Apprenticeship Tax Credit
INCOME TAXPAYERS – Effective for tax years beginning after December 31, 2022.
A tax credit shall be allowed for an eligible employer that employs a qualified apprentice, pursuant to a registered apprenticeship agreement and in accordance with a registered apprenticeship plan for at least all or a portion of the probationary period, as defined for that apprenticeship in the registered apprenticeship program standards, work process schedule otherwise known as appendix A or as designated by the Secretary of Commerce.
Qualifications
The apprentice must have entered into a registered apprenticeship agreement in accordance with a registered apprenticeship plan for at least all or a portion of the probationary period, as defined for that apprenticeship in the registered apprenticeship program standards, work process schedule otherwise known as appendix A or as designated by the Secretary of Commerce. For more information about the program click on the following link: https://ksapprenticeship.org/resource-page/kansas-apprenticeship-tax-and-grant-act/.
Credit Amount
For tax years 2023 through 2025, the credit amount for an employer that hires a qualified apprentice can claim a credit up to $2,500 for each apprentice employed, not to exceed 20 such credits for apprenticeships in any taxable year per eligible employer. Tax credit will be claimed for the taxable year in which the apprentice completed the probationary period. The credit shall not be awarded for employment of the same apprentice more than four times.
For tax year 2026 and after, the credit amount for an employer that hires a qualified apprentice can claim a credit up to up to $2,750 for each apprentice employed, not to exceed 20 such credits for apprenticeships in any taxable year per eligible employer.
In addition, there is a $500 credit. The tax credit can be claimed in the taxable year next succeeding the calendar year in which the requirements to claim have been met. Commerce certified eligible employees. The requirements are if:
- the apprentice is enrolled in a secondary or postsecondary career and technical education program,
- is under 18 at the time credit was claimed,
- has been employed for at least 90 days and
- is participating in an apprentice program registered with Commerce and funded through the Carl D Perkins career and technical education act of 2006, an adult basis education and literacy program funded under title II of the workforce innovation and opportunity act, public law 113-128, or a public workforce program funded under title and title III (public law 113-128 of the workforce innovation and opportunity act).
Limitation of Credit
The aggregate amount of all tax credits for all eligible employers shall not exceed $7,500,000 each taxable year.
Required Steps for Applying for Apprenticeship Tax Credit
Outlined below are the steps that each organization will need to take to apply and qualify for the tax credit.
- Ensure eligibility of apprentices.
- Complete KS Apprenticeship Act - Tax Credit Application form. This needs to be filled out by the company/taxpayer that plans to claim the credits.
- Kansas Office of Apprenticeship (KOA) will review and send a 'Tax Credit Confirmation' Certificate back to the company to confirm eligibility and the tax credit amount.
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The company/taxpayer fills out K-24 Form to claim the tax credit.
*NOTE* the credit amount allocated for the company will be listed on 'Tax Credit Confirmation' Certificate, which will be needed when filling out Line 1 on the K-24 Form.
- Submit the Tax Credit Confirmation Certificate and K-24 Form with Kansas tax return.
Procedures to Claim the Credit
You may download Schedule K-24 to claim the Apprenticeship tax credit. This schedule must be completed and submitted with the income return. You may also call the Department of Revenue voice mail system at 785-296-4937 to request Schedule K-24. You will be asked to give your name, address, phone number and form(s) you desire. Please allow two weeks for delivery of your forms.
Definitions
Apprentice means a person who is a Kansas resident at least 16 years of age, except where an older minimum age standard is otherwise fixed by law, and is employed in Kansas to learn an apprenticeable occupation as defined in 29 C.F.R. § 29.4. "Apprenticeship" includes a person who is compensated by a registered apprenticeship sponsor or a registered apprenticeship intermediary but whose apprenticeable work occurs under the supervision of an eligible employer.
Apprenticeship agreement means a written agreement, meeting the requirements of 29 C.F.R. § 29.2, between an apprentice and either the apprentice's registered program sponsor or an apprenticeship intermediary acting as an agent for the program sponsor, that contains the terms and conditions of the employment and training of the apprentice.
Eligible employer means a business with a physical location in Kansas, authorized to conduct business in Kansas and subject to the Kansas income tax act that employs or supervises the work of an apprentice pursuant to a registered apprenticeship agreement and in accordance with a registered apprenticeship program.
Intermediary means any person, association, business, committee or organization acting as an agent for the program sponsor, pursuant to a registered apprenticeship plan, who has registered with the secretary.
Apprenticeship program means a plan containing all terms and conditions for the qualification, recruitment, selection, employment and training of apprentices, as required under 29 C.F.R. § 29.4 and 29 CFR § 30, including such matters as the requirement for a written apprenticeship agreement.
Registered apprenticeship agreement means an apprenticeship agreement that has been accepted and recorded by the office of apprenticeship of the employment and training administration of the United States department of labor or the secretary as evidence of the apprentice's participation in a particular registered apprenticeship program.