Worker Training Tax Credit

What is it?

A tax credit equal to:

  • 35% of the costs of providing eligible training to qualified workers. Claim this credit against your individual income tax, fiduciary income tax, corporation income tax, bank franchise tax, and taxes imposed on insurance companies and utilities, or
  • 35% of the direct costs of providing manufacturing training or instruction to middle and high school students. Claim this credit against your individual or corporation income tax. 
What is eligible training?
  • Training courses that are part of programs from providers listed on the Commonwealth’s Eligible Training Provider list. Virginia’s Workforce Innovation Opportunity Act Title I Administrator maintains this list. 
  • Training courses provided by any Virginia college, community college, or other public institution of higher learning 
  • Instruction or training that is part of an apprenticeship agreement approved by the Commissioner of Labor and Industry.  For information on pre-approved apprenticeship programs, contact your Virginia Department of Labor and Industry apprenticeship representative. 
What is manufacturing training or instruction for middle and high school students?

Programs offered by manufacturers that:

  • provide orientation, instruction, or training in the type of manufacturing the business in engaged in,
  • are for students in grades 6 through 12,
  • are coordinated with the local school district, 
  • are held at the business’s plant or facility, or a public middle or high school, and
  • are certified by the Virginia Department of Education (VDOE).

These programs qualify for this credit beginning in taxable year 2018.

How much is the credit, and is there a cap?

Eligible worker training: 35% of all classroom training costs. The credit is limited to $500 per qualified employee per year, or $1,000 if the employee is considered a non-highly compensated worker. “Non-highly compensated” workers are those whose income was below Virginia’s median wage amount for the year prior to applying for the credit.

Manufacturing training for middle and high school students: 35% of direct costs associated with the training. No one manufacturer can claim more than $2,000 credit per year.

We are authorized to issue up to $1,000,000 of training credits. If total requested credits exceed this amount, we will prorate the authorized credits.

Is this credit refundable?

No. Your credit cannot be greater than your tax liability. You may carry forward any unused credits for 3 years. 

How to claim the credit
Other information

The amount of the credit attributable to a partnership, electing small business corporation (S corporation), or limited liability company must be allocated to the individual partners, shareholders, or members in proportion to their ownership or interest within the business entity using Form TCA within 30 days after the credit is granted.