Technical Information Release  TIR 24-7: Temporary Authorized Training Tax Credit for Emergency Assistance

Date:	07/02/2024
Referenced Sources:	Massachusetts General Laws

I. Introduction

This Technical Information Release (“TIR”) explains the general rules for calculating, and the tax ramifications of claiming, the Temporary Authorized Training Tax Credit for Emergency Assistance, as recently enacted by “An Act Making Appropriations for the Fiscal Year 2024 to Provide for Supplementing Certain Existing Appropriations and for Certain Other Activities and Projects” (the “Supplemental Budget”).[1]  The Temporary Authorized Training Tax Credit for Emergency Assistance is intended to encourage certain entities to provide training during the capacity limitation on the emergency shelter assistance program.[2]  The training must be provided to individuals receiving benefits through the emergency housing assistance program pursuant to G.L. c. 23B, § 30 (“qualified trainees”)[3] through an authorized training program.[4],[5]

II. Discussion

The Temporary Authorized Training Tax Credit for Emergency Assistance is available to partnerships, limited liability corporations, or other legal entities subject to G.L. c 62, as well as business corporations taxable under G.L. c. 63, that provide training to a qualified trainee through an authorized training program.[6]  To qualify for the credit, such entities must (i) have a place of business in the Commonwealth; (ii) conduct an authorized training program in the Commonwealth that is in compliance with recommendations of the Executive Office of Labor and Workforce Development (“EOLWD”); (iii) enroll the qualified trainee in an authorized training program on or after April 30, 2024; and (iv) meet any additional requirements determined by the Executive Office for Administration and Finance and EOLWD.[7]  The credit is equal to $2,500 for each qualified trainee that receives the training from the entity.[8]  The amount of the credit that exceeds the tax due for a taxable year may be carried forward to the subsequent taxable year.[9]  The credit is subject to an annual cap of $10,000,000.[10]  In the case of a pass-through entity eligible for the credit, the credit will be attributed on a pro rata basis to the owners, partners, or members of the legal entity that provides the training to a qualified trainee.

The Supplemental Budget requires EOLWD, in consultation with the Executive Office of Administration and Finance, to promulgate regulations or other guidance for the administration of the authorized training programs.[11]

The credit may be claimed for taxable years beginning on or after January 1, 2024.[12]  However, the credit may no longer be claimed as of (i) January 1, 2026; or (ii) the taxable year in which the end of the capacity limitation on the emergency shelter assistance program occurs, whichever is sooner.[13]

 

                                                                        /s/Geoffrey E. Snyder
                                                                        Geoffrey E. Snyder
                                                                        Commissioner of Revenue

GES:RHF:db

July 2, 2024

TIR 24-7

[1] St. 2024, c. 88.

[2] The capacity limitation on the emergency shelter assistance program is that established pursuant to a declaration issued by the Secretary of Housing and Livable Communities dated October 31, 2023, the extension of the declaration dated February 28, 2024 and any subsequent extensions, issued pursuant to 760 CMR 67.10, as inserted by emergency regulations issued by the executive office of housing and livable communities on October 31, 2023 and accompanying guidance issued pursuant to said declaration and 760 CMR 67.10.

[3] As provided in G.L. c. 62, § 6(dd)(1) and G.L. c. 63, § 38NN(a), a qualified trainee is an individual receiving benefits through the emergency housing assistance program pursuant to G.L. c. 23B, § 30 and 760 CMR 67.00 or an individual in an overflow emergency shelter site established in response to the capacity limitation on the emergency shelter assistance program, who: (i)(A) has not received federal work authorization pursuant to 8 CFR 274a; or (B) is currently unemployed; and (ii) is participating in an authorized training program.   

[4] G.L. c. 62, § 6(dd)(1) and G.L. c. 63, § 38NN(a) both define an authorized training program as a training program approved by the Executive Office of Administration and Finance and EOLWD that is offered by the entity to train qualified trainees.  The program must assist qualified trainees in developing skills and accessing resources to prepare the qualified trainees to enter the workforce.  No authorized training program shall provide compensation to a qualified trainee without federal work authorization pursuant to 8 CFR 274a and said program shall ensure the qualified trainee has no expectation of compensation for training.

[5] The Supplemental Budget, §§ 5,7, 29.

[6] G.L. c. 62, § 6(dd)(2); G.L. c. 63, § 38NN(b).

[7] G.L. c. 62, § 6(dd)(3); G.L. c. 63, § 38NN(c).

[8] G.L. c. 62, § 6(dd)(2); G.L. c. 63, § 38NN(b).

[9] Id.

[10] G.L. c. 62, § 6(dd)(4); G.L. c. 63, § 38NN(d).

[11] The Supplemental Budget, § 18(a).

[12] The Supplemental Budget, § 29

[13] The Supplemental Budget, §§ 6, 8,30.