II
110th CONGRESS
2d Session
S. 3488
IN THE SENATE OF THE UNITED STATES
September 15, 2008
Mr. Hatch (for himself and Mr. Kennedy) 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.
Short title
This Act may be cited as the
Incentive to Serve Tax
Act
.
Tax credit for qualified donations of employee services
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:
Qualified employee service donations
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.
Qualified wages
For purposes of this section—
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.
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).
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.
Coordination with other credits
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.
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.
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.
Qualified services
For purposes of this section—
In general
The term qualified services means—
eligible direct services to recipients or beneficiaries of charitable organizations and community agencies,
the recruitment and coordination of activities of volunteers providing such eligible direct services, or
the building of the capacity of such organizations and agencies to provide such eligible direct services.
Eligible direct services
The term eligible direct services means direct services which advance 1 or more of the following:
Improving the quality of education in public schools for economically disadvantaged students.
Expanding and improving access to health care.
Improving and conserving energy and natural resources.
Improving economic opportunities for economically disadvantaged individuals.
Improving disaster preparedness and response.
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.
Special rules
For purposes of this section, rules similar to the rules of section 52 shall apply.
.
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 and
at the end of paragraph (32),
by striking the period at the end of paragraph (33) and inserting ,
plus
, and by adding at the end the following new paragraph:
the credit determined under section 45Q(a).
.
Conforming amendments
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:
the qualified employee service credit under section 45Q(a).
.
Section 280C(a)
of such Code is amended by inserting 45Q(a),
after
45A(a)
.
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. 45Q. Qualified employee service donations.
.
Effective date
The amendments made by this section shall apply to wages paid or incurred after the date of the enactment of this Act.
Exclusion
Section 148 of the National and Community Service Act of 1990 (42 U.S.C. 12604) is amended—
by redesignating subsection (g) as subsection (h); and
by inserting after subsection (f) the following:
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.
.