II 

115TH CONGRESS 

1ST SESSION S. 2048 

To amend the Internal Revenue Code of 1986 to provide a credit for 

employer-provided worker training. 

IN THE SENATE OF THE UNITED STATES 

OCTOBER 31, 2017 

Mr. WARNER (for himself, Mr. CASEY, and Ms. STABENOW) introduced the 

following bill; which was read twice and referred to the Committee on Finance 

A BILL 

To amend the Internal Revenue Code of 1986 to provide 

a credit for employer-provided worker training. 

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 ‘‘Investing in American 

5 Workers Act’’. 

6 SEC. 2. EMPLOYER-PROVIDED WORKER TRAINING CREDIT. 

7 (a) IN GENERAL.— 

8 (1) DETERMINATION OF CREDIT.—Subpart D 

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1 nal Revenue Code of 1986 is amended by adding at 

2 the end the following new section: 

3 ‘‘SEC. 45S. EMPLOYER-PROVIDED WORKER TRAINING 

4 CREDIT. 

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

6 employer-provided worker training credit under this sec7 tion for the taxable year is an amount equal to 20 percent 

8 of the excess (if any) of— 

9 ‘‘(1) the qualified training expenditures for the 

10 taxable year, over 

11 ‘‘(2) the average of the adjusted qualified train12 ing expenditures for the 3 taxable years preceding 

13 the taxable year for which the credit is being deter14 mined. 

15 ‘‘(b) QUALIFIED TRAINING EXPENDITURES.—For 

16 purposes of this section— 

17 ‘‘(1) IN GENERAL.—The term ‘qualified train18 ing expenditures’ means any expenditures for the 

19 qualified training of any non-highly compensated 

20 employee. Such term shall not include any amounts 

21 paid for meals, lodging, transportation, or other 

22 services incidental to amounts described in para23 graph (1). 

24 ‘‘(2) QUALIFIED TRAINING.— 


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1 ‘‘(A) IN GENERAL.—For purposes of para2 graph (1), the term ‘qualified training’ means 

3 training which results in the attainment of a 

4 recognized postsecondary credential and which 

5 is provided through— 

6 ‘‘(i) an apprenticeship program reg7 istered under the Act of August 16, 1937 

8 (commonly known as the ‘National Ap9 prenticeship Act’; 50 Stat. 664, chapter 

10 663; 29 U.S.C. 50 et seq.); 

11 ‘‘(ii)(I) a program of training services 

12 which is listed under section 122(d) of the 

13 Workforce Innovation and Opportunity Act 

14 (29 U.S.C. 3152(d)); or 

15 ‘‘(II) an apprenticeship program 

16 which is registered or approved by a recog17 nized State apprenticeship agency (which 

18 uses a State apprenticeship council) in ac19 cordance with section 1 of the Act referred 

20 to in clause (i); 

21 ‘‘(iii) a program which is conducted 

22 by an area career and technical education 

23 school, a community college, or a labor or24 ganization; or 


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1 ‘‘(iv) a program which is sponsored 

2 and administered by an employer, industry 

3 trade association, industry or sector part4 nership, or labor organization. 

5 ‘‘(B) RELATED DEFINITIONS.—In sub6 paragraph (A): 

7 ‘‘(i) AREA CAREER AND TECHNICAL

8 EDUCATION SCHOOL.—The term ‘area ca9 reer and technical education school’ means 

10 such a school, as defined in section 3 of 

11 the Carl D. Perkins Career and Technical 

12 Education Act of 2006 (20 U.S.C. 2302), 

13 which participates in a program under that 

14 Act (20 U.S.C. 2301 et seq.). 

15 ‘‘(ii) COMMUNITY COLLEGE.—The 

16 term ‘community college’ means an institu17 tion which— 

18 ‘‘(I) is a junior or community col19 lege as defined in section 312(f) of the 

20 Higher Education Act of 1965 (20 

21 U.S.C. 1058(f)), except that the insti22 tution need not meet the requirements 

23 of paragraph (1) of that section; and 


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1 ‘‘(II) participates in a program 

2 under title IV of that Act (20 U.S.C. 

3 1070 et seq.). 

4 ‘‘(iii) INDUSTRY OR SECTOR PARTNER5 SHIP.—The term ‘industry or sector part6 nership’ has the meaning given such term 

7 under section 3 of the Workforce Innova8 tion and Opportunity Act (29 U.S.C. 

