Under the Inflation Reduction Act (IRA), a “qualified apprentice” is defined as an individual employed by the taxpayer, contractor, or subcontractor who is participating in a Registered Apprenticeship program. This program must be registered under the National Apprenticeship Act and meet the requirements outlined in 29 CFR parts 29 and 30. The apprenticeship requirements under the IRA include:
- Labor Hours Requirement: A minimum percentage of total labor hours must be performed by qualified apprentices. This percentage varies by the start date of the construction project (10% for projects before 2023, 12.5% for projects starting in 2023, and 15% for projects starting in 2024 or after).
- Ratio Requirement: The taxpayer must ensure that the applicable ratio of apprentices to journeyworkers is met according to the registered apprenticeship program.
- Participation Requirement: If a taxpayer, contractor, or subcontractor employs more than four individuals, at least one qualified apprentice must be employed.
Meeting these requirements can lead to increased tax credits or deductions under the IRA, provided that prevailing wage requirements are also met.
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