About the Program
- An employer is allowed up to a $1000 income tax credit for each qualifying apprentice
- An employer can claim a tax credit for up to five (5) apprentices annually, not to exceed $5,000
- The credit can be applied against any income tax or financial institution excise tax imposed under Chapters 16 or 18 of Title 40
- The income tax credit is not refundable, none transferable, and cannot be carried forward
- The credit cannot be claimed for an individual apprentice for more than four taxable years, regardless of employer. If applicable, Apprenticeship Alabama can verify previous credit with another employer
ELIGIBILITY FOR THE TAX CREDIT
The Employer Must:
- Add apprentices on or after January 1, 2017
- Submit all required paperwork to the Alabama Department of Commerce, Apprenticeship Alabama division on or before May 31st of the taxable year
- Have a written employer apprenticeship agreement with the USDOL Office of Apprenticeship
- Submit a copy of USDOL Program Registration and Apprenticeship Agreement (appendix B) for each registered apprentice
- Verify the apprentice was employed with at least seven (7) full months of the prior year
- Receive “Apprenticeship Tax Credit Certificate” from Apprenticeship Alabama confirming that the apprentice is in compliance with all federal and state requirements for the program
The Importance of a Registered Apprenticeship Program
Senate Bill 90 eligibility requirement for the tax credit program is based on employers having a Registered Apprenticeship program.
Registered Apprenticeships are a tried and true approach for preparing workers for jobs and meeting the business needs for a highly skilled workforce that continue to innovate and adapt to meet the needs of the 21st century.
Businesses that use apprenticeships reduce worker turnover by fostering greater employee loyalty, increasing productivity, and improving the bottom line.