I 

109TH CONGRESS 

1ST SESSION H. R. 2801 

To amend the Internal Revenue Code of 1986 to allow employers a credit 

against income tax for the costs of providing technical training for employees. 

IN THE HOUSE OF REPRESENTATIVES 

JUNE 8, 2005 

Mr. DAVIS of Florida (for himself, Mr. LARSEN of Washington, Mrs. DAVIS

of California, Ms. HOOLEY, Mr. FORD, Mr. SNYDER, Mr. SMITH of 

Washington, Mr. PAUL, and Mrs. MCCARTHY) introduced the following 

bill; which was referred to the Committee on Ways and Means 

A BILL 

To amend the Internal Revenue Code of 1986 to allow employers a credit against income tax for the costs of 

providing technical training for employees. 

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled, 

3 SECTION 1. SHORT TITLE. 

4 This Act may be cited as the ‘‘Up-Skilling Tax Credit 

5 Act of 2005’’. 

6 SEC. 2. CREDIT TO EMPLOYERS FOR COST OF TECHNICAL 

7 TRAINING FOR EMPLOYEES. 

8 (a) IN GENERAL.—Subpart D of part IV of sub9 chapter A of chapter 1 of the Internal Revenue Code of 
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1 1986 (relating to business-related credits) is amended by 

2 adding at the end the following new section: 

3 ‘‘SEC. 45J. EXPENSES FOR TECHNICAL TRAINING OF EM4 PLOYEES. 

5 ‘‘(a) GENERAL RULE.—For purposes of section 38, 

6 the employee technical training credit determined under 

7 this section for the taxable year is an amount equal to 

8 20 percent of the amount paid or incurred by the taxpayer 

9 for technical training for employees performing services in 

10 a trade or business of the taxpayer. 

11 ‘‘(b) LIMITATIONS.— 

12 ‘‘(1) ONLY JANUARY 1, 2005 EMPLOYEES.—The 

13 credit determined under this section shall apply only 

14 to training for individuals who were employees of the 

15 taxpayer on January 1, 2005. 

16 ‘‘(2) PER EMPLOYEE LIMIT.—The credit deter17 mined under this section with respect to each em18 ployee for the taxable year shall not exceed $1,000, 

19 reduced by the credit determined under this section 

20 with respect to such employee for all prior taxable 

21 years. 

22 ‘‘(3) TRAINING MUST LEAD TO RECOGNIZED

23 CERTIFICATE.—Only costs for training leading to an 

24 industry-recognized license or certificate may be 

25 taken into account under this section. 
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1 ‘‘(c) CERTAIN RULES TO APPLY.—Rules similar to 

2 the rules of sections 51(i)(1) and 52 shall apply for pur3 poses of this section. 

4 ‘‘(d) TERMINATION.—This section shall not apply to 

5 taxable years beginning after December 31, 2009.’’. 

6 (b) CREDIT MADE PART OF GENERAL BUSINESS

7 CREDIT.—Subsection (b) of section 38 of such Code is 

8 amended by striking ‘‘plus’’ at the end of paragraph (18), 

9 by striking the period at the end of paragraph (19) and 

10 inserting ‘‘, plus’’, and by adding at the end the following 

11 new paragraph: 

12 ‘‘(20) the employee technical training credit de13 termined under section 45J(a).’’. 

14 (c) DENIAL OF DOUBLE BENEFIT.—Section 280C of 

15 such Code is amended by adding at the end the following 

16 new subsection: 

17 ‘‘(e) EMPLOYEE TECHNICAL TRAINING CREDIT.—No 

18 deduction shall be allowed for that portion of the expenses 

19 otherwise allowable as a deduction for the taxable year 

20 which is equal to the amount of the credit determined for 

21 the taxable year under section 45J(a).’’. 

22 (d) CLERICAL AMENDMENT.—The table of sections 

23 for subpart D of part IV of subchapter A of chapter 1 

24 of such Code is amended by adding at the end the fol25 lowing new item: 

‘‘Sec. 45J. Expenses for technical training of employees.’’. 
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1 (e) EFFECTIVE DATE.—The amendments made by 

2 this section shall apply to expenses paid or incurred in 

3 the taxable years ending after the date of the enactment 

4 of this Act. 

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