A bill to amend the Internal Revenue Code of 1986 to provide work opportunity tax credits for the hiring of long-term unemployed workers.

Summary: Back to Work Tax Credit - Amends the Internal Revenue Code to allow an increased work opportunity tax credit for the hiring of a qualified long-term unemployed individual. Defines "qualified long-term unemployed individual" as any individual who was not a student for at least six months during the one-year period ending on the hiring date and is certified as having aggregate periods of unemployment during the one-year period ending on the hiring date which equal or exceed six months. Allows tax-exempt charitable organizations or public institutions of higher education to claim the lesser of the amount of the work opportunity credit or the amount of payroll taxes paid during the calendar year for hiring qualified long-term unemployed individuals.

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Back to Work Tax Credit''.

SEC. 2. LONG-TERM UNEMPLOYED WORKERS WORK OPPORTUNITY TAX CREDITS.

    (a) In General.--Paragraph (3) of section 51(b) of the Internal 
Revenue Code of 1986 is amended by inserting ``$10,000 per year in the 
case of any individual who is a qualified long term unemployed 
individual by reason of subsection (d)(11), and'' before ``$12,000 per 
year''.
    (b) Long-Term Unemployed Individuals.--
            (1) In general.--Paragraph (1) of section 51(d) of the 
        Internal Revenue Code of 1986 is amended by striking ``or'' at 
        the end of subparagraph (H), by striking the period at the end 
        of subparagraph (I) and inserting ``, or'', and by adding at 
        the end the following new subparagraph:
                    ``(J) a qualified long-term unemployed 
                individual.''.
            (2) Definition.--Subsection (d) of section 51 of such Code 
        is amended by redesignating paragraphs (11) through (14) as 
        paragraphs (12) through (15), respectively, and by inserting 
        after paragraph (10) the following new paragraph:
            ``(11) Qualified long-term unemployed individual.--
                    ``(A) In general.--The term `qualified long-term 
                unemployed individual' means any individual who was not 
                a student for at least 6 months during the 1-year 
                period ending on the hiring date and is certified by 
                the designated local agency as having aggregate periods 
                of unemployment during the 1-year period ending on the 
                hiring date which equal or exceed 6 months.
                    ``(B) Student.--For purposes of this paragraph, a 
                student is an individual enrolled at least half-time in 
                a program that leads to a degree, certificate, or other 
                recognized educational credential for at least 6 months 
                whether or not consecutive during the 1-year period 
                ending on the hiring date.''.
    (c) Simplified Certification.--Section 51(d) of the Internal 
Revenue Code of 1986, as amended by subsection (b)(2), is amended by 
adding at the end the following new paragraph:
            ``(16) Simplified certification for qualified long-term 
        unemployed individuals.--
                    ``(A) In general.--Any individual under paragraph 
                (11) will be treated as certified by the designated 
                local agency as having aggregate periods of 
                unemployment described in such paragraph if the 
                individual is certified by the designated local agency 
                as being in receipt of unemployment compensation under 
                State or Federal law for not less than 6 months during 
                the 1-year period ending on the hiring date.
                    ``(B) Regulatory authority.--The Secretary in the 
                Secretary's discretion may provide alternative methods 
                for certification under paragraph (11).''.
    (d) Credit Made Available to Tax-Exempt Employers in Certain 
Circumstances.--Section 52(c) of the Internal Revenue Code of 1986 is 
amended--
            (1) by striking ``No credit'' and inserting:
            ``(1) In general.--Except as provided in paragraph (2), 
        no'', and
            (2) by adding at the end the following new paragraph:
            ``(2) Exception.--
                    ``(A) In general.--In the case of any tax-exempt 
                employer, there shall be treated as a credit allowable 
                under subpart C (and not allowable under subpart D) the 
                lesser of--
                            ``(i) the amount of the work opportunity 
                        credit determined under this subpart with 
                        respect to such employer that is related to the 
                        hiring of qualified long-term unemployed 
                        individuals described in section 51(d)(11), or
                            ``(ii) the amount of the payroll taxes of 
                        the employer during the calendar year in which 
                        the taxable year begins.
                    ``(B) Credit amount.--In the case of any tax-exempt 