9 3102) 

10 ‘‘(iv) INDUSTRY TRADE ASSOCIA11 TION.—The term ‘industry trade associa12 tion’ means an organization which— 

13 ‘‘(I) is described in paragraph (3) 

14 or (6) of section 501(c) of the Inter15 nal Revenue Code of 1986 and exempt 

16 from taxation under section 501(a) of 

17 such Code; and 

18 ‘‘(II) is representing an industry. 

19 ‘‘(v) LABOR ORGANIZATION.—The 

20 term ‘labor organization’ means a labor or21 ganization, within the meaning of the term 

22 in section 501(c)(5) of the Internal Rev23 enue Code of 1986. 

24 ‘‘(vi) RECOGNIZED POSTSECONDARY

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1 secondary credential’ means a credential 

2 consisting of an industry-recognized certifi3 cate or certification, a certificate of com4 pletion of an apprenticeship, a license rec5 ognized by the State involved or Federal 

6 Government, or an associate or bacca7 laureate degree. 

8 ‘‘(3) NON-HIGHLY COMPENSATED EMPLOYEE.— 

9 For purposes of paragraph (1), the term ‘non-highly 

10 compensated employee’ means an employee of the 

11 taxpayer whose remuneration for the taxable year 

12 for services provided to the taxpayer does not exceed 

13 $82,000. 

14 ‘‘(c) ADJUSTED QUALIFIED TRAINING EXPENDI15 TURES.—For purposes of this section, the term ‘adjusted 

16 qualified training expenses’ means, with respect to any 

17 taxable year— 

18 ‘‘(1) the qualified training expenses for such 

19 taxable year, multiplied by 

20 ‘‘(2) the cost-of-living adjustment determined 

21 under section 1(f)(3) for the calendar year in which 

22 the taxable year for which the credit is being deter23 mined begins, except that section 1(f)(3)(B) shall be 

24 applied by using the CPI for the calendar year in 

25 which the taxable year in which qualified training 


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1 expenses were paid or incurred begins in lieu of the 

2 CPI for calendar year 1982. 

3 ‘‘(d) SPECIAL RULES.—For purposes of this sec4 tion— 

5 ‘‘(1) SPECIAL RULE IN CASE OF NO QUALIFIED

6 TRAINING EXPENDITURES IN ANY OF 3 PRECEDING

7 TAXABLE YEARS.— 

8 ‘‘(A) TAXPAYERS TO WHICH PARAGRAPH

9 APPLIES.—The credit under this section shall 

10 be determined under this paragraph if the tax11 payer has no qualified training expenditures in 

12 any one of the 3 taxable years preceding the 

13 taxable year for which the credit is being deter14 mined. 

15 ‘‘(B) CREDIT RATE.—The credit deter16 mined under this paragraph shall be equal to 

17 10 percent of the adjusted qualified training ex18 penditures for the taxable year. 

19 ‘‘(2) AGGREGATION AND ALLOCATION OF EX20 PENDITURES, ETC.—Rules similar to the rules of 

21 paragraphs (1), (2), (3), (4), and (5) of section 

22 41(f) shall apply. 

23 ‘‘(e) ELECTION TO APPLY CREDIT AGAINST PAY24 ROLL TAXES.— 


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1 ‘‘(1) IN GENERAL.—At the election of a quali2 fied small business or a qualified tax-exempt organi3 zation (as defined in section 3111(e)(5)(A)) for any 

4 taxable year, section 3111(g) shall apply to the pay5 roll tax credit portion of the credit otherwise deter6 mined under subsection (a) for the taxable year and 

7 such portion shall not be treated (other than for 

8 purposes of section 280C) as a credit determined 

9 under subsection (a). 

10 ‘‘(2) PAYROLL TAX CREDIT PORTION.—For 

11 purposes of this subsection, the payroll tax credit 

12 portion of the credit determined under subsection 

13 (a) with respect to any qualified small business or 

14 qualified tax-exempt organization for any taxable 

15 year is the least of— 

16 ‘‘(A) the amount specified in the election 

17 made under this subsection, 

18 ‘‘(B) the credit determined under sub19 section (a) for the taxable year (determined be20 fore the application of this subsection), or 

21 ‘‘(C) in the case of a qualified small busi22 ness other than a partnership or S corporation, 

23 the amount of the business credit carryforward 

24 under section 39 carried from the taxable year 


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1 (determined before the application of this sub2 section to the taxable year). 

