,,ii #aaith ,,congress #b;d ,session ,s4 #ddfc ,,in ,,the ,,senate ,,of ,,the ,,united ,,states ,april #cj1 #bjbf,mr4 ,young introduced the following bill2 which was read twice and referred to the ,committee on ,finance ,a ,,bill ,to amend the ,internal ,revenue ,code of #aihf to provide a credit against employer payroll taxes for wages and other expenses paid or incurred for apprenticeship programs4 #a4 ,short title ,this ,act may be cited as the ,workforce ,apprenticeship ,growth and ,education ,support ,act or the ,,wages ,act of #bjbf4 #b4 ,findings ,congress finds the following3 7#a7 ,apprenticeships strengthen the ,american economy by addressing persistent workforce shortages1 particularly in high-demand and essential industries1 including construction1 advanced manufacturing1 health care1 early childhood education and care1 information technology1 transportation and logistics1 automotive repair and maintenance1 hospitality1 energy1 agriculture1 and the skilled trades4 7#b7 ,a skilled and resilient workforce is essential to maintaining the economic competitiveness of the ,united ,states in an increasingly competitive global economy1 particularly as other nations expand investments in workforce training1 technical education1 and industrial capacity4 7#c7 ,registered apprenticeship programs are a proven workforce development model that combines paid on-the-job learning with related instruction1 enabling workers to earn wages while gaining industry-recognized credentials and skills aligned with employer needs4 7#d7 ,employers that invest in registered apprenticeship programs benefit from improved productivity1 reduced turnover1 and a more skilled workforce1 but often face costs associated with program development1 training1 supervision1 and related instruction that may limit broader adoption4 7#e7 ,the ,act of ,august #af1 #aicg 7commonly known as the ,national ,apprenticeship ,act2 #ej ,stat4 #ffd1 chapter #ffc2 #bi ,u4,s4,c4 #ej et seq47 and regulations issued thereunder establish a rigorous framework for registered apprenticeship programs1 ensuring high-quality training standards1 worker protections1 and nationally recognized credentials4 7#f7 ,expanding employer participation in registered apprenticeship programs is critical to promoting upward economic mobility1 including for individuals without a four-year college degree1 by providing pathways to higher earnings and stable1 well-paying careers4 #c4 ,apprenticeship credit 7a7 ,in general ,subchapter ,d of chapter #ba of the ,internal ,revenue ,code of #aihf is amended by adding at the end the following new section3 #cace4 ,apprenticeship credit 7a7 ,in general ,in the case of an eligible employer1 there shall be allowed as a credit against applicable employment taxes for each calendar quarter an amount equal to #ej percent of the sum of-- 7#a7 the qualified wages with respect to each qualified apprentice of such employer for such calendar quarter1 and 7#b7 the registered apprenticeship program expenses paid or incurred by the employer during the calendar quarter4 7b7 ,limitations and refundability 7#a7 ,wages taken into account ,the amount of qualified wages with respect to any qualified apprentice which may be taken into account under subsection 7a7 by the eligible employer for any calendar quarter shall not exceed #e1jjj4 7#b7 ,registered apprenticeship program expenses taken into account ,the amount of registered apprenticeship program expenses taken into account by the eligible employer with respect to any calendar quarter shall not exceed the greater of-- 7,a7 #e1jjj1 or 7,b7 the lesser of-- 7i7 #b1ejj for each qualified apprentice which is an employee of the eligible employer during such calendar quarter1 or 7ii7 #ej1jjj4 7#c7 ,credit limited to employment taxes ,the credit allowed by subsection 7a7 with respect to any calendar quarter shall not exceed the applicable employment taxes 7reduced by any credits allowed under section #caaa7 on the wages paid with respect to the employment of all the employees of the eligible employer for such calendar quarter4 7#d7 ,refundability of excess credit ,if the amount of the credit under subsection 7a7 exceeds the limitation of paragraph 7#c7 for any calendar quarter1 such excess shall be treated as an overpayment that shall be refunded under sections #fdjb7;a7 and #fdac7;b74 7c7 ,definitions ,for purposes of this section-- 7#a7 ,applicable employment taxes ,the term applicable employment taxes means the following3 7,a7 ,the taxes imposed under section #caaa7;b74 7,b7 ,so much of the taxes imposed under section #cbba7;a7 as are attributable to the rate in effect under section #caaa7;b74 7#b7 ,eligible employer ,the term eligible employer means any employer which1 during the calendar quarter-- 7,a7 either-- 7i7 maintains a registered apprenticeship program1 or 7ii7 has entered into a written agreement 7including a collective bargaining