[Congressional Bills 117th Congress]
[From the U.S. Government Publishing Office]
[S. 551 Introduced in Senate (IS)]
<DOC>
117th CONGRESS
1st Session
S. 551
To amend the Internal Revenue Code of 1986 to expand the Employee
Retention Tax Credit to include certain startup businesses.
_______________________________________________________________________
IN THE SENATE OF THE UNITED STATES
March 2 (legislative day, March 1), 2021
Ms. Hassan (for herself and Mr. Braun) 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 expand the Employee
Retention Tax Credit to include certain startup businesses.
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 ``Recovery Startup Assistance Act''.
SEC. 2. EXPANSION OF EMPLOYEE RETENTION TAX CREDIT TO INCLUDE CERTAIN
STARTUP BUSINESSES.
(a) In General.--Section 2301 of the CARES Act, as amended by
sections 206 and 207 of the Taxpayer Certainty and Disaster Tax Relief
Act of 2020 (Public Law 116-260), is amended--
(1) in subsection (c)--
(A) in paragraph (2)(A)(ii)--
(i) in subclause (I), by striking ``or'' at
the end,
(ii) in subclause (II), by striking the
period at the end and inserting ``, or'', and
(iii) by inserting after subclause (II) the
following:
``(III) the employer is a recovery
startup business (as defined in
paragraph (6)).'',
(B) by redesignating paragraph (6) as paragraph
(7), and
(C) by inserting after paragraph (5) the following:
``(6) Recovery startup business.--
``(A) In general.--The term `recovery startup
business' means any employer which--
``(i) began carrying on a trade or business
after February 15, 2020,
``(ii) had less than 50 full-time employees
(as defined in section 4980H(c)(4) of the
Internal Revenue Code of 1986, except that
subparagraph (A) of such section shall be
applied by substituting `quarter' for `month')
during the calendar quarter for which the
credit is determined under subsection (a),
``(iii) did not have gross receipts (as
determined under the rules of section 448(c)(3)
of such Code, without regard to subparagraph
(A) thereof) in excess of $25,000 for any
taxable year preceding the 5-taxable-year
period ending with the taxable year preceding
such quarter, and
``(iv) elected to have this paragraph apply
for such quarter.
``(B) Phaseout of credit.--In the case of any
recovery startup business, the amount of the credit
allowed under subsection (a) for any calendar quarter
(as determined without regard to this subparagraph)
shall be reduced (but not below zero) by an amount
equal to 1 percent of the amount of such credit for
each $40,000 (or fraction thereof) by which the gross
receipts (as determined under the rules of section
448(c)(3) of the Internal Revenue Code of 1986, without
regard to subparagraph (A) thereof) of such business
for the last taxable year ending before such quarter
exceeds $1,000,000.
``(C) Extensions and modifications.--
``(i) Limitation on number of employees.--
In the case of a recovery startup business, the
amount of qualified wages which may be taken
into account under subsection (a) by such
employer for any calendar quarter shall not
exceed $50,000.
``(ii) Limitation on number of quarters.--
``(I) In general.--Subject to
subclause (II), in the case of a
recovery startup business, the credit
allowed under subsection (a) shall only
apply to wages paid during any period
of 2 consecutive calendar quarters (as
elected by such business), as reduced
by the total number of calendar
quarters in which the recovery startup
business--
``(aa) claimed the credit
under this section, and
``(bb) did not make an
election described in
subparagraph (A)(iv).
``(II) Exclusion.--The period
described in subclause (I) shall not
include any calendar quarter which ends
before the later of--
``(aa) the date of
enactment of the Recovery
Startup Assistance Act, or
``(bb) the date on which
such business began operations.
``(iii) Extension.--In the case of a
recovery startup business, subsection (m) shall
be applied by substituting `January 1, 2022'
for `July 1, 2021'.'',
(2) in subsection (j)(2), by adding at the end the
following:
``(D) Recovery startup business.--Without regard to
subparagraphs (A) through (C), under rules provided by
the Secretary, a recovery startup business may elect
for any calendar quarter to receive an advance payment
of the credit under subsection (a) (after application
of subsection (c)(6)) for such quarter.'', and
(3) in subsection (l)--
(A) in paragraph (2), by striking ``and'' at the
end,
(B) in paragraph (3), by striking the period at the
end and inserting ``, and'', and
(C) by inserting after paragraph (3) the following:
``(4) to prevent fraudulent and abusive claims of the
credit allowed under subsection (a) by recovery startup
businesses.''.
(b) Effective Date.--The amendments made by this section shall
apply to calendar quarters beginning after December 31, 2020.
<all>