WAGES Act of 2026
- Bill Number
- H.R. 8624
- Origin Chamber
- House
- Congress
- 119th Congress, Session 2
- Policy Area
- Taxation
- Status
- Introduced
- Latest Action
- 2026-04-30: Referred to the House Committee on Ways and Means.
- Last Updated
- 2026-06-05T15:36:05Z
AI-Generated Summary
Purpose This legislation amends the Internal Revenue Code of 1986 to create a payroll tax credit for employers that incur costs related to registered apprenticeship programs. The bill, titled the Workforce Apprenticeship Growth and Education Support Act (WAGES Act of 2026), seeks to offset expenses such as wages for apprentices and program-related costs to encourage greater employer participation in these programs.
Key Provisions
- Apprenticeship Credit (Section 3135): Eligible employers may claim a credit equal to 50 percent of qualified wages paid to each qualified apprentice (capped at $5,000 per apprentice per calendar quarter) plus registered apprenticeship program expenses (subject to quarterly caps of the greater of $5,000 or the lesser of $2,500 per apprentice or $50,000).
- Credit Limitations and Refundability: The credit cannot exceed applicable employment taxes (primarily the employer share of Medicare taxes under sections 3111(b) and 3221(a)) and is refundable if it exceeds this limit.
- Definitions and Eligibility: An eligible employer must maintain or participate in a registered apprenticeship program and employ at least one qualified apprentice. Qualified wages cover services during program participation (limited to the first two years). Program expenses include related instruction, on-the-job learning, mentor wages (capped at $10,000 per mentor per quarter), and certain sponsor payments.
- Exclusions and Coordination: The credit is unavailable to most federal, state, and local government employers (with exceptions for certain nonprofits, colleges, and hospitals). It cannot be combined with other federal funding under the Workforce Innovation and Opportunity Act.
- Tax Treatment of Awards (Section 274(j)): Apprenticeship awards are treated as employee achievement awards, with increased annual limits ($1,500 for individual awards and $5,000 for qualified plan awards).
- Administration: The Secretary of the Treasury, in consultation with the Secretary of Labor, must issue guidance. Employers receive notice of the credit's availability. The credit applies to calendar quarters beginning after enactment.
Significant Changes to Existing Law
- Introduces a new refundable credit against payroll taxes specifically for apprenticeship wages and expenses, expanding the use of employment tax credits beyond existing provisions like section 3111.
- Modifies the employee achievement award rules under section 274(j) to explicitly cover apprenticeship-related items and raises the deduction thresholds for such awards.
- Establishes new aggregation, third-party payor, and extended assessment rules (six years for credit claims) tailored to this credit.
Potential Impacts
- Government Agencies: Increases administrative responsibilities for the Internal Revenue Service (tax processing and guidance) and the Department of Labor (apprenticeship oversight and employer outreach). May result in higher refund claims or reduced payroll tax revenue.
- Citizens and Employers: Provides financial incentives for businesses to expand apprenticeship participation, potentially increasing training opportunities in specified industries.
- International Relations: No provisions address international matters.
Main Stakeholders Affected
- Private employers in high-demand sectors (e.g., construction, manufacturing, healthcare, IT).
- Individuals participating as qualified apprentices.
- Registered apprenticeship program sponsors and related organizations.
- Federal agencies including the Department of the Treasury, Internal Revenue Service, and Department of Labor.
Notable Legal, Constitutional, or Political Implications
- Operates within existing congressional taxing authority under the Internal Revenue Code and coordinates with the National Apprenticeship Act framework.
- Includes safeguards against double benefits, improper claims, and avoidance, with extended statutes of limitations for assessments.
- Applies uniformly to qualifying private employers without altering constitutional structures or creating new regulatory mandates beyond tax incentives.
This summary was generated by AI and may contain inaccuracies. Refer to the official source document for the authoritative text.
Sponsor
Rep. Moran, Nathaniel [R-TX-1]
Recent Actions
- 2026-04-30: Referred to the House Committee on Ways and Means.
- 2026-04-30: Introduced in House
- 2026-04-30: Introduced in House
Bill Versions
- Workforce Apprenticeship Growth and Education Support Act — issued 2026-04-30 — PDF (21 pages)