US lawmakers are scrambling to meet the needs of jobless Americans, as unemployment claims have now surpassed 40 million. Although there are many proposals being floated, including  the Heroes' Act which passed in the House,  direct aid plans like a second stimulus check may be a hard sell in the Republican-controlled senate, since many GOP senators have said they will not support them. But a new bipartisan bill introduced in the Senate may stand a better chance: the Skills Renewal Act.

The bill, which provides tax credits for unemployed Americans toward job skills and training, was introduced by Senators Cory Booker, Amy Klobuchar, Tim Scott and Ben Sasse. A companion  Skills Renewal bill is also being introduced in the House.  If you're  out of work and trying to up your chances of finding a new job, the bill might be helpful for you.

The Bill Does Not Offer Not Direct Aid

It's important to understand that the Skills Renewal Act would not provide direct cash assistance to those who have lost their jobs due to COVID-19. Instead, it offers a tax credit to those who have lost work due to the pandemic, which means that you'd be able to deduct money spent on skills training from the income taxes that you owe at the end of the year. The credit would be available for any costs incurred all the way until the end of 2021, but you'd still have to pay up front for the training.

The Credit Would Be Fully Refundable

Although it does not offer direct aid, the Skills Renewal Act would offer a fully refundable tax credit.  Most tax credits are non-refundable. Refundable credits are unique in that you can actually bring your tax liability down to below zero and be refunded the remainder. In plain language, that means that if you spend more on jobs training than you would normally owe in taxes (or normally don't owe taxes at all),  the credit will cover your taxes as well as refunding you the remainder of your expenses, up to the $4000 limit. So theoretically if you spend $3000 on jobs skills but only owe $2000 in taxes, you'd get $1000 back from the IRS at the end of the year.

What Types of Programs would Be Covered?

Although the text of the bill has not been released, according to the senators, the bill would cover a broad swathe of post-secondary programs and training, including distance learning programs to accommodate the needs of those in lockdown.

Some training programs and skills courses that would be covered include:

-Traditional 2 and 4 year programs like Associate and BA degrees and Master's degrees

-Certificate programs

-"Stackable Credentials" that offer the opportunity for students to earn certificates while working toward a final degree

-Apprenticeships

"Bold action is required to help newly unemployed Americans find their footing and begin preparing for life after the pandemic,”  Senator Klobuchar said. “This new legislation will help Americans gain skills that will be in demand for years to come and position them to rapidly reenter the workforce with increased earning potential as soon as businesses begin hiring again.”

We will keep you updated as the bill makes its way through Congress. In the meantime, you can check out our posts on free resume builders, student loan forgiveness and coronavirus, coronavirus-safe side hustles, and managing your budget in this challenging time.

If you haven't already, sign up to become a member of Skip Plus to have exclusive access to all the information you need to ride out this tough time, including help with loan applications and unemployment, financial tips, and more!