Investing in American Workers Act

Summary: Investing in American Workers Act  This bill amends the Internal Revenue Code to allow a business-related tax credit for employers who increase worker training expenditures. The credit is equal to 20% of the excess of: (1) the qualified training expenditures for the year, over (2) the average of the qualified training expenditures for the three previous years. If the employer had no qualified training expenditures in any one of the three previous years, the credit is equal to 10% of the expenditures for the year.  The credit applies to expenditures for the training of non-highly compensated employees (annual compensation does not exceed $82,000). The training must result in the attainment of a recognized postsecondary credential and be provided through:   an apprenticeship program in an emerging industry;   a program of training services that is included on a list of eligible training providers that states are required to maintain under the Workforce Innovation and Opportunity Act;   a program which is conducted by an area career and technical education school, a community college, or a labor organization; or   a program which is sponsored and administered by an employer, industry trade association, industry or sector partnership, or labor organization.   Certain small businesses and tax-exempt organizations may apply the credit against payroll taxes, subject to specified limits and requirements. Eligible small businesses may also apply the credit against the alternative minimum tax. 

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Investing in American Workers Act''.

SEC. 2. EMPLOYER-PROVIDED WORKER TRAINING CREDIT.

    (a) In General.--
            (1) Determination of credit.--Subpart D of part IV of 
        subchapter A of chapter 1 of the Internal Revenue Code of 1986 
        is amended by adding at the end the following new section:

``SEC. 45T. EMPLOYER-PROVIDED WORKER TRAINING CREDIT.

