificate of graduation from a secondary school or a GED certificate awarded no less than 6 months preceding the youth’s hiring date, and has not held a job (other than occasionally) or been admitted to a technical, or post-secondary school since receiving such certificate.

23 Accessing Unemployment Insurance Claim and Wage Information
Thomas P. Crowley UI Tax Chief Department of Labor Employment and Training Administration Office of Workforce Security

24 Guidance for Verifying “Not Regularly
Employed” Status for Disconnected Youth IRS Notice and Disconnected Youth Certification: Defines the legal standard to meet the “not regularly employed” statutory criterion as follows: A Disconnected Youth meets the unemployment requirement if, during each consecutive 3-month period within the 6 months preceding his/her hiring date, the youth earned less than an amount equal to the gross amount he/she would have been paid at the minimum wage if he/she worked 30 hours every week during the 3-month period. This means that, if the youth were hired June 1, he/she must pass the test for each of the following periods:  DEC – FEB; JAN – MAR; FEB – APR; and MAR – MAY.

25 IRS Notice 2009-28 and Disconnected Youth Certification (Cont.):
Guidance for Verifying “Not Regularly Employed” Status for Disconnected Youth (Cont’d) IRS Notice and Disconnected Youth Certification (Cont.): SWAs do not have to test eligibility in each 3-month period. SWAs must test the most recent completed calendar quarter.  If youth fails to meet the criteria for the tested quarter, he/she fails the legal standard.  If youth passes the tested quarter, he/she will qualify. Note. IRS – believes that the modified check is sufficient to identify a substantial proportion of the youth who are not qualified for certification.

26 Accessing UI Claim & Wage Data
Verification: Accessing UI Claim & Wage Data SWAs need to use UI Claims Records -  to verify receipt of UI benefits by Unemployed Veterans (UVs). SWAs need to use UI Wage Records -  to verify that the Disconnected Youth has not been “regularly employed (other than occasionally).” Note. SWAs must negotiate w/the UI state agency to determine the most effective way to access this information.

27 Accessing UI Claim & Wage Data
Example: Accessing UI Claim & Wage Data If a youth was hired on September 8, 2009: Most recent completed calendar quarter = April 1 – June 30 Federal minimum wage during that period = $6.55 13 weeks X 30 hours X $6.55 = $2,827.50 SWA would need to verify that the youth had less than $2, in wages reported by employer(s) for the period 4/1 through 6/30

28 Accessing UI Claim & Wage Data
Example : Accessing UI Claim & Wage Data If a veteran was hired on September 8, 2009: Eligible if discharged between 9/8/04 and 9/7/09 Most recent completed 1 year period = 9/8/ /7/09 Must have been paid UI at least 4 weeks during the 1 year period Amount of UI payment not relevant – only that some UI was paid for 4 or more weeks SWA would need to verify the UI payments by accessing their UI benefit payment files to determine that 4 or more weeks of state or federal (EB) benefits were paid to the individual during the one year measurement period

29 Other Legislative Changes…
Carmen Ortiz, WOTC National Coordinator, Department of Labor, Employment and Training Administration, Division of Adult Services

30 Other Legislative Changes…
Tax Relief and Health Care Act of 2006 (P.L ) – signed on December 20, 2006 & reauthorized the WOTC, retroactively, to December 31, 2005: reauthorized the WOTC, for 2 yrs, through December 31, 2007 & introduced provisions to make it easier for the business sector to participate. Small Business and Work Opportunity Tax Act of 2007 (P.L ) – signed on May 25, 2007. Extended the WOTC, for a 44-month period, through August 31, 2011, -- historically, the longest authorization ever.

31 Legislative Highlights (Cont’d)
Tax Relief and Health Care Act of 2006 – the following statutory changes apply to individuals who began to work for an employer “on or after” Jan. 1/07. the earnings test for Ex-Felons was eliminated; the maximum age for Food Stamp Recipients was increased; the certification request filing deadline was increased; and the WtWTC provisions were merged into the WOTC.

