Reserve Employers Comprehensive Relief and Uniform Incentives on Taxes Act of 2021 or the RECRUIT Act of 2021
This bill allows employers with less than 500 employees a new tax credit for 40% of the wages paid to a member of the National Guard or a reserve component of the Armed Forces. The employer may elect to claim a payroll tax credit for wages paid to such service members.
[Congressional Bills 117th Congress]
[From the U.S. Government Publishing Office]
[H.R. 1854 Introduced in House (IH)]
<DOC>
117th CONGRESS
1st Session
H. R. 1854
To amend the Internal Revenue Code of 1986 to allow for a credit
against tax for employers of reservists.
_______________________________________________________________________
IN THE HOUSE OF REPRESENTATIVES
March 11, 2021
Mr. Ryan (for himself, Mr. Palazzo, Ms. Spanberger, Mr. Kelly of
Mississippi, Mr. Kilmer, Mrs. Bustos, Mrs. Radewagen, Mr. Moore of
Utah, Mr. Stauber, Mr. Crow, and Ms. Stefanik) 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 for a credit
against tax for employers of reservists.
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 ``Reserve Employers Comprehensive
Relief and Uniform Incentives on Taxes Act of 2021'' or as the
``RECRUIT Act of 2021''.
SEC. 2. RESERVIST EMPLOYMENT CREDIT.
(a) Allowance of Credit.--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:
``SEC. 45U. RESERVIST EMPLOYMENT CREDIT.
``(a) Establishment of Credit.--For purposes of section 38, in the
case of an eligible employer, the reservist employment credit for any
taxable year is an amount equal to 40 percent of the wages paid or
incurred to qualified reservists by such employer during such taxable
year.
``(b) Limitation.--
``(1) In general.--The reservist employment credit
determined under subsection (a), with respect to any qualified
reservist for any taxable year, shall not exceed the reservist
credit amount.
``(2) Reservist credit amount.--For purposes of this
section, the term `reservist credit amount' means, with respect
to a qualified reservist for a taxable year, an amount equal to
the sum of--
``(A) $1,000, plus
``(B) in the case of a qualified reservist--
``(i) with 30 or more days, and fewer than
90 days, of service in the uniformed services
during such year, $3,000,
``(ii) with 90 or more days, and fewer than
180 days, of service in the uniformed services
during such year, $5,000, and
``(iii) with 180 or more days of service in
the uniformed services during such year,
$10,000.
``(3) Days of service.--For purposes of paragraph (2), any
day of service--
``(A) shall not be taken into account if such day
constitutes regularly scheduled unit training or annual
training, and
``(B) shall only be taken into account with respect
to a qualified reservist employed by an eligible
employer to the extent such days are during a period of
employment of such reservist by such employer.
``(4) Qualified reservist.--The term `qualified reservist'
means, with respect to a taxable year, an individual who is, at
any time during such taxable year, a member of the National
Guard or a reserve component of the Armed Forces, as named in
section 10101 of title 10, United States Code (except for a
member of the Individual Ready Reserve).
``(5) Other definitions.--The term `reserve component' has
the meanings given such term in section 101 of title 10, United
States Code. The term `National Guard' has the meaning given
such term in section 101(3) of title 32, United States Code.
The term `service in the uniformed services' has the meaning
given such term in section 4303 of title 38, United States
Code.
``(c) Eligible Employer.--For purposes of this section, the term
`eligible employer' means any employer which has an average of less
than 500 employees employed on business days during the taxable year.
``(d) Aggregation Rule.--All persons treated as a single employer
under subsection (b), (c), (m), or (o) of section 414 shall be treated
as 1 employer for purposes of this section.
``(e) Election To Have Credit Not Apply.--
``(1) In general.--A taxpayer may elect to have this
section not apply for any taxable year.
``(2) Other rules.--Rules similar to the rules of
paragraphs (2) and (3) of section 51(j) shall apply for
purposes of this subsection.
``(f) Election to Treat Credit as Payroll Tax Credit.--
``(1) In general.--At the election of an eligible employer
for any taxable year, section 3111(g) shall apply to the
payroll tax credit portion of the credit otherwise determined
under subsection (a) for the taxable year and such portion
shall not be treated (other than for purposes of section 280C)
as a credit determined under subsection (a).
