H.R. 4949: Apprenticeships for Small Businesses Act of 2025

This bill, known as the Apprenticeships for Small Businesses Act of 2025, proposes changes to the Internal Revenue Code to create a tax credit for small businesses that employ certain career and technical education students. Here are the main points of the bill:

Career and Technical Education Credit

The bill would introduce a new tax credit for small businesses, calculated as follows:

• The credit equals 50% of the qualified wages paid to eligible employees during the taxable year.
• It also includes the qualified workmen’s compensation expenses related to those employees for the taxable year.

Limitations on the Credit

There are some limitations on the amount of credit a small business can claim:

• The maximum credit amount is capped at $10,000 for each taxpayer in any given taxable year.
• Taxpayers that are treated as a single employer under specified IRS rules are considered a single taxpayer for this credit.

Eligibility of Employees

To be eligible for the tax credit, the employees must qualify as follows:

• They must be under 21 years of age at the end of the taxable year, or
• They must be participating in a registered apprenticeship program, or
• They must be enrolled in a relevant course of study at a community college or in any career training or vocational program related to the employer’s business.

Qualified Workmen's Compensation Expenses

The bill defines qualified workmen’s compensation expenses as the costs incurred by the employer for premiums related to an insurance policy that protects against claims under workmen's compensation laws, specific to the employment of qualified employees.

General Business Credit Integration

The new career and technical education credit would be included as part of the general business credit that small businesses can claim under the tax code.

Effective Date

The provisions set forth in the bill would become effective for amounts paid or incurred in taxable years starting after December 31, 2025.

Relevant Companies

None found.