32 Legislative Highlights (Cont’d)
Small Business and Work Opportunity Tax Act of 2007 – the following statutory changes apply to individuals who began to work for an employer “on or after” May 25, 2007 and “before” September 1, 2011. Renamed the High-Risk Youth group & called it Designated Community Resident (DCR); Amended the DCR definition and added Rural Renewal Counties (RRCs) as another residential location requirement; Defined a RRC as a county: outside a metropolitan statistical area as per OMB, & during the 5-yr., periods 1990 – 1994 & 1995, had a net population loss.

33 Legislative Highlights (Cont’d)
Small Business and Work Opportunity Tax Act of 2007 – statutory changes cont… apply to individuals who began to work for an employer “on or after” May 26, 2007 and “before” September 1, 2011. expanded the definition of a Qualified Veteran to include “disabled veterans” who are entitled to compensation for a service-connected disability, and who have a hiring date which is not more than 1 yr., after being released from active duty, or who were unemployed for a period or periods totaling at least 6 months. increased “qualified wages” for disabled veterans from $6,000 to $12,000.

34 Tax Credit Benefits… TIER 1:
Claiming the WOTC – is subject to employers meeting the “Minimum Employment or Retention Period” as follows: TIER 1:  WOTC is equal to 25% of “qualified” 1st-yr. wages if the “new hire” works at least 120 hours. TIER 2:  WOTC is equal to 40%, “qualified” 1st-yr. wages, if the “new hire” works at least 400 hours or more.

35 How to Figure the WOTC? 25% if works between 120 and 399 hrs. $1,500
TARGET GRP. RETENTION PERIOD & Credit Percentage MAXIMUM CREDIT WAGES & CREDIT CALCULATION VETERAN 25% if works between 120 and 399 hrs. $1,500 25% x $6,000 40% if works between 400 hrs. or more $2,400* 40% x $6,000 VET With a Service-Related Disability 25% if VET works between $3,000 25% x 12,000 40% if VET works $4,800** 40% x $12,000

36 Tax Credit Benefits (Cont’d)
For the 2-yr. Long-Term TANF new hire, the WOTC can be as much as:  40% of up to $10,000 in qualified first-year wages for a maximum credit of $4,000 (400 work hours or more)  50% of up to $10,000 in qualified second-year wages for a maximum credit of $5,000 (400 work hours or more) For a combined 2-year credit of as much as $9,000

37 There are two forms employers must complete for each new hire:
How Do Employers Apply? There are two forms employers must complete for each new hire: IRS Form 8850: “Pre-Screening Notice and Certification Request” Must be submitted with ORIGINAL signatures and dates (no exceptions) ETA Form 9061* – “Individual Characteristics Form” * An ETA Form 9062 can be sent if the new hire was pre-certified. However, these forms can ONLY be issued by a State Workforce Agency or a Participating Agency (PA).

38 What Does Timely Filing Mean?
To be considered timely, the IRS Form 8850, along with the ETA 9061 or ETA 9062, must be submitted to the employer’s SWA not later than the 28th calendar day* following the new employee’s employment-start date. * When the last day of the 28th calendar day period ends on a Saturday, Sunday or holiday, the next succeeding business day will be treated as the last day of the period (the 28th day). For a copy of the Directory of WOTC State Coordinators with the address of your state to mail the certification request, visit the WOTC Program website at:

39 Where Can Employers Go for More Information?
Employers & their representatives should visit WOTC’s webiste at: or Visit IRS’s website at: or Call their WOTC State Coordinator using the DIRECTORY available at the WOTC program’s website above.

40 Community Development Specialist
Office of Community Renewal Empowerment Zones & Renewal Communities U.S. Dept. of Housing and Urban Development Presenter: Phil Graham Community Development Specialist US Dept. of Housing and Urban Development 40

41 Address Locator (Cont'd)
41

42 RC/EZ boundaries change, so the Locator must change
Updating the Address Locator RC/EZ boundaries change, so the Locator must change In 2008, HUD expanded RCs and EZs in California and New Jersey We want users to have confidence in Address Locator updates 42

43 Measuring Performance
We at HUD want to measure employment credits, WOTCs, CRDs, etc. We are grateful to DOL for data on WOTC claims for hiring RC/EZ residents We hope to obtain better data from DOL on claims at state and MSA levels 43

