Payroll Tax Holiday Act of 2009 - Amends the Internal Revenue Code to eliminate employment and self-employment taxes between the enactment of this Act and January 1, 2010, for small business owners who employ 50 or fewer employees.
[Congressional Bills 111th Congress]
[From the U.S. Government Publishing Office]
[H.R. 1836 Introduced in House (IH)]
111th CONGRESS
1st Session
H. R. 1836
To amend the Internal Revenue Code of 1986 to provide a payroll tax
holiday for small businesses.
_______________________________________________________________________
IN THE HOUSE OF REPRESENTATIVES
April 1, 2009
Mr. Minnick (for himself and Mr. Schock) 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 provide a payroll tax
holiday for small businesses.
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 ``Payroll Tax Holiday Act of 2009''.
SEC. 2. PAYROLL TAX HOLIDAY FOR SMALL BUSINESSES.
(a) In General.--Subchapter C of chapter 21 of the Internal Revenue
Code of 1986 (relating to Federal Insurance Contributions Act) is
amended by redesignating section 3128 as section 3129 and by inserting
after section 3127 the following new section:
``SEC. 3128. PAYROLL TAX HOLIDAY FOR SMALL BUSINESSES DURING PORTION OF
2009.
``(a) Payroll Taxes.--In the case of an eligible small business,
the rate of the taxes imposed by sections 3101(a) and 3111(a) shall be
zero with respect to remuneration paid during the payroll tax holiday
period, including for purposes of determining the rates of tax under
sections 3201(a) and 3221(a) with respect to compensation paid during
such period.
``(b) Self-Employment Taxes.--In the case of an eligible small
business--
``(1) In general.--For purposes of the tax imposed by
section 1401(a), the self-employment income of the taxpayer for
the taxable year (determined without regard to this subsection)
shall be reduced by the payroll tax holiday period income for
such taxable year.
``(2) Tax on employee representatives under the railroad
retirement tax act.--For purposes of the tax imposed by section
3211(a), the compensation of the taxpayer subject to tax under
such section for the taxable year (determined without regard to
this subsection) shall be reduced by the payroll tax holiday
period income for such taxable year for purposes of applying so
much of the rate of such tax as is determined by reference to
the taxes imposed by sections 3101(a) and 3111(a).
``(3) Payroll tax holiday period income.--For purposes of
this subsection, the payroll tax holiday period income for any
taxable year is the amount equal to the applicable percentage
of--
``(A) the self-employment income for such taxable
year in the case of the tax imposed by section 1401(a),
and
``(B) the compensation subject to tax under section
3211(a) in the case of the tax impose by section
3211(a).
``(4) Applicable percentage.--For purposes of paragraph
(3), the applicable percentage is the percentage determined by
dividing--
``(A) the number of days during the taxable year
which are within the payroll tax holiday period, by
``(B) the number of days during the taxable year.
``(c) Eligible Small Business; Payroll Tax Holiday Period.--For
purposes of this section--
``(1) Eligible small business.--
``(A) In general.--The term `eligible small
business' means any person engaged in a trade or
business if such person employed no more than 50
employees on the first day of the payroll tax holiday
period.
``(B) Special rules.--For purposes of subparagraph
(A)--
``(i) all persons treated as a single
employer under subsection (b), (c), (m), or (o)
of section 414 shall be treated as 1 taxpayer,
and
``(ii) temporary lay-offs shall be
disregarded.
``(2) Payroll tax holiday period.--The term `payroll tax
holiday period' means the period--
``(A) after the last day of the month which
includes the date of the enactment of this section, and
``(B) before January 1, 2010.
``(d) Limitation on Reduction in Employer Taxes.--
``(1) In general.--If at the close of the payroll tax
holiday period--
``(A) the aggregate reduction under this section in
the employer taxes, exceeds
``(B) the aggregate increase in employee
compensation or capital expenditures during the payroll
tax holiday period as compared to the comparable period
ending on the day before the payroll tax holiday
period,
then the applicable employer tax (determined without regard to
this subsection) for the first payroll period beginning after
the payroll tax holiday period shall be increased by such
excess.
``(2) Employer taxes.--For purposes of subparagraph (A),
the term `employer taxes' means--
``(A) the taxes imposed by sections 3111(a) and
3221(a), and
``(B) so much of the taxes imposed by sections
1401(a) and 3211(a) as does not exceed the tax
determined at the rate imposed by section 3111(a).
``(e) Trust Funds Held Harmless.--There are hereby appropriated
(out of any money in the Treasury not otherwise appropriated) for each
fiscal year to the trust funds under section 201 of the Social Security
Act and the Social Security Equivalent Benefit Account under section
15A of the Railroad Retirement Act of 1974 (45 U.S.C. 231n-1) an amount
equal to the reduction in the transfers to such fund for such fiscal
year by reason of this section.
``(f) Employer Notification.--The Secretary shall notify small
business employers of the payroll tax holiday period in any manner the
Secretary deems appropriate.''.
(b) Conforming Amendment.--The table of sections for such
subchapter C is amended by redesignating the item relating to section
3128 as relating to section 3129 and by inserting after the item
relating to section 3127 the following new item:
``Sec. 3128. Payroll tax holiday for small businesses during portion of
2009.''.
(c) Effective Date.--
(1) In general.--Except as provided in paragraph (2), the
amendments made by this section shall apply to remuneration
paid after the last day of the month which includes the date of
the enactment of this Act.
(2) Self-employment taxes.--So much of section 3128 of the
Internal Revenue Code of 1986 (as added by this section) as
relates to the taxes imposed by sections 1401(a) and 3211(a)
shall apply to taxable years ending after such last day.
<all>
Introduced in House
Introduced in House
Referred to the House Committee on Ways and Means.
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