To amend the Internal Revenue Code of 1986 to provide a tax credit to employers who employ members of the Ready Reserve or of the National Guard.

Summary: Amends the Internal Revenue Code to provide a business tax credit for employers of members of the Ready Reserve or National Guard absent from work on active duty.  Limits such credit to $2,000 with respect to any one Ready Reserve-National Guard employee.

SECTION 1. READY RESERVE-NATIONAL GUARD EMPLOYEE CREDIT ADDED TO 
              GENERAL BUSINESS CREDIT.

    (a) Ready Reserve-National Guard Credit.--Subpart D of part IV of 
subchapter A of chapter 1 of the Internal Revenue Code of 1986 
(relating to business related credits) is amended by adding at the end 
thereof the following new section:

``SEC. 45A. READY RESERVE-NATIONAL GUARD EMPLOYEE CREDIT.

    ``(a) General Rule.--For purposes of section 38, the Ready Reserve-
National Guard employee credit determined under this section for the 
taxable year is an amount equal to the sum of--
            ``(1) 50 percent of the actual compensation amount for the 
        taxable year, plus
            ``(2) 10 percent of the unpaid compensation amount for the 
        taxable year.
    ``(b) Definition of Actual Compensation Amount and Unpaid 
Compensation Amount.--For purposes of this section--
            ``(1) Actual compensation amount.--The term `actual 
        compensation amount' means the amount of compensation paid or 
        incurred by an employer with respect to a Ready Reserve-
        National Guard employee on any day during a taxable year when 
        the employee was absent from employment for the purpose of 
        performing qualified active duty.
            ``(2) Unpaid compensation amount.--The term `unpaid 
        compensation amount' means the amount of compensation which 
        ordinarily would have been paid or incurred by an employer with 
        respect to a Ready Reserve-National Guard employee on any day 
        during a taxable year but was not paid because the employee was 
        absent from employment for the purpose of performing qualified 
        active duty.
    ``(c) Limitations.--
            ``(1) Maximum credit.--The maximum credit allowable under 
        subsection (a) shall not exceed $2,000 in any taxable year with 
        respect to any one Ready Reserve-National Guard employee.
            ``(2) Days other than work days.--No credit shall be 
        allowed with respect to a Ready Reserve-National Guard employee 
        who performs qualified active duty on any day on which the 
        employee was not scheduled to work (for a reason other than to 
        participate in qualified active duty) and ordinarily would not 
        have worked.
    ``(d) Definitions.--For purposes of this section--
            ``(1) Qualified active duty.--The term `qualified active 
        duty' means--
                    ``(A) active duty, other than the training duty 
                specified in section 270(a) of title 10, United States 
                Code (relating to training requirements for the Ready 
                Reserve), or section 502(a) of title 32, United States 
                Code (relating to required drills and field exercises 
                for the National Guard), in connection with which an 
                employee is entitled to reemployment rights and other 
                benefits or to a leave of absence from employment under 
                section 2024 of title 38, United States Code, and
                    ``(B) hospitalization incident to such duty.
            ``(2) Compensation.--The term `compensation' means any 
        remuneration for employment, whether in cash or in kind--
                    ``(A) which is paid or incurred by a taxpayer and 
                which is deductible from the taxpayer's gross income 
                under section 162(a)(1), or
                    ``(B) which if paid would have been so deductible.
            ``(3) Ready reserve-national guard employee.--The term 
        `Ready Reserve-National Guard employee' means an employee who 
        is a member of the Ready Reserve or of the National Guard.
            ``(4) National guard.--The term `National Guard' has the 
        meaning given such term by section 101(9) of title 10, United 
        States Code.
            ``(5) Ready reserve.--The term `Ready Reserve' has the 
        meaning given such term by section 268 of title 10, United 
        States Code.''
    (b) General Business Credit.--
            (1) In general.--Subsection (b) of section 38 of such Code 
        (relating to general business credit) is amended by adding at 
        the end thereof the following new paragraph:
            ``(9) the Ready Reserve-National Guard employee credit 
        determined under section 45A(a).''
            (2) Clerical amendments.--Such subsection is further 
        amended--
                    (A) by striking ``plus'' in paragraph (7), and
                    (B) by striking the period at the end of paragraph 
                (8) and inserting ``, plus''.

SEC. 2. CONFORMING 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 inserting 
after the item relating to section 45 the following new item:

                              ``Sec. 45A. Ready Reserve-National Guard 
                                        employee credit.''

SEC. 3. EFFECTIVE DATE.

    The amendments made by this Act shall apply to taxable years 
beginning after December 31, 1992.