44 Strong relationship with IRS has lead to more data on WOTC claims
HUD-IRS Partnership Strong relationship with IRS has lead to more data on WOTC claims GAO advised HUD and IRS to work more closely on tax incentive utilization We used data to show numbers of jobs influenced by RC/EZ employment credits claimed 44

45 Individual and Corporate Claims
IRS WOTC Data Individual and Corporate Claims Data at various geographic levels but with redactions The IRS data did not differentiate numbers among different eligible groups, e.g. veterans, ex-felons, food stamp recipients, etc. 45

46 THANK YOU FOR YOUR TIME! ANY QUESTIONS?
The End! THANK YOU FOR YOUR TIME! ANY QUESTIONS?

47 Please enter your questions into the Chat Room!
Question and Answer Period QUESTION & ANSWER PERIOD SLIDE FACILITATOR/MODERATOR or PRESENTER NAME HERE: (Click to next slide) Please enter your questions into the Chat Room!

48 Share Your Ideas with Your Peers!
Simply log on to Workforce3 One and look for the “Share Content” link located on the Homepage. Share your demand-driven strategic plans, models, innovations, resources, and ideas! SHARE YOUR IDEAS SLIDE FACILITATOR: Workforce3 One is a tool built for you and BY you, encouraging peer-to-peer learning and engagement among our multiple communities. The success of Workforce3 One depends on your contributions! Share your ideas, innovations, and more with others. We welcome suggestions for documents to share, programs to feature, and any relevant news or information you’d like to exchange with your colleagues. To submit your content, visit the Suggest Content page on the Workforce3 One webspace, which is located at the URL featured on this slide. (Click to next slide) Submit your content to Workforce3 One at:

49 Access to Webinar Resources
Recordings and transcripts are available within 2 business days after the event. & Password WEBINAR RESOURCES SLIDE FACILITATOR: To access today’s recording once it’s posted, log in to your Workforce3 One account. Once you log into your account, you’ll automatically be taken to your Dashboard page Under the Attended Events section of your Dashboard page, you’ll see the titles of the webinar sessions you’ve registered to attend To access a specific session’s recording, transcript, PPT, and any handouts that were made available before the webinar or any new resources made available after the webinar, “mouse” over and left-click the session title. Please note: The recording and transcript of today’s webinar will be posted within two business days, and other resources for download will be posted as they become available. (Click to next slide)

50 Stay Informed, Get Connected!
Workforce3 One: Communities of Practice Recovery Clearinghouse Live and Archived Webinars Podcasts Monthly Newsletters Over 2000 User-Generated Resources! For more information about the Workforce Investment System: Visit Call US2-JOBS STAY INFORMED/GET CONNECTED SLIDE FACILITATOR: As already noted, you can learn more and stay connected with trends and innovations by logging into Workforce3 One and our: Reemployment Works, Regional Innovation Grants, Registered Apprenticeship, and Driving Transformation Communities of Practice, but if you also want to get up to speed about what’s happening with the American Recovery & Reinvestment Act and how it might affect you, please visit the Recovery Clearinghouse section of Workforce3 One. You can also register to participate in live webinars or visit our archive of past webinars, which feature leaders and experts from industry and government. We also have podcasts for you to listen to from your computer, or you can even download them if you’re on the go! We encourage you to make note of Workforce3 One: It’s a powerful tool, funded by ETA and “powered” by YOU, so if you aren’t already registered, please register for our monthly newsletter so you can be updated about upcoming events and be informed about what’s happening in your field. Also, be sure to visit our database of resources, over 2000 of which were supplied by you, the Workforce3 One community! You can also learn more about the Workforce Investment System by visiting or by calling US2-JOBS. (Click to next slide)

51 THANKS! www.workforce3one.org THANK YOU SLIDE
FACILITATOR/MODERATOR NAME HERE: On behalf of Workforce3 One and today’s presenters, I’d like to conclude today’s session by thanking you all for your time, and we look forward to seeing you on future webinars! Thank you. (End)


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