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Apprenticeship Credit

Act 2016-314 established the Apprenticeship Tax Credit Act of 2016.

  • Credit shall equal $1,000 per qualified apprentice.
  • Available to eligible employers who employ an apprentice for at least 7 full months of the taxable year.
  • The credit will be allowed to offset the tax imposed by Chapter 16 or Chapter 18.
  • The credit will be allowed on a pro rata basis to owners or members of an entity taxed under subchapter S or subchapter K of the IRC.
  • The credit will not be allowed to decrease a taxpayer’s tax liability to less than zero and is non-refundable.
  • The cumulative amount of tax credits allowed by this Act cannot exceed $3,000,000 annually.
  • Effective for tax form years 2018, 2019, 2020, 2021, and 2022, unless extended by an Act of the legislature, for taxpayers subject to Chapter 16.
  • Effective for tax form years 2017, 2018, 2019, 2020, and 2021, unless extended by an Act of the legislature, for taxpayers subject to Chapter 18.

Credit eligibility

  • Apprentice hired must be at least 16 years of age.
  • Must have written apprenticeship agreement between apprentice and sponsor which contains the terms and conditions of employment and training.
  • Apprenticeship agreement must be registered with the Office of Apprenticeship of the Employment and Training Administration of the United States Department of Labor.
  • Employer may hire as many as 5 apprentices under the program.
  • The credit for each individual apprentice shall not be available for more than 4 years.
  • Credit shall equal up to, but cannot exceed $1,000.
  • The Department of Revenue in consultation with the Workforce Development Division of the Department of Commerce shall establish a scale reflecting ranges of amounts of money an employer has invested in an eligible apprentice and a corresponding tax credit amount and shall award the tax credit amount in accordance with this scale following confirmation from the Workforce Development Division that  the apprentice for whom the credit is claimed is in compliance with all requirement of the apprenticeship program.
  • Employers may also apply for a credit on a pro rata monthly basis if the apprentice works less than the full preceding year beginning on the first day of the first full month of apprenticeship.