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Congress·In Committee·3 months ago

Congress considers tax credit to boost employer training for lower-paid workers; small firms can offset payroll taxes

Also known as: Investing in American Workers Act

Legislative Progress

✓ Filed
Review
House
Senate
President

Impacts

Mixed Impacts(1)
Union Member
Neutral

Key Points

  • Creates a new tax credit for employers that increase spending on job training for lower-paid workers who aren’t considered “highly compensated.”
  • The credit is generally 20% of the amount a company’s training spending is above its average training spending from the prior 3 years (so it rewards increased training).
  • Training must lead to a recognized credential, like an apprenticeship completion, an industry certificate, a state or federal license, or a college degree, and must come from approved kinds of programs (like community colleges, unions, or registered apprenticeships).
  • Small businesses and certain tax-exempt organizations can choose to use up to $250,000 of the credit to offset payroll taxes, which can help even if they don’t owe much income tax.
  • The bill also tells Treasury to work on simpler filing options for smaller employers and tells Labor and Treasury to issue guidance on what counts as a recognized credential.
TaxesLabor EmploymentEducationSmall Business

Milestones

2 milestones2 actions
Dec 16, 2025House

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

Dec 16, 2025

Introduced in House

What Happens Next

Projected impacts based on AI analysis

Starting with the first tax year that begins after enactment (often the next calendar year for calendar-year businesses).

The new worker training tax credit becomes available for tax years that start after the bill is enacted.

Employers can start planning training budgets so increases in credential-based training may qualify for a credit on the next tax return that covers an eligible year.

Begins in the first calendar quarter after the employer files the required tax return making the election.

Small businesses and certain tax-exempt organizations can elect to use part of the credit to reduce payroll taxes (up to $250,000).

Even if a small employer doesn’t owe much income tax, it may still get value by lowering payroll taxes after filing its return; cash flow may improve in the following quarters.

After enactment, once Treasury and SBA publish the simplified format.

Treasury and the Small Business Administration create a simpler filing method for employers under $5 million in gross receipts.

Smaller employers may have an easier time claiming the credit and filing required forms, which can make it more likely they use the program.

After enactment, once Treasury publishes regulations.

Treasury issues rules for demographic reporting tied to the credit (race, ethnicity, gender).

Employers claiming the credit may need to collect and report more data about who receives training; workers may notice new questions on HR/training forms.

Related News

2 articles
Mark R. Warner (Senate website press release page)·3 months ago

Warner, Krishnamoorthi Introduce Legislation to Help Workers Adapt to AI-Driven Economy

Announces the Investing in American Workers Act, proposing a 20% credit for increased employer training tied to recognized credentials, aimed at lower- and moderate-income workers and adapting to AI-driven change.

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Brownstein Hyatt Farber Schreck (BHFS)·about 2 months ago

Taxation & Representation, Jan. 7, 2026

Notes companion versions introduced Dec. 16 and summarizes the bill’s 20% incremental training credit and the option for small businesses/tax-exempts to apply it against payroll taxes.

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Source Information

Document Type

Congressional Bill

Official Title

Investing in American Workers Act

Bill NumberHR 6752
Congress119th Congress
ChamberHouse of Representatives
Latest ActionReferred to the Committee on Ways and Means, and in addition to the Committee on Education and 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.

Sponsor

Analysis generated by AI. While we strive for accuracy, this should not be considered legal or professional advice. Always verify information with official government sources.