Arkansas Administrative Code
Agency 172 - Department of Career Education
Rule 172.00.97-004 - Rules and Regulations Associated with Employer Income Tax Credits for Youth Apprecenticeships/Work - Based Learning Programs
Universal Citation: AR Admin Rules 172.00.97-004
Current through Register Vol. 49, No. 2, February 2024
1.00 REGULATORY AUTHORITY
1.01 These regulations shall be
known as the rules and regulations pertaining to tax credits for youth
apprenticeship/work-based learning programs that are not registered with the
Bureau of Apprenticeship and Training.
1.02 Sections 2.00 through 5.00 of these
regulations are promulgated pursuant to the State Board of Workforce Education
and Career Opportunities' authority under Arkansas Code Annotated
6-51-213
and Section 1 of Act 1168 of 1997 to set forth the criteria by which the
Department of Workforce Education may qualify/certify eligible
programs.
1.03 Sections 6.00
through 9.00 are promulgated by the Department of Finance and Administration
pursuant to Section 6 of Act 1168 of 1997 in order to carry out the purposes of
this act.
2.00 PURPOSE
2.01 It is the purpose of these regulations
to establish the rules and criteria for approving programs/occupations that
meet the intent of Act 1168 of 1997 and to set forth the procedure that
employers must follow to be eligible for the tax credit. Only those youth
apprenticeship/work-based learning programs not in occupations that are covered
by Title 29, Subtitle (a), Part 29 of the Code of Federal Regulations shall be
included in these regulations. In addition, only those youth
apprenticeship/work-based learning programs desiring to be approved to allow
participating taxpayers/employers to be eligible for the income tax credit
shall be subject to the rules and regulations.
3.00 DEFINITIONS
3.01 "Eligible employer" means a taxpayer
that employs a student in an apprenticeship/work-based learning program which
meets the standards of program design for nationally recognized curriculum
and/or business and industry or trade association standards; which is not in an
occupation eligible for registration as provided in Title 29, Subtitle (a),
Part 29 of the Code of Federal Regulations, as in effect on January 1, 1995;
and which has been approved by the Arkansas Department of Workforce
Education.
3.02 "Structured plan
for student learning" means a written document developed by the instructor and
workplace mentor that outlines the individual student's learning in the
workplace with progressively higher levels of work experience accompanied by
training and mentoring along with wage progression; identifies work placements
by the employer that engage the student in all aspects of the industry through
job rotations and in structured learning opportunities that meet program/career
learning objectives; and clarifies the legal rights, responsibilities, and
liabilities of the partners. This plan must be signed by the employer,
instructor, and student before the student begins the apprentice position with
the employer.
3.03 "Youth
apprentice" means an individual between the ages of sixteen (16) and twenty-one
(21) who is enrolled in a public or private secondary or postsecondary
school.
4.00 APPROVAL OF APPRENTICESHIP/WORK-BASED LEARNING PROGRAMS
4.01 Educational institutions requesting a
youth apprenticeship/work-based learning program to become approved under these
rules and regulations must submit a written plan to the ADWE that includes the
following information/documentation. Such plan shall be submitted not less than
60 days prior to the requested approval date. EXCEPTION: For institutions
requesting approval for programs during the first three months of 1998, the
Department shall work to ensure that those requests are approved as soon as
possible without regard to the 60-day rule.
4.01.1 Assurance that the participating
students will be enrolled in the appropriate related career major with a
work-based learning component.
4.01.2 Documentation that the standards of
the program design are nationally recognized by business and industry and/or
trade associations and that the program has support by appropriate business and
industry and/or trade associations in this state.
4.01.3 Description and sample of the written
structured plan for the students' learning in the workplace.
4.01.4 The program and student progress
evaluation process.
4.01.5
Assurance that participating students will work a minimum of 270 hours per
semester (or 540 hours per school year distributed appropriately through out
the year).
4.02 The
appropriate program manager of the ADWE shall review the written
plan/documentation and provide technical assistance if necessary.
