Credit for wages paid to employees participating in qualified apprenticeship programs

(a)

In general

Subpart D of part IV of subchapter A of chapter 1 of the Internal Revenue Code of 1986 (relating to business-related credits) is amended by adding at the end the following new section:

45S.

Wages paid to employees participating in qualified apprenticeship programs

(a)

In general

For purposes of section 38, the apprenticeship credit determined under this section for the taxable year is the sum of— (1)the apprenticeship period credit, and (2)the post-apprenticeship credit. (b)

Apprenticeship period credit

For purposes of subsection (a)— (1)

In general

The apprenticeship period credit for the taxable year is 50 percent of the wages paid for services rendered during the taxable year to each apprenticeship employee but only if such wages are paid for services rendered during a qualified training year of such employee (whether or not such employee is an employee of the taxpayer as of the close of such taxable year). (2)

Limitation on wages per year taken into account

The amount of wages which may be taken into account under paragraph (1) with respect to any apprenticeship employee for each qualified training year shall not exceed $2,000. (c)

Post-Apprenticeship credit

For purposes of subsection (a)— (1)

In general

The post-apprenticeship credit for the taxable year is 40 percent of the wages paid for services rendered during the taxable year and the preceding taxable year to each employee who has successfully completed a qualified training program of the employer, but only if such wages are paid by such employer for services rendered during the 2-year period which begins on the day after the employee’s completion of such program. (2)

Limitation on wages per year taken into account

The amount of wages which may be taken into account under paragraph (1) for a taxable year with respect to any apprenticeship employee shall not exceed $6,000. (d)

Definitions

For purposes of this section— (1)

Wages

The term wages has the meaning given to such term by section 51(c), determined without regard to paragraph (4) thereof. (2)

Apprenticeship employee

The term apprenticeship employee means any employee who is employed by the employer pursuant to an apprentice agreement registered with the Office of Apprenticeship of the Employment and Training Administration of the Department of Labor. (3)

Qualified training year

(A)

In general

The term qualified training year means each year during the training period in which— (i)the employee is employed by the employer for at least 25 hours per week during 28 consecutive weeks of such year, and (ii)the employee completes at least 8 credit hours of classroom work under a qualified training program for each semester of such program ending during such year. (B)

Qualified training program

The term qualified training program means any training program undertaken pursuant to the agreement referred to in paragraph (2). (C)

Training period

The term training period means, with respect to an employee, the period— (i)beginning on the date that the employee begins employment with the taxpayer as an apprentice under a qualified training program, and (ii)ending on the earlier of— (I)the date that such apprenticeship with the employer ends, or (II)the date which is 4 years after the date referred to in clause (i). (e)

Coordination with other credits

The amount of credit otherwise allowable under sections 45A, 51(a), and 1396(a) with respect to any employee shall be reduced by the credit allowed by this section with respect to such employee. (f)

Certain rules To apply

Rules similar to the rules of subsections (i)(1) and (k) of section 51 shall apply for purposes of this section.

(b)

Credit made part of general business credit

Subsection (b) of section 38 of such Code is amended by striking plus at the end of paragraph (35), by striking the period at the end of paragraph (36) and inserting , plus, and by adding at the end the following new paragraph:

(37)the apprenticeship credit determined under section 45S(a).

(c)

Denial of double benefit

Subsection (a) of section 280C of such Code is amended by inserting 45S(a), after 45P(a),. (d)

Clerical amendment

The table of sections for subpart D of part IV of subchapter A of chapter 1 of such Code is amended by adding at the end the following new item:

Sec. 45S. Wages paid to employees participating in qualified apprenticeship programs..

(e)

Effective date

The amendments made by this section shall apply to individuals commencing apprenticeship programs after the date of the enactment of this Act.