The Connecticut Senate has approved Senate Bill 98, allowing pass-through entities to take advantage of the manufacturing apprenticeship tax credit.
In its current form, the credit is only available to businesses subject to the corporate income tax, which excludes S-corporations, limited liability companies, and other pass-through entities. This has presented a disadvantage to small- and mid-sized manufacturers who are most strongly affected by decreased business productivity when experienced workers train new employees.
According to a survey by the Connecticut Business and Industry Association, approximately half of manufacturers in Connecticut have difficulty finding new workers, and a third said inexperience or lack of skills among candidates contributed to hiring difficulties. The extension would encourage small- and mid-sized manufacturers to increase their apprenticeship rates by reducing personal income or business entity tax liabilities. Offsetting the short-term loss in productivity with the long-term gain of a trained employee could help alleviate the current workforce shortage.
The bill is now headed to the House of Representatives for consideration.
Questions regarding your business's eligibility? Contact a UHY professional to find out if your business qualifies for the credit under the new rules.