Text: S.278 — 111th Congress (2009-2010)All Information (Except Text)

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Introduced in Senate (01/16/2009)


111th CONGRESS
1st Session
S. 278


To amend the Internal Revenue Code of 1986 to provide for a tax credit for qualified donations of employee services.


IN THE SENATE OF THE UNITED STATES

January 16, 2009

Mr. Hatch (for himself, Mr. Kennedy, Mr. Gregg, and Mr. Cochran) 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 for a tax credit for qualified donations of employee services.

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 “Incentive to Serve Tax Act”.

SEC. 2. Tax credit for qualified donations of employee services.

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

“SEC. 45R. Qualified employee service donations.

“(a) In general.—For purposes of section 38, the qualified employee service donation credit under this section is an amount equal to 25 percent of the qualified wages paid or incurred by the taxpayer.

“(b) Qualified wages.—For purposes of this section—

“(1) IN GENERAL.—The term ‘qualified wages’ means the wages paid or incurred by an employer during the taxable year to an eligible employee during periods in which the eligible employee is performing qualified services.

“(2) WAGES.—The term ‘wages’ has the meaning given to such term by subsection (b) of section 3306 (determined without regard to the dollar limitation contained in such section).

“(3) LIMITATION ON WAGES TAKEN INTO ACCOUNT.—The amount of qualified wages which may be taken into account with respect to any individual shall not exceed $100,000 per year.

“(4) COORDINATION WITH OTHER CREDITS.—

“(A) WORK OPPORTUNITY CREDIT.—The term ‘qualified wages’ shall not include wages attributable to service rendered during the 1-year period beginning with the day the individual begins work for the employer if any portion of such wages is taken into account in determining the credit under section 51.

“(B) INDIAN EMPLOYMENT CREDIT.—The term ‘qualified wages’ shall not include wages with respect to any employee if a credit is allowed for wages paid to such employee under section 45A.

“(c) Eligible employee.—For purposes of this section, the term ‘eligible employee’ means any employee of the employer who performs qualified services at the direction of the employer and with the employee's consent for a period of not less than 160 hours for which such employee was fully compensated during the taxable year of the employer.

“(d) Qualified services.—For purposes of this section—

“(1) IN GENERAL.—The term ‘qualified services’ means—

“(A) eligible direct services to recipients or beneficiaries of charitable organizations and community agencies,

“(B) the recruitment and coordination of activities of volunteers providing such eligible direct services, or

“(C) the building of the capacity of such organizations and agencies to provide such eligible direct services.

“(2) ELIGIBLE DIRECT SERVICES.—The term ‘eligible direct services’ means direct services which advance 1 or more of the following:

“(A) Improving the quality of education in public schools for economically disadvantaged students.

“(B) Expanding and improving access to health care.

“(C) Improving and conserving energy and natural resources.

“(D) Improving economic opportunities for economically disadvantaged individuals.

“(E) Improving disaster preparedness and response.

“(e) Verification.—No amount shall be allowed as a credit under subsection (a) for qualified wages for qualified services with respect to which the taxpayer has not submitted such information or certification as the Secretary determines necessary to ensure the performance of such qualified services.

“(f) Special rules.—For purposes of this section, rules similar to the rules of section 52 shall apply.”.

(b) Credit treated as business credit.—Section 38(b) of the Internal Revenue Code of 1986 (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) the credit determined under section 45R(a).”.

(c) Conforming amendments.—

(1) Section 196(c) of the Internal Revenue Code of 1986 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 at the end the following new paragraph:

“(14) the qualified employee service credit under section 45R(a).”.

(2) Section 280C(a) of such Code is amended by inserting “45R(a),” after “45P(a),”.

(d) Clerical amendment.—The table of sections for subpart D of part IV of subchapter A of chapter 1 of the Internal Revenue Code of 1986 is amended by adding at the end the following new item:


“Sec. 45R. Qualified employee service donations.”.

(e) Effective date.—The amendments made by this section shall apply to wages paid or incurred after the date of the enactment of this Act.

SEC. 3. Exclusion.

Section 148 of the National and Community Service Act of 1990 (42 U.S.C. 12604) is amended—

(1) by redesignating subsection (g) as subsection (h); and

(2) by inserting after subsection (f) the following:

“(g) Exclusion from income.—The amount of an educational award provided to an individual under this section shall not be included in the gross income of the individual for purposes of the Internal Revenue Code of 1986.”.