Effective January 1, 2020, employers are allowed a tax credit for qualified educational expenses associated with qualifying apprentices. Employers may receive a credit of up to $3,500 per apprentice against the taxes imposed by subsections (a) and (b) of Section 201 of the Illinois Income Tax Act, and an additional credit of up to $1,500 for each apprentice if (1) the apprentice resides in an underserved area or (2) the employer's principal place of business is located in an underserved area.
NOTE: The total tax credits issued by the Department under this program may not exceed $5 million in any calendar year, which shall be allowed on a first-come first-served basis, based on the date on which each properly completed application is received by the Department.
- A qualifying apprentice must be: (a) an Illinois resident; (b) at least 16 at the close of the school year for which a credit is sought; (c) a full-time apprentice enrolled in an apprenticeship program registered with U.S. Department of Labor (USDOL), Office of Apprenticeship during the school year; and (d) employed by the taxpayer in Illinois.
- Qualified educational expenses include tuition, book fees, and lab fees.
- A qualified school means any Illinois public or nonpublic secondary school that is: (a) an institution of higher education providing a program that leads to an industry-recognized postsecondary credential or degree; (b) an entity that carrying out programs registered under the federal National Apprenticeship Act; or (c) another public or private provider of a program of training services, which may include a joint labor-management organization.
- Employers must apply to the Department for certification.
- Employers must provide certain supporting information, including but not limited to: (s) the name, age, and taxpayer identification number of each qualifying apprentice employed by the taxpayer; (b) the amount of qualified education expenses incurred with respect to each qualifying apprentice, including supporting documentation; and the name of the school at which the qualifying apprentice is enrolled and the qualified education expenses are incurred.
An employer filing a return claiming the apprenticeship education expense credit shall maintain records of proof as to the education expenses paid for by the employer. The employer shall maintain the records for a period of not less than three years after the date the return on which the employer claimed the apprenticeship education expense credit was filed. Records maintained by the employer shall be subject to inspection by the Department and its duly authorized agents and employees.
Apprenticeship Tax Credit Application
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