I 

115TH CONGRESS 

2D SESSION H. R. 5516 

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

employer-provided worker training. 

IN THE HOUSE OF REPRESENTATIVES 

APRIL 13, 2018 

Mr. KRISHNAMOORTHI (for himself, Mr. CROWLEY, Ms. SA ́NCHEZ, Ms. 

DELBENE, Mrs. DINGELL, Mr. SOTO, Mr. BROWN of Maryland, and Mr. 

BERA) introduced the following bill; which was referred to the Committee 

on Ways and Means, and in addition to the Committee on Education and 

the Workforce, for a period to be subsequently determined by the Speaker, in each case for consideration of such provisions as fall within the jurisdiction of the committee concerned 

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.— 


SSpencer on DSKBBXCHB2PROD with BILLS
2 

•HR 5516 IH

1 (1) DETERMINATION OF CREDIT.—Subpart D 

2 of part IV of subchapter A of chapter 1 of the Inter3 nal Revenue Code of 1986 is amended by adding at 

4 the end the following new section: 

5 ‘‘SEC. 45T. EMPLOYER-PROVIDED WORKER TRAINING 

6 CREDIT. 

7 ‘‘(a) IN GENERAL.—For purposes of section 38, ex8 cept as provided in subsection (d), the employer-provided 

9 worker training credit under this section for the taxable 

10 year is an amount equal to 20 percent of the excess (if 

11 any) of— 

12 ‘‘(1) the qualified training expenditures for 

13 such taxable year, over 

14 ‘‘(2) the average of the qualified training ex15 penditures (if any) for the 3 taxable years preceding 

16 such taxable year. 

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

18 purposes of this section— 

19 ‘‘(1) QUALIFIED TRAINING EXPENDITURES DE20 FINED.— 

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

22 training expenditures’ means any expenditures 

23 by an employer for qualified training for any 

24 non-highly compensated employee. 


SSpencer on DSKBBXCHB2PROD with BILLS
3 

•HR 5516 IH

1 ‘‘(B) EXCLUSIONS.—The term ‘qualified 

2 training expenditures’ shall not include any 

3 amounts paid for meals, lodging, transpor4 tation, or other services incidental to expendi5 tures described in subparagraph (A). 

6 ‘‘(2) QUALIFIED TRAINING.— 

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

8 training’ means training which results in the at9 tainment of a recognized postsecondary creden10 tial and which is provided pursuant to one of 

11 the following: 

12 ‘‘(i) An apprenticeship program which 

13 is registered under the Act of August 16, 

14 1937 (commonly known as the ‘National 

15 Apprenticeship Act’; 50 Stat. 664, chapter 

16 663), and is in an emerging industry. 

17 ‘‘(ii) An apprenticeship program 

18 which is registered or approved by a recog19 nized State apprenticeship agency in ac20 cordance with section 1 of such Act and 

21 which is in an emerging industry. 

22 ‘‘(iii) A program of training services 

23 listed pursuant to section 122(d) of the 

24 Workforce Innovation and Opportunity 

25 Act. 


SSpencer on DSKBBXCHB2PROD with BILLS
4 

•HR 5516 IH

1 ‘‘(iv) A program which is conducted 

2 by an area career and technical education 

3 school, a community college, or a labor or4 ganization. 

5 ‘‘(v) A program which is sponsored 

6 and administered by an employer, industry 

7 trade association, industry or sector part8 nership, or labor organization. 

9 ‘‘(B) EMERGING INDUSTRY.—The term 

10 ‘emerging industry’ means, for a taxable year, 

11 an industry that comprises less than 30 percent 

12 of all civilian apprentices registered with the 

13 Department of Labor for the fiscal year ending 

14 in such taxable year. 

15 ‘‘(C) COMMUNITY COLLEGE.—The term 

16 ‘community college’ means an institution which 

17 is a junior or community college as defined in 

18 section 312(f) of the Higher Education Act of 

19 1965. 

20 ‘‘(D) LABOR ORGANIZATION.—The term 

21 ‘labor organization’ means a labor organization, 

22 within the meaning of the term in section 

23 501(c)(5) of the Internal Revenue Code of 

24 1986. 


SSpencer on DSKBBXCHB2PROD with BILLS
5 

•HR 5516 IH

1 ‘‘(E) INDUSTRY TRADE ASSOCIATION.— 

2 The term ‘industry trade association’ means an 

3 organization which— 

4 ‘‘(i) is described in paragraph (3) or 

5 (6) of section 501(c) of the Internal Rev6 enue Code of 1986 and exempt from tax7 ation under section 501(a) of such Code, 

8 and 

9 ‘‘(ii) is representing an industry. 

10 ‘‘(F) OTHER TERMS.—The terms ‘area ca11 reer and technical education school’, ‘recognized 

12 postsecondary credential’, and ‘industry or sec13 tor partnership’ have the meanings given such 

14 terms, respectively, by section 3 of the Work15 force Innovation and Opportunity Act. 

