Work Opportunity Tax Credit Initial Funding Allotments for Fiscal Year 2026

The Employment and Training Administration (ETA) has issued Training and Employment Guidance Letter No. 09-25, announcing Fiscal Year (FY) 2026 funding allotments for the Work Opportunity Tax Credit (WOTC) program. State Workforce Agencies (SWAs) are required to submit applications for these funds within 30 days of the letter's issuance. A total of $15,203,383 is available for WOTC administration. The WOTC, authorized until December 31, 2025, allows states to review and prepare certification requests even during authorization lapses but prohibits issuing certifications for new hires after January 1, 2026. Funds are primarily for processing certification requests for hires on or before December 31, 2025. Allotments are based on a formula considering state shares of certifications, denials, and Civilian Labor Force averages. SWAs must submit an SF-424 Form electronically via grants.gov, detailing their requested amount and indirect costs. The grants support SWAs in administering WOTC, including designating a State Coordinator, determining eligibility, issuing determinations, establishing operating procedures, developing backlog reduction plans, and maintaining quality review processes. These grants aim to increase employment opportunities for job seekers and facilitate tax credits for employers.