small business jobs act of 2015

.....................................................................

(Original Signature of Member)

114TH CONGRESS 1ST SESSION H. R. ll To amend the Internal Revenue Code of 1986 to allow a credit to small

employers for certain newly hired employees, and for other purposes.

IN THE HOUSE OF REPRESENTATIVES

Mr. AGUILAR introduced the following bill; which was referred to the Committee on llllllllllllll

A BILL To amend the Internal Revenue Code of 1986 to allow a

credit to small employers for certain newly hired employ-ees, and for other purposes.

Be it enacted by the Senate and House of Representa-1

tives of the United States of America in Congress assembled, 2

SECTION 1. SHORT TITLE. 3

This Act may be cited as the Small Business Jobs 4

Act of 2015. 5

VerDate Nov 24 2008 15:47 Jul 20, 2015 Jkt 000000 PO 00000 Frm 00001 Fmt 6652 Sfmt 6201 C:\USERS\EWBALLOU\APPDATA\ROAMING\SOFTQUAD\XMETAL\7.0\GEN\C\AGUILA~1.XJuly 20, 2015 (3:47 p.m.)

F:\M14\AGUILA\AGUILA_003.XML

f:\VHLC\072015\072015.242.xml (596640|6)

2 SEC. 2. CREDIT FOR CERTAIN INDIVIDUALS HIRED BY A 1

SMALL EMPLOYER. 2

(a) IN GENERAL.Subpart D of part IV of sub-3

chapter A of chapter 1 of the Internal Revenue Code of 4

1986 is amended by adding at the end the following: 5

SEC. 45S. CERTAIN INDIVIDUALS HIRED BY A SMALL EM-6

PLOYER. 7

(a) GENERAL RULE.For purposes of section 38, 8

in the case of an eligible small employer, the small em-9

ployer hiring credit determined under this section for any 10

taxable year is the amount determined under subsection 11

(b). 12

(b) SMALL EMPLOYER HIRING CREDIT AMOUNT. 13

The amount determined under this subsection for a tax-14

able year with respect to a qualified small employer is the 15

product of 16

(1) the tax rate in effect under section 17

3111(a) for the calendar year in which such taxable 18

year ends, multiplied by 19

(2) the wages paid by the qualified small em-20

ployer with respect to employment of all covered em-21

ployees during the taxable year. 22

(c) QUALIFIED EMPLOYER.For purposes of this 23

subsection 24



f:\VHLC\072015\072015.242.xml (596640|6)

3

(1) IN GENERAL.The term qualified small 1

employer means with respect to any calendar year, 2

an employer who 3

(A) has a place of business in a county 4

with an annual unemployment rate for the pre-5

ceding calendar year of at least one percentage 6

point greater than the national annual unem-7

ployment rate for the preceding calendar year, 8

and 9

(B) who on no business day of the pre-10

ceding calendar year employed less than 2, or 11

more than 100, employees. 12

(2) EMPLOYERS NOT IN EXISTENCE IN PRE-13

CEDING YEAR.In the case of an employer which 14

was not in existence throughout the preceding cal-15

endar year, the determination of whether such em-16

ployer is a small employer shall be based on the 17

number of employees that it is reasonably expected 18

such employer will employ on business days in the 19

current calendar year. 20

(3) SPECIAL RULES.For purposes of this 21

subsection 22

(A) PREDECESSOR AND SUCCESSOR. 23

Any reference in this paragraph to an employer 24



f:\VHLC\072015\072015.242.xml (596640|6)

4

shall include a reference to any predecessor of, 1

or successor to, such employer. 2

(B) AGGREGATION RULE.All persons 3

treated as a single employer under subsection 4

(b), (c), (m), or (o) of section 414 shall be 5

treated as one employer. 6

(C) GOVERNMENTAL EMPLOYERS NOT IN-7

CLUDED.The term employer does not in-8

clude the United States, any State, or any polit-9

ical subdivision thereof, or any instrumentality 10

of the foregoing. 11

(D) DETERMINATION OF UNEMPLOYMENT 12

RATE.The unemployment rate shall be the 13

rate determined by the Bureau of Labor Statis-14

tics. 15

(4) CREDIT APPLIES FOR ONLY 1 YEAR.If 16

an election to claim the credit under this section is 17

in effect for any calendar year, paragraph (1) shall 18

not apply to such employer for any year after such 19

calendar year. 20

(d) COVERED EMPLOYEE.For purposes of this 21

subsection 22

(1) IN GENERAL.The term covered em-23

ployee means, with respect to any week, is an em-24

ployee who 25



f:\VHLC\072015\072015.242.xml (596640|6)

