The Apprenticeship Tax Refund Pilot Program offers Texas employers a tax incentive for employing apprentices enrolled in a qualifying apprenticeship.
Overview
Texas strives to foster and maintain a workforce trained and ready to fit the needs of the state’s employers. Registered Apprenticeship programs (RAPs) serve both employers and job seekers in this mission by training workers in highly-skilled, highly-paid careers during a full-time, paid apprenticeship.
With the goal of creating more RAPs in emerging and diversified fields, the Texas Workforce Commission (TWC) has been tasked with piloting a tax refund program for employers who hire apprentices. The tax refund will be applied to U.S. Department of Labor—Office of Apprenticeship RAPs.
Program Details
Eligible employers can receive a state tax refund of up to $2,500 per apprentice enrolled in a qualifying apprenticeship (registered with the U.S. Department of Labor) who has earned at least seven months of wages in the calendar year.
If the number of eligible applicants exceeds 100, TWC will give preference to applicants who:
- Offer qualified apprenticeships in non-metropolitan areas of the state; and
- Provide training and skills development in emerging or developing occupational fields.
Additional preference may be given to applicants who employ at least one apprentice who is included in one or more of the following populations:
- Transitioning foster youth.
- Military veteran.
- Military spouse.
- Women.
TWC has the discretion to certify up to 100 eligible applicants in a calendar year.
Authority & Funding
Senate Bill (SB) 1524
, enacted by the 87th Texas Legislature, Regular Session (2021), establishes a pilot program that provides for a tax incentive for employers hiring apprentices through a U.S. Department of Labor-approved registered apprenticeship program. Entities shall apply for eligibility through TWC. The Tax Refund Pilot Program expires on December 31, 2026.
The tax refund, which is provided by the comptroller's office, shall not be for more than $2,500 per eligible apprentice. Though employers may hire as many apprentices each year as they choose, eligible entities may only receive a tax refund for a single individual. However, if an eligible entity employs new apprentices who are transitioning or former foster youth, veterans, military spouses, or women, they may be eligible for a tax refund for up to six apprentices, provided at least half are from one or more of these groups.
The Apprenticeship Tax Refund Pilot Program is governed by the following:
Application & Instructions
To qualify, an employer must pay State of Texas sales and use taxes and have paid wages to a Texas resident for a minimum of seven months while enrolled in a qualifying apprenticeship.
Texas employers must complete and sign an online Employer Application for Tax Refund Pilot Program
to obtain certification.
Online applications are submitted directly to RATF@twc.texas.gov.
Applications must be submitted on or after January 1 and on or before March 31 the first quarter following the calendar year of apprenticeship.
Notes
- Complete a separate online application for each eligible apprentice.
- Your auto generated confirmation becomes your evidence of timely submission and must be retained to meet record retention requirements (four years for certifications and one year for denials).
- If applying by email, attached application(s) must be encrypted or password-protected, with the password sent in a separate email to RATF@twc.texas.gov.
Processing Times
Be aware, reviewing of applications will begin April 1 through May 31. Employers will be informed of certification or denial once certification has been determined. If you have submitted an application and would like to know the status, you may email the unit directly at RATF@twc.texas.gov. Please make sure to have the employer’s name and apprentice information available for your inquiry.
Contact Information
- Email:
RATF@twc.texas.gov
