S. 4463 — WAGES Act of 2026

This section finds that registered apprenticeship programs strengthen the American economy by addressing workforce shortages in high-demand industries including construction, advanced manufacturing, health care, early childhood education and care, information technology, transportation and logistics, automotive repair and maintenance, hospitality, energy, agriculture, and the skilled trades; that such programs combine paid on-the-job learning with related instruction to enable workers to earn wages while obtaining industry-recognized credentials; that employers benefit from improved productivity and reduced turnover but often face costs that limit broader adoption; and that expanding participation promotes upward economic mobility, particularly for individuals without a four-year college degree, under the framework established by the National Apprenticeship Act of 1937.

This section establishes a new apprenticeship tax credit under section 3135 of the Internal Revenue Code. Eligible employers may claim a credit against applicable employment taxes equal to 50 percent of qualified wages paid to each qualified apprentice (capped at $5,000 per apprentice per calendar quarter) plus registered apprenticeship program expenses (capped at the greater of $5,000 or the lesser of $2,500 per qualified apprentice or $50,000 per calendar quarter). The credit is limited to the employer’s applicable employment taxes for the quarter and any excess is treated as an overpayment and refunded. Eligible employers must maintain or participate in a registered apprenticeship program and employ at least one qualified apprentice. Qualified wages cover services rendered during program participation but exclude amounts paid after two years from the apprentice’s start date; registered apprenticeship program expenses exclude qualified wages. A qualified apprentice is an employee who enters a registered apprenticeship program after the date of enactment, meets certification and registration requirements with the Department of Labor or a state agency, and is not a 5-percent owner or otherwise excluded under section 51(i)(1).

This section expands the definition of employee achievement awards excludable from gross income to include items transferred by an employer to an employee in a registered apprenticeship program in connection with the program's training and curriculum, provided the award occurs after the recipient's first 90 days of participation. It increases the annual deduction limitation for such apprenticeship awards to $1,500 (from $400) and sets a $5,000 limitation for qualified plan awards that qualify as apprenticeship awards. The changes apply to awards transferred after the date of enactment.