In Texas, we want to make sure our workers are well trained to meet the needs of employers in Texas. Registered Apprenticeship Programs (RAPs) train workers through full-time, paid apprenticeships.
The Texas Workforce Commission (TWC) is testing a tax refund program for employers who hire apprentices. This program will encourage more RAPs in new and diverse fields. The tax refund will be for RAPs approved by the U.S. Department of Labor—Office of Apprenticeship.
Some employers can get a refund on their state taxes of up to $2,500 for each apprentice who is part of a qualifying apprenticeship. To be eligible, the apprentice must have earned wages for at least seven months in a year.
TWC may approve tax refunds for up to 100 eligible employers in a year. If there are more than 100 eligible applicants, TWC will give priority to employers who offer apprenticeships in rural areas and provide training in new job fields. Priority may also be given to employers who have apprentices from specific groups, like transitioning foster youth, military veterans, military spouses and women.
To apply for the tax refund, the employer should meet two requirements: first, they must pay State of Texas sales and use taxes, and second, they need to have paid wages to a Texas resident for at least seven months during their qualifying apprenticeship.
To apply, employers will submit their applications online when the application portal becomes available, on January 1.
They should do this between January 1 and March 31 of the year following the calendar year of the apprenticeship.
Here are some important notes for you to remember:
- Fill out a separate online application for each eligible apprentice.
- Keep the confirmation notice you receive after submitting the application because it's your proof of timely submission. You need to keep it for four years if it's approved or for one year if it's denied.
- Please ensure application information is protected and stored in a secure manner.
Here's some information about the processing times:
- Applications will be reviewed from April 1 to May 31.
- Employers will be notified if their application is approved or denied after the review process is finished.
- If you want to know the status of your application, you can email RATF@twc.texas.gov. Just make sure to have the employer's name and apprentice information ready when you inquire.
During the Regular Session of 2021, the 87th Texas Legislature passed Senate Bill (SB) 1524. This created a pilot program called the Apprenticeship Tax Refund Pilot Program.
To take part, entities (like companies or organizations) need to apply for eligibility through TWC. The program will be active until December 31, 2026.
Employers can receive a tax refund of up to $2,500 for each eligible apprentice they hire. They can hire as many apprentices as they want, but the tax refund is only for one individual per eligible entity. If an entity hires new apprentices from specific groups, such as transitioning or former foster youth, veterans, military spouses or women, they might be eligible for a tax refund for up to six apprentices. At least half of these apprentices need to be from one or more of these special groups.
The rules and regulations for the Apprenticeship Tax Refund Pilot Program can be found here: