States That Offer Tax Credits for Hiring Apprentices and Tuition Support for Registered Apprentices
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.
For tax years beginning on or after January 1, 2020, through Dec 31, 2025 - $1,250 per qualifying apprentice for up to 10 apprentices employed. An additional credit of up to $500 is available to the employer for each apprentice who is 16 years old or younger and meet the certain youth-registered or industry-recognized apprenticeship criteria at the time the credit is claimed.
Legislation passed in 2023 changed the sunset date for this tax credit to the end of calendar year 2024.
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.
Cal Competes is a discretionary program was re-authorized through fiscal year 2022-2023 that budgets $180 million of corporate income tax credits to businesses that create new jobs and make capital investments. The credits apply only to income tax owed to the Franchise Tax Board. The credits are non-refundable and non-transferrable; they are available for five years but may be carried forward for up to 6 additional years.
Funds allow community colleges to provide most instruction for apprenticeship programs.
Tax Credits and Incentives:
The state of Colorado offers various tax credits and incentives related to apprenticeship.
- A CollegeInvest 529 Savings Plan is a tax-free educational savings account that can be used to pay for apprenticeships. For Colorado taxpayers, contributions to any CollegeInvest savings account are eligible for a deduction from your state income tax return.
- The Enterprise Zone Job Training Tax Credit helps businesses develop and retain a skilled workforce. Businesses located within enterprise zones can earn a state income tax credit of 12% of eligible job training costs for employees and apprentices working within the enterprise zone.
- The Career Development Incentive Program (CDIP) provides financial incentives for school districts and charter schools that encourage high school students, grades 9-12, to complete qualified industry credential programs, including registered apprenticeships and quality pre-apprenticeships.
- Inflation Reduction Act Tax Incentive includes bonus credits for businesses that pay workers a prevailing wage and use registered apprenticeship programs.
State Grant Funding Opportunities
- Skill Advance: Colorado First and Existing Industry Job Training Grant Programs support Colorado’s workforce development by providing grants to both existing businesses and those locating to or expanding in Colorado. By reimbursing costs associated with job training, the programs increase transferable job skills that support business competitiveness and enhance workers’ resumes and long-term employment opportunities.
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.
Support for Delaware’s Apprenticeship programs are provided by the 2019-2022 Apprenticeship State Expansion (ASE) Grant awarded by the U.S. Department of Labor Employment and Training Administration. The overall funds of this grant total $714,251.37, of which federal funds comprise 100%. The remaining 0% is comprised of local state, general, and special funds.
The Delaware Department of Education’s annual budget for Apprenticeship and Trade-Extension programs provides funds to the Vocational Technical Schools Adult Ed Divisions to support tuition for registered apprentices.
To date, the Florida Legislature has appropriated $30 million dollars to the Florida Pathways to Career Opportunities Grant Program to expand and establish 149 apprenticeship and preapprenticeship programs in this state. While Florida provides a competitive grant to fund the establishment or expansion of apprenticeship programs in the state, which eligible businesses may receive, the state does not offer businesses an apprenticeship tax credit.
- State Statute 446.051(2) encourages career educational institutions to cooperate and assist in providing facilities, equipment and supplies, and instructor's salaries for the performance of related and supplemental instruction associated with the registered program. Learn more on the Florida Legislature website
- Florida Statute, 1009.25 Fee exemptions – apprentices registered in an approved apprenticeship program, as defined in s. 446.021, are exempt from the payment of tuition and fees, including lab fees, at a school district that provides workforce education programs, Florida College System institutions, or state university. Learn more on the Florida Legislature website
Georgia residents who are attending a Georgia public technical college to earn a certificate or diploma are eligible for a HOPE Grant regardless of high school graduation date or grade average. This fund covers approximately 70% of student expenses. Additionally, the State Legislature has established the Hope Career Grant for select high demand occupations. Additional funding is allocated each year to allow for virtually free tuition for students entering these select occupations.
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.
Seventy percent (70%) of its Manpower Development Fund is allocated to the Apprenticeship Training Program at the Guam Community College to be expended exclusively to fund the administrative and instructional costs for the operation of the apprenticeship training programs; advertising and outreach programs for the promotion of the apprenticeship training programs; and direct financial assistance to students enrolled in the apprenticeship program.
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.
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The state created a special employment and training fund, IC 22-4-25-1, from the penalties and interest from the Unemployment Insurance system to fund various training programs. Ivy Tech Community College receives funds to train apprentices in joint labor-management apprenticeship programs. Funds are also used to pay instructors for general education towards an Associate’s degree and journey worker upgrade courses.