3 ‘‘(3) QUALIFIED SMALL BUSINESS.—For pur4 poses of this subsection— 

5 ‘‘(A) IN GENERAL.—The term ‘qualified 

6 small business’ means, with respect to any tax7 able year— 

8 ‘‘(i) a corporation or partnership, if— 

9 ‘‘(I) the gross receipts (as deter10 mined under the rules of section 

11 448(c)(3), without regard to subpara12 graph (A) thereof) of such entity for 

13 the taxable year is less than 

14 $5,000,000, and 

15 ‘‘(II) such entity did not have 

16 gross receipts (as so determined) for 

17 any taxable year preceding the 5-tax18 able-year period ending with such tax19 able year, and 

20 ‘‘(ii) any person (other than a cor21 poration or partnership) who meets the re22 quirements of subclauses (I) and (II) of 

23 clause (i), determined— 

24 ‘‘(I) by substituting ‘person’ for 

25 ‘entity’ each place it appears, and 


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1 ‘‘(II) by only taking into account 

2 the aggregate gross receipts received 

3 by such person in carrying on all 

4 trades or businesses of such person. 

5 ‘‘(B) LIMITATION.—Such term shall not 

6 include an organization which is exempt from 

7 taxation under section 501. 

8 ‘‘(4) ELECTION.— 

9 ‘‘(A) IN GENERAL.—Any election under 

10 this subsection for any taxable year— 

11 ‘‘(i) shall specify the amount of the 

12 credit to which such election applies, 

13 ‘‘(ii) shall be made on or before the 

14 due date (including extensions) of— 

15 ‘‘(I) in the case of a partnership, 

16 the return required to be filed under 

17 section 6031, 

18 ‘‘(II) in the case of an S corpora19 tion, the return required to be filed 

20 under section 6037, and 

21 ‘‘(III) in the case of any other 

22 qualified small business or qualified 

23 tax-exempt organization, the return of 

24 tax for the taxable year, and 


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1 ‘‘(iii) may be revoked only with the 

2 consent of the Secretary. 

3 ‘‘(B) LIMITATIONS.— 

4 ‘‘(i) AMOUNT.—The amount specified 

5 in any election made under this subsection 

6 shall not exceed $250,000. 

7 ‘‘(ii) NUMBER OF TAXABLE YEARS.— 

8 A person may not make an election under 

9 this subsection if such person (or any other 

10 person treated as a single taxpayer with 

11 such person under paragraph (5)(A)) has 

12 made an election under this subsection for 

13 five or more preceding taxable years. 

14 ‘‘(C) SPECIAL RULE FOR PARTNERSHIPS

15 AND S CORPORATIONS.—In the case of a part16 nership or S corporation, the election made 

17 under this subsection shall be made at the enti18 ty level. 

19 ‘‘(5) AGGREGATION RULES.— 

20 ‘‘(A) IN GENERAL.—Except as provided in 

21 subparagraph (B)— 

22 ‘‘(i) all members of the same con23 trolled group of corporations shall be treat24 ed as a single taxpayer, and 


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1 ‘‘(ii) all trades or businesses (whether 

2 or not incorporated) which are under com3 mon control shall be treated as a single 

4 taxpayer. 

5 ‘‘(B) SPECIAL RULES.—For purposes of 

6 this subsection and section 3111(g)— 

7 ‘‘(i) each of the persons treated as a 

8 single taxpayer under subparagraph (A) 

9 may separately make the election under 

10 paragraph (1) for any taxable year, and 

11 ‘‘(ii) the $250,000 amount under 

12 paragraph (3)(B)(i) shall be allocated 

13 among all persons treated as a single tax14 payer under subparagraph (A) in the man15 ner provided by the Secretary which is 

16 similar to the manner provided under sec17 tion 41(f)(1). 

18 ‘‘(6) REGULATIONS.—The Secretary shall pre19 scribe such regulations as may be necessary to carry 

20 out the purposes of this subsection, including— 

21 ‘‘(A) regulations to prevent the avoidance 

22 of the purposes of the limitations and aggrega23 tion rules under this subsection, 


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1 ‘‘(B) regulations to minimize compliance 

2 and recordkeeping burdens under this sub3 section, and 

4 ‘‘(C) regulations for recapturing the ben5 efit of credits determined under section 3111(g) 

6 in cases where there is a recapture or a subse7 quent adjustment to the payroll tax credit por8 tion of the credit determined under subsection 

9 (a), including requiring amended income tax re10 turns in the cases where there is such an ad11 justment.’’. 

