S.Amdt. 563

1. Adds SEC. ____. REFUNDABLE TAX CREDIT FOR INITIAL HIRES OF SMALL BUSINESSES at the end of subtitle C of title V

   Adds a section

   In S. 1054 · Placed on Calendar Senate

   (c) Effective Date.--The amendments made by this section shall apply to amounts paid or accrued after the date of enactment of this section in taxable years ending after such date.

   Inserted: SEC. ____. REFUNDABLE TAX CREDIT FOR INITIAL HIRES OF SMALL BUSINESSES.

   Inserted: (a) In General.--Subpart C of part IV of subchapter A of chapter 1 (relating to refundable credits) is amended by redesignating section 36 as section 37 and inserting after section 35 the following new section:

   Inserted: "SEC. 36. INITIAL HIRES BY SMALL BUSINESSES.

   Inserted: "(a) Determination of Amount.--There shall be allowed as a credit against the tax imposed by this subtitle for the taxable year an amount equal to 10 percent of the qualified first-year wages for such year.

   Inserted: "(b) Qualified Wages Defined.--For purposes of this section--

   Inserted: "(1) In general.--The term 'qualified wages' means the wages paid or incurred by a qualified small business during the taxable year to an individual who is a qualified small business employee.

   Inserted: "(2) Qualified first-year wages.--The term 'qualified first-year wages' means, with respect to a qualified small business employee, qualified wages attributable to service rendered during the 1-year period beginning with the day the individual begins work for the employer.

   Inserted: "(3) Only first $20,000 of wages taken into account.--The amount of the qualified first-year wages which may be taken into account with respect to any individual shall not exceed $20,000.

   Inserted: "(4) Wages.--

   Inserted: "(A) In general.--The term 'wages' has the meaning given such term by section 51(c).

   Inserted: "(B) Special rules for agricultural and railway labor.--If such individual is an employee to whom subparagraph (A) or (B) of section 51(h)(1) applies, rules similar to the rules of such subparagraphs shall apply except that--

   Inserted: "(i) such subparagraph (A) shall be applied by substituting '$20,000' for '$6,000', and

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   Inserted: "(ii) such subparagraph (B) shall be applied by substituting '$1,666.66' for '$500'.

   Inserted: "(c) Qualified Small Business Employee.--For purposes of this section--

   Inserted: "(1) In general.--The term 'qualified small business employee' means the first individual hired by a qualified small business who is not an employee within the meaning of section 401(c)(1).

   Inserted: "(2) Qualified small business.--The term 'qualified small business' has the meaning given the term 'small employer' by section 4980D(d)(2), determined without regard to any minimum number of employees.

   Inserted: "(d) Certain Rules To Apply.--Rules similar to the rules of section 52, and subsections (d)(10), (f), (g), (i) (other than paragraph (3)(A) thereof), (j), and (k) of section 51, shall apply for purposes of this section.

   Inserted: "(e) Termination.--This section shall not apply to individuals who begin work for the employer after the date which is 1 year after the date of the enactment of the Entrepreneurship Promotion Act of 2003.".

   Inserted: (b) Conforming Amendments.--

   Inserted: (1) Paragraph (2) of section 1324(b) of title 31, United States Code, is amended by inserting before the period ", or from section 36 of such Code".

   Inserted: (2) The table of sections for subpart C of part IV of subchapter A of chapter 1 is amended by striking the last item and inserting the following new items:

   Inserted: "Sec. 36. Initial hires by small businesses.

   Inserted: "Sec. 37. Overpayments of tax.".

   Inserted: (c) Revision of Partial Exclusion of Dividends Received By Individuals.--Section 116(a)(2)(B), as added by section 201 of this Act, is amended by striking "2007" and inserting "2008".

   Inserted: (d) Effective Dates.--

   Inserted: (1) In general.--Except as provided in paragraph (2), the amendments made by this section shall apply to individuals who begin work for the employer after the date of the enactment of this Act.

   Inserted: (2) Revision.--The amendment made by subsection (c) shall apply to taxable years beginning after the date of the enactment of this Act.

   Original wording

   At the end of subtitle C of title V add the following:

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As printed