Text: H.R.4056 — 111th Congress (2009-2010)All Information (Except Text)

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Introduced in House (11/06/2009)


111th CONGRESS
1st Session
H. R. 4056


To amend the Internal Revenue Code of 1986 to allow small businesses a credit against income tax for increasing employment.


IN THE HOUSE OF REPRESENTATIVES

November 6, 2009

Mr. Sestak 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 allow small businesses a credit against income tax for increasing employment.

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 “Jobs Opportunity and Business Stability Act of 2009”.

SEC. 2. Credit for small businesses that increase employment.

(a) In general.—Subpart D of part IV of subchapter A of chapter 1 of the Internal Revenue Code of 1986 (relating to business-related credits) is amended by adding at the end the following new section:

“SEC. 45R. Credit for small businesses that increase employment.

“(a) General rule.—In the case of an eligible small business employer, the increased small business employment credit determined under this section shall be—

“(1) for any taxable year beginning in 2010, an amount equal to 15 percent of the excess of—

“(A) the aggregate wages paid during 2010, over

“(B) 102 percent of the aggregate wages paid during 2009, and

“(2) for any taxable year beginning in 2011, an amount equal to 10 percent of the excess of—

“(A) the aggregate wages paid during 2011, over

“(B) 102 percent of the aggregate wages paid during 2010.

“(b) Minimum preceding year wages.—For purposes of subsection (a)—

“(1) the amount taken into account under paragraph (1)(B) thereof shall not be less than 50 percent of the amount described in paragraph (1)(A) thereof, and

“(2) the amount taken into account under paragraph (2)(B) thereof shall not be less than 50 percent of the amount described in paragraph (2)(A) thereof.

“(c) Total wages must increase.—The amount of credit determined under this section for any taxable year shall not exceed the amount which would be so determined for such year (without regard to subsection (b)) if—

“(1) the aggregate amounts taken into account as wages were determined without any dollar limitation, and

“(2) ‘105 percent’ were substituted for ‘102 percent’ in the appropriate subparagraph of subsection (a).

“(d) Eligible small business employer.—For purposes of this section, the term ‘eligible small business employer’ means, with respect to any taxable year, any employer if—

“(1) such employer employed an average of less than 20 employees on business days during the preceding taxable year, and

“(2) such employer (and any predecessor) met the gross receipts test of section 448(c) for the preceding taxable year.

“(e) Wages.—For purposes of this section—

“(1) IN GENERAL.—Except as provided in paragraph (2), the term ‘wages’ has the meaning given to such term by section 3121(a) with respect to the tax imposed by section 3101(a).

“(2) RAILWAY LABOR.—In the case of remuneration subject to the tax imposed by 3201(a), the term ‘wages’ means so much of compensation (as defined in section 3231(e)) for the calendar year as does not exceed the contribution and benefit base determined under section 230 of the Social Security Act for such calendar year.

“(f) Certain rules To apply.—Rules similar to the following rules shall apply for purposes of this section:

“(1) Section 51(f) (relating to remuneration must be for trade or business employment).

“(2) Section 51(k) (relating to treatment of successor employers; treatment of employees performing services for other persons).

“(3) Subsections (a) and (b) of section 52 (relating to controlled groups).

“(g) Election To have credit not apply.—

“(1) IN GENERAL.—A taxpayer may elect to have this section not apply for any taxable year.

“(2) TIME FOR MAKING ELECTION.—An election under paragraph (1) for any taxable year may be made (or revoked) at any time before the expiration of the 3-year period beginning on the last date prescribed by law for filing the return for such taxable year (determined without regard to extensions).”.

(b) Denial of double benefit.—Subsection (a) of section 280C of such Code is amended by inserting “45R(a),” after “45P(a),”.

(c) Credit made part of general business credit.—

(1) IN GENERAL.—Subsection (b) of section 38 of such Code (relating to current year business credit) is amended by striking “plus” at the end of paragraph (34), by striking the period at the end of paragraph (35) and inserting “, plus”, and by adding at the end the following new paragraph:

“(36) in the case of an eligible small business employer (as defined in section 45R(e)), the increased small business employment credit determined under section 45R(a).”.

(2) DEDUCTION FOR CERTAIN UNUSED BUSINESS CREDITS.—Subsection (c) of section 196 of such Code is amended by striking “and” at the end of paragraph (12), by striking the period at the end of paragraph (13) and inserting “, and”, and by adding after paragraph (13) the following new paragraph:

“(14) the increased small business employment credit determined under section 45R(a).”.

(d) Credit To be refundable.—Subsection (c) of section 38 of such Code (relating to limitation based on amount of tax) is amended by redesignating paragraph (5) as paragraph (6) and by inserting after paragraph (4) the following new paragraph:

“(5) SPECIAL RULES FOR INCREASED SMALL BUSINESS EMPLOYMENT CREDIT.—In the case of the credit determined under section 45R—

“(A) this section and section 39 shall be applied separately with respect to such credit, and

“(B) in applying paragraph (1) to such credit—

“(i) the tentative minimum tax shall be treated as being zero, and

“(ii) the limitation under paragraph (1) (as modified by clause (i)) shall be reduced by the credit allowed under subsection (a) for the taxable year (other than the credit determined under section 45R), and

“(iii) the amount of the credit determined under section 45R in excess of the limitation under paragraph (1) (as modified by clause (ii)) shall be treated as a credit under subpart C.”.

(e) Clerical amendment.—The table of sections for subpart D of part IV of subchapter A of chapter 1 of such Code is amended by inserting after the item relating to section 45Q the following new item:


“Sec. 45R. Credit for small businesses that increase employment.”.

(f) Effective date.—The amendments made by this section shall apply to taxable years beginning after December 31, 2009.

(g) Public information campaign.—The Secretary of the Treasury (or the Secretary’s delegate) shall undertake a public information campaign to make employers aware of the credit added by this Act.

(h) Study To provide comparable benefits to nonprofit organizations.—The Secretary of the Treasury (or the Secretary’s delegate) shall conduct a study on ways to provide benefits to nonprofit organizations which are comparable to the credit added by the Act. The results of such study shall be submitted to the Committee on Ways and Means of the House of Representatives and the Committee on Finance of the Senate not later than 90 days after the date of the enactment of this Act.