Changes to the Apprenticeship Training Tax Credit

Do you have an apprenticeship program at your work? Then you should learn about some very important changes to the Apprenticeship Training Tax Credit (ATTC) program. The two big changes are reflected in the amount of eligible expenditures that you can claim on your taxes and the annual tax credit amount you could claim for each apprentice. Let’s take a closer look at how these changes will affect your business come tax time.

1. ATTC has reduced the amount of eligible expenditures you can claim from 35 percent to the new amount of 25 percent.
2. Small businesses that have a payroll of $400,000 or less annually can claim up to 30 percent of their eligible expenditures for their apprentices. This figure has also come down from the previous 45 percent for small businesses.
3. The length of time you could count for your program was originally for the first 48 months for each apprenticeship. You can now only count the first 36 months.
4. The program has also changed by decreasing the maximum $10,000 tax credit down to $5,000 for each qualified apprenticeship.

You should note that these changes apply to apprenticeship programs that began on or after April 24, 2015. If your program started before this date, you can still claim the previous credits until the allotted time frame expires.

If you are unsure what to count as eligible expenditures, ATTC recognizes the following items:

• The apprentice’s annual salary or wages.
• The taxable benefits that the apprentice received while working for your business.
• Any fees paid to an employment agency for work done by an apprentice.

Overall, these new changes reflect cuts to the ATTC figures in every area. The good news is that you can still receive sizable tax credits for your important apprenticeship programs.

The blogs posted on our website provide information of a general nature. These posts should not be considered specific advice; as each reader's personal financial situation is unique and fact specific. Please contact a professional advisor prior to implementing or acting upon any of the information contained in one of the blogs.

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