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

17 The term ‘non-highly compensated employee’ means, 

18 with respect to an employer, an employee whose— 

19 ‘‘(A) compensation (as such term is de20 fined in section 415(c)(3)) from such employer 

21 for services provided for the taxable year does 

22 not exceed $82,000, and 

23 ‘‘(B) rate of compensation, if applied to a 

24 full-time employee for a year, would not exceed 

25 $82,000. 


SSpencer on DSKBBXCHB2PROD with BILLS
6 

•HR 5516 IH

1 ‘‘(c) SPECIAL RULES.— 

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

3 TRAINING EXPENDITURES IN ANY OF 3 PRECEDING

4 TAXABLE YEARS.— 

5 ‘‘(A) TAXPAYERS TO WHICH PARAGRAPH

6 APPLIES.—The credit under this section shall 

7 be determined under this paragraph if the tax8 payer has no qualified training expenditures in 

9 any one of the 3 taxable years preceding the 

10 taxable year for which the credit is being deter11 mined. 

12 ‘‘(B) CREDIT RATE.—The credit deter13 mined under this paragraph shall be equal to 

14 10 percent of the adjusted qualified training ex15 penditures for the taxable year. 

16 ‘‘(2) AGGREGATION AND ALLOCATION OF EX17 PENDITURES, ETC.—In determining the amount of 

18 the credit under this section, rules similar to the 

19 rules of paragraphs (1), (2), (3), (4), and (5) of sec20 tion 41(f) shall apply. 

21 ‘‘(d) ELECTION TO APPLY CREDIT AGAINST PAY22 ROLL TAXES.— 

23 ‘‘(1) IN GENERAL.—At the election of a quali24 fied small business (as defined in section 41(h)) or 

25 a qualified tax-exempt organization (as defined in 


SSpencer on DSKBBXCHB2PROD with BILLS
7 

•HR 5516 IH

1 section 3111(e)(5)(A)) for any taxable year, section 

2 3111(g) shall apply to the payroll tax credit portion 

3 of the credit otherwise determined under subsection 

4 (a) for the taxable year and such portion shall not 

5 be treated (other than for purposes of section 280C) 

6 as a credit determined under subsection (a). 

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

8 purposes of this subsection, the payroll tax credit 

9 portion of the credit determined under subsection 

10 (a) with respect to any taxpayer for any taxable year 

11 is the least of— 

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

13 made under this subsection, 

14 ‘‘(B) the credit determined under sub15 section (a) for the taxable year (determined be16 fore the application of this subsection), or 

17 ‘‘(C) in the case of a qualified small busi18 ness other than a partnership or S corporation, 

19 the amount of the business credit carryforward 

20 under section 39 carried from the taxable year 

21 (determined before the application of this sub22 section to the taxable year). 

23 ‘‘(3) ELECTION.— 

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

25 this subsection for any taxable year— 


SSpencer on DSKBBXCHB2PROD with BILLS
8 

•HR 5516 IH

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

2 credit to which such election applies, 

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

4 due date (including extensions) of— 

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

6 the return required to be filed under 

7 section 6031, 

8 ‘‘(II) in the case of an S corpora9 tion, the return required to be filed 

10 under section 6037, and 

11 ‘‘(III) in the case of any other 

12 taxpayer, the return of tax for the 

13 taxable year, and 

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

15 consent of the Secretary. 

16 ‘‘(B) LIMITATIONS.— 

17 ‘‘(i) AMOUNT.—The amount specified 

18 in any election made under this subsection 

19 shall not exceed $250,000. 

20 ‘‘(ii) NUMBER OF TAXABLE YEARS.— 

21 A person may not make an election under 

22 this subsection if such person (or any other 

23 person treated as a single taxpayer with 

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


SSpencer on DSKBBXCHB2PROD with BILLS
9 

•HR 5516 IH

1 made an election under this subsection for 

2 five or more preceding taxable years. 

3 ‘‘(C) SPECIAL RULE FOR PARTNERSHIPS

4 AND S CORPORATIONS.—In the case of a part5 nership or S corporation, the election made 

6 under this subsection shall be made at the enti7 ty level. 

8 ‘‘(4) AGGREGATION RULES.— 

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

10 subparagraph (B)— 

11 ‘‘(i) all members of the same con12 trolled group of corporations shall be treat13 ed as a single taxpayer, and 

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

15 or not incorporated) which are under com16 mon control shall be treated as a single 

17 taxpayer. 

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

19 this subsection and section 3111(g)— 

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

21 single taxpayer under subparagraph (A) 

22 may separately make the election under 

23 paragraph (1) for any taxable year, and 

24 ‘‘(ii) the $250,000 amount under 

25 paragraph (4)(B)(i) shall be allocated 


SSpencer on DSKBBXCHB2PROD with BILLS
10 

•HR 5516 IH

1 among all persons treated as a single tax2 payer under subparagraph (A) in the same 

3 manner as under section 41(f)(1). 

