WAGES Act of 2026

Key Points

• The WAGES Act creates a new tax credit equal to 50% of wages paid to apprentices and 50% of other apprenticeship program costs, offset against employer payroll taxes. The credit applies each calendar quarter, making it a regular, ongoing benefit for participating employers.
• Wage credits are capped at $5,000 per apprentice per quarter, and employers can only claim the credit for the first two years of each apprentice's participation. This focuses the incentive on the early training period when costs are highest.
• Covered training expenses go well beyond wages. The bill reimburses costs for classroom instruction, on-the-job training, mentor pay premiums (up to $10,000 per quarter per mentor), and program development and registration costs.
• If the credit exceeds an employer's payroll tax liability, the excess is refundable, meaning the government sends back the difference. This is especially important for small businesses that may not owe enough in taxes to use the full credit otherwise.
• Only programs registered under the National Apprenticeship Act qualify, ensuring a baseline of training quality, worker protections, and nationally recognized credentials. Government employers are generally excluded, though public hospitals and colleges can participate.
• Apprentices can also receive tax-free achievement awards worth up to $1,500 (or $5,000 under a qualified plan) as part of their training, beyond the normal $400 employee award limit. These awards cannot be given in the first 90 days to prevent abuse.