This one-time, corporate income tax credit is available to participants in the New Jobs Training (260E) Program. Iowa offers this credit as an incentive for businesses that provide additional training to employees and expand their workforce.
- Iowa Apprenticeship Act, commonly referred to as "15B": An annual non-competitive grant program that is available for any Registered Apprenticeship program to apply for $3 million in state funding available; distributed to all who apply based on the number of their apprentices and the training hours involved in the Registered Apprenticeship program.
- Iowa Registered Apprenticeship Development Fund, commonly referred to as "15C": A competitive grant program available to new Registered Apprenticeship programs that were created within a high-demand occupation field or for Registered Apprenticeship programs that add a high-demand occupation to their existing Registered Apprenticeship program. $1 million in state funding available; grants are available up to $25,000 per occupation applied for. Programs can apply for more than one grant per each high-demand occupation; overall grants to an organization are capped at $50,000 per fiscal year. Programs must have less than 20 overall apprentices.
Kansas has enacted the Kansas Apprenticeship Act (Act), which establishes a tax credit and grant incentive programs for apprenticeships and creates a matching grant program within the Department of Commerce to provide grants to eligible institutions of higher education based on the number of engineering program graduates of the institution. The law creates a credit to be claimed by an eligible employer for the taxable year in which an apprentice completed the probationary period or the taxable year succeeding the calendar year in which the apprentice completed the probationary period. The employer may be credited $2,500 per eligible apprentice, for up to as many as 20 apprentices.
The Work Opportunity Tax Credit (WOTC) is a federal program, administered by each state, intended to incentivize businesses to hire specific target groups that typically face significant barriers to employment. These target groups include, but are not limited to: Supplemental Nutrition Assistance Program (SNAP) benefit recipients, Temporary Assistance for Needy Families (TANF) recipients, veterans, ex-felons, and the long-term unemployed. Within 28 days of the hire date of an individual in one of the categories, an employer can submit an application for the tax credit. If the employee is eligible under the program then the company can receive a certificate to file with the IRS for a tax credit ranging from $1,200 to $9,600, depending on the target group. Please see visit Kentucky Career Center tax credit page for further information. The process for submitting WOTC applications is automated and employers can apply, and submit all required documentation through the Work Opportunity Tax Credit online system.
An Unemployment Tax Credit (UTC) is a state funded program administered by the Kentucky Tax Credit Unit. The 1982 Kentucky General Assembly enacted KRS 141.065 that provides an unemployment tax credit against the income tax liability of Kentucky employers who hire qualified, unemployed individuals. Employers may claim a $100 credit for each eligible employee who has been certified by the Office of Employment and Training. Certification requires that the employee be unemployed for 60 days prior to being hired into full-time employment and must remain employed fulltime for 180 consecutive calendar days in the tax year in which the credit is claimed. Please see Kentucky Career Center tax credit page for further information.
Kentucky currently has no apprenticeship tax credit.
The Kentucky Work Ready Scholarship Program is a collaborative effort between the Kentucky Cabinet for Education and Workforce Development, public and private universities, and Kentucky Community and Technical Colleges to provide tuition assistance for Kentucky students to receive a maximum of 60 credit hours towards career certifications and associate degrees in applied science. The scholarship provides tuition assistance for Kentucky students and adults to obtain an industry-recognized certificate, associate’s degree in applied science or diploma at one of 21 participating colleges and universities throughout the Commonwealth. Approved programs must be in one of Kentucky’s five high-demand industry sectors: Advanced Manufacturing, Business and IT, Construction Trades, Healthcare and Transportation and Logistics. To apply individuals should register with KHEAA then complete and submit a Work Ready Kentucky Scholarship application. Applicants will also need to complete the Federal Student Aid's FAFSA form to be approved. Scholarships are awarded on a first-come, first-serve basis.
Beginning January 1, 2022, an employer is eligible for a nonrefundable income or franchise tax credit equal to $1.25 for each hour of employment of an eligible apprentice, not to exceed 1,000 hour per apprentice. An eligible apprentice must have been employed at least 250 hours during the tax year and meet one of the two following requirements: 1. An apprentice who has entered into a written apprentice agreement with an employer or association of employers pursuant to a registered apprenticeship program through the Louisiana Workforce Commission; or 2. An apprentice who is (1) enrolled in an NCCER accredited training program which has no less than four levels of trainings and no less than 500 hours of instruction; (2) has successfully completed no less than two levels of trainings; and (3) has attained no less than 250 hours of instruction.
