Tax Credits for IT Training

By Stacy Cholewinski

Bills to amend the Internal Revenue Code of 1986 to allow employers a credit against income tax for information technology training expenses paid or incurred by the employer, and for other purposes were introduced simultaneously in the U.S. Senate and in the House of Representatives in late February.

H.R. 838 and S. 456 were sponsored primarily by Mr. Jerry Moran, Virginia, and Mr. Kent Conrad, North Dakota, respectfully, state:

"In the case of an employer, the information technology training program credit determined under this section is an amount equal to twenty percent of information technology training program expenses paid or incurred by the taxpayer during the taxable year"

and

"The percentage under [the above subsection] shall be increased by five percentage points for information technology training program expenses paid or incurred by the taxpayer with respect to a program operated..."

Examples of programs that would receive the additional five-percent credit include:

• empowerment zones or enterprise communities;
• school districts in which at least fifty percent of the students attending schools in such districts are eligible for free or reduced-cost lunches under the school lunch program;
• areas designated as disaster areas;
• rural enterprise communities; and
• Rural Economic Area Partnership Zones.

The amount of information technology training program expenses with respect to an individual that may be taken into account for the taxable year shall not exceed $6,000.

If the legislation is to pass, the amendments made will only apply to tax credits on amounts paid or incurred after the date of enactment of the Act in the taxable year ending after such date.

The House bill has been referred to the Committee on Ways and Means and the Senate bill has been referred to the Committee on Finance.