# The LEAP Act: Tax Credits for Companies That Hire Apprentices

The LEAP Act creates a tax credit that rewards employers for hiring people in registered apprenticeship programs. Essentially, if you're a company that takes on apprentices—people learning a trade through a combination of on-the-job training and classroom instruction—the government will give you a tax break. This is designed to encourage businesses to invest in training the next generation of skilled workers in fields like construction, plumbing, electrical work, and other trades.

Here's how the money works: Companies get a tax credit of $1,500 per year for each apprentice under 25 years old, and $1,000 per year for each apprentice 25 and older. However, the credit only applies to apprentices beyond a certain threshold. If a company already had apprentices in previous years, they only get the credit for apprentices above 80 percent of their average from the past three years. This prevents companies from just getting credits for apprentices they would have hired anyway. For brand-new apprenticeship programs with no prior apprentices, the threshold starts at zero, so they can claim the credit immediately. The credit can be claimed for up to two years per apprentice, and the apprenticeship program must have at least a 50 percent completion rate to qualify.

The bill applies to apprenticeships registered with either the federal Department of Labor or state apprenticeship agencies, ensuring the programs meet certain quality standards. Companies can't use this credit to double-dip with other existing tax credits for hiring workers, so the government prevents the same employee from generating multiple tax benefits. For workers and the economy, this could mean more opportunities to learn skilled trades while earning money, and for employers, it reduces the financial burden of training new workers in fields where skilled labor is in short supply.

LEAP Act

Wilson, Frederica S.

Leveraging and Energizing America's Apprenticeship Programs Act or the LEAP ActThis bill allows employers a business-related tax credit of $1,500 for hiring an apprenticeship employee who has not attained age 25 at the close of the taxable year or $1,000 for hiring an apprenticeship employee who has attained age 25. The credit is available for no more than two taxable years with respect to any apprenticeship employee.An apprenticeship employee is any employee who is (1) a party to an apprenticeship agreement registered with the Office of Apprenticeship of the Employment and Training Administration of the Department of Labor or a recognized state apprenticeship agency; and (2) employed by the employer in the occupation identified in the apprenticeship agreement, whether or not the employer is a party to such agreement.