    ``(a) In General.--For purposes of section 38, except as provided 
in subsection (d), the employer-provided worker training credit under 
this section for the taxable year is an amount equal to 20 percent of 
the excess (if any) of--
            ``(1) the qualified training expenditures for such taxable 
        year, over
            ``(2) the average of the qualified training expenditures 
        (if any) for the 3 taxable years preceding such taxable year.
    ``(b) Qualified Training Expenditures.--For purposes of this 
section--
            ``(1) Qualified training expenditures defined.--
                    ``(A) In general.--The term `qualified training 
                expenditures' means any expenditures by an employer for 
                qualified training for any non-highly compensated 
                employee.
                    ``(B) Exclusions.--The term `qualified training 
                expenditures' shall not include any amounts paid for 
                meals, lodging, transportation, or other services 
                incidental to expenditures described in subparagraph 
                (A).
            ``(2) Qualified training.--
                    ``(A) In general.--The term `qualified training' 
                means training which results in the attainment of a 
                recognized postsecondary credential and which is 
                provided pursuant to one of the following:
                            ``(i) An apprenticeship program which is 
                        registered under the Act of August 16, 1937 
                        (commonly known as the `National Apprenticeship 
                        Act'; 50 Stat. 664, chapter 663), and is in an 
                        emerging industry.
                            ``(ii) An apprenticeship program which is 
                        registered or approved by a recognized State 
                        apprenticeship agency in accordance with 
                        section 1 of such Act and which is in an 
                        emerging industry.
                            ``(iii) A program of training services 
                        listed pursuant to section 122(d) of the 
                        Workforce Innovation and Opportunity Act.
                            ``(iv) A program which is conducted by an 
                        area career and technical education school, a 
                        community college, or a labor organization.
                            ``(v) A program which is sponsored and 
                        administered by an employer, industry trade 
                        association, industry or sector partnership, or 
                        labor organization.
                    ``(B) Emerging industry.--The term `emerging 
                industry' means, for a taxable year, an industry that 
                comprises less than 30 percent of all civilian 
                apprentices registered with the Department of Labor for 
                the fiscal year ending in such taxable year.
                    ``(C) Community college.--The term `community 
                college' means an institution which is a junior or 
                community college as defined in section 312(f) of the 
                Higher Education Act of 1965.
                    ``(D) Labor organization.--The term `labor 
                organization' means a labor organization, within the 
                meaning of the term in section 501(c)(5) of the 
                Internal Revenue Code of 1986.
                    ``(E) Industry trade association.--The term 
                `industry trade association' means an organization 
                which--
                            ``(i) is described in paragraph (3) or (6) 
                        of section 501(c) of the Internal Revenue Code 
                        of 1986 and exempt from taxation under section 
                        501(a) of such Code, and
                            ``(ii) is representing an industry.
                    ``(F) Other terms.--The terms `area career and 
                technical education school', `recognized postsecondary 
                credential', and `industry or sector partnership' have 
                the meanings given such terms, respectively, by section 
                3 of the Workforce Innovation and Opportunity Act.
            ``(3) Non-highly compensated employee.--The term `non-
        highly compensated employee' means, with respect to an 
        employer, an employee whose--
                    ``(A) compensation (as such term is defined in 
                section 415(c)(3)) from such employer for services 
                provided for the taxable year does not exceed $82,000, 
                and
                    ``(B) rate of compensation, if applied to a full-
                time employee for a year, would not exceed $82,000.
    ``(c) Special Rules.--
            ``(1) Special rule in case of no qualified training 
        expenditures in any of 3 preceding taxable years.--
                    ``(A) Taxpayers to which paragraph applies.--The 
                credit under this section shall be determined under 
                this paragraph if the taxpayer has no qualified 
                training expenditures in any one of the 3 taxable years 
                preceding the taxable year for which the credit is 
                being determined.
                    ``(B) Credit rate.--The credit determined under 
                this paragraph shall be equal to 10 percent of the 
                adjusted qualified training expenditures for the 
                taxable year.
            ``(2) Aggregation and allocation of expenditures, etc.--In 
        determining the amount of the credit under this section, rules 
        similar to the rules of paragraphs (1), (2), (3), (4), and (5) 
        of section 41(f) shall apply.
    ``(d) Election To Apply Credit Against Payroll Taxes.--
            ``(1) In general.--At the election of a qualified small 
        business (as defined in section 41(h)) or a qualified tax-
        exempt organization (as defined in section 3111(e)(5)(A)) for 
        any taxable year, section 3111(g) shall apply to the payroll 
        tax credit portion of the credit otherwise determined under 
        subsection (a) for the taxable year and such portion shall not 
        be treated (other than for purposes of section 280C) as a 
        credit determined under subsection (a).
            ``(2) Payroll tax credit portion.--For purposes of this 
        subsection, the payroll tax credit portion of the credit 
        determined under subsection (a) with respect to any taxpayer 
        for any taxable year is the least of--
                    ``(A) the amount specified in the election made 
                under this subsection,
                    ``(B) the credit determined under subsection (a) 
                for the taxable year (determined before the application 
                of this subsection), or
                    ``(C) in the case of a qualified small business 
                other than a partnership or S corporation, the amount 
                of the business credit carryforward under section 39 
                carried from the taxable year (determined before the 
                application of this subsection to the taxable year).
            ``(3) Election.--
                    ``(A) In general.--Any election under this 
                subsection for any taxable year--
                            ``(i) shall specify the amount of the 
                        credit to which such election applies,
                            ``(ii) shall be made on or before the due 
                        date (including extensions) of--
                                    ``(I) in the case of a partnership, 
                                the return required to be filed under 
                                section 6031,
                                    ``(II) in the case of an S 
                                corporation, the return required to be 
                                filed under section 6037, and
                                    ``(III) in the case of any other 
                                taxpayer, the return of tax for the 
                                taxable year, and
                            ``(iii) may be revoked only with the 
                        consent of the Secretary.
                    ``(B) Limitations.--
                            ``(i) Amount.--The amount specified in any 
                        election made under this subsection shall not 
                        exceed $250,000.
                            ``(ii) Number of taxable years.--A person 
                        may not make an election under this subsection 
                        if such person (or any other person treated as 
                        a single taxpayer with such person under 
                        paragraph (5)(A)) has made an election under 
                        this subsection for five or more preceding 
                        taxable years.
                    ``(C) Special rule for partnerships and s 
                corporations.--In the case of a partnership or S 
                corporation, the election made under this subsection 
                shall be made at the entity level.
            ``(4) Aggregation rules.--
                    ``(A) In general.--Except as provided in 
                subparagraph (B)--
                            ``(i) all members of the same controlled 
                        group of corporations shall be treated as a 
                        single taxpayer, and
                            ``(ii) all trades or businesses (whether or 
                        not incorporated) which are under common 
                        control shall be treated as a single taxpayer.
                    ``(B) Special rules.--For purposes of this 
                subsection and section 3111(g)--
                            ``(i) each of the persons treated as a 
                        single taxpayer under subparagraph (A) may 
                        separately make the election under paragraph 
                        (1) for any taxable year, and
                            ``(ii) the $250,000 amount under paragraph 
                        (4)(B)(i) shall be allocated among all persons 
                        treated as a single taxpayer under subparagraph 
                        (A) in the same manner as under section 
                        41(f)(1).
            ``(5) Regulations.--The Secretary shall prescribe such 
        regulations as may be necessary to carry out the purposes of 
        this subsection, including--
                    ``(A) regulations to prevent the avoidance of the 
                purposes of the limitations and aggregation rules under 
                this subsection,
                    ``(B) regulations to minimize compliance and 
                recordkeeping burdens under this subsection, and
                    ``(C) regulations for recapturing the benefit of 
                credits determined under section 3111(g) in cases where 
                there is a recapture or a subsequent adjustment to the 
                payroll tax credit portion of the credit determined 
                under subsection (a), including requiring amended 
                income tax returns in the cases where there is such an 
                adjustment.''.
            (2) Credit part of general business credit.--Section 38(b) 
        of the Internal Revenue Code of 1986 is amended by striking 
        ``plus'' at the end of paragraph (36), by striking the period 
        at the end of paragraph (37) and inserting ``, plus'', and by 
        adding at the end the following new paragraph:
            ``(38) the employer-provided worker training credit 
        determined under section 45T(a).''.
            (3) Coordination with deductions.--Section 280C of the 
        Internal Revenue Code of 1986 is amended by adding at the end 
        the following new subsection:
    ``(j) Employer-Provided Worker Training Credit.--No deduction shall 
be allowed for that portion of the expenses otherwise allowable as a 
deduction taken into account in determining the credit under section 
45T for the taxable year which is equal to the amount of the credit 
determined for such taxable year under section 45T(a).''.
            (4) Clerical amendment.--The table of sections for subpart 
        D of part IV of subchapter A of chapter 1 of the Internal 
        Revenue Code of 1986 is amended by adding at the end the 
        following new item:

