HB217 Alabama 2016 Session

Summary

Primary Sponsor

Alan BakerRepresentative

Republican

Session

Regular Session 2016

Title

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

Summary

HB217 creates an apprenticeship tax credit in Alabama, giving employers $1,000 per eligible apprentice with annual caps and required reporting.

What This Bill Does

If passed, the bill would grant eligible employers a nonrefundable $1,000 income tax credit for each apprentice employed for at least seven full months, up to five apprentices per employer. The credit would be applied against Alabama income tax (not reducing liability below zero) and could be claimed annually with pro rata adjustments if the apprentice didn’t work the full year. It also establishes annual caps on total credits ($3,000,000 for the first two years, then $5,000,000 each year thereafter) and requires the Department of Revenue to manage the cap and credit issuance, plus the Workforce Development Division to report on program effectiveness.

Who It Affects

• Eligible employers that hire apprentices (including owners of businesses taxed as S corporations, K corporations, LLCs, or professional corporations) who meet the seven-month requirement and may claim up to five apprentices per employer.
• Apprentices and their training programs, who participate under a registered apprenticeship and may benefit from the employer's tax credit; program administration involves the Workforce Development Division and the Department of Revenue.

Key Provisions

• Establishes a $1,000 Alabama income tax credit for each eligible apprentice employed for at least seven full months, with a maximum of five apprentices per eligible employer; credit for an individual apprentice is limited to four taxable years.
• Credit is nonrefundable, nontransferable, and applies against tax under Chapter 18 of Title 40; can be claimed on a pro rata basis if the apprentice does not complete the full preceding calendar year.
• Annual cap on total credits: $3,000,000 for the first two taxable years after the act’s effective date, then $5,000,000 annually thereafter; the Department of Revenue must enforce the cap and notify taxpayers when the cap is reached.
• Definitions for key terms: apprentice (16+ years old, apprenticed in an eligible occupation), apprenticeship agreement, eligible employer (employers with a registered apprenticeship program), and coordination with federal Office of Apprenticeship.
• Rulemaking and administration: Workforce Development Division may adopt rules to implement the act and coordinate with the Department of Revenue for proper administration.
• Annual reporting: Workforce Development Division must report to specified legislative committee chairs on the program’s effectiveness.
• Effective date: Applicable to the 2017 tax year and later; act becomes effective following 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