                employer, the work opportunity credit under 
                subparagraph (A) shall be determined by substituting 
                `26 percent' for `40 percent' in subsections (a) and 
                (i)(3)(A) of section 51 and by substituting `16.25 
                percent' for `25 percent' in section 51(i)(3)(A).
                    ``(C) Tax-exempt employer.--For purposes of this 
                paragraph, the term `tax-exempt employer' means an 
                employer which is--
                            ``(i) an organization described in section 
                        501(c) and exempt from taxation under section 
                        501(a), or
                            ``(ii) a public higher education 
                        institution (as defined in section 101 of the 
                        Higher Education Act of 1965).
                    ``(D) Payroll taxes.--For purposes of this 
                paragraph, the term `payroll taxes' means--
                            ``(i) amounts required to be withheld from 
                        the employees of the tax-exempt employer under 
                        section 3402(a),
                            ``(ii) amounts required to be withheld from 
                        such employees under section 3101, and
                            ``(iii) amounts of the taxes imposed on the 
                        tax-exempt employer under section 3111.''.
    (e) Treatment of Possessions.--
            (1) Payments to possessions.--
                    (A) Mirror code possessions.--The Secretary of the 
                Treasury shall pay to each possession of the United 
                States with a mirror code tax system amounts equal to 
                the loss to that possession by reason of the 
                application of the amendments made by this section 
                (other than this subsection). Such amounts shall be 
                determined by the Secretary of the Treasury based on 
                information provided by the government of the 
                respective possession of the United States.
                    (B) Other possessions.--The Secretary of the 
                Treasury shall pay to each possession of the United 
                States, which does not have a mirror code tax system, 
                amounts estimated by the Secretary of the Treasury as 
                being equal to the aggregate credits that would have 
                been provided by the possession by reason of the 
                application of the amendments made by this section 
                (other than this subsection) if a mirror code tax 
                system had been in effect in such possession. The 
                preceding sentence shall not apply with respect to any 
                possession of the United States unless such possession 
                has a plan, which has been approved by the Secretary of 
                the Treasury, under which such possession will promptly 
                distribute such payments.
            (2) Coordination with credit allowed against united states 
        income taxes.--No increase in the credit determined under 
        section 38(b) of the Internal Revenue Code of 1986 that is 
        attributable to the credit provided by the amendments made by 
        this section (other than this subsection) shall be taken into 
        account with respect to any person--
                    (A) to whom a credit is allowed against taxes 
                imposed by the possession of the United States by 
                reason of the amendments made by this section for such 
                taxable year, or
                    (B) who is eligible for a payment under a plan 
                described in paragraph (1)(B) with respect to such 
                taxable year.
            (3) Definitions and special rules.--
                    (A) Possession of the united states.--For purposes 
                of this subsection, the term ``possession of the United 
                States'' includes American Samoa, the Commonwealth of 
                the Northern Mariana Islands, the Commonwealth of 
                Puerto Rico, Guam, and the United States Virgin 
                Islands.
                    (B) Mirror code tax system.--For purposes of this 
                subsection, the term ``mirror code tax system'' means, 
                with respect to any possession of the United States, 
                the income tax system of such possession if the income 
                tax liability of the residents of such possession under 
                such system is determined by reference to the income 
                tax laws of the United States as if such possession 
                were the United States.
                    (C) Treatment of payments.--For purposes of section 
                1324(b)(2) of title 31, United States Code, rules 
                similar to the rules of section 1001(b)(3)(C) of the 
                American Recovery and Reinvestment Tax Act of 2009 
                shall apply.
    (f) Effective Date.--The amendments made by this section shall 
apply to individuals who begin work for the employer after the date of 
the enactment of this Act.