Employer-provided upskilling credit

(a) In general (1) Determination of credit Subpart D of part IV of subchapter A of chapter 1 of the Internal Revenue Code of 1986 is amended by adding at the end the following new section: 45BB. Employee upskilling credit (a) In general For purposes of section 38, the employee upskilling credit determined under this section for any taxable year is an amount equal to 25 percent of qualified training expenditures for the taxable year. (b) Qualified training expenditures (1) In general The term qualified training expenditures means any amount paid or incurred by the taxpayer for the qualified training of any employee working in an at-risk occupation to transition them to another occupation. (2) Exclusion The term qualified training expenditures shall not include any amount paid or incurred for meals, lodging, transportation, or any other services which are incidental to qualified training. (c) Other definitions In this section— (1) At-risk occupation The term at-risk occupation means an occupation listed in the most recently published list under section 7(a)(2) of the FUTURE of Workers Act. (2) Qualified training (A) In general In this section, the term qualified training means training which results in the attainment of a recognized postsecondary credential and which is provided through— (i) a registered apprenticeship, (ii) a program of training services which is on a State list established under section 122(d) of the Workforce Innovation and Opportunity Act (29 U.S.C. 3152(d)), (iii) a program which is conducted by an area career and technical education school, a community college, or a labor organization, or (iv) a program which is sponsored and administered by an employer, industry trade association, industry or sector partnership, or labor organization. (B) Related definitions For purposes of subparagraph (A): (i) Area career and technical education school The term area career and technical education school means such a school, as defined in section 3 of the Carl D. Perkins Career and Technical Education Act of 2006 (20 U.S.C. 2302), which participates in a program under that Act (20 U.S.C. 2301 et seq.). (ii) Community college The term community college has the meaning given the term in section 5002 of the National Artificial Intelligence Initiative Act of 2020 (15 U.S.C. 9401). (iii) Industry or sector partnership The term industry or sector partnership has the meaning given such term in section 3 of the Workforce Innovation and Opportunity Act (29 U.S.C. 3102). (iv) Industry trade association The term industry trade association means an organization which— (I) is described in paragraph (3) or (6) of section 501(c) of the Internal Revenue Code of 1986 and exempt from taxation under section 501(a) of such Code, and (II) is representing an industry. (v) Labor organization The term labor organization means a labor organization, within the meaning of the term in section 501(c)(5) of the Internal Revenue Code of 1986. (vi) Recognized postsecondary credential The term recognized postsecondary credential means a credential consisting of an industry-recognized certificate or certification, a certificate of completion of a registered apprenticeship, a license recognized by the State involved or Federal Government, or an associate or baccalaureate degree. (vii) Registered apprenticeship The term registered apprenticeship means an apprenticeship registered under the Act of August 16, 1937 (commonly known as the National Apprenticeship Act; 50 Stat. 664, chapter 663; 29 U.S.C. 50 et seq.).. (2) Credit part of general business credit Section 38(b) of the Internal Revenue Code of 1986 is amended by striking plus at the end of paragraph (40), by striking the period at the end of paragraph (41) and inserting, plus, and by adding at the end the following new paragraph: (42) the employee upskilling credit determined under section 45BB(a).. (3) Clerical amendment The table of sections for subpart D of part IV of subchapter A of chapter 1 of the Internal Revenue Code of 1986 is amended by adding at the end the following new item: Sec. 45BB. Employee upskilling credit.. (b) Credit allowed against alternative minimum tax Subparagraph (B) of section 38(c)(4) of the Internal Revenue Code of 1986 is amended— (1) by redesignating clauses (x), (xi), and (xii) as clauses (xi), (xii), and (xiii), respectively, and (2) by inserting after clause (ix) the following new clause: (x) the credit determined under section 45BB with respect to an eligible small business (as defined in paragraph (5)(A), after application of rules similar to the rules of paragraph (5)(B)),. (c) Regulations relating to postsecondary credentials Not later than 1 year after the date of enactment of this Act— (1) the Secretary of Labor, in consultation with the Secretary of the Treasury, shall issue regulations or other guidance applying the definition of the term recognized postsecondary credential as provided in section 3 of the Workforce Innovation and Opportunity Act (29 U.S.C. 3102); and (2) the Secretary of the Treasury, in consultation with the Secretary of Labor, shall issue regulations or other guidance applying the definition of the term recognized postsecondary credential as provided in section 45BB(c)(2)(B) of the Internal Revenue Code of 1986. (d) Effective date The amendments made by this section shall apply to taxable years beginning after the date of enactment of this Act.