4.03 Final approval of each tax credit
eligible program shall be by the Associate Director for Instructional
Programs.
5.00 APPROVAL/CERTIFICATION OF PARTICIPATING STUDENTS INTO AN APPROVED PROGRAM
5.01 For each new participating student, the
following information/documentation must be submitted to the ADWE at least 30
days prior to the date that the student begins work in an apprentice position
for which the eligible employer may claim a tax credit. EXCEPTION: For
institutions requesting approval for participating students during the first
three months of 1998, the Department shall work to ensure that those requests
are approved as soon as possible without regard to the 30-day rule.
5.01.1 A copy of each participating student's
four- to six-year career action plan (at least two years of secondary school
preceding graduation and one or two years of postsecondary education) in the
appropriate related career major with a work-based learning component and that
is signed by the student, parent, and teacher.
5.01.2 A signed copy of the structured plan
for student learning.
5.01.3 A
Status of Apprentice Form for each student.
5.02 The instructor shall submit an
Apprentice Status Form in the event an apprentice changes employers; completes
or withdraws from the apprenticeship program; or for any other reason, is no
longer participating in the program.
6.00 INCOME TAX CREDIT
6.01 At the end of each tax year, the
eligible employer shall submit the following documentation to the ADWE:
6.01.1 The prescribed form (ADWE-YAP) which
shall be sent by the Department of Workforce Education to all approved programs
for distribution to eligible employers. Such form shall require information
that includes the apprentice's wages and the period of time worked;
6.01.2 A copy of the W-2 for each youth
apprentice for which the tax credit is claimed; and
6.01.3 A detailed schedule by pay period of
wages.
6.02 Wages paid
prior to approval of the program or after the end of the student's
participation in the approved program shall not qualify for credit. Also, wages
paid to employees after they are disqualified pursuant to the terms of the
approved apprenticeship program shall not qualify for the credit.
6.03 An eligible taxpayer who trains a youth
apprentice shall be entitled to the tax credit even though the apprentice
receives his or her wages for training from a 501(c)(3) corporation.
6.04 The appropriate program manager and the
Associate Director for Instructional Programs shall certify to the Department
of Finance and Administration that the eligible taxpayer has met all the
requirements and qualifications for the tax credit. The certification shall
include the total amount of wages paid to each youth apprentice employed by the
taxpayer during the taxable year in which the taxpayer is claiming the
credit.
7.00 AMOUNT OF TAX CREDIT
7.01 The taxpayer shall be allowed
a credit equal to ten percent (10%) of the certified wages earned by a youth
apprentice or two thousand dollars ($2,000), whichever is less.
7.02 The Department of Finance and
Administration shall issue the taxpayer an Income Tax Credit Memorandum based
on the certified wages.
7.03
Separate credit memos will be issued for each tax year in which the taxpayer
has paid certified wages, but in not event will more than a cumulative total of
$2,000 be allowed per youth apprentice.
8.00 USE OF CREDIT
8.01 In order for the taxpayer to use the
credit, the Income Tax Credit . Memorandum must be attached to the income tax
return in which the credit is first claimed.
8.02 The amount of credit that may be used by
a taxpayer for any taxable year shall not exceed the amount of individual or
corporate income tax otherwise due.
8.03 Regardless of whether or not the credit
is used for the tax year in which it was earned, any unused credit may be
carried over only for a maximum of two (2) consecutive taxable years.
8.04 If the Business is an S corporation, the
pass-through provisions of Arkansas Code Annotated §
26-51-409,
as in effect for the taxable year the credit is earned, shall be
applicable.
8.05 A partner's or
member's distributive share of the 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
credits. If the agreement does not have substantial economic effect or does not
provide for the allocation of the credit, the credit shall be allocated
according to the partner's or member's interest in the partnership, pursuant to
Federal Internal Revenue Code section 704(B), as in effect on January 1,
1995.
9.00 EFFECTIVE DATE
9.01 The tax credit provided under this act
shall apply to taxable years beginning January 1, 1998, and all taxable years
thereafter.
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