Massachusetts Creates Apprenticeship Credit

Massachusetts creates an apprenticeship credit program for taxpayers who hire and train apprentices for certain occupations. Taxpayers can apply the apprentice credit against:

  • corporate excise taxes; and
  • personal income taxes.

How Do Taxpayers Qualify for the Credit?

To qualify for the credit, taxpayers must:

  • employ an apprentice in Massachusetts for at least 180 days in a tax year;
  • register as an apprenticeship program sponsor; and
  • enter an apprenticeship agreement.

They also must hire and train the apprentice in:

  • computer occupations;
  • health technologist and technician occupations;
  • healthcare support occupations; or
  • product manufacturing occupations.

How Much Is the Credit?

The credit equals the lesser of:

  • $4,800; or
  • 50% of the wages paid to the apprentice.

Taxpayers can claim a second credit if they employ the apprentice in the next tax year. The taxpayer must receive certification of the continued employment.

Massachusetts caps credits for all taxpayers at $2.5 million each calendar year.

When Can Taxpayers Claim the Credit?

Taxpayers can claim the apprenticeship credit in tax years beginning after 2018.

Can Pass-Throughs Claim the Credit?

A pass-through entity can claim the credit. But it must distribute the credit to its owners, partners, and members based on their share of its income. The owners, partners, or members can apply the credit against their Massachusetts tax liability.

Does the Credit Program Sunset?

The legislation contained provisions that sunset the credit for tax years after 2021. Gov. Charlie Baker vetoed the sunset provisions and sent them back to the legislature. He proposed a 5-year period for examining the program’s effectiveness.

Ch. 228 (H.B. 4732), Laws 2018, effective August 10, 2018 and as noted; Veto Message, Massachusetts Gov. Charlie Baker, August 10, 2018

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