Maine Revised Statutes Title 26, §3211, 6-A states that the Maine Department of Labor “shall underwrite 50 percent of tuition costs for apprentices in good standing at public educational institutions and provide training cost assistance to sponsor groups in accordance with sponsor policies.
The Tax Credit for Eligible Apprentices provides a state tax credit to Maryland businesses which employ eligible Apprentices. Employers seeking the credit must submit an application to the Maryland Department of Labor and receive a certification for the amount of credit they are eligible to claim. The certification must be attached on the taxpayer’s Maryland State tax return. This credit is authorized under Maryland Code Ann., Tax-General, §10-742 and additional information can be found in the Code of Maryland Regulations 09.37.04.00 - 09.37.04.999.
Learn more about the Apprenticeship Tax Credit on the Maryland Apprenticeship and Training website.
Sponsor Apprenticeship Incentive Reimbursement
The Sponsor Apprenticeship Incentive Reimbursement (SAIR) program, approved by the U.S. Department of Labor on July 29, 2022, encourages Sponsors to sign more Apprenticeship agreements and submit them for registration by MD Labor. SAIR is a rolling reimbursement program where Sponsors can be granted up to $2,500 to offset the costs of Related Instruction (RI).
Specifically, funds may be used to:
1. Offset a portion of the Sponsor’s own related instruction costs; or
2. Offset a portion of the Apprentice’s employer’s RI costs.
Funds used in this manner will be granted to the Sponsor, who will then reimburse the employer. All apprentices served through SAIR must be newly registered apprentices registered on or after May 1, 2023 and must meet the criteria for Registered Apprentices.
ELIGIBLE ENTITIES - Registered Apprenticeship Sponsors approved by MD Labor are the only eligible entity for SAIR. Sponsors can be private, public, Individual, Group Joint, Group Non-Joint, or non-profit.
ALLOWABLE USE OF FUNDS - Reimbursement towards the cost of an apprentice’s RI are the only permissible use of funds under the SAIR plan. All other costs are not eligible for reimbursement.
Learn more about the SAIR
Maryland Business Works
For-profit and non-profit private sector businesses headquartered in (or with at least one permanent physical location in) the State are eligible to participate in the Maryland Business Works program. Funds will be primarily targeted to the following:
- Small businesses with 500 employees or fewer, and
- Providing in-demand products or services.
Staff are eligible to participate in training provided through Maryland Business Works only if they are full-time employees who are eligible to receive benefits and have worked for the employer for a minimum of six months.
There is a $4,500 training cap funding level that may be awarded to a specific trainee for a project or series of projects during a program year running from July 1 through June 30 each year with a $40,000 funding cap for awards to a specific employer for a project or series of projects during the program year. Training proposals that exceed the $4,500 cap will be considered if extenuating circumstances warrant. Consideration will require strong documentation be submitted by the applicant, evidencing substantial wage growth and job creation as an outcome of participation in the program.
Training must result in an industry-recognized credential, certificate of completion for a Registered Apprenticeship, or a certificate that results in a wage increase.
The following types of activities and items are examples of allowable training costs:
Classroom-based training, including training that is designed to meet the specific requirements of a business,
In-house staff training,
Instruction provided by consultants,
Books and training materials,
Initial proficiency testing (for approved curriculum),
GED® preparation, and
English Language Acquisition.
Learn more about Maryland Business Works.
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.
(1) A taxpayer may claim a credit against the tax imposed by this act equal to the sum of 50% of the qualified expenses defined in subsection (5)(d)(i) and (ii) and 100% of the qualified expenses defined in subsection (5)(d)(iii) paid by the taxpayer in the tax year, not to exceed $2,000.00 for each apprentice trained by the taxpayer in the tax year.
The Mississippi Apprenticeship Program (MAP) helps companies, regardless of size, develop a Registered Apprenticeship (RA) program from the initial concept phase to registration and subsequent implementation within the company. Recognizing that RA is business driven, MAP works closely with companies to identify the occupations and skillsets needed on their job site and build out a RA program designed to meet their needs.
Please refer to Pages 22-24 for information regarding the Mississippi Skills Training Income Tax Credit.
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.
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.
Employers who participate in the program qualify for a tax credit of up to $2,000 annually per apprenticeship that applies to the employer's single business tax. The tax credit covers 50 percent of the wage-related costs of the youth apprentice, including salary, fringes, and other payroll expenses. The tax credit also covers up to 100 percent of the costs of classroom-related instruction paid by the employer. The state exempts all real and personal property of an apprenticeship program from taxation.
