Arkansas Code of 1987 (2023) › Title 26 - TAXATION (§§ 26-1-101 — 26-82-119) › Subtitle 5 - STATE TAXES (§§ 26-50-101 — 26-65-108) › Chapter 51 - INCOME TAXES (§§ 26-51-101 — 26-51-2804) › Subchapter 5 - TAX CREDITS GENERALLY (§§ 26-51-501 — 26-51-517) › Section 26-51-509 - Apprenticeship program - Definition

(a)
As used in this section, "apprentice" means a worker who is at least sixteen (16) years of age and is employed:
(1)
To learn an apprenticeable occupation under
29 C.F.R. § 29.1
et seq., as it existed on January 1, 1995; or
(2)
In an apprenticeship or work-based learning program that meets:
(A)
Either the standards of program design for a nationally recognized curriculum or business, industry, or trade association standards; and
(B)
The criteria for vocationally approved apprentice or work-based learning programs.
(b)
(1)
(A)
A taxpayer who employs an apprentice is allowed an income tax credit in the amount of two thousand dollars ($2,000) or ten percent (10%) of the wages earned by the apprentice, whichever is less, against the tax imposed by the Income Tax Act of 1929, §
26-51-101
et seq., for each apprentice.
(B)
However, the total amount of the income tax credit that a taxpayer may claim under this section for a tax year shall not exceed ten thousand dollars ($10,000).
(2)
(A)
A partner's or member's distributive share of the income tax credit shall be determined by the partnership or limited liability company agreement, unless the agreement does not have substantial economic effect or does not provide for the allocation of the income tax credits.
(B)
If the agreement does not have substantial economic effect or does not provide for the allocation of the income tax credit, the income tax credit shall be allocated according to the partner's or member's interest in the partnership or limited liability company, pursuant to
26 U.S.C. § 704(b)
, as in effect on January 1, 1995.
(c)
(1)
To claim the benefits of this section, a taxpayer shall obtain a certification from the following, certifying to the Department of Finance and Administration that the taxpayer has met all the requirements and qualifications stated in this section:
(A)
If the apprentice is employed as described in subdivision (a)(1) of this section, the United States Office of Apprenticeship; or
(B)
If the apprentice is employed as described in subdivision (a)(2) of this section, the Office of Skills Development.
(2)
The certification to the department shall include the total amount of wages paid to each apprentice employed by the taxpayer or organization exempt from taxation under
26 U.S.C. § 501(c)(3)
in the taxable year for which the taxpayer claims the income tax credit provided in this section.
(d)
(1)
The amount of the income tax credit that may be used by a taxpayer for a taxable year may not exceed the amount of individual or corporate income tax otherwise due.
(2)
Any unused income tax credit may be carried over for a maximum of two (2) consecutive taxable years.
(e)
If the business is an S corporation, the pass-through provisions of §
26-51-409
, as in effect for the taxable year the income tax credit is earned, shall be applicable.
(f)
A taxpayer who trains an apprentice as provided in subsection (b) of this section is entitled to the income tax credit provided in this section for the apprentice, even though the apprentice receives his or her wages for such training from an organization exempt from taxation under
26 U.S.C. § 501(c)(3)
.
(g)
(1)
The department shall promulgate such rules as may be deemed necessary to carry out the purposes of this section.
(2)
The department shall consult with the United States Office of Apprenticeship and the Office of Skills Development during the promulgation of the rules.
Amended by Act 2019, No. 213,§ 2, eff. 7/24/2019.
Amended by Act 2019, No. 213,§ 1, eff. 7/24/2019.
Amended by Act 2019, No. 910,§ 2399, eff. 7/1/2019.
Amended by Act 2019, No. 910,§ 2398, eff. 7/1/2019.
Amended by Act 2017, No. 1042,§ 1, eff. for tax years beginning on or after 1/1/2018.
Acts 1995, No. 1103, §§ 1-5.