WA · Tax Credit

Washington Workforce Training Tax Credits: What Employers Can Claim

Washington has no general state credit for hiring or training. Two B&O credits fit employers: a 50% credit on repayments of a Customized Training Program loan, and $2,000 to $4,000 per new job at a manufacturing or R&D facility in a rural county. The state Veterans Employer credit expired in 2023. The federal Work Opportunity Tax Credit covered workers who began work on or before Dec 31, 2025, and the IRS page as of September 2026 shows no extension.

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

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HOW IT WORKS

Four steps, in this order.

1
Decide which credit matches your activity: training loan or new rural jobs
2
Apply (rural jobs: within 90 days of first hire) or join CTP through a college
3
Keep payroll, repayment and ESD records
4
Claim on your B&O return and file the annual tax performance report

2 VERIFIED PROGRAMS

Where the Washington money comes from.

Run by Washington Department of Revenue (B&O credits) and SBCTC (Customized Training Program). Every figure is from an official page, linked on each card.

B&O tax credit for the Washington Customized Training Program

50% of each CTP repayment

OPEN, ROLLING

WHAT YOU GET

A credit against B&O tax equal to 50% of each payment you make to repay your CTP training loan.

HOW MUCH

50% of each repayment, carried over to later years if unused. No credit can be earned on payments made on or after July 1, 2031, and credits earned in 2031 can be used until Dec 31, 2032. The program expires July 1, 2033.

WHO RECEIVES THE MONEY

The business takes the credit on its state B&O tax return. The state training loan itself is paid to the college.

WHO QUALIFIES

You are a participant in the Customized Training Program
You file an annual tax performance report with the Department of Revenue
The credit cannot exceed the B&O tax due for the period

Before you start: Yes, through the CTP contract. There is no separate credit application.

B&O tax credit for new jobs in manufacturing and research and development in rural counties

$2,000 to $4,000 per new rural job

ONGOING

WHAT YOU GET

A credit per new permanent full-time position created at a manufacturing or R&D facility in an eligible area.

HOW MUCH

$4,000 for each new position paying over $40,000 a year in wages and benefits; $2,000 for each at $40,000 or less. The facility's average qualified employment must grow at least 15% in the first four full quarters. Statewide credits are capped at $7.5 million per fiscal year.

WHO RECEIVES THE MONEY

The business, as a credit against its B&O tax.

WHO QUALIFIES

Manufacturing or research and development activity at a specific facility in a rural county
Average qualified positions rise at least 15% in the four quarters after the first qualifying hire, compared with the four before
Qualified positions are permanent, full time (35 or more hours a week), and held for four consecutive quarters
You cannot use the credit to decertify a union or displace existing jobs

Before you start: Yes. DOR says applications must be received within 90 days after the first hire date.

AVOID THESE

What gets Washington Tax Credit claims denied.

Not filing the annual tax performance report.
SOURCE: APP.LEG.WA.GOV
Claiming more than your B&O tax due. The CTP credit cannot exceed it.
SOURCE: DOR.WA.GOV
Missing the rural-jobs application window.
SOURCE: DOR.WA.GOV
Using the rural credit to decertify a union or displace existing jobs.
SOURCE: APP.LEG.WA.GOV
Claiming CTP credit before SBCTC reports your repayment to the Department of Revenue.
SOURCE: SBCTC.EDU

STRAIGHT ANSWERS

Washington Tax Credit questions.

Is the federal Work Opportunity Tax Credit available for 2026 hires?

No. The IRS says it applies to individuals who begin work on or before Dec 31, 2025, and the page, updated July 20, 2026, shows no extension. Washington's ESD pages still describe WOTC, so follow the IRS page. Check it for any later change.

SOURCE: IRS.GOV

Does Washington still have a veterans hiring credit?

No. The Veterans Employer B&O credit is shown as expired July 1, 2023.

SOURCE: DOR.WA.GOV

What counts as rural for the new-jobs credit?

The statute ties it to a rural county as defined in RCW 82.14.370. DOR's page also mentions Community Empowerment Zones, but the statute text read on this date defines the eligible area only as a rural county. Confirm with DOR.

SOURCE: APP.LEG.WA.GOV

When does the training credit end?

No credit can be earned on payments made on or after July 1, 2031, and the program expires July 1, 2033.

SOURCE: APP.LEG.WA.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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