An employer is allowed up to a $1000 income tax credit for each qualifying apprentice (Increasing to $1250 in 2020.)
An employer can claim a tax credit for up to five (5) apprentices annually, not to exceed $5,000 (Increasing to 10 apprentices in 2020.)
Beginning for tax year 2020, there will be an additional $500 tax credit available for each apprentice who is under the age of 18 for 90 days of their seven month minimum employment.
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, the Alabama Office of Apprenticeship 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 Office of Apprenticeship
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 for at least seven (7) full months of the calendar year for which the credit is being claimed
Receive “Apprenticeship Tax Credit Certificate” from the Alabama Office of Apprenticeship confirming that the apprentice is in compliance with all federal and state requirements for the program and signifying to the employer that their eligibility for the credit has been transmitted to the Alabama Department of Revenue.
AOA Operations Manager, Katanga Mants, stands ready and able to assist you with any questions you have about the tax credit.Email or call at 334-280-4414.
If you are an employer of apprentices and you are ready to fill out the application;