Apprenticeships for Small Businesses Act of 2025

The Apprenticeships for Small Businesses Act of 2025 creates a new tax credit intended to encourage small businesses to hire and train career and technical education (CTE) students and apprentices. Specifically, it adds a new Career and Technical Education Credit (Section 45U) to the general business credit. Eligible small businesses can claim a credit equal to 50% of qualified wages paid to qualifying employees, plus qualified workers’ compensation expenses, with a $10,000 cap per taxpayer per year. The credit applies to amounts paid or incurred in tax years beginning after December 31, 2025. A “qualified employee” is someone under 21 or someone participating in a registered apprenticeship or enrolled in eligible CTE or related coursework tied to the employer’s trade or business. Related-party groups are treated as a single taxpayer for the purpose of the cap. The measure integrates the new credit into the existing general business credit framework (so it follows the general rules and limitations of that credit). It does not create a separate refundable payment; instead, it reduces tax liability (subject to the usual limitations and carryovers/carrybacks of the general business credit).