P.L. 2019, Chapter 417, effective January 21, 2020, created the Apprenticeship Start-Up Grant Program administered by the Office of Customized Training in the Department of Labor and Workforce Development. As part of the program, a taxpayer may apply for, and upon approval of an application to the Department of Labor and the Division of Taxation will be allowed, a $5,000 tax credit against the tax imposed pursuant to N.J.S.A. 54:10A-5(c) if the taxpayer has documented qualified start-up costs associated with the initial year of participation in an apprenticeship program. There is an additional $5,000 tax credit if the apprenticeship program provides opportunities for workers in key industries such as:
• Tourism and
• Renewable energy.
Download Form 330 Apprenticeship Program Tax Credit from New Jersey’s state website for more information.
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.
Funding is available through the State University of New York (SUNY) for sponsors to cover the costs of Related Instruction in community colleges across the state.
The State Board of Community Colleges may provide by general and uniform regulations for waiver of tuition and registration fees for courses provided to students who are participating in a Registered Apprenticeship program that requires the participants to be high school students when entering the program.
Tax Credits:A taxpayer is entitled to a credit as determined under this section against the income tax liability under section 57 - 38 - 30 or 57 - 38 - 30.3 for qualified compensation paid to an individual who is an apprentice in an apprenticeship program as provided in title 29, Code of Federal Regulations, subtitle a, part 29 or an apprentice electrician registered under chapter 43 - 09 and is employed in this state by the taxpayer.
Tax Credits:Eligible employers may receive the lesser of $5,000 per eligible employee or 15% of wages paid to an eligible employee. The tax credit certificate is submitted with the employer’s Ohio income tax return and provides a credit against aggregate tax liability.The total amount of funding is not to exceed $5 million within the state fiscal biennium (2-year period). Following the March 23, 2022 effective date of the new law, the first biennial period will run from the effective date through June 30, 2023; the next biennial period will be from July 1, 2023 to June 30, 2025.
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.
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.
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.
The state offers tuition assistance up to $11,600 for two years ($5,800 per year) at the schools, institutions, and entities governed by the Tennessee Board of Regents and the University of Tennessee Board of Trustees, as well as state certified apprenticeship programs. Tuition assistance benefits are available for a two-year period beginning when an employee is separated due to a reduction in force.
Employers can receive a tax refund of up to $2,500 for each eligible apprentice they hire. They can hire as many apprentices as they want, but the tax refund is only for one individual per eligible entity. If an entity hires new apprentices from specific groups, such as transitioning or former foster youth, veterans, military spouses or women, they might be eligible for a tax refund for up to six apprentices. At least half of these apprentices need to be from one or more of these special groups.
The Texas Workforce Commission provides funds to local public educational institutions to support the costs of related classroom instruction in registered apprenticeship training programs. Local education agencies act as fiscal agents for registered apprenticeship training programs.
Worker Retraining Tax Credit
The amount of this tax 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.
Worker Training Tax Credit
Virginia also has the Worker Training Tax Credit that applies to Registered Apprenticeship sponsors, equal to:
- 35% of the costs of providing eligible training to qualified workers. Claim this credit against your individual income tax, fiduciary income tax, corporation income tax, bank franchise tax, and taxes imposed on insurance companies and utilities, or
- 35% of the direct costs of providing manufacturing training or instruction to middle and high school students. Claim this credit against your individual or corporation income tax.
Apprentice expenses paid for by Sponsors are eligible for reimbursement up to $1,000 per individual participant. Eligible expenses include:
- Related Technical Instruction
- Supportive Services, including Uniforms, Protective Wear, Tools, and Testing/Exams/Certification fees (Pending DOL Approval est. early 2021)
- On-The-Job Training, including Mentor Training and Extraordinary Training Costs (Pending DOL Approval est. early 2021)
Funding will be a one-time-only reimbursement and will only be provided as long as grant funds are available.
Registered apprentices may be given a 50 percent tuition reduction at community and technical colleges. The State Board for Community and Technical Colleges issues policy on tuition and fee rates annually.
Tax credit of $2.00 per hour times the 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.
Apprentices pay $120 per credit (36 hours). The 144 hours of related instruction per year requirement costs $480. Apprentices are paid their hourly wage to attend class, and in some cases, tuition is reimbursed by sponsors or joint training funds.
The Wyoming Department of Workforce Service's Workforce Development Training Fund, a state-funded program, has a grant option available for registered apprenticeship programs to reimburse expenses associated with related classroom instruction. Sponsors, related instruction providers, and employers are eligible to apply. Grants funds can be used for tuition/registration, class fees and materials, travel, instructor wages and fringe benefits, fees for licenses or certifications obtained as part of the related instruction, and up to five percent for administration. More information is available.