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119-hr-6752119th CongressWALLET

Investing in American Workers Act

Sponsored By: Representative Krishnamoorthi, Raja [D-IL-8]

Introduced

Summary

Creates a new employer-provided worker training tax credit to encourage employers to fund credential-focused training for lower-paid workers. The credit would generally equal 20% of qualified training spending above a three-year average and would let qualified small employers elect to apply part of the credit against payroll taxes.

Show full summary
  • Non-highly compensated employees would get greater access to training that leads to recognized postsecondary credentials, including apprenticeships, industry certificates, licenses, or degrees.
  • Employers could claim a credit equal to 20% of qualifying training expenses over a three-year average. If an employer had no qualified training spending in the three prior years the credit would be 10% of current-year expenses.
  • Qualified small businesses and eligible tax-exempt organizations could elect to use the credit against payroll taxes, subject to a $250,000 per-election cap and simplified filing for firms with under $5 million in annual receipts.
  • The credit would cover training delivered by registered apprenticeships, programs listed under the Workforce Innovation and Opportunity Act section 122(d), community colleges, area career and technical education schools, labor organizations, and employer- or industry-sponsored programs.
  • Tax rules would disallow a deduction for the portion of expenses equal to the credit and would require reporting of race, ethnicity, and gender tied to training expenditures while directing agencies to issue regulations to prevent avoidance and define recognized credentials.

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Bill Overview

Analyzed Economic Effects

2 provisions identified: 0 benefits, 0 costs, 2 mixed.

Payroll tax election for small firms

If enacted, qualified small businesses and certain tax‑exempt groups would be able to elect to apply part of the worker training credit against the employer payroll tax. The payroll credit portion would be the least of the amount you specify in the election, the training credit for the year, and, for some firms, any business credit carryforward. Each election would be capped at $250,000 and is limited each quarter to the employer payroll tax owed; unused amounts would carry to the next quarter. Partnerships and S corporations must make the election at the entity level and must file the election by the due date of the relevant return; revocation would require Treasury consent. The bill would also direct Treasury and the SBA to provide a simplified filing method for employers with under $5,000,000 in annual gross receipts; the payroll election applies to taxable years beginning after enactment while simplified filing takes effect upon enactment.

Tax credit for employer training

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 adjusted average, or 10% if the employer had no such spending in any prior year. Training must be for lower‑paid employees (those paid at or below 60% of a statutory highly‑compensated threshold) and must lead to a recognized postsecondary credential. The bill would disallow a deduction equal to the credit, include the credit in general business credit rules, and require the Labor Secretary to issue credential guidance within one year; it would apply to taxable years beginning after enactment.

Sponsors & CoSponsors

Sponsor

Krishnamoorthi, Raja [D-IL-8]

IL • D

Cosponsors

There are no cosponsors for this bill.

Roll Call Votes

No roll call votes available for this bill.

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