agreement7 under which the employer agrees to adhere to the apprenticeship standards formulated and registered by a registered apprenticeship program sponsor with respect to qualified apprentices participating in the registered apprenticeship program of such sponsor1 and 7,b7 employs a qualified apprentice4 7#c7 ,qualified wages 7,a7 ,in general ,the term qualified wages means1 with respect to any qualified apprentice1 wages paid for service rendered while such qualified apprentice is participating in a registered apprenticeship program4 7,b7 ,limitations ,such term shall not include any wages paid for service rendered after the date that is #b years after the date the qualified apprentice begins participation in a registered apprenticeship program4 7#d7 ,wages 7,a7 ,in general ,the term wages means wages 7as defined in section #caba7;a77 and compensation 7as defined in section #cbca7;e774 7,b7 ,allowance for certain health plan expenses 7i7 ,in general ,such term shall include amounts paid by the eligible employer to provide and maintain a group health plan 7as defined in section #ejjj7;b77#a771 but only to the extent that such amounts are excluded from the gross income of employees by reason of section #ajf7;a74 7ii7 ,allocation rules ,for purposes of this section1 amounts treated as wages under clause 7i7 shall be treated as paid with respect to any employee 7and with respect to any period7 to the extent that such amounts are properly allocable to such employee 7and to such period7 in such manner as the ,secretary may prescribe4 ,except as otherwise provided by the ,secretary1 such allocation shall be treated as properly made if made on the basis of being pro rata among periods of coverage4 7#e7 ,qualified apprentice 7,a7 ,in general ,the term qualified apprentice means an individual who-- 7i7 is an employee of an eligible employer1 and 7ii7 participates in a registered apprenticeship program pursuant to a written apprenticeship agreement with the registered apprenticeship program sponsor entered into after the date of the enactment of this section4 7,b7 ,exception ,such term shall not include-- 7i7 any individual described in subparagraph 7,a71 7,b71 or 7,c7 of section #ea7;i77#a71 or 7ii7 any #e-percent owner 7as defined in section #daf7;i77#a77;,b774 7,c7 ,participation in a registered apprenticeship program ,for purposes of subparagraph 7,a77ii71 an individual participates in a registered apprenticeship program if-- 7i7 the individual has entered into an apprenticeship agreement that has been registered with the ,office of ,apprenticeship of the ,department of ,labor or a recognized ,state apprenticeship agency during the first #ij days of probationary employment with an eligible employer under a registered apprenticeship program1 and 7ii7 the individual has been certified by such ,office of ,apprenticeship or a recognized ,state apprenticeship agency as eligible for probationary employment as an apprentice 7as defined in section #bi4b of title #bi1 ,code of ,federal ,regulations 7as in effect on the date of the enactment of this subparagraph774 7#f7 ,registered apprenticeship program ,the term registered apprenticeship program means an apprenticeship registered under the ,act of ,august #af1 #aicg 7commonly known as the ,national ,apprenticeship ,act2 #ej ,stat4 #ffd1 chapter #ffc2 #bi ,u4,s4,c4 #ej et seq47 that meets the standards of parts #bi and #cj of title #bi1 ,code of ,federal ,regulations 7as in effect on the date of the enactment of this paragraph74 7#g7 ,registered apprenticeship program expenses 7,a7 ,in general ,the term registered apprenticeship program expenses means expenses 7other than qualified wages7 paid or incurred in connection with a registered apprenticeship program1 including-- 7i7 related instruction expenses1 7ii7 on-the-job learning expenses1 7iii7 mentor wages1 7iv7 expenses directly associated with the development1 registration1 or maintenance of a registered apprenticeship program1 and 7v7 amounts paid or incurred by an eligible employer to a registered apprenticeship program sponsor pursuant to a collective bargaining agreement 7or similar binding agreement7 for the purpose of supporting or funding such program4 7,b7 ,related instruction expenses ,the term related instruction expenses means the costs of organized instruction-- 7i7 in technical subjects related to the occupation1 and 7ii7 that may be provided in a classroom1 through distance learning1 or other means of instruction1 consistent with the requirements for such instruction under section #bi4e7;b77#d7 of title #bi1 ,code of ,federal ,regulations 7as in effect on the date of the enactment of this paragraph74 7,c7 ,on-the-job learning expenses ,the term on-the-job learning expenses-- 7i7 means the costs of training that-- 7,i7 is provided to a qualified apprentice while engaged in productive work in a job1 and 7,,ii7 provides knowledge