Artificial Intelligence Education and Workforce Readiness Act of 2026

45BB. Artificial intelligence reskilling credit

(a) In general. For purposes of section 38, the artificial intelligence reskilling credit determined under this section for any taxable year is an amount equal to 40 percent of the qualified expenses of the employer taxpayer for the taxable year.

(b) Limitation. The amount of the credit allowed under subsection (a), with respect to an employer, for any taxable year shall not exceed—

(1) $250,000 in the case of a taxpayer with gross receipts less than $25,000,000 for such taxable year, and

(2) $1,000,000 in the case of any other taxpayer.

(c) Qualified expenses. For purposes of this section—

(1) In general. The term qualified expenses means amounts paid or incurred by the taxpayer for participation by an employee of the taxpayer in a qualified training program, reduced by any amounts paid or incurred using funds provided under a grant awarded under the Artificial Intelligence Education and Workforce Readiness Act of 2026.

(2) Qualified training program. The term qualified training program means—

(A) a reskilling program under section 205 of the Artificial Intelligence Education and Workforce Readiness Act of 2026,

(B) a program of training services which is listed under section 122(d) of the Workforce Innovation and Opportunity Act (29 U.S.C. 3152(d)),

(C) an apprenticeship program under section 204 of the Artificial Intelligence Education and Workforce Readiness Act of 2026,

(D) a program which is sponsored and administered by an employer, industry trade association, industry or sector partnership, or labor organization,

(E) any substantially equivalent reskilling program, as determined by the Secretary of Labor or that provides industry-recognized postsecondary credentialing.

(d) Election To apply credit against payroll taxes

(1) In general. At the election of a qualified small business or a qualified tax-exempt organization (as defined in section 3111(e)(5)(A)) for any taxable year, section 3111(g) shall apply to the payroll tax credit portion of the credit otherwise determined under subsection (a) for the taxable year and such portion shall not be treated (other than for purposes of section 280C) as a credit determined under subsection (a).

(2) Payroll tax credit portion. For purposes of this subsection, the payroll tax credit portion of the credit determined under subsection (a) with respect to any qualified small business or qualified tax-exempt organization for any taxable year is the least of—

(A) the amount specified in the election made under this subsection,

(B) the credit determined under subsection (a) for the taxable year (determined before the application of this subsection), or

(C) in the case of a qualified small business other than a partnership or S corporation, the amount of the business credit carryforward under section 39 carried from the taxable year (determined before the application of this subsection to the taxable year).

(3) Qualified small business. For purposes of this subsection—

(A) In general. The term qualified small business means, with respect to any taxable year—

(i) a corporation or partnership with the gross receipts (as determined under the rules of section 448(c)(3), without regard to subparagraph (A) thereof), of such entity for the taxable year is less than $5,000,000, and

(ii) any person who meets the requirements of clause (i), determined—

(I) by substituting person for entity, and

(II) by only taking into account the aggregate gross receipts received by such person in carrying on all trades of business of such person.

(B) Limitation. Such term shall not include an organization which is exempt from taxation under section 501.

(4) Election

(A) In general. Any election under this subsection for any taxable year—

(i) shall specify the amount of the credit to which such election applies,

(ii) shall be made on or before the due date (including extensions) of—

(I) in the case of a partnership, the return required to be filed under section 6031,

(II) in the case of an S corporation, the return required to be filed under section 6037, and

(III) in the case of any other qualified small business or qualified tax-exempt organization, the return of tax for the taxable year, and

(iii) may be revoked only with the consent of the Secretary.

(B) Limitation. The amount specified in any election made under this subsection shall not exceed $250,000.

(C) Special rule for partnerships and s corporations. In the case of a partnership or S corporation, the election made under this subsection shall be made at the entity level.

(5) Aggregation rules

(A) In general. Except as provided in subparagraph (B)—

(i) all members of the same controlled group of corporations shall be treated as a single taxpayer, and

(ii) all trades or businesses (whether or not incorporated) which are under common control shall be treated as a single taxpayer.

(B) Special rules. For purposes of this subsection and section 3111(g)—

(i) each of the persons treated as a single taxpayer under subparagraph (A) may separately make the election under paragraph (1) for any taxable year, and

(ii) the $250,000 amount under paragraph (3)(B) shall be allocated among all persons treated as a single taxpayer under subparagraph (A) in the manner provided by the Secretary which is similar to the manner provided under section 41(f)(1).

(6) Regulations. The Secretary shall prescribe such regulations as may be necessary to carry out the purposes of this subsection, including—

(A) regulations to prevent the avoidance of the purposes of the limitations and aggregation rules under this subsection,

(B) regulations to minimize compliance and record keeping burdens under this subsection,

(C) regulations for recapturing the benefit of credits determined under section 3111(g) in cases where there is a recapture or a subsequent adjustment to the payroll tax credit portion of the credit determined under subsection (a), including requiring amended income tax returns in the cases where there is such an adjustment, and

(D) regulations to require the collection and reporting of demographic information with respect to the race, ethnicity, and gender of the individuals with respect to whom a taxpayer makes qualified expenses for which a credit is allowed under this section.

(e) Denial of double benefit. No deduction or credit shall be allowed under any other provision of this chapter with respect to the amount of the credit determined under this section.

(f) Treatment of related parties. All persons which are treated as a single employer under subsections (a) and (b) of section 52 shall be treated as a single taxpayer for purposes of this section.

(g) Regulations. The Secretary, in consultation with the Secretary of Labor, shall issue such regulations or other guidance, including regulations or other guidance prescribing procedures for the verification of qualified training programs, as may be necessary or appropriate to carry out the purposes of this section.

(42) the artificial intelligence reskilling credit determined under section 45BB(a).

Sec. 45BB. Artificial intelligence reskilling credit.