HB695 Extends Worker Training Tax Credit

HB 695 extends the Worker Training Tax Credit, taking effect retroactively beginning in 2019, sunsetting in 2025, and granting $1 million in eligible tax credits per year.

BENEFITS:

• Up to 35 % of expenses incurred by the business during the taxable year for eligible worker training allowed.

• $500 per qualified employee annually or $1,000 credit per non-highly compensated worker annually.

• 35 percent of direct costs incurred during the taxable year in conducting orientation, instruction, and training in the Commonwealth relating to manufacturing activities undertaken by the business.

• Any credit not usable for the taxable year may be carried over for the next three taxable years.

• Most notable is the new definition for “eligible worker training”:

       “Eligible worker training” means the training of a qualified employee or non-   

       highly compensated worker in the form of (i) credit or noncredit courses at

       any institution recognized on the Eligible Training Provider List or at any 

       Virginia public institution of higher education, as such term is defined in

       § 23.1-100, or as described in §§ 23.1-3111, 23.1-3115, 23.1-3120, and 

        23.1-3125, that results in the qualified employee or non-highly compensated

       worker receiving a workforce credential or (ii) instruction or training that is

       part of an apprenticeship agreement approved by the Commissioner of Labor

       and Industry.

WHAT IT MEANS:

The training can be accomplished through:

1. Credit or noncredit courses at any institution recognized on the Eligible Training Provider List that results in the qualified employee or non-highly compensated worker receiving a workforce credential or
2. Credit or noncredit courses at any Virginia public institution of higher education that results in the qualified employee or non-highly compensated worker receiving a workforce credential or
3. Instruction or training that is part of an apprenticeship agreement approved by the Commissioner of Labor and Industry

Qualifying programs:

1. Eligible worker training.
2. Provide orientation, instruction, and training solely to students in grades 6-12.
3. Are coordinated with the local school division.
4. Are conducted either at a plant or facility owned, leased, rented, or otherwise used by the business or at a public middle or high school in the Commonwealth.

This change means that the Worker Training Tax Credit can now be applied to approved costs associated with ANY Virginia public college’s workforce program or programs from the Eligible Training Provider List; including the New College Institute and the VMA Machine Operator Apprenticeship Program.

The Virginia Department of Taxation Worker Training Tax Credit Guidance will be updated, click here to see the current version.