12 (2) CREDIT PART OF GENERAL BUSINESS

13 CREDIT.—Section 38(b) of the Internal Revenue 

14 Code of 1986 is amended by striking ‘‘plus’’ at the 

15 end of paragraph (35), by striking the period at the 

16 end of paragraph (36) and inserting ‘‘, plus’’, and 

17 by adding at the end the following new paragraph: 

18 ‘‘(37) the employer-provided worker training 

19 credit determined under section 45S(a).’’. 

20 (3) COORDINATION WITH DEDUCTIONS.—Sec21 tion 280C of the Internal Revenue Code of 1986 is 

22 amended by adding at the end the following new 

23 subsection: 

24 ‘‘(j) EMPLOYER-PROVIDED WORKER TRAINING

25 CREDIT.—No deduction shall be allowed for that portion 


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1 of the expenses otherwise allowable as a deduction taken 

2 into account in determining the credit under section 45S 

3 for the taxable year which is equal to the amount of the 

4 credit determined for such taxable year under section 

5 45S(a).’’. 

6 (4) CLERICAL AMENDMENT.—The table of sec7 tions for subpart D of part IV of subchapter A of 

8 chapter 1 of the Internal Revenue Code of 1986 is 

9 amended by adding at the end the following new 

10 item: 

‘‘Sec. 45S. Employer-provided worker training credit.’’. 

11 (b) CREDIT ALLOWED AGAINST ALTERNATIVE MIN12 IMUM TAX.—Subparagraph (B) of section 38(c)(4) of the 

13 Internal Revenue Code of 1986 is amended— 

14 (1) by redesignating clauses (ix), (x), and (xi) 

15 as clauses (x), (xi), and (xii), respectively, and 

16 (2) by inserting after clause (viii) the following 

17 new clause: 

18 ‘‘(ix) the credit determined under sec19 tion 45S with respect to an eligible small 

20 business (as defined in paragraph (5)(C), 

21 after application of rules similar to the 

22 rules of paragraph (5)(D)),’’. 

23 (c) PAYROLL TAX CREDIT.—Section 3111 of the In24 ternal Revenue Code of 1986 is amended by adding at the 

25 end the following new subsection: 


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1 ‘‘(g) CREDIT FOR WORKER TRAINING EXPENSES.— 

2 ‘‘(1) IN GENERAL.—In the case of a taxpayer 

3 who has made an election under section 45S(e) for 

4 a taxable year, there shall be allowed as a credit 

5 against the tax imposed by subsection (a) for the 

6 first calendar quarter which begins after the date on 

7 which the taxpayer files the return specified in sec8 tion 45S(e)(4)(A)(ii) an amount equal to the payroll 

9 tax credit portion determined under section 

10 45S(e)(2). 

11 ‘‘(2) LIMITATION.—The credit allowed by para12 graph (1) shall not exceed the tax imposed by sub13 section (a) for any calendar quarter on the wages 

14 paid with respect to the employment of all individ15 uals in the employ of the employer. 

16 ‘‘(3) CARRYOVER OF UNUSED CREDIT.—If the 

17 amount of the credit under paragraph (1) exceeds 

18 the limitation of paragraph (2) for any calendar 

19 quarter, such excess shall be carried to the suc20 ceeding calendar quarter and allowed as a credit 

21 under paragraph (1) for such quarter. 

22 ‘‘(4) DEDUCTION ALLOWED FOR CREDITED

23 AMOUNTS.—The credit allowed under paragraph (1) 

24 shall not be taken into account for purposes of de25 termining the amount of any deduction allowed 


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1 under chapter 1 for taxes imposed under subsection 

2 (a).’’. 

3 (d) SIMPLIFIED FILING FOR CERTAIN SMALL BUSI4 NESSES.—The Secretary of the Treasury shall provide for 

5 a method of filing returns of tax and information returns 

6 required under the Internal Revenue Code of 1986 in a 

7 simplified format, to the extent possible, for employers 

8 with less than $5,000,000 in annual gross receipts (as de9 termined under guidance provided by the Secretary). 

10 (e) REGULATIONS RELATING TO POSTSECONDARY

11 CREDENTIALS.—Not later than 1 year after the date of 

12 the enactment of this Act, the Secretary of Labor, in con13 sultation with the Secretary of the Treasury, shall issue 

14 regulations or other guidance applying the definition of 

15 the term ‘‘recognized postsecondary credential’’ as pro16 vided in section 3 of the Workforce Innovation and Oppor17 tunity Act (29 U.S.C. 3102). 

18 (f) EFFECTIVE DATE.—The amendments made by 

19 this section shall apply to taxable years beginning after 

20 the date of the enactment of this Act. 

Æ 


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