Section 40-18-420 through Section 40-18-424, Code of Alabama 1975
The Alabama Industry Recognized and Registered Apprenticeship Program offers a tax credit to companies that hire qualified apprentices who receive classroom or industry-specific instruction and on-the-job training.
The Alabama Office of Apprenticeship will review applications to establish the eligibility for this tax credit. Once the eligibility is established, the credit is claimed via My Alabama Taxes. Please see the bottom of this page for further details on how to claim the apprenticeship credit through My Alabama Taxes.
Section 40-18-422 provides for an income tax credit to employers as follows:
- The credit can be applied against income tax and financial institution excise tax.
- For tax years beginning on or after January 1, 2017, through January 1, 2019 – $1,000 per qualifying apprentice for up to five apprentices employed.
- 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 18 years old or younger and meet the certain youth-registered or industry-recognized apprenticeship criteria at the time the credit is claimed.
- The credit is not available for an individual apprentice for more than four taxable years.
- This credit is nonrefundable, nontransferable, and cannot be carried forward.
Additional provisions include:
- A written apprenticeship agreement must exist between apprentice and the sponsor containing 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 U.S. Department of Labor.
- This credit is set to expire on Dec. 31, 2024, unless it is extended by a legislative act before its expiration.
The Alabama Office of Apprenticeship is the administering agency for the Apprenticeship Credit; therefore, all inquiries regarding the qualifications of the credit should be addressed to the Alabama Office of Apprenticeship.
To utilize the credit on the income tax return, a credit claim request must be made via My Alabama Taxes: