Jumpstarting Our Businesses' Success Credit Act of 2020 or the JOBS Credit Act of 2020
This bill increases the employer tax credit for the retention of employees and coordinates such credit with the Payroll Protection Program. Specifically, it increases the rate of the employee retention credit to 80% of up to $15,000 in employee wages per calendar quarter with an increased annual wage cap of $45,000 for all calendar quarters. The bill increases the maximum credit amount to $36,000.
The bill expands the definition of large employer, for credit eligibility purposes, to include employers with more than 1,500 employees and more than $41.5 million in gross receipts in 2019, and requires employers to show a significant decline in gross receipts. It also extends eligibility for the credit to state governmental agencies and Indian tribal governments.
The bill also coordinates the credit with the Paycheck Protection Program to allow employers to claim both programs subject to certain restrictions.
[Congressional Bills 116th Congress]
[From the U.S. Government Publishing Office]
[H.R. 6776 Introduced in House (IH)]
<DOC>
116th CONGRESS
2d Session
H. R. 6776
To provide for improvements related to the employee retention tax
credit.
_______________________________________________________________________
IN THE HOUSE OF REPRESENTATIVES
May 8, 2020
Mrs. Murphy of Florida (for herself, Mr. Katko, Ms. DelBene, Mr.
Fitzpatrick, and Mr. Pappas) introduced the following bill; which was
referred to the Committee on Ways and Means, and in addition to the
Committee on Small Business, for a period to be subsequently determined
by the Speaker, in each case for consideration of such provisions as
fall within the jurisdiction of the committee concerned
_______________________________________________________________________
A BILL
To provide for improvements related to the employee retention tax
credit.
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 ``Jumpstarting Our Businesses' Success
Credit Act of 2020'' or as the ``JOBS Credit Act of 2020''.
SEC. 2. IMPROVEMENTS TO EMPLOYEE RETENTION CREDIT.
(a) Increase in Credit Percentage.--Section 2301(a) of the CARES
Act is amended by striking ``50 percent'' and inserting ``80 percent''.
(b) Increase in Per Employee Limitation.--Section 2301(b)(1) of the
CARES Act is amended by striking ``for all calendar quarters shall not
exceed $10,000.'' and inserting ``shall not exceed--
``(A) $15,000 in any calendar quarter, and
``(B) $45,000 in the aggregate for all calendar
quarters.''.
(c) Modification of Threshold for Treatment as a Large Employer.--
(1) In general.--Section 2301(c)(3)(A) of the CARES Act is
amended--
(A) by striking ``for which the average number of
full-time employees (within the meaning of section
4980H of the Internal Revenue Code of 1986) employed by
such eligible employer during 2019 was greater than
100'' in clause (i) and inserting ``which is a large
employer'', and
(B) by striking ``for which the average number of
full-time employees (within the meaning of section
4980H of the Internal Revenue Code of 1986) employed by
such eligible employer during 2019 was not greater than
100'' in clause (ii) and inserting ``which is not a
large employer''.
(2) Large employer defined.--Section 2301(c) of the CARES
Act is amended by redesignating paragraph (6) as paragraph (7)
and by inserting after paragraph (5) the following new
paragraph:
``(6) Large employer.--The term `large employer' means any
eligible employer if--
``(A) the average number of full-time employees (as
determined for purposes of determining whether an
employer is an applicable large employer for purposes
of section 4980H(c)(2) of the Internal Revenue Code of
1986) employed by such eligible employer during
calendar year 2019 was greater than 1,500, and
``(B) the gross receipts (within the meaning of
section 448(c) of the Internal Revenue Code of 1986) of
such eligible employer during calendar year 2019 was
greater than $41,500,000.''.
(d) Phase-In of Eligibility Based on Reduction in Gross Receipts.--
(1) Decrease of reduction in gross receipts necessary to
qualify for credit.--Section 2301(c)(2)(B)(i) of the CARES Act
is amended by striking ``50 percent'' and inserting ``80
percent''.
(2) Phase-in of credit if reduction in gross receipts is
less than 50 percent.--Section 2301(c)(2) of the CARES Act is
amended by adding at the end the following new subparagraph:
``(D) Phase-in of credit where business not
suspended and reduction in gross receipts less than 50
percent.--
``(i) In general.--In the case of any
calendar quarter with respect to which an
eligible employer would not be an eligible
employer if subparagraph (B)(i) were applied by
substituting `50 percent' for `80 percent', the
amount of the credit allowed under subsection
(a) shall be reduced by the amount which bears
the same ratio to the amount of such credit
(determined without regard to this
subparagraph) as--
``(I) the excess gross receipts
percentage point amount, bears to
``(II) 30 percentage points.
``(ii) Excess gross receipts percentage
point amount.--For purposes of this
subparagraph, the term `excess gross receipts
percentage point amount' means, with respect to
any calendar quarter, the excess of--
``(I) the lowest of the gross
receipts percentage point amounts
determined with respect to any calendar
quarter during the period ending with
such calendar quarter and beginning
with the first calendar quarter during
the period described in subparagraph
(B), over
``(II) 50 percentage points.
``(iii) Gross receipts percentage point
amounts.--For purposes of this subparagraph,
the term `gross receipts percentage point
amount' means, with respect to any calendar
quarter, the percentage (expressed as a number
of percentage points) obtained by dividing--
``(I) the gross receipts (within
the meaning of subparagraph (B)) for
such calendar quarter, by
``(II) the gross receipts for the
same calendar quarter in calendar year
2019.''.
(3) Gross receipts of tax-exempt organizations.--Section
2301(c)(2)(C) of the CARES Act is amended--
(A) by striking ``of such Code, clauses (i) and
(ii)(I)'' and inserting ``of such Code--
``(i) clauses (i) and (ii)(I)'',
(B) by striking the period at the end and inserting
``, and'', and
(C) by adding at the end the following new clause:
``(ii) any reference in this section to
gross receipts shall be treated as a reference
to gross receipts within the meaning of section
6033 of such Code.''.
(e) Modification of Treatment of Health Plan Expenses.--
(1) In general.--Section 2301(c)(5) of the CARES Act is
amended to read as follows:
``(5) Wages.--
``(A) In general.--The term `wages' means wages (as
defined in section 3121(a) of the Internal Revenue Code
of 1986) and compensation (as defined in section
3231(e) of such Code).
``(B) Allowance for certain health plan expenses.--
``(i) In general.--Such term shall include
amounts paid or incurred by the eligible
employer to provide and maintain a group health
plan (as defined in section 5000(b)(1) of the
Internal Revenue Code of 1986), but only to the
extent that such amounts are excluded from the
gross income of employees by reason of section
106(a) of such Code.
``(ii) Allocation rules.--For purposes of
this section, amounts treated as wages under
clause (i) shall be treated as paid with
respect to any employee (and with respect to
any period) to the extent that such amounts are
properly allocable to such employee (and to
such period) in such manner as the Secretary
may prescribe. Except as otherwise provided by
the Secretary, such allocation shall be treated
as properly made if made on the basis of being
pro rata among periods of coverage.''.
(2) Conforming amendment.--Section 2301(c)(3) of the CARES
Act is amended by striking subparagraph (C).
(f) Qualified Wages Permitted To Include Amounts for Tip
Replacement.--
(1) In general.--Section 2301(c)(3)(B) of the CARES Act is
amended by inserting ``(including tips which would have been
deemed to be paid by the employer under section 3121(q))''
after ``would have been paid''.
(2) Conforming amendment.--Section 2301(h)(2) of the CARES
Act is amended by inserting ``45B or'' before ``45S''.
(g) Certain Governmental Employers Eligible for Credit.--
(1) In general.--Section 2301(f) of the CARES Act is
amended to read as follows:
``(f) Certain Governmental Employers.--
``(1) In general.--The credit under this section shall not
be allowed to the Federal Government or any agency or
instrumentality thereof.
``(2) Exception.--Paragraph (1) shall not apply to any
organization described in section 501(c)(1) of the Internal
Revenue Code of 1986 and exempt from tax under section 501(a)
of such Code.
``(3) Special rules.--In the case of any State government,
Indian tribal government, or any agency, instrumentality, or
political subdivision of the foregoing--
``(A) clauses (i) and (ii)(I) of subsection
(c)(2)(A) shall apply to all operations of such entity,
and
``(B) subclause (II) of subsection (c)(2)(A)(ii)
shall not apply.''.
(2) Coordination with application of certain definitions.--
(A) In general.--Section 2301(c)(5)(A) of the CARES
Act, as amended by the preceding provisions of this
Act, is amended by adding at the end the following:
``For purposes of the preceding sentence (other than
for purposes of subsection (b)(2)), wages as defined in
section 3121(a) of the Internal Revenue Code of 1986
shall be determined without regard to paragraphs (1),
(5), (6), (7), (8), (10), (13), (18), (19), and (22) of
section 3212(b) of such Code (except with respect to
services performed in a penal institution by an inmate
thereof).''.
(B) Conforming amendments.--Sections 2301(c)(6) of
the CARES Act is amended by striking ``Any term'' and
inserting ``Except as otherwise provided in this
section, any term''.
(h) Effective Date.--The amendments made by this section shall take
effect as if included in section 2301 of the CARES Act.
SEC. 3. IMPROVED COORDINATION BETWEEN PAYCHECK PROTECTION PROGRAM AND
EMPLOYEE RETENTION TAX CREDIT.
(a) Amendment to Paycheck Protection Program.--Section 1106(a)(8)
of the CARES Act is amended by inserting ``, except that such costs
shall not include qualified wages taken into account in determining the
credit allowed under section 2301 of this Act'' before the period at
the end.
(b) Amendments to Employee Retention Tax Credit.--
(1) In general.--Section 2301(g) of the CARES Act is
amended to read as follows:
``(g) Election To Not Take Certain Wages Into Account.--
``(1) In general.--This section shall not apply to
qualified wages paid by an eligible employer with respect to
which such employer makes an election (at such time and in such
manner as the Secretary may prescribe) to have this section not
apply to such wages.
``(2) Coordination with paycheck protection program.--The
Secretary, in consultation with the Administrator of the Small
Business Administration, shall issue guidance providing that
payroll costs paid or incurred during the covered period shall
not fail to be treated as qualified wages under this section by
reason of an election under paragraph (1) to the extent that a
covered loan of the eligible employer is not forgiven by reason
of a decision under section 1106(g). Terms used in the
preceding sentence which are also used in section 1106 shall
have the same meaning as when used in such section.''.
(2) Conforming amendments.--
(A) Section 2301 of the CARES Act is amended by
striking subsection (j).
(B) Section 2301(l) of the CARES Act is amended by
striking paragraph (3) and by redesignating paragraphs
(4) and (5) as paragraphs (3) and (4), respectively.
(c) Effective Date.--The amendments made by this section shall take
effect as if included in the provisions of the CARES Act to which they
relate.
<all>
Introduced in House
Introduced in House
Referred to the Committee on Ways and Means, and in addition to the Committee on Small Business, for a period to be subsequently determined by the Speaker, in each case for consideration of such provisions as fall within the jurisdiction of the committee concerned.
Referred to the Committee on Ways and Means, and in addition to the Committee on Small Business, for a period to be subsequently determined by the Speaker, in each case for consideration of such provisions as fall within the jurisdiction of the committee concerned.
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