Tax treatment of apprenticeship awards

(a) Apprenticeship awards treated as employee achievement awards (1) In general Section 274(j)(3)(A)(i)(I) of the Internal Revenue Code of 1986 is amended by striking subclauses (I), (II), and (III) and inserting the following: (I) (aa) transferred by an employer to an employee for length of service achievement or safety achievement and awarded as part of a meaningful ceremony, or (bb) transferred by an employer to an employee participating in a registered apprenticeship program in connection with the training and curriculum of such program, and (II) awarded under conditions and circumstances that do not create a significant likelihood of the payment disguised as compensation.. (2) Definitions Section 274(j)(4) of such Code is amended by adding at the end the following new subparagraphs: (D) Apprenticeship awards An item shall not be treated as having been provided in connection with the training and curriculum of a registered apprenticeship program if such item is received during the recipient's first 90 days of participating in the registered apprenticeship program. (E) Registered apprenticeship program The term registered apprenticeship program has the meaning given such term under section 3135(c)(6).. (b) Increased limitation Paragraph (2) of section 274(j) of the Internal Revenue Code of 1986 is amended— (1) by inserting ($1,500 in the case of an employee achievement award described in paragraph (3)(A)(i)(I)(bb)) after $400 in paragraph (A), and (2) by inserting ($5,000 in the case of a qualified plan award which is an employee achievement award described in paragraph (3)(A)(i)(I)(bb)) at the end of paragraph (B). (c) Effective date The amendments made by this section shall apply to awards transferred after the date of enactment of this Act.