New employee-training credits & incentives opportunities in New York

Credits & Incentives talk with Deloitte

​“Credits & Incentives talk with Deloitte,” is a monthly column by Kevin Potter of Deloitte Tax LLP, featured in the Journal of Multistate Taxation and Incentives, a Thomson Reuters publication. The January edition, co-authored with Jackie Hakimian of Deloitte Tax LLP, is devoted to employee-training tax credits and financial incentives as a potential way to help organizations subsidize this significant cost.

Learning and development opportunities

In recent years, employers have increasingly focused on the need to provide learning and development opportunities for employees. Learning has become a business-critical priority for increasing skills, improving the leadership pipeline, and enhancing employee engagement and retention. Traditional employee training is being revolutionized by flipped classrooms,1 learning-centric models, and a vast increase in the content being delivered over a variety of new online and mobile platforms. Traditional employee training represents a $130 billion global market, and the average employer spends about $30 per hour on employee training.2

Deloitte's 2015 Global Human Capital Trends report illustrates the vital need to provide learning and development opportunities for employees.3 In this annual report, Deloitte Consulting surveyed more than 3,300 business and human resource leaders from 106 countries to assess the importance of 10 specific talent challenges facing their organization and to judge how prepared they are to meet these challenges.

In the 2015 report, the third most important challenge was the need to transform and accelerate corporate learning, up from number eight in 2014. The percentage of companies rating learning and development as very important tripled since the previous year, but the readiness to address it went down. Only 40 percent of respondents rated their organizations as "ready" or "very ready" in learning and development in 2015, compared to 75 percent in 2014.

With an increased emphasis on employee learning and development, we expect to see businesses setting aside significant resources for employee training in 2016 and beyond. Given this trend, this month's Credits & Incentives Talk column is devoted to employee-training tax credits and financial incentives as a potential way to help organizations subsidize this significant cost.

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Excerpts from this month's issue

In order to enhance the potential value and the likelihood of securing the New York State and New York City training incentives discussed in this column, as well as training incentives potentially available in other jurisdictions, businesses should take into account the following basic rules of the road in pursuing such incentives:

Start planning your approach early in the process: Often, training incentives have an application and pre-approval process, making it important to start actively planning approaches to pursue such benefits at the inception of the training process.

Become familiar with the rules and requirements: Read up on program rules and requirements in order to tailor your application to address program requirements. Information on employee training incentives can come from a variety of sources, including the US Department of Labor, state departments of revenue, state and local economic development agencies, and state workforce investment boards, among others.

Apply before you commit to training: Consider completing required applications and taking other initial steps required to secure benefits prior to entering into agreements with training providers to undertake an employee-training project. As training incentives are often provided as an inducement to engage in a training project, entering into training agreements prior to taking steps to secure the incentives may render the incentives unavailable to an applicant.

Obtain administrative agency review of your draft application: Don't hesitate to ask the administering agency if it can review an initial draft application prior to submission. This can provide valuable insight on what the agency is looking for in a successful application.

Capture relevant data: Cost of compliance can be high if you do not have systems and processes in place to capture the relevant data required to be shared with the requisite authorities. Utilization of a learning management system may play a significant role in lowering the overall costs of compliance.

As the corporate learning market undergoes a digital transformation and as organizations try to fill the gaps in talent and skills they are facing, training tax credits, grants, or specialized programs developed at no or low cost should all be part of a comprehensive learning strategy.

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