Engineering Job Incentives Guide

Oklahoma’s Demand for Engineers Outpaces Supply

Oklahoma’s future runs on engineers. From building highways and bridges to designing the aircraft that crisscross our skies, engineers power our economy in ways both visible and invisible. Yet, the state faces a persistent challenge: demand for engineers is outpacing supply.

That’s why Oklahoma has built some of the most generous engineering workforce tax incentives in the nation. These programs help companies recruit and retain talent, ease the financial burden of education, and encourage engineers to stay in Oklahoma after graduation.

If you’re a high school student considering an engineering degree, a college graduate launching your career, or an employer trying to expand your engineering team, this guide will walk you through what’s available, how it works, and how to take advantage of it.

Why Incentives Matter

The numbers tell the story. Oklahoma graduates fewer engineers each year than it needs to meet workforce demand. Civil engineers are in especially short supply, and aerospace employers compete fiercely with neighboring states for talent. Without targeted policies, Oklahoma risks losing its brightest engineering graduates to Texas, Colorado, or Kansas.

Workforce tax incentives are Oklahoma’s answer. They are designed to:

• Reward employers for hiring and keeping engineers in-state.
• Help students pay for school through tuition reimbursement.
• Put money directly in engineers’ pockets as a retention tool.

In short, they make engineering careers in Oklahoma more attractive.

Aerospace: The Model Program

Oklahoma first tested engineering incentives in aerospace, one of the state’s flagship industries. The results have been promising enough to expand the model into other sectors.

What’s available now:

1. Employer tax credit: Aerospace companies may claim 5% of an engineer’s salary as a tax credit, or 10% if the engineer graduated from an Oklahoma university. This is capped at $12,500 per engineer, per year.
2. Tuition reimbursement credit: Employers may receive up to 50% back for tuition costs they cover for their engineers.
3. Individual engineer credit: Engineers themselves may claim a $5,000 annual income tax credit for up to five years.

How to access:

• Engineers must be employed full-time in qualifying aerospace positions.
• Employers claim credits on their state tax filings; employees claim the $5,000 credit on their personal state return.
• Documentation of degrees, salaries, and tuition reimbursement is required.

What to watch: These credits are scheduled to sunset in January 2026. Extension will depend on legislative action.

Manufacturing, Automotive, and Software

Following aerospace, Oklahoma broadened its incentive portfolio.

• Automotive Engineer Workforce Tax Credit: Mirrors aerospace with employer, tuition reimbursement, and individual credits. With new automotive manufacturing and EV supply chains coming into the state, this is a major growth area.
• Software & Cybersecurity Credit: Available to qualifying software developers and cybersecurity professionals. The dollar amounts are smaller than aerospace, but the intent is the same: keep Oklahoma’s tech talent in Oklahoma.
• Manufacturing Exemptions:
  • Sales tax exemptions for equipment, machinery, and energy used in manufacturing.
  • Ad valorem (property) tax exemptions for up to five years on new facilities and equipment.
  • Since most modern manufacturers employ engineers, these benefits often directly support engineering jobs.

How to access:

• Employers apply for exemptions through the Oklahoma Tax Commission and the county assessor’s office (for ad valorem).
• Engineers in software/cyber must hold qualifying degrees or certifications and be employed in eligible roles.

Civil Engineering: The New Incentive Frontier

Civil engineers are critical to Oklahoma’s infrastructure, but the state is graduating too few of them. In response, lawmakers passed House Bill 2260, modeled after the aerospace program.

Beginning in 2026:

1. Employer credit: 5% of an engineer’s salary (10% if the engineer graduated from an Oklahoma school), capped at $12,500 annually, for up to five years.
2. Tuition reimbursement credit: Employers may claim up to 50% of tuition reimbursed to a civil engineer, for up to four years.
3. Individual credit: Civil engineers may claim $5,000 annually for up to five years.

Why this matters: Every bridge, road, and water system depends on civil engineers. By offering tax incentives, Oklahoma is one of the first states in the nation to specifically target this discipline.

Quality Jobs and Broader Incentives

Beyond engineering-specific credits, companies may also qualify for broader incentive programs:

• Oklahoma Quality Jobs Program: Provides cash payments (up to 5% of new payroll) for companies creating well-paying jobs, often in engineering-heavy sectors.
• 21st Century Quality Jobs Program: For knowledge-based industries with higher wage thresholds, offering even greater benefits.
• Training for Industry Program (TIP): Delivers customized employee training for new and expanding companies.

These programs don’t single out engineers, but since engineers are among the highest-paid and most in-demand workers, many employers use them in tandem with engineering credits.

How Students Benefit

Part of OEF’s mission is to grow the number of high school graduates pursuing engineering degrees. Here’s why these incentives matter to students:

• Lower college costs: Employers willing to reimburse tuition can recover up to half through tax credits. This makes them more likely to offer tuition support packages.
• Early career bonuses: The $5,000 personal credit is available in aerospace, automotive, and (soon) civil engineering. That’s $25,000 in your pocket over five years.
• Career stability: Incentives encourage companies to hire Oklahoma graduates and keep them here. That means more internships, job offers, and opportunities for local students.

Tip for students: Ask potential employers whether they participate in these tax credit programs. Many will—especially in aerospace, automotive, and civil engineering starting in 2026.

How Employers Benefit

For employers, these credits are more than a hiring perk, they’re a competitive edge.

• Recruitment: Offering tuition reimbursement plus the knowledge that the engineer will personally receive $5,000/year makes job offers far more attractive.
• Retention: The five-year cap on credits is deliberate. It encourages employers to hold onto talent and discourages early-career engineers from leaving the state.
• Savings: A company employing ten engineers could see up to $125,000 in annual tax credits, plus credits on tuition reimbursement.

How to get started:

1. Review eligibility criteria on the Oklahoma Tax Commission and Oklahoma Department of Commerce websites.
2. Gather documentation: payroll records, degree verification, tuition reimbursement receipts.
3. Consult with a tax professional to ensure proper filings and maximize benefit.

Limitations and Watch Points

• Sunset dates: Aerospace incentives expire in 2026 unless renewed. Civil engineer credits begin in 2026 and run until 2031.
• Caps: Employer credits are capped at $12,500 per engineer per year.
• Eligibility: Credits are larger when hiring Oklahoma graduates. Not all software/cyber roles qualify.

Employers and engineers alike should monitor legislative sessions for updates and potential extensions.

A Call to Action

For students, the takeaway is simple: engineering in Oklahoma is not just a career choice, it’s a financially smart one. Tax credits make your degree more affordable and your first years on the job more lucrative.

For employers, the message is just as clear: use the tools available. These credits exist to help you recruit and retain engineers. If you’re not claiming them, you’re leaving money on the table.

And for all of us at the Oklahoma Engineering Foundation, these programs align with our mission: to increase the number of engineers working and living in Oklahoma, and to inspire high school graduates to pursue engineering degrees.

Quick Reference: Oklahoma Engineering Incentives