Work Opportunity Tax Credit Remaining Funding Allotments for Fiscal Year 2025

The U.S. Department of Labor’s Employment and Training Administration (ETA) released Change 2 to Training and Employment Guidance Letter (TEGL) No. 08-24, which details the remaining fiscal year (FY) 2025 Work Opportunity Tax Credit (WOTC) funding allotments. This updated guidance also introduces a new funding opportunity for 29 selected states to receive backlog award funding aimed at improving processing efficiency and alleviating backlogs through system modernization. These allocations are made possible through full-year FY 2025 appropriations passed under the Full-Year Continuing Appropriations and Extensions Act, 2025. The WOTC program provides federal tax credits to employers who hire individuals from certain targeted groups facing significant barriers to employment. ETA administers WOTC funding to State Workforce Agencies (SWAs), which in turn support employers’ processing of WOTC certification requests. The funding allotments are distributed based on a formula considering each state’s share of certifications issued, denials, and the size of their Civilian Labor Force, based on data from October 1, 2023, through September 30, 2024. This TEGL includes Attachment I, which provides the specific full-year allotments and remaining balances for each state after accounting for funding already distributed under earlier continuing resolutions. To apply for FY 2025 WOTC funding, SWAs must submit an electronically signed SF-424 Form via Grants.gov within 30 calendar days of the issuance date of this TEGL (June 5, 2025). States receiving backlog awards must submit a separate SF-424 Form indicating their specific award amounts. Application instructions include entering Catalog of Federal Domestic Assistance Number 17.271, the Unique Entity Identifier (UEI), and other specified data points. Applicants must also be registered with SAM.gov. Opportunity numbers for the funding are ETA-WOTC-TEGL-08-24-C2 for remaining balance funding and ETA-WOTC-TEGL-08-24-C2-BACKLOG for backlog award applications. The TEGL outlines that 29 states were selected for backlog award funding and placed into three funding tiers based on need and capacity to implement improvements. Tier 1 provides $50,000, Tier 2 offers $75,000, and Tier 3 awards $100,000. These selections were based on each state’s backlog severity, historical expenditure rates, and narrative proposals for system improvements. If a selected state fails to submit application materials on time or declines the award, the funds may be redistributed or reallocated to other eligible states. Reporting requirements for all grantees include quarterly submission of financial reports using ETA Form 9130 and performance reports through the State Workforce Agency Reporting and Analysis System (SWARAS) using ETA Form 9058. Both are due no later than 45 days after each quarter ends. Additional inquiries should be directed to regional WOTC coordinators listed on the Department of Labor’s website.

Ensure UEI is active in SAM.gov; Do not re-enter indirect cost data if previously submitted for CR1; Adhere strictly to the 30-day submission window.