BEST Act

To amend the Internal Revenue Code of 1986 to provide employers a credit against employment and income taxes for certain employee training expenses. 1. Short title This Act may be cited as the Bettering Employee Skills and Talents Act BEST Act 2. Workforce training credit (a) In general Subchapter D of chapter 21 3135. Workforce training credit (a) In general There shall be allowed as a credit against applicable employment taxes for each calendar quarter an amount equal to 30 percent of the qualified workforce training expenses paid or incurred by the employer during such calendar quarter. (b) Qualified workforce training expenses For purposes of this section— (1) In general The term qualified workforce training expenses (2) Qualified employee The term qualified employee (3) Qualified training The term qualified training (c) Applicable employment taxes For purposes of this section, the term applicable employment taxes (d) Carryover of excess credit as employment or income tax credit (1) Credit limited to employment taxes The credit allowed under subsection (a) with respect to any calendar quarter shall not exceed the applicable employment taxes (reduced by any credits allowed under subsection (e) or (f) of section 3111) on the wages paid with respect to the employment of all the employees of the employer for such calendar quarter. (2) Carryover as employment or income tax credit If the amount of any credit under subsection (a) exceeds the limitation of paragraph (1) for any calendar quarter, such excess— (A) except as provided in subparagraph (B), shall be carried to the succeeding calendar quarter and allowed as a credit under subsection (a) for such quarter, or (B) if the employer elects the application of this subparagraph (at such time and in such manner as the Secretary may provide), shall taken into account as a current year business credit under section 38(b)(42) for the taxable year of the employer in which or with which such calendar quarter ends. (e) Recapture (1) In general If credit is determined under this section with respect to any employee and such employee fails to succeed at training, the applicable employment taxes of the employer with respect to which such credit is determined shall be increased for the calendar quarter which includes the date of such failure by the aggregate amount of such credits. (2) Determination of failure An employee shall be treated as failing to succeed at training if such employee fails to complete the training program or fails to obtain the skill, employment classification, or certification with respect to which the training program relates. (f) Special rules (1) Aggregation rule For purposes of subsection (b), all persons treated as a single employer under subsection (a) or (b) of section 52, or subsection (m) or (o) of section 414, shall be treated as one employer. (2) Denial of double benefit No deduction or credit (other than the credit determined under this section) shall be allowed for that portion of the qualified workforce training expenses paid or incurred in a taxable year which is equal to the credit determined under this section with respect to such expenses. (3) Exclusion of governmental and non-profit employers No credit shall be allowed under this section to— (A) any agency or instrumentality of and Federal, State, or local government, or (B) any organization exempt from the tax imposed under chapter 1. (4) Election to not claim credit No credit shall be determined under subsection (a) with respect to so much of the qualified workforce training expenses as the employer elects (at such time and in such manner as the Secretary may provide) to not take into account for purposes of this section. (5) Treatment of deposits The Secretary shall waive any penalty under section 6656 for any failure to make a deposit of any applicable employment taxes if the Secretary determines that such failure was due to the reasonable anticipation of the credit allowed under this section. (6) Extension of limitation on assessment Notwithstanding section 6501, the limitation on the time period for the assessment of any amount attributable to a credit claimed under this section shall not expire before the date that is 5 years after the later of— (A) the date on which the original return which includes the calendar quarter with respect to which such credit is determined is filed, or (B) the date on which such return is treated as filed under section 6501(b)(2). (g) Regulations and guidance The Secretary shall issue such forms, instructions, regulations, and other guidance as are necessary— (1) with respect to the application of the credit under this section to third party payors (including professional employer organizations, certified professional employer organizations, or agents under section 3504), including regulations or guidance allowing such payors to submit documentation necessary to substantiate such credit, (2) to provide for adequate reporting of information to the Secretary for purposes of this section, and (3) with respect to the recapture under subsection (f) of the credit determined by this section, including the establishment of periods after which a failure described in subsection (f)(2) will be treated as occurring if the requirements described in such subsection are not satisfied as of the close of such period. Any forms, instructions, regulations, or other guidance described in paragraph (1) shall require the customer to be responsible for the accounting of the credit and for any liability for improperly claimed credits and shall require the certified professional employer organization or other third party payor to accurately report such tax credits based on the information provided by the customer. . (b) Conforming amendments (1) Section 38(b) of such Code is amended by striking plus , plus (42) in the case of a taxpayer making the election under 3135(e)(2)(B) for any calendar quarter ending during or with such taxable year, the amount treated as a credit under this paragraph pursuant to such election. . (2) Section 3511(d)(2) of such Code is amended by striking and (I) section 3135 (workforce training credit), and . (3) The table of sections for subchapter D of chapter 21 of such Code is amended by adding at the end the following new item: Sec. 3135. Workforce training credit. . (c) Effective date The amendments made by this section shall apply to calendar quarters beginning after the date of the enactment of this Act.

Summary: Bettering Employee Skills and Talents Act or the BEST Act This bill allows a new tax credit against employment taxes for 30% of qualified workforce training expenses paid by an employer. The bill defines qualified workforce training expenses as amounts paid by an employer to provide entry-level employees without a bachelor's degree with skills training recognized by governmental and private organizations.