Arkansas HVACR NewsMagazine February 2018

S tate, National, Chapter News State national Chapter News

Act 1042

a. Some wanted to pay for the apprentice’s education expense up front. It was a way to attract a good prospective employee. b. Others felt that reimbursing the student at the successful completion of the semester was a better option. That way the student had some “skin in the game” and were more likely to be dedicated to the course work as well as being a more motivated employee. c. A few felt that This seemed to be motivated by a fear that the employee would leave anyway and the contractor would lose any value his training dollars should have earned the company. This, of course, did not take into consideration the fact that apprentices are much more likely to stay with their employer than someone that was a typical hire with OJT only. With the apprenticeship tax credit, the employer only has to consider when to reimburse the employee the tuition and book expense—before or after they complete a semester’s classwork. What if the business has no tax liability one year? The tax credit can be carried over up to two years. $2000 Tax Credit That is serious money! the employee received the greater benefit and should “fit the bill” without the possibility of reimbursement.

provides up to

$2,000 tax credit. In the 2017 legislative session Senator English sponsored SB505 to expand the youth apprenticeship tax credit to include workers 16 years and older. There is now no upper age limit so it really isn’t a youth apprenticeship tax credit anymore. It’s a worker apprentice tax credit. The law allows an

employer to claim a tax credit equal to $2,000 or 10% of the employee’s wage,

whichever is greater. For the HVACR industry wage scale, that means $2,000. The employer can claim up to 5 apprentices or $10,000.

This is a huge positive movement for the HVACR industry. It does away with the cost of the education component associated with apprenticeship training. In fact, it should cover the cost of the tuition and the books for most if not all the apprenticeship programs. Since tuition and books must be paid at the beginning of each semester, fall and spring, someone has to front the cost. Prior to this announcement, most contractors were willing to pay the expense. The question was when to pay it.

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