Work Opportunity Tax Credit Backlog Funding Allotments for Fiscal Year 2025

The U.S. Department of Labor’s Employment and Training Administration (ETA) has issued Change 2 to Training and Employment Guidance Letter (TEGL) No. 08-24, dated June 5, 2025. This guidance announces the full fiscal year (FY) 2025 Work Opportunity Tax Credit (WOTC) funding allotments, including the remaining balance of funds available to state workforce agencies (SWAs). The WOTC program incentivizes the hiring of individuals who face significant barriers to employment by providing federal income tax credits to employers. While the WOTC tax provisions are administered by the Internal Revenue Service under the Department of the Treasury, the U.S. Department of Labor provides grants to states for administering the program. The total full-year FY 2025 allotment amounts to $18,485,000. Of this, $4,101,822 and $4,253,398 were already distributed under two previous continuing resolutions. The remaining $10,129,780 is being allocated based on an administrative formula that considers each state’s share of issued certifications and denials during FY 2024 and the state’s civilian labor force. A minimum allotment of $94,957 is applied, and allotment changes are capped between 95 percent (stop-loss) and 120 percent (stop-gain) of the previous year’s share. Each state must submit a completed, electronically signed SF-424 form through Grants.gov within 30 days of this TEGL's issuance to receive their share. The grant also announces that 29 states will receive additional funding for WOTC backlog relief and system modernization. The available $2.5 million is distributed among these states in three tiers: $50,000, $75,000, and $100,000, depending on each state’s demonstrated need, size, and proposed use of funds. These funds aim to enhance technological systems, reduce backlogs, or implement staff support. The selection was based on application narratives, financial reporting from FY 2023 and FY 2024, and backlog analysis. States with low expenditure rates were excluded from the award. To apply, each SWA must access the appropriate opportunity number on Grants.gov—either “ETA-WOTC-TEGL-08-24-C2” for general funding or “ETA-WOTC-TEGL-08-24-C2-BACKLOG” for backlog funding. States must ensure that their Unique Entity Identifier (UEI) is valid and registered in SAM.gov. Applications must be marked as “continuation” and reflect state-specific amounts listed in the attachment to the TEGL. The Catalog of Federal Domestic Assistance number for this grant is 17.271. SWAs must comply with quarterly reporting requirements, submitting financial reports using ETA Form 9130 and performance reports using ETA Form 9058 through the SWARAS system. Reports are due within 45 days of the close of each quarter. These submissions ensure transparency and support the management and performance evaluation of the WOTC program. For questions or technical issues, applicants are directed to the Grants.gov support center via phone or email. Inquiries about the TEGL can also be directed to the Regional WOTC Coordinators listed on the WOTC website.

Do not resubmit previously submitted indirect cost estimates Ensure the application is submitted within 30 calendar days Use the exact opportunity numbers for backlog or general funding when applying through Grants.gov Contact Grants.gov for support as needed