[Congressional Bills 117th Congress]
[From the U.S. Government Publishing Office]
[S. 536 Introduced in Senate (IS)]
<DOC>
117th CONGRESS
1st Session
S. 536
To amend the Internal Revenue Code of 1986 to provide a credit for
wages received by individuals that are less than the median wage.
_______________________________________________________________________
IN THE SENATE OF THE UNITED STATES
March 2 (legislative day, March 1), 2021
Mr. Hawley introduced the following bill; which was read twice and
referred to the Committee on Finance
_______________________________________________________________________
A BILL
To amend the Internal Revenue Code of 1986 to provide a credit for
wages received by individuals that are less than the median wage.
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 ``Blue Collar Bonus Act of 2021''.
SEC. 2. BLUE COLLAR BONUS TAX CREDIT.
(a) In General.--
(1) Allowance of credit.--Subpart C of part IV of
subchapter A of chapter 1 of the Internal Revenue Code of 1986
is amended by inserting after section 36B the following:
``SEC. 36C. CREDIT FOR WAGES PAID AT A RATE LESS THAN THE MEDIAN WAGE.
``(a) Credit Allowed.--
``(1) In general.--In the case of an individual, there
shall be allowed as a credit against the tax imposed by this
subtitle for any taxable year an amount equal to the sum of the
amounts determined under paragraph (2) for each individual
included on the taxpayer's return of tax for the taxable year.
``(2) Amount per individual.--The amount determined under
this paragraph with respect to any individual shall be the
product of--
``(A) the blue collar bonus amount of such
individual for the taxable year, and
``(B) the number of hours for which the individual
performed services for which wages were paid during
such taxable year.
``(b) Blue Collar Bonus Amount.--For purposes of this section--
``(1) In general.--The term `blue collar bonus amount'
means, with respect to any individual for any taxable year, 50
percent of the excess (if any) of--
``(A) the median wage rate for such taxable year,
over
``(B) the average hourly wages received by the
individual during the taxable year.
``(2) Non-hourly wage rate.--For purposes of paragraph
(1)(A), in the case of any individual who is not paid on an
hourly wage rate, the wages of such employee shall be prorated
to an hourly wage rate under regulations established by the
Secretary.
``(3) Median wage rate.--
``(A) In general.--The median wage rate is $16.50
per hour.
``(B) Adjustment.--
``(i) In general.--In the case of any
taxable year beginning in a calendar year after
2021, the $16.50 amount under subparagraph (A)
shall each be increased by an amount equal to--
``(I) such dollar amount,
multiplied by
``(II) the cost-of-living
adjustment determined under section
1(f)(3) for the calendar year in which
the taxable year begins, determined by
substituting in subparagraph (A)(ii)
thereof `calendar year 2020' for
`calendar year 2016'.
``(ii) Rounding.--If any amount as adjusted
under paragraph (1) is not a multiple of $0.10,
such dollar amount shall be rounded to the next
lowest multiple of $0.10.
``(c) Number of Hours Taken Into Account.--For purposes of
subsection (a)(2)(B) and for purposes of determining the average hourly
wages of an individual under subsection (b)(1)(B), the number of hours
taken into account shall not exceed--
``(1) for any week, 40, and
``(2) for any taxable year, 2080.
``(d) Other Definitions and Special Rules.--
``(1) Wages.--The term `wages' has the meaning given such
term by subsection (b) of section 3306 (determined without
regard to any dollar limitation contained in such section).
``(2) Treatment of dependents.--If a deduction under
section 151 with respect to an individual is allowed to another
taxpayer for a taxable year beginning in the calendar year in
which such individual's taxable year begins, no credit shall be
allowed under subsection (a) to such individual for such
individual's taxable year.
``(3) Nonresident aliens.--This section shall not apply to
any taxpayer that is a nonresident alien for the taxable year.
