TN · Tax Credit

Tennessee Workforce Training Tax Credits: What Employers Can Claim

Tennessee's main employer hiring credit is the Job Tax Credit: $4,500 per net new full-time position against franchise and excise tax, for companies that create at least 25 jobs in 36 months and invest at least $500,000. A separate credit pays $5,000 per full-time job for hiring people with disabilities who are enrolled in your health plan, with no capital investment needed. There is no state apprenticeship or training tax credit. The federal Work Opportunity Tax Credit lapsed for people who start work after Dec. 31, 2025, per the IRS page updated July 20, 2026.

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State pre-filled: TN
Program type pre-filled: tax_credit

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HOW IT WORKS

Four steps, in this order.

1
Check the credit: standard, enhanced county, community resurgence, or disability hiring
2
File the business plan with the Department of Revenue and get it approved
3
Create and fill the jobs and keep the records
4
Claim the credit on Schedule X of your franchise and excise return

3 VERIFIED PROGRAMS

Where the Tennessee money comes from.

Run by Tennessee Department of Revenue (claims on the franchise and excise return) and TNECD (incentive approvals). Every figure is from an official page, linked on each card.

Standard Job Tax Credit, with Enhanced and Community Resurgence versions

$4,500 per net new full-time job

ONGOING

WHAT YOU GET

$4,500 per net new full-time position. It offsets up to 50% of F&E tax in a year, with 25 years of carry forward.

HOW MUCH

Enhanced credit: an extra $4,500 per position a year for three years (Tier 2) or five years (Tiers 3 and 4), no carry forward, offsetting up to 100% of F&E tax. Community Resurgence: $2,500 per position in a census tract with a poverty rate over 30%.

WHO RECEIVES THE MONEY

The taxpayer, as a credit against franchise and excise tax.

WHO QUALIFIES

Standard: at least 25 net new full-time positions in 36 months and $500,000 invested in a qualified business enterprise
Tier 3: 20 positions; Tier 4: 10 positions, each with $500,000 invested
Community Resurgence: 10 net new positions paying at least the state average occupational wage

Before you start: Yes. A job tax credit business plan is filed and approved first (the disability form states this; confirm for the standard credit).

Job Tax Credit for hiring persons with disabilities

$5,000 per full-time job (disability hiring)

ONGOING

WHAT YOU GET

$5,000 for each qualifying full-time job and $2,000 for each part-time job, when the employee is on your health plan.

HOW MUCH

$5,000 per full-time job and $2,000 per part-time job, when the employee is enrolled in your health insurance plan. Unused credit carries forward up to 25 years.

WHO RECEIVES THE MONEY

The taxpayer, as a credit against franchise and excise tax.

WHO QUALIFIES

New jobs filled by qualified persons with disabilities
Full-time employee enrolled in your health insurance plan
No qualified business enterprise status or capital investment required

Before you start: Yes. File and get the business plan approved before claiming on Schedule X.

Federal Work Opportunity Tax Credit (WOTC)

Lapsed for 2026 hires

LAPSED

WHAT YOU GET

Generally up to $2,400 per certified hire. Not available for people who start work after Dec. 31, 2025.

HOW MUCH

40% of up to $6,000 of first-year wages, 25% for 120 to 399 hours. The IRS page was last updated July 20, 2026 and still shows the Dec. 31, 2025 cutoff.

WHO RECEIVES THE MONEY

The employer, as a federal income tax credit.

WHO QUALIFIES

Hire began on or before Dec. 31, 2025
Certified in a targeted group; Form 8850 within 28 days of start

Before you start: Yes, for eligible earlier hires: file Form 8850 within 28 days of the start date.

AVOID THESE

What gets Tennessee Tax Credit claims denied.

Claiming the disability credit without an approved business plan.
SOURCE: TN.GOV
Too few jobs or too little investment for the standard credit.
SOURCE: TNECD.COM
Offsetting more tax than the limit allows.
SOURCE: TNECD.COM
Claiming WOTC for a 2026 hire.
SOURCE: IRS.GOV
Late WOTC paperwork for an eligible earlier hire.
SOURCE: TN.GOV

STRAIGHT ANSWERS

Tennessee Tax Credit questions.

Is the federal WOTC still available?

Not for people who start work after Dec. 31, 2025. The IRS page, updated July 20, 2026, says it is available for those who begin work on or before that date. Check the IRS page for any later extension.

SOURCE: IRS.GOV

Why does Tennessee's WOTC page still describe applying?

It does not mention the lapse. Follow the IRS page. The state portal is still how you file for an earlier hire.

SOURCE: TN.GOV

Does Tennessee have a tax credit for training or apprentices?

No credit was found for either. A 2001 apprenticeship credit bill failed. The state's workforce money comes as grants. See the training and apprenticeship pages.

SOURCE: WAPP.CAPITOL.TN.GOV

Do I need to invest money to get the disability hiring credit?

No. The Department of Revenue form says the employer need not make a required capital investment or be a qualified business enterprise.

SOURCE: TN.GOV

How we checked. Every fact on this page comes from a state agency, a local workforce board or federal regulation, read on September 30, 2026. Where a board publishes nothing, we say so instead of guessing. Programs and funding change often; confirm with the program before you commit. Written by Jason Meehl, founder of Reimbursa. Found an error? Email hello@reimbursa.com.

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