or skills essential to the full and adequate performance of the job1 7ii7 includes reimbursement or support for the costs of such training and of supervision provided during such training1 and 7iii7 does not include the costs of any wages provided to the qualified apprentice during the training4 7,d7 ,mentor wages 7i7 ,in general ,the term mentor wages means wages which-- 7,i7 are paid by an eligible employer to an employee who is a journeyworker 7within the meaning of section #bi4b of title #bi1 ,code of ,federal ,regulations 7as in effect on the date of the enactment of this subparagraph771 and 7,,ii7 are in excess of the base rate of pay of such employee for pay periods in which such employee is providing mentorship or supervisory services to a qualified apprentice of such eligible employer4 7ii7 ,base rate of pay 7,i7 ,in general ,the term base rate of pay means1 with respect to any pay period for any employee providing mentorship or supervisory services1 the average wages paid for pay periods occurring over the #ab-month period ending with the pay period before the date on which such individual began providing such mentorship or supervisory services4 7,,ii7 ,special rules ,if the employee was not employed for the entire #ab-month period referred to in subclause 7,i71 such subclause shall be applied on the basis of the period during which such employee was so employed4 ,the ,secretary may provide rules for the application of this clause in cases where the employee was not employed for any period before providing mentorship or supervisory services4 7iii7 ,limitation on mentor wages ,the amount of mentor wages which may be taken into account during a calendar quarter with respect to any employee providing mentorship or supervisory services shall not exceed #aj1jjj4 7#h7 ,registered apprenticeship program sponsor ,the term registered apprenticeship program sponsor means any person1 association1 committee1 or organization operating a registered apprenticeship program and in whose name such program is registered or approved4 7d7 ,other rules ,for purposes of this section-- 7#a7 ,aggregation rules ,all persons which are treated as a single employer under subsections 7a7 and 7b7 of section #eb or subsection 7m7 or 7o7 of section #dad shall be treated as a single taxpayer4 7#b7 ,certain governmental employers 7,a7 ,in general ,this credit shall not apply to the ,government of the ,united ,states1 the government of any ,state or political subdivision thereof1 or any agency or instrumentality of any of the foregoing4 7,b7 ,exception ,paragraph 7#a7 shall not apply to-- 7i7 any organization described in section #eja7;c77#a7 and exempt from tax under section #eja7;a71 or 7ii7 any entity described in paragraph 7#a7 if-- 7,i7 such entity is a college or university1 or 7,,ii7 the principal purpose or function of such entity is providing medical or hospital care4 7#c7 ,denial of double benefit 7,a7 ,credits ,any wages or expenses taken into account in determining the credit allowed under this section shall not be taken into account for purposes of determining any credit allowed against the tax imposed by chapter #a4 7,b7 ,deductions 7i7 ,wages ,for purposes of this section1 rules similar to the rules of section #bhj;,c7a7 shall apply4 7ii7 ,other expenses ,no deduction shall be allowed under chapter #a with respect to that portion of the registered apprenticeship program expenses 7other than wages7 taken into account under this section4 7#d7 ,coordination with other ,federal payments ,this section shall not apply to any qualified wages or registered apprenticeship program expenses paid or incurred by an eligible employer if such eligible employer received payments for such qualified wages or registered apprenticeship program expenses under the ,workforce ,innovation and ,opportunity ,act or any other federally funded program4 7#e7 ,election to have apprenticeship credit not apply ,this section shall not apply to so much of the qualified wages and registered apprenticeship program expenses paid or incurred by an eligible employer as such employer elects 7at such time and in such manner as the ,secretary may prescribe7 to not take into account for purposes of this section4 7#f7 ,third party payors ,any credit allowed under this section shall be treated as a credit described in section #ceaa7;d77#b74 7#g7 ,extension of limitation on assessment 7,a7 ,in general ,notwithstanding section #feja1 the limitation on the time period for the assessment of any amount attributable to a credit claimed under this section shall not expire before the date that is #f years after the latest of-- 7i7 the date on which the original return which includes the calendar quarter with respect to which such credit is determined is filed1 7ii7 the date on which such return is treated as filed under section #feja7;b77#b71 or 7iii7 the date on which the claim for credit or refund