``(e) Identification Requirement.--No credit shall be allowed under
this section to a taxpayer with respect to any individual unless the
taxpayer includes the social security number of such individual on the
return of tax for the taxable year. For purposes of the preceding
sentence, the term `social security number' means a social security
number issued to an individual by the Social Security Administration,
but only if the social security number is issued--
``(1) to a citizen of the United States or pursuant to
subclause (I) (or that portion of subclause (III) that relates
to subclause (I)) of section 205(c)(2)(B)(i) of the Social
Security Act, and
``(2) before the due date for such return.
``(f) Restrictions on Taxpayers Who Improperly Claimed Credit in
Prior Year.--
``(1) Taxpayers making prior fraudulent or reckless
claims.--
``(A) In general.--No credit shall be allowed under
this section for any taxable year in the disallowance
period.
``(B) Disallowance period.--For purposes of
subparagraph (A), the disallowance period is the period
of 2 taxable years after the most recent taxable year
for which there was a final determination that the
taxpayer's claim of credit under this section was due
to fraud or to reckless or intentional disregard of
rules and regulations.
``(g) Reconciliation of Credit and Advance Credit.--
``(1) In general.--The amount of the credit allowed under
this section to any taxpayer for any taxable year shall be
reduced (but not below zero) by the aggregate amount of
payments made under section 7527A to such taxpayer during such
taxable year. Any failure to so reduce the credit shall be
treated as arising out of a mathematical or clerical error and
assessed according to section 6213(b)(1).
``(2) Excess advance payments.--
``(A) In general.--If the aggregate amount of
payments under section 7527A to the taxpayer during the
taxable year exceeds the amount of the credit allowed
under this section to such taxpayer for such taxable
year (determined without regard to paragraph (1)), the
tax imposed by this chapter for such taxable year shall
be increased by the amount of such excess. Any failure
to so increase the tax shall be treated as arising out
of a mathematical or clerical error and assessed
according to section 6213(b)(1).
``(B) Safe harbor based on modified adjusted gross
income.--
``(i) In general.--Subparagraph (A) shall
not apply to any taxpayer whose adjusted gross
income for the taxable year does not exceed
$50,000 ($100,000, in the case of a joint
return).
``(ii) Limitation on increase.--In the case
of a taxpayer whose adjusted gross income
exceeds $50,000 ($100,000, in the case of a
joint return), the amount of the increase under
subparagraph (A) shall not exceed the excess
of--
``(I) the adjusted gross income of
the taxpayer for the taxable year, over
``(II) $50,000 ($100,000, in the
case of a joint return).
``(h) Regulations.--The Secretary may prescribe such rules or other
guidance as may be necessary to carry out the purposes of this section
and section 7527A, including--
``(1) rules or guidance related to the treatment of tipped
workers,
``(2) rules or guidance related to minimizing compliance
and record-keeping burdens,
``(3) rules or guidance related to individuals who receive
wages from multiple employers, and
``(4) in consultation with the Secretary of Labor, rules or
guidance related to the prevention of reduced wages or hours
worked on account of the benefit provided under this section.
``(i) Termination.--This section shall not apply to any taxable
year beginning after December 31, 2023.''.
(2) Conforming amendments.--
(A) Paragraph (2) of section 1324(b) of title 31,
United States Code, is amended by inserting ``36C,''
after ``36B,''.
(B) The table of sections for subpart C of part IV
of subchapter A of chapter 1 of such Code is amended by
inserting after the item related to section 36B the
following new item:
``Sec. 36C. Credit for wages paid at a rate less than the median
wage.''.
(b) Advance Payment of Credit.--
(1) In general.--Chapter 77 of such Code is amended by
inserting after section 7527 the following new section:
``SEC. 7527A. ADVANCE PAYMENT OF WAGE TAX CREDIT.
``(a) In General.--As soon as practical but not later than 90 days
after the date of the enactment of this section, the Secretary shall
establish a program for making periodic payments to taxpayers in an
amount equal to the amount of the credit the taxpayer would receive
under section 36C if the last day of the taxable year were the last day
of the applicable period for which the payment is made.
