Investing in American Workers Act
Sponsored By: Senator Sen. Warner, Mark R. [D-VA]
Introduced
Summary
This bill would create a refundable-like tax credit for employer-provided training that rewards firms for increasing spending on training for lower-paid workers. It ties credits to programs that lead to recognized postsecondary credentials and offers a payroll tax election for qualifying small employers.
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- Workers: Non-highly compensated employees are prioritized for funded training. The bill defines them as workers paid no more than 60 percent of a high-compensation threshold and covers apprenticeships, community college programs, industry certificates, and employer-run training.
- Employers: The credit equals 20 percent of qualified training spending that exceeds the taxpayer's three-year prior average. It excludes amounts for meals, lodging, and transportation and the rate drops to 10 percent if the employer had no qualified training expenditures in any one of the three preceding years.
- Small employers and rules: Businesses with under $5 million in gross receipts may elect to apply part of the credit against payroll taxes, capped at $250,000 per year, with simplified filing for small employers. The bill also aggregates controlled groups for limits, allows carryforwards, requires demographic reporting, and directs Treasury and Labor rulemaking.
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Bill Overview
Analyzed Economic Effects
2 provisions identified: 0 benefits, 0 costs, 2 mixed.
New employer training tax credit
If enacted, employers would be able to claim a new tax credit for worker training. The credit would equal 20% of qualifying training spending above a three-year indexed average, or 10% in cases where a business had zero qualifying spending in any one of the three prior years. Training would have to lead to a recognized postsecondary credential and be for non-highly compensated workers. The bill would disallow a tax deduction for the portion of expenses equal to the credit, but it would let eligible small businesses use this credit against the alternative minimum tax. These changes would apply for tax years beginning after enactment.
Payroll election for small employers
If enacted, qualifying small employers (under $5 million gross receipts) would be able to elect to treat up to $250,000 of their training credit as a payroll-tax credit. The payroll credit would be limited each quarter to the employer payroll tax owed and any unused amount would carry to the next quarter. The election must be made by the tax return due date and may be revoked only with the Secretary's consent. The bill would also direct Treasury to write rules to prevent avoidance, set recapture steps, and require demographic reporting for trainees, and it would direct Treasury and SBA to offer simplified filing for very small employers. These rules would apply for tax years beginning after enactment.
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Sponsors & CoSponsors
Sponsor
Sen. Warner, Mark R. [D-VA]
VA • D
Cosponsors
There are no cosponsors for this bill.
Roll Call Votes
No roll call votes available for this bill.
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