Investing in American Workers Act
- Bill Number
- H.R. 6752
- Origin Chamber
- House
- Congress
- 119th Congress, Session 1
- Policy Area
- Taxation
- Status
- Introduced
- Latest Action
- 2025-12-16: Referred to the Committee on Ways and Means, and in addition to the Committee on Education and Workforce, for a period to be subsequently determined by the Speaker, in each case for consideration of such provisions as fall within the jurisdiction of the committee concerned.
- Last Updated
- 2026-01-15T17:39:23Z
AI-Generated Summary
Purpose of the Legislation
The "Investing in American Workers Act" (H.R. 6752) aims to encourage employers to invest in training their workers by providing a new tax credit for qualified training expenses. This is intended to help workers gain skills and credentials, improving job opportunities and workforce development.
Key Provisions
- Tax Credit Structure (Section 45BB):
- Employers can claim a credit equal to 20% of qualified training expenses for the current year that exceed the average of such expenses from the prior three years.
- If an employer had no qualified training expenses in any of the prior three years, the credit is 10% of the current year's expenses.
- The credit is part of the general business credit under Internal Revenue Code (IRC) Section 38 and can offset alternative minimum tax for eligible small businesses.
- Definition of Qualified Training Expenses:
- Expenses must cover training for "non-highly compensated employees" (those earning no more than 60% of the threshold for highly compensated employees, roughly $150,000 adjusted annually for inflation).
- Training must lead to a "recognized postsecondary credential," such as an industry-recognized certificate, apprenticeship completion, license, or associate/bachelor's degree.
- Training must be provided through approved programs, including:
- Registered apprenticeships under the National Apprenticeship Act.
- Programs listed under the Workforce Innovation and Opportunity Act (WIOA).
- State-approved apprenticeships.
- Programs run by area career and technical education schools, community colleges, labor organizations, employers, industry trade associations, or sector partnerships.
- Excludes costs for meals, lodging, transportation, or other incidental services.
- Payroll Tax Option for Small Businesses:
- Qualified small businesses (annual gross receipts under $5 million) and certain tax-exempt organizations can elect to apply up to $250,000 of the credit against payroll taxes (under IRC Section 3111) instead of income taxes.
- Unused payroll tax credits carry forward to the next quarter.
- Elections are made on tax returns and can be revoked only with IRS approval; aggregation rules apply to related businesses.
- Other Rules:
- No tax deduction is allowed for expenses used to calculate the credit (IRC Section 280C).
- Adjusted expenses account for inflation using the Consumer Price Index (CPI).
- IRS must issue regulations to prevent abuse, simplify compliance, handle recaptures, and collect demographic data (race, ethnicity, gender) on trained workers.
- Treasury and Small Business Administration (SBA) must provide simplified tax filing for employers with under $5 million in gross receipts.
- Department of Labor (DOL), with Treasury, must issue guidance within one year on "recognized postsecondary credentials" under WIOA.
- Effective Date:
- Applies to tax years beginning after the date of enactment.
Significant Changes to Existing Law
- New Credit Addition: Inserts Section 45BB into the IRC, creating a dedicated business tax credit for worker training, which did not previously exist in this form.
- Integration with Existing Credits: Adds the credit to the list in IRC Section 38(b) for general business credits and allows it against alternative minimum tax (AMT) under Section 38(c)(4).
- Payroll Tax Amendment: Adds subsection (g) to IRC Section 3111, enabling the credit to offset Social Security payroll taxes for the first time in this context, similar to credits for paid family leave.
- Deduction Coordination: Expands IRC Section 280C to prevent double benefits by disallowing deductions for credited training expenses.
- Clerical Updates: Adds the new section to the IRC table of contents.
- These changes build on existing frameworks like WIOA and apprenticeship laws but introduce financial incentives tied directly to employer spending.
Potential Impacts
- On Government Agencies:
- IRS and Treasury will face increased administrative burdens for processing claims, issuing regulations, and ensuring compliance, including demographic reporting.
- DOL will need to develop and update guidance on credentials, potentially expanding oversight of training programs.
- SBA may assist with simplified filing, reducing barriers for small employers.
- On Citizens (Workers and Employees):
- Non-highly compensated workers could gain access to more training opportunities, leading to better credentials, higher wages, and career advancement.
- May narrow skills gaps in the workforce, benefiting unemployed or underemployed individuals.
- On Employers and Businesses:
- Encourages investment in employee training, particularly for small businesses via payroll tax relief, potentially lowering costs and improving retention.
- Larger employers benefit from the income tax credit but face aggregation rules to prevent abuse.
- On International Relations:
- No direct impacts; the bill focuses on domestic workforce development.
- Broader Economic Effects:
- Could boost overall workforce productivity and economic growth by increasing skilled labor, though actual uptake depends on program adoption.
Main Stakeholders Affected
- Employers: Primary beneficiaries, especially small businesses (under $5 million gross receipts) and those in industries needing skilled workers; must track expenses and comply with reporting.
- Workers: Non-highly compensated employees (lower-wage earners) who receive training; demographic data collection may highlight equity in access.
- Educational and Training Providers: Community colleges, career schools, labor organizations, trade associations, and apprenticeship programs, which could see increased enrollment and funding indirectly.
- Government Entities: IRS (tax administration), Treasury (regulations), DOL (credential guidance), and SBA (filing support).
- Tax-Exempt Organizations: Eligible for payroll tax option if involved in workforce training.
Notable Legal, Constitutional, or Political Implications
- Legal Implications: Introduces enforceable tax incentives that tie credits to specific federal standards (e.g., WIOA credentials), potentially leading to audits or disputes over what qualifies as "training." Regulations on demographic reporting raise privacy considerations under existing tax laws, but align with anti-discrimination goals. Recapture rules ensure credits are not claimed on adjusted or reversed expenses.
- Constitutional Implications: None apparent; the bill operates within Congress's taxing and spending powers under Article I, promoting general welfare through workforce investment without infringing on individual rights.
- Political Implications: Supports bipartisan priorities like job training and small business aid, but could spark debates on tax expenditures (estimated costs to federal revenue) versus benefits for economic equity. The focus on lower-wage workers may advance discussions on income inequality without mandating participation.
This summary was generated by AI and may contain inaccuracies. Refer to the official source document for the authoritative text.
Sponsor
Rep. Krishnamoorthi, Raja [D-IL-8]
Recent Actions
- 2025-12-16: Referred to the Committee on Ways and Means, and in addition to the Committee on Education and Workforce, for a period to be subsequently determined by the Speaker, in each case for consideration of such provisions as fall within the jurisdiction of the committee concerned.
- 2025-12-16: Referred to the Committee on Ways and Means, and in addition to the Committee on Education and Workforce, for a period to be subsequently determined by the Speaker, in each case for consideration of such provisions as fall within the jurisdiction of the committee concerned.
- 2025-12-16: Introduced in House
- 2025-12-16: Introduced in House
Bill Versions
- Investing in American Workers Act — issued 2025-12-16 — PDF (16 pages)