on-the-job training tax credit act of 2015

[113H4204]

.....................................................................

(Original Signature of Member)

114TH CONGRESS 1ST SESSION H. R. ll

To amend the Internal Revenue Code of 1986 to provide a credit against tax for job training expenses of employers.

IN THE HOUSE OF REPRESENTATIVES

Mr. AGUILAR introduced the following bill; which was referred to the Committee on llllllllllllll

A BILL To amend the Internal Revenue Code of 1986 to provide

a credit against tax for job training expenses of employers.

Be it enacted by the Senate and House of Representa-1

tives of the United States of America in Congress assembled, 2

SECTION 1. SHORT TITLE. 3

This Act may be cited as the On-the-Job Training 4

Tax Credit Act of 2015. 5

SEC. 2. ON-THE-JOB TRAINING TAX CREDIT. 6

(a) IN GENERAL.Subpart D of part IV of sub-7

chapter A of chapter 1 of the Internal Revenue Code of 8

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1986 is amended by adding at the end the following new 1

section: 2

SEC. 45S. ON-THE-JOB TRAINING TAX CREDIT. 3

(a) IN GENERAL.For purposes of section 38, in 4

the case of an eligible employer, the on-the-job training 5

tax credit determined under this section with respect to 6

any eligible employee of the employer is an amount equal 7

to the lesser of 8

(1) 50 percent of the job training program ex-9

penditures of the taxpayer with respect to such em-10

ployee during the taxable year, or 11

(2) $5,000. 12

(b) ELIGIBLE EMPLOYER.For purposes of this 13

section, the term eligible employer means an employer 14

which employed an average of not more than 500 full-time 15

employees during the taxable year. 16

(c) JOB TRAINING PROGRAM EXPENSES.For pur-17

poses of this section 18

(1) IN GENERAL.The term job training pro-19

gram expenses means amounts paid or incurred by 20

the employer for expenses incurred by or on behalf 21

of an eligible employee for participation in a quali-22

fied training program. 23

(2) QUALIFIED TRAINING PROGRAM.For 24

purposes of this subsection, the term qualified train-25



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3

ing program means any of the following written 1

plans of study and training: 2

(A) An apprenticeship program registered 3

and certified with the Secretary of Labor under 4

section 1 of the National Apprenticeship Act 5

(29 U.S.C. 50). 6

(B) A program licensed, registered, or 7

certified by the workforce investment board or 8

apprenticeship agency or council of a State or 9

administered in compliance with apprenticeship 10

laws of a State. 11

(C) A program conducted by a vocational 12

or technical education school, community col-13

lege, industrial or trade training organization, 14

or labor organization. 15

(D) A program which conforms to ap-16

prentice training programs developed or admin-17

istered by an employer trade group or com-18

mittee. 19

(E) An industry sponsored or adminis-20

tered program which is clearly identified and 21

commonly recognized. 22

(d) ELIGIBLE EMPLOYEE.For purposes of this 23

section, the term eligible employee means any employee 24

of the employer, who while participating in the job skills 25



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4

training program is employed on average at least 40 hours 1

of service per week. 2

(e) RECAPTURE OF CREDIT FOR EMPLOYEE NOT 3

PERFORMING MINIMUM SERVICE. 4

(1) IN GENERAL.In the case of any em-5

ployee with respect to whom a credit is allowed 6

under this section and whose employment is termi-7

nated by the employer (other than by reason of such 8

employees gross misconduct) before the end of the 9

2-year period beginning on the first day of the em-10

ployees study or training with respect to which a 11

credit is allowed under this section, the tax of the 12

taxpayer under this chapter for the taxable year dur-13

ing which such termination occurs shall be increased 14

by an amount equal to 15

(A) the aggregate decrease in the credits 16

allowed under section 38 for all prior taxable 17

years which would have resulted if the job 18

training program expenses with respect to such 19

employee had been zero, multiplied by 20

(B) the inclusion ratio. 21

(2) INCLUSION RATIO.For purposes of this 22

subsection, the inclusion ratio is the ratio which 23

(A) an amount equal to the difference 24

of 25



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5

(i) the number of days in the 2-year 1

period, over 2

(ii) the number of days such em-3

ployee was employed by the employer dur-4

ing such 2-year period, bears to 5

(B) the number of days in the 2-year pe-6

riod. 7

(f) CONTROLLED GROUPS.For purposes of this 8

section, all persons treated as a single employer under sub-9

section (b), (c), (m), or (o) of section 414 shall be treated 10

as a single employer. 11

(g) TERMINATION.The section shall not apply 12

amounts paid or incurred during taxable years beginning 13

after December 31, 2017.. 14

(b) CREDIT TO BE PART OF GENERAL BUSINESS 15

CREDIT.Subsection (b) of section 38 of such Code is 16

amended by striking plus at the end of paragraph (35), 17

by striking the period at the end of paragraph (36) and 18

inserting , plus, and by adding at the end the following 19

new paragraph: 20

(37) the on-the-job training tax credit deter-21

mined under section 45S(a).. 22

(c) CLERICAL AMENDMENT.The table of sections 23

for subpart D of part IV of subchapter A of chapter 1 24



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6

of such Code is amended by adding at the end the fol-1

lowing new item: 2Sec. 45S. On-the-job training tax credit..

