Thank you to Congressman Lloyd Smucker of Pennsylvania for introducing the USA Workforce Tax Credit Act, new legislation that will “encourage investment in organizations that are preparing individuals for the jobs of today.”
Our country will have two million open jobs in construction alone by 2020. The USA Workforce Tax Credit Act will help bridge the gap by helping to train a new generation of skilled workers.
So, what’s inside this bill? Check out a quick overview:
Credit Against Income and Corporate Taxes: This bill would amend the Internal Revenue Code to allow individual taxpayers a tax credit to charitable contributions to non-profit organizations that exclusively provide workforce development, apprenticeship training, or K-12 scholarships. The bill allows a maximum credit amount equal to or less than 25 percent of an individual taxpayer’s total liability, or $250,000; and for corporate taxpayers the lesser of 25 percent of the tax liability or $250,000.
Eligible Students or Participants: An eligible participant is an individual enrolled in a workforce development or apprenticeship program. A student is eligible to receive a scholarship from a non-profit scholarship-granting organization if they are enrolled in an elementary or secondary school and reside in a household with a total annual income that does not exceed 200 percent of the median gross income.
This measure reflects the wide variance in middle-class incomes throughout the country. In 2017, for example, a student residing in Brooklyn, New York could be in a household with up to $132,400 in total annual income. A student in Minneapolis, Minnesota would qualify in a household with up to $180,800 in total annual income. A student in Pittsburgh, Pennsylvania would qualify in a household with up to $145,200 in total annual income.
Eligible Entities: Eligible entities that can receive tax-credited contributions must be 501(c)(3) tax-exempt entities that provide, at a minimum, workforce development, apprenticeship training, or K-12 scholarship assistance. Such entities would include, but are not limited to, community colleges, workforce training programs as defined by state workforce agencies, organizations that provide career and technical education, training institutes, private schools that confer diplomas, degrees, or certify completion of certain grades, community organizations that provide certified training, and organizations that provide K-12 scholarships to more than one student and offer more than one school.
Eligible entities must obtain annual financial and compliance audits from an independently-certified public accountant which must be submitted to the Secretary of the Treasury. The bill would also impose a penalty on organizations that provide workforce development or apprenticeship training that fail to distribute at least 90 percent of their total receipts for elementary and secondary school expenses in a taxable year.
Eligible K-12 Schools: Schools may enroll scholarship students under this program if they charge tuition, comply with all applicable state laws relating to unlawful discrimination, health, safety, and criminal background checks. Schools must also agree to provide reports to parents on their student’s academic achievement.
Key Information on the USA Workforce Tax Credit Act:
1. Official Bill Number- H.R.5153
2. Sponsor- Representative Lloyd Smucker
3. Committee Assignment- Committee on Ways & Means
Pictured left to right: Brett Melvin, Executive Director, Bridging America’s Gap and former Senior Advisor to then U.S. Secretary of Labor Elaine Chao; Rep. Lloyd Smucker; Thomas Carroll, Executive Director of the #EdTaxCredit50 Coalition; Corporal Jeffrey J. Cleland, U.S. Marine Corps, Ret., Director of President George W. Bush Institute’s Military Service Institute