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Status: Canceled

Tax Treatment of Payments to Participants Under the Job Training Partnership Act (JTPA)

To provide information to Native American grantees on the Internal Revenue Service's (IRS) position with respect to certain payments to participants enrolled in programs under JTPA.


All Native American Grantees


PAUL A. MAYRAND HERBERT FELLMAN Director Chief Office of Special Targeted Division of Indian and Programs Native American Programs Mr. Patrick J. O'Keefe A


February 05, 1985

Expiration Date
Rescissions:    None.
Text :
References. DINAP Bulletin 84-14, Master Plan System Instructions, p.9, Item (g); 20 CFR 632.81; 20 CFR 632.83; 20 CFR 632. 28(e); Job Training Partnership Act, -Section 142, October 13, 1982, P.L. 97-300. Background. Under JTPA, there are three types of payments which are made directly to participants and may be considered by the IRS as income for services rendered. They are: (a) wages paid by employers to individuals participating in on-the-job training programs; (b) wages paid by grantee to individuals participating in work experience programs; and (c) "needs-based payments" paid by the grantee to individuals participating in a variety of other authorized activities. The Department of Labor (DOL) requested the IRS to provide guidance on the tax treatment for these various payments to participants. This bulletin transmits the guidance provided by IRS on these issues. Action. Attached for your information is a copy of the IRS response to the DOL on the tax treatment of various payments to participants enrolled in JTPA activities. while the opening paragraph in the IRS letter indicates that IRS cannot provide any rulings on JTPA payments to participants at this time, the balance of the letter and further discussions by DOL staff with IRS staff indicated that the rulings cited in the response can be used as general guidance in determining the tax treatment for JTPA payments to participants. The attached letter provides significant guidance with respect to the three types of payments. IRS cautions that it is important to apply the tax principles to particular situations and not to apply them generally to all situations. The facts pertaining to each situation could be important. If there are concerns about particular circumstances, it is recommended that the circumstances be discussed with the local IRS office. Inquiries. Please address questions concerning this bulletin to your DINAP Federal Representative.

Attachments :
For a copy of attachment(s), please contact Brenda Tollerson at (202) 219-8502.

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