Apprenticeship Infrastructure Tax Credit Act of 2025

Bill Number

H.R. 3871

Origin Chamber

House

Congress

119th Congress, Session 1

Policy Area

Taxation

Status

Introduced

Latest Action

2025-06-10: Referred to the House Committee on Ways and Means.

Last Updated

2026-03-18T08:06:39Z

AI-Generated Summary

Purpose

The Apprenticeship Infrastructure Tax Credit Act of 2025 aims to encourage employers to hire and train workers through registered apprenticeship programs focused on infrastructure-related jobs. It does this by offering a tax credit to offset hiring costs, particularly for new workers in fields like construction, maintenance, and information technology, to build a skilled workforce for national infrastructure needs.

Key Provisions

• Tax Credit Amount: Employers receive a credit of $3,000 per eligible apprenticeship employee. This doubles to $6,000 for recently separated veterans (discharged within 4 years), members of the National Guard or military reserves, or military spouses.
• Eligibility Period (Apprenticeship Credit Period): The credit applies for the tax year when the employee enrolls in the program, plus potentially the next year if the program requires at least 3,000 hours of on-the-job training (for time-based, hybrid, or competency-based programs). Unused portions can carry forward in limited cases.
• Definitions and Requirements:
• Apprenticeship Employee: A new hire (starting work no more than 90 days before enrollment) enrolled in a qualified registered apprenticeship program (government-approved under the National Apprenticeship Act) for an "infrastructure-related occupation." These include jobs in construction/extraction, installation/maintenance/repair, production, and computer/IT/security (based on the Occupational Information Network, or O*NET, codes). The employee must be paid as a W-2 employee (not an independent contractor via 1099 form).
• Apprenticeship Employer: A business that partners with an approved apprenticeship program sponsor but is not tax-exempt or the program sponsor itself.
• Exclusions: No credit if the employee was hired more than 90 days before enrollment, is laid off due to workforce reductions (non-disciplinary reasons), or pays fees/tuition to the employer or sponsor (except for public or nonprofit funding like Pell Grants or workforce programs).
• Reduced or Zero Credit Scenarios: If employed for 90–179 days in the year, the credit is prorated based on days worked (ratio to 180 days). Zero credit if fewer than 90 days. No double-dipping with other tax credits for the same wages.
• Certification Process: Employers must obtain an "apprenticeship tax credit eligibility certificate" from the Department of Labor (DOL) using the Registered Apprenticeship Partners Information Database System (RAPIDS). Certificates are issued quarterly (within 31 days after quarter-end) and include details on the program, employer, and employee. DOL must update reporting rules to ensure timely status updates (within 30 days after quarter-end).
• Volume Cap and Management: Total credits are capped at $5 billion nationwide. The IRS (in consultation with DOL) tracks usage and certifies when the cap is reached (ending the program). Annual reports detail credit usage, issuance rates, and reallocations of unused credits. If credits are under-allocated (e.g., certificates issued but not claimed), DOL can issue more. When the remaining cap falls below $1 billion, restrictions may apply, like prioritizing military-related apprentices or limiting occupations. The program runs until at least 2035 unless the cap is hit earlier.
• Effective Date: Applies to tax years starting after December 31, 2025.

Significant Changes to Existing Law

• Adds a new Section 45BB to the Internal Revenue Code (IRC) for this credit, making it part of the general business credit under IRC Section 38.
• Amends IRC Section 280C to prevent employers from claiming this credit alongside deductions for the same apprentice wages (avoiding double benefits).
• Requires DOL to update apprenticeship reporting regulations (e.g., in 29 CFR Part 29) for faster status updates and to include hiring dates and W-2 confirmation on agreements.
• Introduces a novel volume cap mechanism with reallocation and prioritization rules, unlike many open-ended tax credits.

Potential Impacts

• On Government Agencies: The IRS will administer credits, track the $5 billion cap, and issue annual reports, increasing administrative workload. DOL will handle certifications, update occupation lists annually, and adjust eligibility to manage the cap, potentially requiring new regulations and data systems.
• On Citizens: Apprentices (especially military families and veterans) gain easier access to paid training and jobs in high-demand fields, promoting skill-building and employment. Employers in infrastructure sectors may hire more apprentices to claim credits, reducing training costs and boosting job opportunities, though the cap limits total benefits.
• On International Relations: No direct impact; the bill focuses on domestic workforce development.
• Broader Economic Effects: Could stimulate infrastructure projects by addressing labor shortages, but the $5 billion cap may constrain long-term growth if demand exceeds supply.

Main Stakeholders Affected

• Employers: Primarily businesses in construction, manufacturing, maintenance, IT, and related fields that partner with apprenticeship programs; they benefit from tax savings but must meet hiring and reporting rules.
• Apprentices and Workers: New hires, especially veterans, reservists, National Guard members, and military spouses, who gain structured training and employment without personal costs (except allowed funding).
• Government Entities: DOL (certification and oversight) and IRS (credit administration and cap enforcement).
• Apprenticeship Sponsors: Unions, trade groups, or educational organizations running programs; they must update reporting for compliance.
• Taxpayers: Indirectly affected through reduced federal revenue from credits (up to $5 billion).

Notable Legal, Constitutional, or Political Implications

• Legal: Relies on existing apprenticeship laws (National Apprenticeship Act) and IRC frameworks, with clear definitions to minimize disputes over eligibility. The certificate requirement adds a verification layer to prevent fraud, but could face challenges if reporting delays occur. Coordination between IRS and DOL may require joint regulations.
• Constitutional: No apparent issues; tax incentives are a standard congressional power under Article I, Section 8. Prioritizing military personnel aligns with support for veterans but does not discriminate unconstitutionally.
• Political: Promotes bipartisan goals of workforce training and infrastructure investment (e.g., tying to O*NET occupations). The cap and reallocation mechanisms encourage efficient use of funds, potentially appealing to fiscal conservatives, while veteran/military focus garners support for defense-related communities. Could influence future tax policy by modeling capped, targeted credits for job programs.

This summary was generated by AI and may contain inaccuracies. Refer to the official source document for the authoritative text.

Sponsor

Rep. Ellzey, Jake [R-TX-6]

Cosponsors (2)

Rep. Scholten, Hillary J. [D-MI-3], Rep. Bera, Ami [D-CA-6]

Recent Actions

• 2025-06-10: Referred to the House Committee on Ways and Means.
• 2025-06-10: Introduced in House
• 2025-06-10: Introduced in House

Bill Versions

• Apprenticeship Infrastructure Tax Credit Act of 2025 — issued 2025-06-10 — PDF (23 pages)