January 5, 2022

Ohio Income Tax Credit Available for Career-Technical Program Employers

Ohio Income Tax Credit Available for Career-Technical Program Employers Tax Credits & Incentives

On December 22, 2021, Governor DeWine signed Senate Bill 166 into law, authorizing an income tax credit for employers providing work-based learning pilot programs. The law includes measures:

  • Authorizing a nonrefundable income tax credit for employers that hire students age 19 or younger for a work-based learning experience, internship or cooperative education program associated with a career-tech education program in which the employee is enrolled;
  • Providing that the credit equals 15 percent of the wages paid to the student on and after the law’s effective date, capped at $5,000 per student, per year; and
  • Capping the total credits that may be claimed by employer per biennium at $5 million.

The credit is available for any program offered by vocational schools – also sometimes referred to as trade schools, technical schools, or career schools. Note that this is an income tax credit; therefore, it does not apply to C-corporations as they are not subject to income tax by Ohio. Direct and indirect investors in pass-through entities are eligible to claim the credit. The credit will go into effect during the 2022 calendar year.

Marcum Insight

While additional information at this point is limited, taxpayers should be aware of the credit in the event that eligible students are already employed in work-based learning programs. In addition, taxpayers not currently employing eligible students from these programs may want to consider doing so in order to obtain the tax benefit and cultivate talent pipelines to help satisfy future business needs.

For additional information or assistance, please contact your Marcum professional.