5

(A) first begins work for the employer for 1

services performed by the employee 2

(i) in a trade or business of such 3

qualified small employer, or 4

(ii) in the case of a qualified small 5

employer exempt from tax under section 6

501(a), in furtherance of the activities re-7

lated to the purpose or function consti-8

tuting the basis of the employers exemp-9

tion under section 501, and 10

(B) is employed on average at least 30 11

hours of service per week. 12

(2) LIMITATION TO 5 EMPLOYEES.An em-13

ployer may not treat more than 5 employees as cov-14

ered employees. 15

(3) HOURS OF SERVICE.The Secretary, in 16

consultation with the Secretary of Labor, shall pre-17

scribe such regulations, rules, and guidance as may 18

be necessary to determine the hours of service of an 19

employee, including rules for the application of this 20

paragraph to employees who are not compensated on 21

an hourly basis. 22

(e) CREDIT MADE AVAILABLE TO TAX-EXEMPT EL-23

IGIBLE SMALL EMPLOYERS. 24



f:\VHLC\072015\072015.242.xml (596640|6)

6

(1) IN GENERAL.In the case of a tax-exempt 1

eligible small employer, there shall be treated as a 2

credit allowable under subpart C (and not allowable 3

under this subpart) the amount of the credit deter-4

mined under this section with respect to such em-5

ployer. 6

(2) TAX-EXEMPT ELIGIBLE SMALL EM-7

PLOYER.For purposes of this section, the term 8

tax-exempt eligible small employer means an eligi-9

ble small employer which is any organization de-10

scribed in section 501(c) which is exempt from tax-11

ation under section 501(a). 12

(f) DENIAL OF DOUBLE BENEFIT.No deduction 13

or credit shall be allowed under any other provision of this 14

chapter with respect to the amount of the credit deter-15

mined under this section. 16

(g) ELECTION.This section shall apply to any tax-17

payer for any taxable year only if such taxpayer elects (at 18

such time and in such manner as the Secretary may by 19

regulations prescribe) to have this section apply for such 20

taxable year. 21

(h) TERMINATION.This section shall not apply 22

with respect to wages paid after December 31, 2017.. 23

(b) CREDIT TO BE PART OF GENERAL BUSINESS 24

CREDIT.Section 38(b) of the Internal Revenue Code of 25



f:\VHLC\072015\072015.242.xml (596640|6)

7

1986 (relating to current year business credit) is amended 1

by striking plus at the end of paragraph (35), by strik-2

ing the period at the end of paragraph (36) and inserting 3

, plus, and by inserting after paragraph (36) the fol-4

lowing: 5

(37) the small employer small employer hiring 6

credit determined under section 45S.. 7

(c) CLERICAL AMENDMENT.The table of sections 8

for subpart D of part IV of subchapter A of chapter 1 9

of the Internal Revenue Code of 1986 is amended by add-10

ing at the end the following: 11Sec. 45S. Certain individuals hired by a small employer..

(d) EFFECTIVE DATE.The amendments made by 12

this section shall apply to amounts paid or incurred in tax-13

able years beginning after December 31, 2015. 14



f:\VHLC\072015\072015.242.xml (596640|6)