with respect to such credit is made4 7,b7 ,deduction for wages and expenses taken into account in determining improperly claimed credit 7i7 ,in general ,notwithstanding section #feaa1 in the case of an assessment attributable to a credit claimed under this section1 the limitation on the time period for credit or refund of any amount attributable to a deduction for improperly claimed apprenticeship wages and expenses shall not expire before the time period for such assessment expires under paragraph 7#a74 7ii7 ,improperly claimed apprenticeship wages and expenses ,for purposes of this paragraph1 the term improperly claimed apprenticeship wages and expenses means1 with respect to an assessment attributable to a credit claimed under this section1 the wages and expenses with respect to which a deduction would not have been allowed if the portion of the credit to which such assessment relates had been properly claimed4 7e7 ,treatment of deposits ,the ,secretary shall waive any penalty under section #ffef for any failure to make a deposit of any applicable employment taxes if the ,secretary determines that such failure was due to the reasonable anticipation of the credit allowed under this section4 7f7 ,regulations and guidance ,the ,secretary1 in consultation with the ,secretary of ,labor1 shall issue such forms1 instructions1 regulations1 and guidance-- 7#a7 with respect to the application of the credit under subsection 7a7 to third party payors 7including professional employer organizations1 certified professional employer organizations1 or agents under section #cejd71 including regulations or guidance allowing such payors to submit documentation necessary to substantiate the registered apprenticeship program expenses of employers that use such payors1 and 7#b7 to prevent the avoidance of the purposes of the limitations under this section4 ,any forms1 instructions1 regulations1 or other guidance described in paragraph 7#a7 shall require the customer to be responsible for the accounting of the credit and for any liability for improperly claimed credits and shall require the certified professional employer organization or other third party payor to accurately report such tax credits based on the information provided by the customer4 4 7b7 ,notice of availability of credit ,the ,secretary of ,labor1 in consultation with the ,secretary of the ,treasury 7or the ,secretary's delegate71 shall take such steps as may be necessary or appropriate to keep employers apprised of the availability of the credit allowed under section #cace of the ,internal ,revenue ,code of #aihf1 as added by this section4 7c7 ,clerical amendment ,the table of sections for subchapter ,d of chapter #ba of the ,internal ,revenue ,code of #aihf is amended by adding at the end the following new item3 ,sec4 #cace4 ,apprenticeship credit4 4 7d7 ,effective date ,the amendments made by this section shall apply to wages paid1 and expenses paid or incurred1 for calendar quarters beginning after the date of enactment of this ,act4 #d4 ,tax treatment of apprenticeship awards 7a7 ,apprenticeship awards treated as employee achievement awards 7#a7 ,in general ,section #bgd7;j77#c77;,a77i77,i7 of the ,internal ,revenue ,code of #aihf is amended by striking subclauses 7,i71 7,,ii71 and 7,,iii7 and inserting the following3 7,i7 7aa7 transferred by an employer to an employee for length of service achievement or safety achievement and awarded as part of a meaningful ceremony1 or 7bb7 transferred by an employer to an employee participating in a registered apprenticeship program in connection with the training and curriculum of such program1 and 7,,ii7 awarded under conditions and circumstances that do not create a significant likelihood of the payment disguised as compensation4 4 7#b7 ,definitions ,section #bgd7;j77#d7 of such ,code is amended by adding at the end the following new subparagraphs3 7,d7 ,apprenticeship awards ,an item shall not be treated as having been provided in connection with the training and curriculum of a registered apprenticeship program if such item is received during the recipient's first #ij days of participating in the registered apprenticeship program4 7,e7 ,registered apprenticeship program ,the term registered apprenticeship program has the meaning given such term under section #cace7;c77#f74 4 7b7 ,increased limitation ,paragraph 7#b7 of section #bgd7;j7 of the ,internal ,revenue ,code of #aihf is amended-- 7#a7 by inserting 7#a1ejj in the case of an employee achievement award described in paragraph 7#c77;,a77i77,i77bb77 after #djj in paragraph 7,a71 and 7#b7 by inserting 7#e1jjj in the case of a qualified plan award which is an employee achievement award described in paragraph 7#c77;,a77i77,i77bb77 at the end of paragraph 7,b74 7c7 ,effective date ,the amendments made by this section shall apply to awards transferred after the date of enactment of this ,act4