TX · Tax Credit

Texas Workforce Training Tax Credits: What Employers Can Claim

Texas has no state income tax credit for training. Its one employer tax program is a pilot refund of state sales and use taxes, up to $2,500 per apprentice in a Registered Apprenticeship, which ends December 31, 2026. The federal Work Opportunity Tax Credit lapsed for people hired after December 31, 2025, unless Congress revives it.

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

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HOW IT WORKS

Four steps, in this order.

1
Confirm the RAP is approved by the U.S. DOL and you pay Texas sales and use tax
2
Employ the Texas-resident apprentice at least seven months in the year
3
Apply online January 1 to March 31 of the following year, one form per apprentice
4
TWC reviews April 1 to May 31 and notifies you

2 VERIFIED PROGRAMS

Where the Texas money comes from.

Run by Texas Workforce Commission (Apprenticeship Tax Refund Pilot) and IRS/U.S. DOL (WOTC). Every figure is from an official page, linked on each card.

Apprenticeship Tax Refund Pilot Program (SB 1524)

Up to $2,500 per apprentice

CLOSING DEC 31, 2026

WHAT YOU GET

A refund of state taxes per eligible apprentice.

HOW MUCH

Up to $2,500 per apprentice. Up to 100 employers a year. One individual per entity generally; up to six if at least half are from priority groups (foster youth, veterans, military spouses, women).

WHO RECEIVES THE MONEY

The employer, as a refund of state sales and use taxes paid.

WHO QUALIFIES

Registered Apprenticeship Program approved by the U.S. DOL
You pay State of Texas sales and use taxes
Apprentice is a Texas resident paid wages at least seven months in the year

Before you start: No. Apply after the year ends.

Work Opportunity Tax Credit (federal, WOTC)

Lapsed for 2026 hires

LAPSED, AWAITING CONGRESS

WHAT YOU GET

Normally 40% of up to $6,000 of first-year wages, so up to $2,400, for hires from certified target groups.

HOW MUCH

Up to $2,400 typical; higher for some veterans. Not available for people who start work after December 31, 2025, unless Congress acts.

WHO RECEIVES THE MONEY

The employer, as a federal income tax credit (nonrefundable).

WHO QUALIFIES

Hire certified as a member of a target group
At least 400 hours for the full 40% rate
Submit Form 8850 within 28 days of start

Before you start: Yes. Screen before the job offer and file within 28 days.

AVOID THESE

What gets Texas Tax Credit claims denied.

Missing the January 1 to March 31 window for the pilot refund.
SOURCE: TWC.TEXAS.GOV
Apprentice paid less than seven months in the year.
SOURCE: TWC.TEXAS.GOV
Late WOTC screening: Form 8850 is due within 28 days of the start date.
SOURCE: IRS.GOV
Not a DOL-approved Registered Apprenticeship Program.
SOURCE: TWC.TEXAS.GOV

STRAIGHT ANSWERS

Texas Tax Credit questions.

Is WOTC available for people I hire in 2026?

Not currently. The credit covers only people who began work on or before December 31, 2025. As of September 2026 we found no law renewing it. Congress has extended WOTC retroactively before, so keep screening and check the IRS page.

SOURCE: IRS.GOV

Should I still file Form 8850?

Texas TWC says it still accepts and processes forms, holding them in HIATUS status until reauthorization. Timely filing is not guaranteed to be excused.

SOURCE: TWC.TEXAS.GOV

Is the Texas apprentice refund a credit on my franchise tax?

No. It refunds state sales and use taxes you paid.

SOURCE: TWC.TEXAS.GOV

Can I apply for the refund after 2026?

TWC says the pilot ends December 31, 2026 and it will not accept applications for subsequent program years.

SOURCE: TWC.TEXAS.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.

OTHER PROGRAMS IN TEXAS

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