On Thursday, U.S. Representatives Derek Kilmer (WA-06) and Glenn “GT” Thompson (PA-15) reintroduced two bills to help workers access skills training. The Skills Investment Act would expand Coverdell Education Savings Accounts (ESAs)—tax advantaged savings accounts for educational expenses—so American workers can use the accounts to pay for skills training, apprenticeships, and professional development.
The Skills Renewal Act would create a flexible skills training credit up to $4,000 per person for workers who have lost their job due to the coronavirus pandemic. This would cover the cost of a wide range of training programs that build skills expected to be in high demand by employers in the coming months.
Companion legislation for the Skills Investment Act was introduced in the U.S. Senate by Senators Amy Klobuchar (D-MN) and Ben Sasse (R-NE). Companion legislation for the Skills Renewal Act was introduced by Senators Amy Klobuchar (D-MN), Ben Sasse (R-NE), Cory Booker (D-NJ), and Tim Scott (R-SC).
“Even before this pandemic, folks were feeling the impacts of disruptive economic change. Workers need to be empowered to navigate those changes – they can’t be left behind,” said Rep. Kilmer. “That’s why I’m proud to be leading these two legislative efforts that give American workers a hand, helping them enroll in apprenticeships, college classes, or retraining programs, so they can learn new skills, land new jobs, and earn a good living.”
“The pandemic has made it abundantly clear how valuable career and technical education is for our nation,” said Rep. Thompson. “This pair of bills invests in these programs and put individuals who have lost their job as a result of COVID-19 back in the driver seat of their professional futures with good paying, family sustaining job opportunities.”
“As millions of American workers seek to re-enter the workforce after becoming unemployed during the pandemic, we must help them access training and development programs that will position them for success,” said Sen. Klobuchar. “The Skills Investment Act and Skills Renewal Act will help Americans afford the education necessary to thrive in their careers, helping set them on a path to long-term prosperity.”
“Washington is stuck in the past and doesn’t spend enough time talking about the future of work. We need smart, flexible policy to reflect the continuing evolution of work: people aren’t just changing jobs more often — they’re changing entire industries with much more frequency. This bipartisan legislation can help American workers complete new skills development and retraining programs. That’s a good start,” said Sen. Sasse.
The Skills Investment Act will allow workers to use tax-advantaged savings accounts to pay for skills training programs throughout an account holder’s lifetime. The bill would eliminate the age-based contribution limit on Coverdell ESAs and expand the scope of allowable distributions to cover a broad array of career and technical education services. These savings accounts would now be eligible for pretax contributions and mid-career workers would be allowed to contribute up to $4,000 tax free each year, with a maximum contribution limit of $10,000. Employers would receive a 25% tax credit for contributions to a worker’s account.
The Skills Renewal Act will create a flexible skills training credit of up to $4,000 per person that may be applied to cover the cost of a wide range of training programs that build skills expected to be in high demand by employers in the coming months. The tax credit is fully refundable—which means it will be available to all workers, including low-income workers with no federal income tax liability. The credit may be applied to offset the cost, on a dollar-by-dollar basis, of training programs located anywhere along the postsecondary pipeline—including apprenticeships, stackable credentials, certificate programs, and traditional two- and four-year programs. To maximize participation, distance learning programs will also be included.
The Skills Investment Act and Skills Renewal Act are endorsed by Third Way and the National Skills Coalition. The Skills Renewal Act is also endorsed by the Security Industry Association, American Society of Association Executives, and the Professional Certification Coalition.