``(2) Payroll tax credit portion.--For purposes of this
subsection, the term `payroll tax credit portion' means the
lesser of--
``(A) the amount specified in the election made
under this subsection, or
``(B) the amount of the credit otherwise determined
under subsection (a) for the taxable year.
``(3) Election.--Any election under this subsection for any
taxable year--
``(A) shall specify the amount of the credit to
which such election applies,
``(B) shall be made on or before the due date
(including extensions) of--
``(i) in the case of an eligible employer
which is a partnership, the return required to
be filed under section 6031,
``(ii) in the case of an eligible employer
which is an S corporation, the return required
to be filed under section 6037, and
``(iii) in the case of any other eligible
employer, the return of tax for the taxable
year, and
``(C) may be revoked only with the consent of the
Secretary.''.
(b) Credit Part of General Business Credit.--Section 38(b) of the
Internal Revenue Code of 1986 is amended by striking ``plus'' 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:
``(34) in the case of an eligible employer (as defined in
section 45U(c)), the reservist employment credit determined
under section 45U(a).''.
(c) Credit Allowed Against AMT.--Subparagraph (B) of section
38(c)(4) of the Internal Revenue Code of 1986 is amended by
redesignating clauses (x) through (xii) as clauses (xi) through (xiii),
respectively, and by inserting after clause (ix) the following new
clause:
``(x) the credit determined under section
45U,''.
(d) Payroll Tax Credit.--Section 3111 of the Internal Revenue Code
of 1986 is amended by adding at the end the following new subsection:
``(g) Reservist Employment Credit.--
``(1) In general.--In the case of a taxpayer which has made
an election under section 45U(f) for a taxable year, there
shall be allowed as a credit against the tax imposed by
subsection (a) for the first calendar quarter which begins
after the date on which the taxpayer files the return specified
in section 45U(f)(3)(B) an amount equal to the payroll tax
credit portion determined under section 45U(f)(2).
``(2) Limitation.--
``(A) In general.--The credit allowed by paragraph
(1) shall not exceed the tax imposed by subsection (a)
for any calendar quarter on the wages paid with respect
to the employment of all individuals in the employ of
the employer. The limitation imposed by the preceding
sentence shall be applied to appropriately take into
account any other credits allowed against such tax in
such manner as the Secretary may provide.
``(B) Temporary refundability.--In the case of any
credit allowed by paragraph (1) with respect to a
payroll tax credit portion determined for a taxable
year beginning in 2021 or 2022, if the amount of such
credit exceeds the limitation of subparagraph (A) for
the calendar quarter, such excess shall be treated as
an overpayment that shall be refunded under sections
6402(a) and 6413(b) of such Code. For purposes of
section 1324 of title 31, United States Code, any
amounts due to an employer under this subparagraph
shall be treated in the same manner as a refund due
from a credit provision referred to in subsection
(b)(2) of such section.
``(C) Carryover.--In the case of any credit allowed
by paragraph (1) with respect to a payroll tax credit
portion determined for a taxable year beginning after
2022, if the amount of such credit exceeds the
limitation of subparagraph (A) for any calendar
quarter, such excess shall be carried to the succeeding
calendar quarter and allowed as a credit under
paragraph (1) for such quarter.
``(3) Deduction allowed for credited amounts.--The credit
allowed under paragraph (1) shall not be taken into account for
purposes of determining the amount of any deduction allowed
under chapter 1 for taxes imposed under subsection (a).''.
(e) Conforming Amendments.--
(1) Denial of double benefit.--Section 280C(a) of the
Internal Revenue Code of 1986 is amended by inserting
``45U(a),'' after ``45S(a),''.
(2) Election to have credit not apply.--Section 6501(m) of
the Internal Revenue Code of 1986 is amended by inserting
``45U(d),'' after ``45H(g),''.
(3) 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. 45U. Reservist employment credit.''.
(f) Effective Date.--The amendments made by this section shall
apply to wages paid in taxable years beginning after December 31, 2020.
<all>
Introduced in House
Introduced in House
Referred to the House Committee on Ways and Means.
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