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State Tax Credits

States That Offer Tax Credits to Employers for Hiring Apprentices

Alabama

This law provides an income tax credit of $1,250 to an employer for each qualified apprentice of an employer, with an additional $500 to an employer for each qualified high school apprentice.  The law caps the cumulative tax credits allowed at $3,000,000 for the first two tax years following the passage of the bill and $5,000,000 for each tax year thereafter. This law also requires the Workforce Development Division of the Department of Commerce to provide an annual report to certain legislative committees regarding the effectiveness of the program.

http://www.apprenticeshipalabama.org/employers/

 

Arkansas

Act 1042 of 2017 provides for an income tax credit for each qualified youth apprentice who is at least 16 years of age and is employed to learn an apprenticeable occupation or is in an apprenticeship or work-based learning program. To claim the benefits, a taxpayer must obtain a certification from the Office of Apprenticeship of the U.S. Department of Labor or the Department of Career Education, certifying to the Department of Finance and Administration that the taxpayer has met all the requirements and qualifications.

A taxpayer who employs an apprentice is allowed an income tax credit in the amount of $2,000 or 10% of the wages earned by the youth apprentice, whichever is less, for each apprentice. The amount of the income tax credit claimed in a taxable year may not exceed the individual or corporate income tax otherwise due. Any unused credit may be carried forward for a maximum of two (2) consecutive taxable years.

https://www.dfa.arkansas.gov/excise-tax/tax-credits-special-refunds/business-incentives-and-credits/#Apprenticeship Program

Connecticut

Any taxpayer who employs an apprentice duly enrolled and registered under the terms of a qualified Manufacturing Program is entitled to a tax credit for each eligible apprentice of up to $7,500.00 maximum or 50% of actual wages, whichever is less, provided such apprenticeships meet the following requirements: a) The tax credit is limited to qualified Manufacturing Programs with apprenticeship periods of duration which are not less than 4,000 hours (2 years) and not more than 8,000 hours (4 years). b) The apprentice must be employed on a full time basis which is defined as working a minimum of 120 hours per month at the trade. Up to 80 hours may be applied during the tax year against the 120 hour limitation.

https://www.ctdol.state.ct.us/progsupt/appren/taxcr1.htm

Guam

Any business that employs apprentices may receive a tax credit against its business privilege tax liability equal to 50 percent of all eligible costs paid or incurred by a program participant to train an apprentice. Eligible costs include direct wages and benefits of the apprentice, instructor costs, training costs and personal protective equipment costs.

http://www.guamcourts.org/CompilerofLaws/GCA/22gca/22gc010.pdf

Illinois

Illinois provides a non-refundable credit against Illinois income tax for 100% of the qualified education expenses of a qualifying apprentice. The credit allowed is up to $3,500, per apprentice per tax year, for tuition, book fees, and lab fees at the school or community college in which the apprentice is enrolled. A taxpayer may be eligible for an additional $1,500 credit if the principal place of business is located in an underserved area or if the apprentice resides in an underserved area.  

http://www.ilga.gov/legislation/publicacts/101/PDF/101-0207.pdf

Louisiana

Any program sponsor (employer/contractor) who pays the wages of an apprentice that is registered with the Louisiana Workforce Commission, Apprenticeship Division may receive a tax credit equal to $1/hour worked per calendar year, with a maximum allowable amount for each apprentice of $1,000/year.

http://www.laworks.net/Downloads/App/RegisteredApprenticeshipTaxCreditGuide.pdf

Maryland

The Maryland Apprenticeship Tax Credit provides a State income tax credit to Registered Apprenticeship Sponsors or participating employers (Employer) which hire an eligible Registered Apprentice(s). The Employer may qualify for a $1,000 tax credit for each eligible Registered Apprentice.

http://www.labor.maryland.gov/employment/appr/apprtaxcreditinfo.shtml

Massachusetts

As of January 1, 2019, Massachusetts has offered a Registered Apprentice Tax Credit (RATC) to promote the expansion of registered apprenticeship into healthcare, technology, and manufacturing sectors. Employers in these sectors may be eligible for up to a $4,800 credit per qualified apprentice. Specifically, eligible employers that employ registered apprentices may apply for tax credits of up to $4,800 or 50% of wages paid, whichever is less, for each apprentice who meets the RATC program guidelines. Employers are eligible for up to $100,000 in credits each calendar year, and are eligible to apply for RATC once their apprentices have been employed for 180 days in a given calendar year.

