This bill creates a new federal tax credit for employers that run or support registered apprenticeship programs. The credit equals 50% of qualified wages paid to apprentices and of eligible apprenticeship program expenses for each calendar quarter. The bill adds rules defining eligible employers, qualified apprentices, qualified wages, registered apprenticeship program expenses (for example, related instruction, on-the-job learning costs, mentor wages, and program development costs), and registered apprenticeship program sponsors. It sets limits: qualified wages counted per apprentice per quarter are capped at $5,000; registered apprenticeship program expenses per quarter are limited to the greater of $5,000 or the lesser of $2,500 per apprentice or $50,000; mentor wages counted per mentor per quarter are capped at $10,000. The credit cannot exceed applicable employment taxes for the quarter, but any excess may be refunded. The credit does not apply when the employer already received other federal payments for the same wages or expenses (for example, under the Workforce Innovation and Opportunity Act). The bill excludes most federal, state, and local governments but allows certain colleges, universities, and medical or hospital providers to qualify. It also extends the time for tax assessment related to claimed credits and waives certain deposit penalties when nonpayment is due to a reasonable expectation of the credit. The Secretary of the Treasury, in consultation with the Secretary of Labor, must issue regulations and guidance, including rules for third-party payors. The credit applies to calendar quarters beginning after enactment.
The bill also changes tax rules for apprenticeship awards. It treats awards given to apprentices in connection with registered apprenticeship training as employee achievement awards and raises the dollar limits for such awards to $1,500 (and $5,000 for certain qualified plan awards). Awards received during an apprentice's first 90 days of participation are excluded from this special treatment. These changes apply to awards transferred after enactment.
No publicly available information on federal cost or budgetary effects. The bill itself specifies how the credit is calculated and capped: 50% of qualified wages and registered apprenticeship program expenses per quarter, with per-apprentice and per-quarter caps ($5,000 wage cap per apprentice; program expense cap equal to the greater of $5,000 or the lesser of $2,500 per apprentice or $50,000). Mentor wage amounts counted for the credit are limited to $10,000 per mentor per quarter. The credit is limited by applicable employment taxes for the quarter; excess amounts may be refunded.
According to the bill's findings, apprenticeships help address workforce shortages in many industries, combine paid on-the-job learning with instruction, give workers industry credentials while they earn wages, improve employer productivity and reduce turnover, and expand pathways to good careers for people without four-year degrees. The bill is framed as a way to expand employer participation in registered apprenticeship programs by offsetting development and training costs.
No publicly available information.