[Congressional Bills 117th Congress]
[From the U.S. Government Publishing Office]
[H.R. 5231 Introduced in House (IH)]
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117th CONGRESS
1st Session
H. R. 5231
To amend the Internal Revenue Code of 1986 to modify the employer
credit for paid family and medical leave, and for other purposes.
_______________________________________________________________________
IN THE HOUSE OF REPRESENTATIVES
September 10, 2021
Mr. Kelly of Pennsylvania introduced the following bill; which was
referred to the Committee on Ways and Means
_______________________________________________________________________
A BILL
To amend the Internal Revenue Code of 1986 to modify the employer
credit for paid family and medical leave, and for other purposes.
Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ``Relief for Working Families Act''.
SEC. 2. MODIFICATIONS TO EMPLOYER CREDIT FOR PAID FAMILY AND MEDICAL
LEAVE.
(a) Credit Made Permanent and Limited to First 5 Years After
Establishment of Plan.--
(1) In general.--Section 45S(i) of the Internal Revenue
Code of 1986 is amended to read as follows:
(2) Phase-out.--Section 45S of such Code is amended by
adding at the end the following new subsection:
``(i) Credit Limited to First 5 Years After Establishment of
Plan.--
``(1) In general.--No credit shall be allowed under this
section with respect to any taxpayer after the 5-taxable-year
period beginning with the taxable year which includes the date
on which the taxpayer first has in place a policy described in
subsection (c)(1).
``(2) Phase-down of credit.--The credit determined under
this section (without regard to this subsection) shall be
reduced by--
``(A) in the case of the fourth taxable year in the
5-taxable-year period described in paragraph (1), 25
percent of the amount of such credit, and
``(B) in the case of the fifth taxable year in such
5-taxable-year period, 50 percent of the amount of such
credit.
``(3) Transitional rule.--The 5-taxable-year period
described in paragraph (1) shall not be treated as beginning
before the beginning of the taxpayer's first taxable year
beginning after December 31, 2022.''.
(b) Enhanced Credit for New Plans of Small Employers.--
(1) In general.--Section 45S of such Code is amended by
adding at the end the following new subsection:
``(j) Enhanced Credit for Certain New Plans of Small Employers.--
``(1) In general.--In the case of an eligible small
employer--
``(A) subsection (a)(2) shall be applied--
``(i) by substituting `25 percent' for
`12.5 percent', and
``(ii) by substituting `50 percent' for `25
percent' (determined without regard to the
substitution described in clause (i)),
``(B) the credit determined under subsection (a)(1)
for any taxable year shall be increased by the
applicable percentage (determined after application of
subparagraph (A)) of the sum of--
``(i) so much of the amounts paid during
such taxable year as administrative expenses of
carrying out the policy described in subsection
(c)(1) (other than any amounts paid to
establish such policy), including payments to
third-party administrators and premiums for
short-term disability insurance, as do not
exceed $50,000, plus
``(ii) in the case of the taxable year
which includes the date on which the policy
described in subsection (c)(1) takes effect, so
much of the amounts paid to establish such
policy as do not exceed $1,000.
``(2) Eligible small employer.--For purposes of this
subsection, the term `eligible small employer' means, with
respect to any taxable year, any eligible employer--
``(A) the gross receipts of which for such taxable
year do not exceed $25,000,000,
``(B) which employed on average 50 or fewer
employees on business days during the taxable year, and
``(C) which did not have a policy described in
subsection (c)(1) in place at any time prior to the
date of the enactment of this Act.''.
(2) Effective date.--The amendment made by this subsection
shall apply to taxable years beginning after the date of the
enactment of this Act.
(c) Employer Requirements for Rate of Payment.--
(1) In general.--Subsection (c) of section 45S of such Code
is amended--
(A) in paragraph (1)(B), by inserting after the
first sentence the following: ``For purposes of
determining the rate of payment under the program, any
family and medical leave which is paid by a State or
local government or required by State or local law,
determined as a percentage of the wages normally paid
to such employee for services performed for the
employer, shall be taken into account.''; and
(B) in paragraph (4)--
(i) by striking ``For purposes of this
section, any'' and inserting ``Any''; and
(ii) by striking ``amount of paid family
and medical leave provided by the employer''
and inserting ``wages taken into account under
subsection (a)''.
(2) Effective date.--The amendments made by this subsection
shall take effect as if included in section 13403 of Public Law
115-97.
(d) Technical Corrections.--
(1) In general.--Section 45S of such Code is amended--
(A) in subsection (b)(1), by striking ``credit
allowed'' and inserting ``wages taken into account'';
(B) in subsection (c), by striking paragraph (3)
and inserting the following:
``(3) Aggregation rule.--
``(A) In general.--Except as provided in
subparagraph (B), all persons which are treated as a
single employer under subsections (b) and (c) of
section 414 shall be treated as a single employer.
``(B) Exception.--
``(i) In general.--Subparagraph (A) shall
not apply to any person who establishes to the
satisfaction of the Secretary that such person
has a substantial and legitimate business
reason for failing to provide a written policy
described in paragraph (1) or (2).
``(ii) Substantial and legitimate business
reason.--For purposes of clause (i), the term
`substantial and legitimate business reason'
shall not include the operation of a separate
line of business, the rate of wages or category
of jobs for employees (or any similar basis),
or the application of State or local laws
relating to family and medical leave, but may
include the grouping of employees of a common
law employer.''; and
(C) in subsection (d)(2), by inserting ``, as
determined on an annualized basis (pro-rata for part-
time employees),'' after ``compensation''.
(2) Effective date.--The amendments made by this subsection
shall take effect as if included in section 13403 of Public Law
115-97.
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