Like most states, Kentucky offers a number of tax credits, deductions and other incentives to companies that expand or relocate operations to the state. Beyond this there are also incentives to reward local companies for expanding operations and hiring residents to manage operations. This can often times leave one wondering what incentives exist for Kentucky companies that may not be seeking to relocate, but want to provide employees with assistance in skills training and other areas? The good news is that the state does have several incentive programs designed to help companies keep their workforce focused, educated and on the cutting edge in their respective industries. Below Barnes Dennig has provided a summary list of incentives that companies can leverage in these situations, including:
Skills Training Investment Credit
This program is designed to promote employment opportunities for Kentucky residents through tax credit awards to business and industry. The program offers tax credits to qualifying companies for approved training/education activities. Companies interested in participating must submit a detailed application to the Bluegrass State Skills Corporation. The tax credit amount available to companies each year during the period (July 1, 2014 – July 30, 2016) is the lesser of $100,000 or $500 multiplied by the by the company’s number of fill time state resident employees. The program allows for a 50% tax credit for all training expenses and will provide credits for up to $25 per hour for all in house training costs.
Companies that have been engaged in the following activities for a period of no less than three years within the state of Kentucky are eligible to submit an application. This includes manufacturing, including the processing, assembly, production or warehousing of any property; processing of agricultural and forestry products; telecommunications; healthcare; product research and engineering; tool and tie and machine technology; mining; tourism and operation of facilities to be used in the entertainment, recreation and convention industry; and transportation in support of manufacturing.
Qualifying Training Types
According to the terms of the program the following training types apply including; in-house training, consultant training, instruction received at an educational institution, instructional materials, texts and related supplies and trainee wages. Safety and regulatory training is also eligible assuming it accounts for less than 50% of the overall eligible instruction.
Grant in Aid Program
The Grant in Aid (GIA) program offers up to a 50% reimbursement of eligible training costs incurred by a company or consortium for approved training activities. To be eligible for the program companies must complete an application and submit it to the Bluegrass State Skills Corporation. The credit amount varies based on the overall size of the company. However, no one company with 1-499 employees can receive more than $25,000 and no one company with 500 or more employees can receive more than $50,000. Funding received may not exceed the number of trainees multiplied by $2,000. The minimum application amount is $6,000.
Companies primarily operating in the following sectors are able to participate in the program including, manufacturing, service and technology, public or nonprofit hospitals and training groups with three of more eligible companies. It’s essential to note that any business who is primarily focused on the retail sale of good is excluded from this program.
Qualifying Training Types
According to the terms of the program the following training types apply including: in-house training; educational institution and consultant training; instructional materials, texts and supplies; train-the-trainer travel; trainee wages and registered apprenticeship training – year one apprentices.
To learn more about workforce, job training and other incentives available to Kentucky based companies please contact Scott Cress at 859.344.6400.