https://www.mass.gov/how-to/apply-for-a-registered-apprentice-tax-credit-ratc

Missouri

Tax credits are allocated to organizations administering positive youth development or crime prevention projects that have been approved through the application process.  Approved organizations secure contributions from their community, and the contributor receives tax credits for those contributions.  There are 50% tax credits for monetary contributions and wages paid to youth in an approved internship, apprenticeship or employment project, and 30% tax credits for property or equipment contributions used specifically for the project.

https://ded.mo.gov/programs/community/YOP

Montana

This state tax credit provides businesses financial incentive to launch new, or expand their current training programs through the Montana Registered Apprenticeship unit at the Montana Department of Labor & Industry. $750 tax credit for each new apprentice, or; $1,500 tax credit for each new apprentice that is a veteran; Tax credit takes effect for 2018 tax year; Tax credit takes effect once apprentice has completed probationary period or after 6 months, whichever is earlier; The tax credit may be applied for each qualified apprentice’s training program for length of training program or up to five years.

http://apprenticeship.mt.gov/Sponsor-Tax-Credit-Information

Nevada

The state exempts all real and personal property of an apprenticeship program from taxation.

https://cdn.americanprogress.org/wp-content/uploads/2016/02/09100012/1StateApprenticeship-brief1.pdf

New York

The Empire State Apprenticeship Tax Credit (ESATC) provides tax incentives to certified New York State (NYS) Registered Apprenticeship (RA) program sponsors (for group programs, the Tax Credit program is also available to the sponsor’s approved participating signatory employers) for hiring new qualified apprentices on or after January 1, 2018. The tax credit is available through 2022.

A certified employer will be entitled to tax credits against income or franchise tax for each qualified apprentice. Enhanced credits are offered to those who employ disadvantaged youth as apprentices and for those programs who engage the support of a mentor. Qualified apprentices must be employed full-time (a minimum of 35 hours per week) for at least six months during the tax year. To become certified for this tax credit, you must be a qualified employer. A qualified employer is a sponsor (or for group programs, approved participating signatory employers) of an active or probationary NYS RA program. If you are not already a NYS RA sponsor, please contact the New York State Department of Labor to establish a RA program.

https://labor.ny.gov/apprenticeship/empire-state-tax-credit.shtm

Rhode Island

To allow a tax credit of 50 percent of actual wages paid to a qualifying apprentice or $4,800, whichever is less. Employers that hire an apprentice as a machine toolmaker, machinist, model-maker, gage maker, pattern-maker, plastic process technician, tool and machine setter, die-sinker, mold-maker, tool & die maker, and similar occupations may be eligible for a tax credit of 50 percent of actual wages or $4,800, whichever is less. The apprentice must be enrolled in a registered qualified program through the Rhode Island Department of Labor and Training's State Apprenticeship Council.  

http://www.dlt.ri.gov/bwc/taxcredits.htm#ITC

South Carolina

Eligible South Carolina businesses who sponsor a registered apprenticeship program can receive a $1,000 direct tax credit for each registered apprentice employed for at least seven months during each year of apprenticeship for up to four years. The tax credit is intended to offset the direct and indirect costs of establishing the registered apprenticeship program. Costs may include course design and development, instructional costs, training material and supplies, maintaining records and administering the program.

https://scworks.org/employer/business-services/business-tax-credits/apprenticeship-tax-credit

Tennessee

Taxpayers that employee an apprentice can receive a tax credit in an amount equal to $2,000 or 10 percent of the wages earned by an apprentice pursuant to this act, whichever is less.  

http://www.capitol.tn.gov/Bills/102/bill/SB1548.pdf

Virginia

The amount of credit allowed is thirty percent of all training costs incurred for noncredit courses paid by an employer to Virginia community colleges during the taxable year for eligible worker retraining for qualified employees. Employers who send their qualified employees to private schools for eligible worker retraining are allowed an annual credit equal to the cost per student or $100 per student, whichever is less. The credit is effective for taxable years beginning on or after January 1, 1999, and the total amount of credits that can be granted by the Commonwealth for each fiscal year is limited to $2,500,000.  

https://www.tax.virginia.gov/laws-rules-decisions/tax-bulletins/99-4

West Virginia

Tax credit of $2.00 per hour x total number of hours worked by an apprentice during the tax year, not to exceed the lesser of $2,000 or 50% of the actual wages paid for the apprenticeship. The training program is to consist of at least 2,000 hours, but not more than 10,000 hours of on-the-job training. The tax credit offsets the business franchise tax, corporate net income tax and personal income tax. The apprentice who benefits from this tax credit could be a person with a disability who is able to do construction work.

http://www.employmentincentives.com/state_incentives/West_Virginia/wv_tax_incentives.htm