(d) EFFECTIVE DATE.The amendments made by 3

this section shall apply to taxable years beginning after 4

December 31, 2014. 5



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F:\M14\AGUILA\AGUILA_006.XML 5/19/2015 9:20 04/20/2015 14:18 1141-0420-233807 598381|4 [Discussion Draft] [113H4204] (Original Signature of Member) [DISCUSSION DRAFT] I 114th CONGRESS 1st Session H. R. __ IN THE HOUSE OF REPRESENTATIVES Mr. Aguilar introduced the following bill; which was referred to the Committee on ______________ A BILL To amend the Internal Revenue Code of 1986 to provide a credit against tax for job training expenses of employers. 1. Short title This Act may be cited as the On-the-Job Training Tax Credit Act of 2015. 2. On-the-Job Training Tax Credit (a) In general 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: 45S. On-the-job training tax credit (a) In general For purposes of section 38, in the case of an eligible employer, the on-the-job training tax credit determined under this section with respect to any eligible employee of the employer is an amount equal to the lesser of (1) 50 percent of the job training program expenditures of the taxpayer with respect to such employee during the taxable year, or (2) $5,000. (b) Eligible employer For purposes of this section, the term eligible employer means an employer which employed an average of not more than 500 full-time employees during the taxable year. (c) Job training program expenses For purposes of this section (1) In general The term job training program expenses means amounts paid or incurred by the employer for expenses incurred by or on behalf of an eligible employee for participation in a qualified training program. (2) Qualified training program For purposes of this subsection, the term qualified training program means any of the following written plans of study and training: (A) An apprenticeship program registered and certified with the Secretary of Labor under section 1 of the National Apprenticeship Act (29 U.S.C. 50). (B) A program licensed, registered, or certified by the workforce investment board or apprenticeship agency or council of a State or administered in compliance with apprenticeship laws of a State. (C) A program conducted by a vocational or technical education school, community college, industrial or trade training organization, or labor organization. (D) A program which conforms to apprentice training programs developed or administered by an employer trade group or committee. (E) An industry sponsored or administered program which is clearly identified and commonly recognized. (d) Eligible employee For purposes of this section, the term eligible employee means any employee of the employer, who while participating in the job skills training program is employed on average at least 40 hours of service per week. (e) Recapture of credit for employee not performing minimum service (1) In general In the case of any employee with respect to whom a credit is allowed under this section and whose employment is terminated by the employer (other than by reason of such employees gross misconduct) before the end of the 2-year period beginning on the first day of the employees study or training with respect to which a credit is allowed under this section, the tax of the taxpayer under this chapter for the taxable year during which such termination occurs shall be increased by an amount equal to (A) the aggregate decrease in the credits allowed under section 38 for all prior taxable years which would have resulted if the job training program expenses with respect to such employee had been zero, multiplied by (B) the inclusion ratio. (2) Inclusion ratio For purposes of this subsection, the inclusion ratio is the ratio which (A) an amount equal to the difference of (i) the number of days in the 2-year period, over (ii) the number of days such employee was employed by the employer during such 2-year period, bears to (B) the number of days in the 2-year period. (f) Controlled groups For purposes of this section, all persons treated as a single employer under subsection (b), (c), (m), or (o) of section 414 shall be treated as a single employer. (g) Termination The section shall not apply amounts paid or incurred during taxable years beginning after December 31, 2017. . (b) Credit To be part of general business credit Subsection (b) of section 38 of such Code is amended by striking plus at the end of paragraph (35), by striking the period at the end of paragraph (36) and inserting , plus, and by adding at the end the following new paragraph: (37) the on-the-job training tax credit determined under section 45S(a). . (c) Clerical amendment The table of sections for subpart D of part IV of subchapter A of chapter 1 of such Code is amended by adding at the end the following new item: Sec.45S.On-the-job training tax credit. . (d) Effective date The amendments made by this section shall apply to taxable years beginning after December 31, 2014.

on-the-job training tax credit act of 2015

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