Brenden Healy Shares Insights on the Expanded Human Capital Tax Credit
Whittlesey Partner in Charge of Tax Services, Brenden Healy, was recently featured in the Hartford Business Journal for his insights pertaining to the new Connecticut law that increases tax credits for employee training and child care. The measure is a proactive step to incentivize businesses to invest in their workforce and potentially address the state’s worker shortage.
The recently enacted state budget has raised Connecticut’s human capital investment tax credit from 5% to 10% for workforce training-related investments and up to 25% for childcare-related expenditures. The law benefits corporations operating in Connecticut by providing them a larger credit for costs tied to in-state job training, work education and training programs, and contributions to higher education institutions for technology advancements or improvements.
Brenden Healy, our Tax Manager at Whittlesey, opined that companies could use the credit to minimize their Connecticut corporation business tax liability, fostering an appealing incentive to invest in workforce training programs. "It’s going to help make Connecticut more attractive to companies to stay here or to relocate here because it creates a well-trained workforce," Healy stated.
He further elaborated, “If a company spends $100,000 on training, they can take the $10,000 in tax credit. So, they are not spending the money just to get the credit. But, for a company that’s maybe a little on the fence, it’s an incentive to push them over.”
This law also promises to help workers better afford child care, which has emerged as a significant obstacle in filling vacant jobs. A notable aspect of this law is its flexibility. From offering credits for a company to construct a child-care center to financing a private child-care center build-out, or providing child-care vouchers for families, the provisions are far-reaching.
Although the primary target of this part of the bill are larger companies, smaller corporations can also benefit through the voucher system. For example, if a daycare costs $600 per week per child, an employer might give a $100 subsidy to a worker, then the company gets $25 back in the tax credit under the law.
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