4 ‘‘(5) REGULATIONS.—The Secretary shall pre5 scribe such regulations as may be necessary to carry 

6 out the purposes of this subsection, including— 

7 ‘‘(A) regulations to prevent the avoidance 

8 of the purposes of the limitations and aggrega9 tion rules under this subsection, 

10 ‘‘(B) regulations to minimize compliance 

11 and recordkeeping burdens under this sub12 section, and 

13 ‘‘(C) regulations for recapturing the ben14 efit of credits determined under section 3111(g) 

15 in cases where there is a recapture or a subse16 quent adjustment to the payroll tax credit por17 tion of the credit determined under subsection 

18 (a), including requiring amended income tax re19 turns in the cases where there is such an ad20 justment.’’. 

21 (2) CREDIT PART OF GENERAL BUSINESS

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

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

24 end of paragraph (36), by striking the period at the 


SSpencer on DSKBBXCHB2PROD with BILLS
11 

•HR 5516 IH

1 end of paragraph (37) and inserting ‘‘, plus’’, and 

2 by adding at the end the following new paragraph: 

3 ‘‘(38) the employer-provided worker training 

4 credit determined under section 45T(a).’’. 

5 (3) COORDINATION WITH DEDUCTIONS.—Sec6 tion 280C of the Internal Revenue Code of 1986 is 

7 amended by adding at the end the following new 

8 subsection: 

9 ‘‘(j) EMPLOYER-PROVIDED WORKER TRAINING

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

11 of the expenses otherwise allowable as a deduction taken 

12 into account in determining the credit under section 45T 

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

14 credit determined for such taxable year under section 

15 45T(a).’’. 

16 (4) CLERICAL AMENDMENT.—The table of sec17 tions for subpart D of part IV of subchapter A of 

18 chapter 1 of the Internal Revenue Code of 1986 is 

19 amended by adding at the end the following new 

20 item: 

‘‘Sec. 45T. Employer-provided worker training credit.’’. 

21 (b) CREDIT ALLOWED AGAINST ALTERNATIVE MIN22 IMUM TAX.—Subparagraph (B) of section 38(c)(4) of the 

23 Internal Revenue Code of 1986 is amended— 

24 (1) by redesignating clauses (x), (xi), and (xii) 

25 as clauses (xi), (xii), and (xiii), respectively; and 


SSpencer on DSKBBXCHB2PROD with BILLS
12 

•HR 5516 IH

1 (2) by inserting after clause (ix) the following 

2 new clause: 

3 ‘‘(x) the credit determined under sec4 tion 45T with respect to an eligible small 

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

6 after application of rules similar to the 

7 rules of paragraph (5)(D)),’’. 

8 (c) PAYROLL TAX CREDIT.—Section 3111 of the In9 ternal Revenue Code of 1986 is amended by adding at the 

10 end the following new subsection: 

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

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

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

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

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

16 first calendar quarter which begins after the date on 

17 which the taxpayer files the return specified in sec18 tion 45S(e)(4)(A)(ii) an amount equal to the payroll 

19 tax credit portion determined under section 

20 45S(e)(2). 

21 ‘‘(2) LIMITATION.—The credit allowed by para22 graph (1) shall not exceed the tax imposed by sub23 section (a) for any calendar quarter on the wages 

24 paid with respect to the employment of all individ25 uals in the employ of the employer. 


SSpencer on DSKBBXCHB2PROD with BILLS
13 

•HR 5516 IH

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

2 amount of the credit under paragraph (1) exceeds 

3 the limitation of paragraph (2) for any calendar 

4 quarter, such excess shall be carried to the suc5 ceeding calendar quarter and allowed as a credit 

6 under paragraph (1) for such quarter. 

7 ‘‘(4) DEDUCTION ALLOWED FOR CREDITED

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

9 shall not be taken into account for purposes of de10 termining the amount of any deduction allowed 

11 under chapter 1 for taxes imposed under subsection 

12 (a).’’. 

13 (d) SIMPLIFIED FILING FOR CERTAIN SMALL BUSI14 NESSES.—The Secretary of the Treasury shall provide for 

15 a method of filing returns of tax and information returns 

16 required under the Internal Revenue Code of 1986 in a 

17 simplified format, to the extent possible, for employers 

18 with less than $5,000,000 in annual gross receipts. 

19 (e) REGULATIONS RELATING TO POSTSECONDARY

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

21 the enactment of this Act, the Secretary of Labor, in con22 sultation with the Secretary of the Treasury, shall issue 

23 regulations or other guidance applying the definition of 

24 the term ‘‘recognized postsecondary credential’’ as proVerDate Sep 11 2014 02:06 Apr 18, 2018 Jkt 079200 PO 00000 Frm 00013 Fmt 6652 Sfmt 6201 E:\BILLS\H5516.IH H5516

SSpencer on DSKBBXCHB2PROD with BILLS
14 

•HR 5516 IH

1 vided in section 3 of the Workforce Innovation and Oppor2 tunity Act (29 U.S.C. 3102). 

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

4 this section shall apply to taxable years beginning after 

5 the date of the enactment of this Act. 

Æ 


SSpencer on DSKBBXCHB2PROD with BILLS