F:\M14\AGUILA\AGUILA_003.XML 7/20/2015 15:47 04/01/2015 15:46 1141-0401-640370 596640|6 [Discussion Draft] (Original Signature of Member) [DISCUSSION DRAFT] I 114th CONGRESS 1st Session H. R. __ IN THE HOUSE OF REPRESENTATIVES Mr. Aguilar introduced the following bill; which was referred to the Committee on ______________ A BILL To amend the Internal Revenue Code of 1986 to allow a credit to small employers for certain newly hired employees, and for other purposes. 1. Short title This Act may be cited as the Small Business Jobs Act of 2015. 2. Credit for certain individuals hired by a small employer (a) 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: 45S. Certain individuals hired by a small employer (a) General Rule For purposes of section 38, in the case of an eligible small employer, the small employer hiring credit determined under this section for any taxable year is the amount determined under subsection (b). (b) Small employer hiring credit amount The amount determined under this subsection for a taxable year with respect to a qualified small employer is the product of (1) the tax rate in effect under section 3111(a) for the calendar year in which such taxable year ends, multiplied by (2) the wages paid by the qualified small employer with respect to employment of all covered employees during the taxable year. (c) Qualified employer For purposes of this subsection (1) In general The term qualified small employer means with respect to any calendar year, an employer who (A) has a place of business in a county with an annual unemployment rate for the preceding calendar year of at least one percentage point greater than the national annual unemployment rate for the preceding calendar year, and (B) who on no business day of the preceding calendar year employed less than 2, or more than 100, employees. (2) Employers not in existence in preceding year In the case of an employer which was not in existence throughout the preceding calendar year, the determination of whether such employer is a small employer shall be based on the number of employees that it is reasonably expected such employer will employ on business days in the current calendar year. (3) Special rules For purposes of this subsection (A) Predecessor and successor Any reference in this paragraph to an employer shall include a reference to any predecessor of, or successor to, such employer. (B) Aggregation rule All persons treated as a single employer under subsection (b), (c), (m), or (o) of section 414 shall be treated as one employer. (C) Governmental employers not included The term employer does not include the United States, any State, or any political subdivision thereof, or any instrumentality of the foregoing. (D) Determination of unemployment rate The unemployment rate shall be the rate determined by the Bureau of Labor Statistics. (4) Credit applies for only 1 year If an election to claim the credit under this section is in effect for any calendar year, paragraph (1) shall not apply to such employer for any year after such calendar year. (d) Covered employee For purposes of this subsection (1) In general The term covered employee means, with respect to any week, is an employee who (A) first begins work for the employer for services performed by the employee (i) in a trade or business of such qualified small employer, or (ii) in the case of a qualified small employer exempt from tax under section 501(a), in furtherance of the activities related to the purpose or function constituting the basis of the employers exemption under section 501, and (B) is employed on average at least 30 hours of service per week. (2) Limitation to 5 employees An employer may not treat more than 5 employees as covered employees. (3) Hours of service The Secretary, in consultation with the Secretary of Labor, shall prescribe such regulations, rules, and guidance as may be necessary to determine the hours of service of an employee, including rules for the application of this paragraph to employees who are not compensated on an hourly basis. (e) Credit made available to tax-exempt eligible small employers (1) In general In the case of a tax-exempt eligible small employer, there shall be treated as a credit allowable under subpart C (and not allowable under this subpart) the amount of the credit determined under this section with respect to such employer. (2) Tax-exempt eligible small employer For purposes of this section, the term tax-exempt eligible small employer means an eligible small employer which is any organization described in section 501(c) which is exempt from taxation under section 501(a). (f) Denial of double benefit No deduction or credit shall be allowed under any other provision of this chapter with respect to the amount of the credit determined under this section. (g) Election This section shall apply to any taxpayer for any taxable year only if such taxpayer elects (at such time and in such manner as the Secretary may by regulations prescribe) to have this section apply for such taxable year. (h) Termination This section shall not apply with respect to wages paid after December 31, 2017. . (b) Credit to Be Part of General Business Credit Section 38(b) of the Internal Revenue Code of 1986 (relating to current year business credit) is amended by striking plus at the end of paragraph (35), by striking the period at the end of paragraph (36) and inserting ", plus", and by inserting after paragraph (36) the following: (37) the small employer small employer hiring credit determined under section 45S. . (c) 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: Sec.45S.Certain individuals hired by a small employer. . (d) Effective date The amendments made by this section shall apply to amounts paid or incurred in taxable years beginning after December 31, 2015.

small business jobs act of 2015

Documents