H.R. 4437 – Reading Mode

111th CONGRESS

2d Session

H. R. 4437

IN THE HOUSE OF REPRESENTATIVES

January 13, 2010

Mr. Etheridge (for himself, Mr. Kagen, Mr. Israel, Mr. Jackson of Illinois, Mr. Hinchey, Mr. Courtney, Mr. Skelton, Mr. Butterfield, and Mr. Price of North Carolina) 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 employers a refundable credit for increasing employment.

Short title

This Act may be cited as the Hiring Incentives to Reinvest and Incentivize New Growth Act of 2010 or the HIRING Act of 2010 .

Refundable credit for increasing employment

(a)

In general

Subpart C of part IV of subchapter A of chapter 1 of the Internal Revenue Code of 1986 (relating to refundable credits) is amended by inserting after section 36A the following new section:

36B.

Credit for increasing employment

(a)

In general

There shall be allowed as a credit against the tax imposed by this subtitle—

(1)

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

(A)

the aggregate wages paid during 2010, over

(B)

the inflation-adjusted wages paid during 2009, and

(2)

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

(A)

the aggregate wages paid during 2011, over

(B)

the inflation-adjusted wages paid during 2010.

(b)

Quarterly advance payments of credit

(1)

In general

The Secretary shall pay (without interest) to each employer for each calendar quarter an amount equal to the credit percentage of the excess (if any) of—

(A)

the aggregate wages paid by the employer during such quarter, over

(B)

the inflation-adjusted wages paid by the employer during the comparable quarter of the preceding calendar year.

(2)

Credit percentage

For purposes of paragraph (1), the credit percentage is—

(A)

15 percent in the case of the calendar quarters of 2010, and

(B)

10 percent in the case of the calendar quarters of 2011.

(3)

Reconciliation

(A)

In general

If there is a payment under paragraph (1) for 1 or more calendar quarters ending with or within a taxable year, then the tax imposed by this chapter for such taxable year shall be increased by the aggregate amount of such payments.

(B)

Reconciliation

Any increase in tax under subparagraph (A) shall not be treated as tax imposed by this chapter for purposes of determining the amount of any credit (other than the credit under subsection (a)) allowable under this part.

(4)

Time for filing claim

No claim shall be allowed under this subsection with respect to any calendar quarter unless filed on or before the earlier of—

(A)

the last day of the succeeding quarter, or

(B)

the time prescribed by law for filing the return of tax imposed by this chapter for the taxable year in which or with which such quarter ends.

(5)

Interest

Notwithstanding paragraph (1), if the Secretary has not paid pursuant to a claim filed under this subsection within 45 days of the date of the filing of such claim (20 days in the case of an electronic claim), the claim shall be paid with interest from such date determined by using the overpayment rate and method under section 6621.

(c)

Total wages must increase

The amount of credit allowed under this section for any taxable year shall not exceed the amount which would be so allowed for such year if—

(1)

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

(2)

103 percent of the amount of wages otherwise required to be taken into account under subsection (a)(1)(B) or subsection (a)(2)(B), as the case may be, were taken into account.

(d)

Inflation-Adjusted wages; wages

For purposes of this section—

(1)

Inflation-adjusted wages

(A)

In general

The term inflation-adjusted wages means, for any period—

(i)

the aggregate wages paid by the employer during such period, increased by

(ii)

an amount equal to the inflation percentage of such wages.

(B)

Inflation percentage

The inflation percentage is—

(i)

3 percent for purposes of determining inflation-adjusted wages for periods during 2009, and

(ii)

5 percent for purposes of determining inflation-adjusted wages for periods during 2010.

(2)

Wages

(A)

In general

Except as provided in subparagraph (B), the term wages means, with respect to any calendar year, so much of wages (as defined in section 3121(a)) as does not exceed the median household income in the United States for the preceding calendar year.

(B)

Railway labor

In the case of remuneration subject to the tax imposed by 3201(a), the term wages means, with respect to any calendar year, so much of compensation (as defined in section 3231(e)) as does not exceed the median household income in the United States for the preceding calendar year.

(e)

Special rules

(1)

Adjustments for certain acquisitions, etc

(A)

Acquisitions

If, after December 31, 2008, an employer acquires the major portion of a trade or business of another person (hereinafter in this subparagraph referred to as the predecessor) or the major portion of a separate unit of a trade or business of a predecessor, then, for purposes of applying this section for any calendar year ending after such acquisition, the amount of wages deemed paid by the employer during periods before such acquisition shall be increased by so much of such wages paid by the predecessor with respect to the acquired trade or business as is attributable to the portion of such trade or business acquired by the employer.

(B)

Dispositions

If, after December 31, 2008—

(i)

an employer disposes of the major portion of any trade or business of the employer or the major portion of a separate unit of a trade or business of the employer in a transaction to which subparagraph (A) applies, and

(ii)

the employer furnishes the acquiring person such information as is necessary for the application of subparagraph (A),

then, for purposes of applying this section for any calendar year ending after such disposition, the amount of wages deemed paid by the employer during periods before such disposition shall be decreased by so much of such wages as is attributable to such trade or business or separate unit.

(2)

Change in status from self-employed to employee

If—

(A)

during 2009 or 2010 an individual has net earnings from self-employment (as defined in section 1402(a)) which are attributable a trade or business, and

(B)

for any portion of the succeeding calendar year such individual is an employee of such trade or business,

then, for purposes of determining the credit allowable for a taxable year beginning in such succeeding calendar year, the employer’s aggregate wages for 2009 or 2010, as the case may be, shall be increased by an amount equal to so much of the net earnings referred to in subparagraph (A) as does not exceed the median household income in the United States for 2009 or 2010, as the case may be.

(3)

Certain other rules to apply

Rules similar to the following rules shall apply for purposes of this section:

(A)

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

(B)

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

(C)

Section 52 (relating to special rules).

(4)

Short taxable years

If the employer has more than 1 taxable year beginning in 2010 or 2011, the credit under this section shall be determined for the employer’s last taxable year beginning in 2010 or 2011, as the case may be.

(f)

Tax-Exempt employers treated as taxpayers

Solely for purposes of this section and section 6402, employers exempt from tax under section 501(a) shall be treated as taxpayers.

(b)

Denial of double benefit

Subsection (a) of section 280C of such Code is amended by inserting 36B(a), before 45A(a).

(c)

Conforming amendments

(1)

Section 1324(b)(2) of title 31, United States Code, is amended by inserting 36B, after 36A,.

(2)

The table of sections for subpart C of part IV of subchapter A of chapter 1 of such Code is amended by inserting after the item relating to section 36A the following new item:

Sec. 36B. Credit for increasing employment..

(d)

Effective date

The amendments made by this section shall apply to taxable years beginning after December 31, 2009.

(e)

Notice of availability of credit

The Secretary of the Treasury shall work with the State Employment Security Agencies to inform businesses of the availability of section 36B of the Internal Revenue Code of 1986 (as added by this Act).