``Sec. 45T. Employer-provided worker training credit.''.
    (b) Credit Allowed Against Alternative Minimum Tax.--Subparagraph 
(B) of section 38(c)(4) of the Internal Revenue Code of 1986 is 
amended--
            (1) by redesignating clauses (x), (xi), and (xii) as 
        clauses (xi), (xii), and (xiii), respectively; and
            (2) by inserting after clause (ix) the following new 
        clause:
                            ``(x) the credit determined under section 
                        45T with respect to an eligible small business 
                        (as defined in paragraph (5)(C), after 
                        application of rules similar to the rules of 
                        paragraph (5)(D)),''.
    (c) Payroll Tax Credit.--Section 3111 of the Internal Revenue Code 
of 1986 is amended by adding at the end the following new subsection:
    ``(g) Credit for Worker Training Expenses.--
            ``(1) In general.--In the case of a taxpayer who has made 
        an election under section 45S(e) for a taxable year, there 
        shall be allowed as a credit against the tax imposed by 
        subsection (a) for the first calendar quarter which begins 
        after the date on which the taxpayer files the return specified 
        in section 45S(e)(4)(A)(ii) an amount equal to the payroll tax 
        credit portion determined under section 45S(e)(2).
            ``(2) Limitation.--The credit allowed by paragraph (1) 
        shall not exceed the tax imposed by subsection (a) for any 
        calendar quarter on the wages paid with respect to the 
        employment of all individuals in the employ of the employer.
            ``(3) Carryover of unused credit.--If the amount of the 
        credit under paragraph (1) exceeds the limitation of paragraph 
        (2) for any calendar quarter, such excess shall be carried to 
        the succeeding calendar quarter and allowed as a credit under 
        paragraph (1) for such quarter.
            ``(4) Deduction allowed for credited amounts.--The credit 
        allowed under paragraph (1) shall not be taken into account for 
        purposes of determining the amount of any deduction allowed 
        under chapter 1 for taxes imposed under subsection (a).''.
    (d) Simplified Filing for Certain Small Businesses.--The Secretary 
of the Treasury shall provide for a method of filing returns of tax and 
information returns required under the Internal Revenue Code of 1986 in 
a simplified format, to the extent possible, for employers with less 
than $5,000,000 in annual gross receipts.
    (e) Regulations Relating to Postsecondary Credentials.--Not later 
than 1 year after the date of the enactment of this Act, the Secretary 
of Labor, in consultation with the Secretary of the Treasury, shall 
issue regulations or other guidance applying the definition of the term 
``recognized postsecondary credential'' as provided in section 3 of the 
Workforce Innovation and Opportunity Act (29 U.S.C. 3102).
    (f) Effective Date.--The amendments made by this section shall 
apply to taxable years beginning after the date of the enactment of 
this Act.