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B&O Tax Credit for Washington Customized Training Program Extended

Issue Date

Intended audience: Existing small businesses in Washington wishing to recruit, retain, and expand employees.

The Washington Customized Training Program (CTP) and the associated business and occupation (B&O) tax credit have been extended (RCW 82.04.449, Substitute Senate Bill 1033).

The program, administered by the State Board for Community and Technical Colleges (SBCTC), is a revolving loan fund that provides assistance for training costs to businesses locating or expanding in Washington.

Participants in the CTP can earn B&O tax credit for 50% of the amount paid to the program. All credits must be applied to returns filed with the Department of Revenue by June 30, 2026.

How the program works

Businesses interested in taking advantage of this revolving loan program and earning the B&O tax credit must take the following steps:

  • Partner with an eligible training institution. Eligible training institutions include:
    • A Washington community or technical college.
    • A Washington-located, private career school or college that is licensed by either the Workforce Training and Education Coordinating Board or the Higher Education Coordinating Board.
  • Apply to SBCTC for a training allowance (loan).
    • After receiving an allowance, the business must send one or more employees to training.
    • Upon completion of the training, the business must repay 25% of the total amount of the training allowance to the SBCTC.
    • The business must repay the remaining 75% of the training costs over the next 18 months.

Limits to the program

The following limits apply to the program:

  • No business may receive more than $500,000 in training allowances per calendar year. In addition, the SBCTC will determine a per employee cap for training allowances.
  • Businesses with fewer than 50 employees will be given preference.

Claiming B&O tax credit

A B&O tax credit for 50% of the full cost of their training program is available to businesses participating in this program. A business may begin claiming the credit once a payment has been made to the SBCTC. The tax credit claimed may not exceed the B&O tax amount due for the reporting period.

  • Credits may be carried forward through June 30, 2026.
  • No credit may be applied to a return on or after July 1, 2026.

Filing requirements

Businesses claiming B&O tax credits must:

  • Electronically file tax returns and related documents.
  • File a completed Customized Training Credit Worksheet (available through My DOR).
  • File an Annual Tax Performance Report with the Department by May 31 of the year following the year the credit is claimed.

Additional information