USA Workforce Investment Act
The USA Workforce Investment Act would create a new nonrefundable federal income tax credit for individuals who make cash donations to certain workforce development and apprenticeship training organizations. The credit would be equal to the total qualified contributions an individual makes in a given year, but capped at $1,700 per taxpayer. The credit would be reduced by any matching state tax credit for the same qualified contributions. Qualified contributions must be cash designated by the recipient to be used only for workforce training programs, and eligible organizations must be 501(c)(3) public charities (not private foundations) that appear on a government-approved list of providers under the Workforce Innovation and Opportunity Act (WIOA) as eligible to offer such programs. The programs themselves must be those that provide training services under WIOA. Additionally, a contributed amount used for the credit cannot also be claimed as a charitable deduction under Section 170. Any unused federal credit can be carried forward for up to five years on a first-in, first-out basis. The bill would amend the Internal Revenue Code accordingly and apply to taxable years beginning after enactment.
Key Points
- 1Creation of a new Section 25G: A federal personal income tax credit for contributions to workforce development and apprenticeship training organizations.
- 2Credit amount and limits: The credit equals the taxpayer’s aggregate qualified contributions for the year, but cannot exceed $1,700 per taxpayer. It is reduced by any state tax credit claimed for the same contributions.
- 3Qualified contributions and eligible organizations: Only cash contributions designated by the recipient organization for workforce development or apprenticeship training may qualify. Eligible organizations must be 501(c)(3), exempt under 501(a), not a private foundation, and listed on the WIOA Section 122 provider list for eligibility to offer such programs.
- 4Program definition: The funded activities must be training services as defined by WIOA (Section 134(c)(3)).
- 5Denial of double benefit: Amounts claimed as the credit cannot also be claimed as a charitable deduction under Section 170.
- 6Carryforward: Unused credit can be carried forward for up to five years, with FIFO treatment.
- 7Conforming amendments: The bill adds 25G to the tax code and updates the cross-reference table accordingly.
- 8Effective date: The new credit applies to taxable years beginning after enactment.