``(b) Length of Period.--Payments under the program established
under subsection (a) shall be made not less than quarterly.
``(c) Adjustments.--The Secretary may adjust the amount of any
payment to properly take into account the amount by which any payment
made before such date was greater than or less than the amount that
such payment would have been on the basis of data for any subsequent
period.
``(d) Information Reporting.--The Secretary shall require the
submission of additional information concerning the wages paid by
employers for purposes of providing advance payments under this
section. Such information may be provided as part of existing reporting
requirements.
``(e) On-Line Information Portal.--The Secretary shall establish an
on-line portal which allows taxpayers to--
``(1) elect not to receive payments under this section, and
``(2) provide such information as the Secretary may require
to facilitate an advance payment of the credit to the eligible
individual.
``(f) Notice of Payments.--Not later than January 31 of the
calendar year following any calendar year during which the Secretary
makes one or more payments to any taxpayer under this section, the
Secretary shall provide such taxpayer with a written notice which
includes the taxpayer's taxpayer identity (as defined in section
6103(b)(6)), the aggregate amount of such payments made to such
taxpayer during such calendar year, and such other information as the
Secretary determines appropriate.
``(g) Administrative Provisions.--
``(1) Application of direct deposit requirement.--Solely
for purposes of section 3332 of title 31, United States Code
(and notwithstanding the last sentence of subsection (j)(3)
thereof), the payments made by the Secretary under subsection
(a) shall be treated as Federal payments.
``(2) Delivery of payments.--Notwithstanding any other
provision of law, the Secretary may certify and disburse
refunds payable under this section electronically to--
``(A) any account to which the payee received or
authorized, on or after January 1, 2019, a refund of
taxes under this title or a Federal payment (as defined
in section 3332 of title 31, United States Code),
``(B) any account belonging to a payee from which
that individual, on or after January 1, 2019, made a
payment of taxes under this title, or
``(C) any Treasury-sponsored account (as defined in
section 208.2 of title 31, Code of Federal
Regulations).
``(3) Waiver of certain rules.--Notwithstanding section
3325 of title 31, United States Code, or any other provision of
law, with respect to any payment of a refund under this
section, a disbursing official in the executive branch of the
United States Government may modify payment information
received from an officer or employee described in section
3325(a)(1)(B) of such title for the purpose of facilitating the
accurate and efficient delivery of such payment. Except in
cases of fraud or reckless neglect, no liability under section
3325, 3527, 3528, or 3529 of title 31, United States Code,
shall be imposed with respect to payments made under this
paragraph.
``(4) Exception from reduction or offset.--Any payment made
to any individual under this section shall not be--
``(A) subject to reduction or offset pursuant to
section 3716 or 3720A of title 31, United States Code,
``(B) subject to reduction or offset pursuant to
subsection (d), (e), or (f) of section 6402, or
``(C) reduced or offset by other assessed Federal
taxes that would otherwise be subject to levy or
collection.''.
(2) Conforming amendments.--
(A) Section 26(b)(2) of such Code is amended by
striking ``and'' at the end of subparagraph (X), by
striking the period at the end of subparagraph (Y) and
inserting ``, and'', and by adding at the end the
following new subparagraph:
``(Z) section 36C(g)(2) (relating to excess advance
payments).''.
(B) Section 6211(b)(4)(A) of such Code, as amended
by the preceding provisions of this subtitle, is
amended--
(i) by inserting ``36C'' after ``36B'', and
(ii) by striking ``and 6428A'' and
inserting ``6428A, and 7527A''.
(C) Paragraph (2) of section 1324(b) of title 31,
United States Code, is amended by striking ``or 6431''
and inserting ``6431, or 7527A''.
(D) The table of sections for chapter 77 of the
Internal Revenue Code of 1986 is amended by inserting
after the item relating to section 7527 the following
new item:
``Sec. 7527A. Advance payment of wage tax credit.''.
(c) Effective Date.--The amendments made by this section shall
apply to taxable years beginning after December 31, 2020.
<all>