HB437 Alabama 2015 Session

Summary

Primary Sponsor

Ritchie WhortonRepresentative

Republican

Session

Regular Session 2015

Title

Taxation, tax credit, employer provided a tax credit for employing an apprentice, definitions, Apprenticeship Tax Credit Act

Summary

HB437 would create a nonrefundable Alabama income tax credit of $1,000 per apprentice for employers who hire apprentices for at least seven full months.

What This Bill Does

It establishes an annual $1,000 tax credit for each eligible apprentice employed for at least seven full months in the tax year, against Alabama income tax. The credit cannot reduce tax liability below zero and is not refundable or transferable; it is available on a pro rata basis for partial-year employment and for owners of pass-through entities. Employers must apply each year for the credit for the preceding calendar year, and program administration is shared by AIDT, the Department of Revenue, and the Department of Commerce.

Who It Affects

• Eligible employers in Alabama that hire an apprentice under a registered apprenticeship agreement can claim a $1,000 credit per apprentice, provided the apprentice works at least seven full months in the tax year.
• Owners of qualified employers that are S or K corporation entities can receive the credit on a pro rata basis according to their ownership stakes.
• Apprentices and apprenticeship sponsors/agreements participate in programs that must be registered with the U.S. Department of Labor; their status and the agreement enable the employer to claim the credit.

Key Provisions

• Creates an Alabama income tax credit of $1,000 for each apprentice employed for at least seven full months in the tax year; credit limited to four tax years per apprentice.
• Credit is applied against the tax under Title 40, Chapter 18, is nonrefundable, cannot reduce tax liability below zero, and is not transferable.
• Credit is available on a pro rata basis for partial-year employment and for owners of pass-through entities (S or K corp). Employers must apply annually to receive the credit for the preceding calendar year.
• Definitions include: Apprentice (16+ with certain age exceptions), Apprenticeship Agreement (registered with program sponsor/committee per 29 CFR Part 29), and Eligible Employer (employs apprentice via a registered agreement). Administrative responsibilities are assigned to AIDT, with forms prescribed by the Department of Revenue and coordination with Revenue and Commerce.
• Effective dates: credit first available for the 2016 tax year; act becomes effective upon passage and approval.

AI-generated summary using openai/gpt-5-nano on Feb 24, 2026. May contain errors — refer to the official bill text for accuracy.

Subjects

Taxation