Incentives for Apprenticeships

Iris Hentze 2/6/2019

Incentives for Apprenticeships

Several states across the nation offer a variety of tax incentives and grant funding for the employment of apprentices or the implementation of apprenticeship programs.

States offer different types of resources to employers, including income tax credits for hiring new apprentices, tax credits for any property or equipment used in apprenticeship programs, and grant funding to help expand the number of industries and participants in state apprenticeship programs.

To be eligible for these incentives, states often require apprentices to be officially registered through the US. Department of Labor’s Employment and Training Administration (DOLETA). Additionally, DOLETA has a variety of useful statistics on registered apprenticeship programs nationwide. Data for fiscal year 2017 is the most recent available.

The table below provides a sample of different state tax incentives for apprentices.

State Apprenticeship Tax Incentives
STATE INCENTIVE DETAILS/NOTES
Alabama Income tax credits of $1,000 to an employer for each qualified apprentice--capped at $3 million for the first two tax years and $5 million each tax year thereafter. A “qualified apprentice” is one who is at least 16 years old, employed in an apprenticeable occupation as provided in 29 C.F.R. part 29.4 and who has entered into an “apprenticeship agreement” with the program sponsor which contains the terms and conditions of employment and training.
Arkansas Youth Only: Employers hiring a youth apprentice may receive a credit of $2,000 or 10 percent of the wages earned by the youth, whichever is less, against the tax imposed by the Arkansas Income Tax Act.  
Connecticut Any taxpayer who employs an apprentice under the terms of a Qualified Manufacturing Program is eligible for a credit of up to $7,500 or 50 percent of actual wages, depending on whichever is less. A “qualified apprentice” is one with an apprenticeship period between two and four years who is employed on a full-time basis and working a minimum of 120 hours per month. The apprentice must also work in a manufacturing trade to be eligible. These include machinist, plastic technicians, injection modeling technicians and others.
Louisiana Any program sponsor (employer/contractor) who pays the wages of an apprentice is eligible for a tax credit of $1/hour worked per calendar year with a maximum amount for each apprentice being $1,000/year. An apprentice must be registered with the Louisiana Workforce Commission–Apprenticeship Division for the program sponsor to be eligible for the credit.
Missouri As part of the Missouri Department of Economic Development’s Youth Opportunity Program, 50 percent tax credits are available for wages paid to youth in approved internship, apprenticeship or employment projects and 30 percent tax credits for property or equipment contributions used specifically for the project. Tax credits are allocated to organizations administering “positive youth development” or crime prevention projects that have been approved through an application process. Such projects include internship/ apprenticeship programs.
Montana Any employer who offers on-the-job training to workers through the Montana Registered Apprenticeship unitis eligible for a $750 tax credit for each worker. Any employer who offers the same to a worker with veteran status is eligible for a $1,500 tax credit per employed veteran.  
Nevada Exempts from taxation all qualified real and personal property of an apprenticeship program.  
South Carolina Eligible businesses can receive a tax credit of $1,000 for each registered apprentice employed for at least seven months during each year of an apprenticeship program, for up to four years.  
Virginia Employers may claim a tax credit for providing eligible worker retraining to qualified employees, including apprentices, of 30 percent of all training costs through a community college or up to $100 annually for each employee if incurred at a private school. “Qualified employees/apprentices” are those who are approved by the Virginia Apprenticeship Council through an application process.
West Virginia Employers may claim a tax credit for hiring apprentices in a qualified apprenticeship training program of up to $1,000 or 50 percent of the actual wages paid in the tax year for the apprentice.  

 

State Registered Apprentice Tuition Supports

STATE

TUITION ASSISTANCE

DETAILS/NOTES

Georgia

Georgia residents who are attending a public technical college in the state to earn a certificate or diploma are eligible for a grant program that can cover up to 70 percent of student expenses.

Additionally, another grant program the state legislature allocates funding to each year can cover nearly 100 percent of all tuition costs for students entering a select group of occupations.  

 

Indiana

Indiana has a special employment and training fund, funded from the penalties and interest from the Unemployment Insurance system.

Ivy Tech Community College receives some of these funds to train officially registered apprentices and journeyman and upgrade training in some of the skilled trades.

 

Iowa

The Iowa Department of Economic Development funds and manages the Iowa Jobs Training Program, which provides $1 million in funding a year to support job training services to employees who are registered apprentices of eligible businesses.

The program provides loans to Iowa businesses that are forgivable as long as the employers uses the funding to train a specified number of workers.

 

Maine

Maine statute states that, as funds permit, the Department of Labor shall underwrite 50 percent of tuition costs for apprentices in good standing at public education institutions and provide training cost assistance to sponsor groups.

To ensure adequate funds are available for related instruction, the Maine Apprenticeship Program shall establish a biennial plan, including projected apprenticeship enrollments and a subsequent budget request.

Texas

The Texas Workforce Commission (TWC) provides funds to local education agencies and apprenticeship providers to support the costs of classroom instruction in registered apprenticeship training programs.

An apprenticeship program seeking funding from the TWC must be under the direction of an apprenticeship committee consisting of sponsor representatives.

Washington

Colleges shall waive an amount equal to one-half of the standard per-credit amount for tuition and services and activities fees for apprentices. Students must be registered with the Washington State Apprenticeship Council or DOLETA to be eligible.

 

Wisconsin

In certain cases, apprentices are paid their standard hourly wage to attend class and also offered tuition reimbursement from sponsors or joint training funds, depending on the program.

One such program is the Apprenticeship Completion Award Program, in which the Department of Labor shall administer an apprenticeship competition award to partially reimburse tuition costs incurred by an apprentice who has successfully completed all the requirements of their program.

 

 

Iris Hentze in a Policy Associate in the Employment, Labor and Retirement Program.

Additional Resources