Ways to Fund Employee Training (Grants, Credits & Programs)

WIOA on-the-job training (OJT)

Through local workforce development boards, the Workforce Innovation and Opportunity Act can reimburse employers for part of the wages of eligible new hires during on-the-job training, typically up to 50% of the wage rate, and up to 75% in some circumstances. Contact your local American Job Center to learn about eligibility and approved occupations.

Registered apprenticeship

Registered apprenticeship programs combine paid work with related instruction. Many states and the federal government offer grants, tax credits or technical assistance to help employers start programs. Visit Apprenticeship.gov or your state apprenticeship agency.

State workforce training grants

Many states offer incumbent worker training grants, customized training programs and community college partnerships that subsidize training for current employees. Check your state workforce or economic development agency.

Section 127 educational assistance

Under Internal Revenue Code Section 127, employers can provide eligible employees with up to $5,250 per year in educational assistance that is generally excluded from the employee’s income, under a qualifying written plan. Confirm current limits and rules with IRS guidance and your tax advisor.

Work Opportunity Tax Credit (WOTC)

WOTC has provided employers a federal tax credit for hiring individuals from certain target groups. Authorization and requirements change, so check current guidance from the IRS and the U.S. Department of Labor.

Veterans programs

Programs such as on-the-job and apprenticeship benefits under the GI Bill can support eligible veterans while they train with you.

Getting started

1. Call your local workforce board or American Job Center.
2. Ask your community college’s workforce or business services office.
3. Talk with your tax advisor about tax-advantaged options.
4. Keep good training records. Most programs require documentation.

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