HR3871-119

What This Bill Does

The Apprenticeship Infrastructure Tax Credit Act creates a new general business credit for employers hiring apprentices in infrastructure-related occupations. The credit is $3,000 per qualifying apprenticeship employee and $6,000 for a recently separated veteran, National Guard or reserve component member, or military spouse. The credit period is the first taxable year the employee enrolls in the employer's qualified registered apprenticeship program and, for long programs with 3,000 or more on-the-job learning hours, the succeeding taxable year; carryforward amounts can affect the next year. Covered occupations are identified by the Labor Secretary and initially include ONET construction and extraction, installation, maintenance and repair, production, and computer, information technology, and security occupations. A qualifying apprentice must be a new W-2 hire, enrolled under a written agreement in a National Apprenticeship Act registered program, and not hired more than 90 days before enrollment. The employer cannot be tax-exempt, the apprenticeship sponsor, or related to the sponsor. The credit is prorated for 90 to 180 days of employment, zero if fewer than 90 days, and reduced against other compensation-based credits. No credit is allowed if the apprentice is involuntarily terminated for reduction in force, job elimination, closure, downsizing, restructuring, or other non-disciplinary employer-initiated reason. No credit is allowed if the apprentice pays tuition, application fees, or other remuneration to the employer or sponsor, subject to exceptions for certain outside funding. Sponsors must issue quarterly eligibility certificates within 31 days after each quarter with sponsor, employer, apprentice, RAPIDS, ONET, FEIN, dates, W-2, termination, and exit-reason data; DOL must update status-reporting rules to require updates within 30 days after quarter close and update apprenticeship agreement forms.

Who Benefits and How

Infrastructure employers benefit from a $3,000 or $6,000 tax credit for qualifying registered apprentices. Recently separated veterans benefit from the higher $6,000 credit that makes them more attractive apprenticeship hires. Military spouses benefit from the higher credit for qualifying apprenticeship employment. Registered apprenticeship sponsors benefit from employer demand for eligible programs in infrastructure occupations. Apprentices in infrastructure occupations benefit from rules barring apprentice-paid participation fees and penalizing non-disciplinary layoffs.

Who Bears the Burden and How

IRS business credit staff must administer the new section 45BB credit and interactions with other wage-based credits. Labor Department apprenticeship staff must identify eligible occupations, update reporting rules, and oversee quarterly certificates. Apprenticeship sponsors must issue detailed quarterly eligibility certificates within 31 days after each quarter. Employers claiming the credit must document W-2 status, new-hire timing, employment days, termination reasons, and sponsor relationships. Tax-exempt employers and sponsor-related employers cannot claim the credit.

Key Provisions

• Creates a $3,000 apprenticeship infrastructure tax credit for qualifying employees.
• Provides a $6,000 credit for recently separated veterans, National Guard or reserve members, and military spouses.
• Limits initial eligible occupations to construction, extraction, installation, repair, production, computer, IT, and security occupations.
• Requires apprentices to be new W-2 hires in qualified registered apprenticeship programs.
• Reduces or denies credits for short employment, non-disciplinary involuntary terminations, apprentice-paid fees, and ineligible employers.
• Requires quarterly DOL eligibility certificates with sponsor, employer, apprentice, RAPIDS, O*NET, FEIN, and employment data.