To amend the Internal Revenue Code of 1986 to allow employers a refundable credit for increasing employment.

Summary: Hiring Incentives to Reinvest and Incentivize New Growth Act of 2010 or the HIRING Act of 2010 - Amends the Internal Revenue Code to allow employers, including tax-exempt employers, a refundable tax credit for increases in wages paid during 2010 and 2011.

Directs the Secretary of the Treasury to work with state employment agencies to inform businesses of the availability of the tax credit allowed by this Act.

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Hiring Incentives to Reinvest and 
Incentivize New Growth Act of 2010'' or the ``HIRING Act of 2010''.

SEC. 2. REFUNDABLE CREDIT FOR INCREASING EMPLOYMENT.

    (a) In General.--Subpart C of part IV of subchapter A of chapter 1 
of the Internal Revenue Code of 1986 (relating to refundable credits) 
is amended by inserting after section 36A the following new section:

``SEC. 36B. CREDIT FOR INCREASING EMPLOYMENT.

    ``(a) In General.--There shall be allowed as a credit against the 
tax imposed by this subtitle--
            ``(1) for any taxable year beginning in 2010, an amount 
        equal to 15 percent of the excess (if any) of--
                    ``(A) the aggregate wages paid during 2010, over
                    ``(B) the inflation-adjusted wages paid during 
                2009, and
            ``(2) for any taxable year beginning in 2011, an amount 
        equal to 10 percent of the excess (if any) of--
                    ``(A) the aggregate wages paid during 2011, over
                    ``(B) the inflation-adjusted wages paid during 
                2010.
    ``(b) Quarterly Advance Payments of Credit.--
            ``(1) In general.--The Secretary shall pay (without 
        interest) to each employer for each calendar quarter an amount 
        equal to the credit percentage of the excess (if any) of--
                    ``(A) the aggregate wages paid by the employer 
                during such quarter, over
                    ``(B) the inflation-adjusted wages paid by the 
                employer during the comparable quarter of the preceding 
                calendar year.
            ``(2) Credit percentage.--For purposes of paragraph (1), 
        the credit percentage is--
                    ``(A) 15 percent in the case of the calendar 
                quarters of 2010, and
                    ``(B) 10 percent in the case of the calendar 
                quarters of 2011.
            ``(3) Reconciliation.--
                    ``(A) In general.--If there is a payment under 
                paragraph (1) for 1 or more calendar quarters ending 
                with or within a taxable year, then the tax imposed by 
                this chapter for such taxable year shall be increased 
                by the aggregate amount of such payments.
                    ``(B) Reconciliation.--Any increase in tax under 
                subparagraph (A) shall not be treated as tax imposed by 
                this chapter for purposes of determining the amount of 
                any credit (other than the credit under subsection (a)) 
                allowable under this part.
            ``(4) Time for filing claim.--No claim shall be allowed 
        under this subsection with respect to any calendar quarter 
        unless filed on or before the earlier of--
                    ``(A) the last day of the succeeding quarter, or
                    ``(B) the time prescribed by law for filing the 
                return of tax imposed by this chapter for the taxable 
                year in which or with which such quarter ends.
            ``(5) Interest.--Notwithstanding paragraph (1), if the 
        Secretary has not paid pursuant to a claim filed under this 
        subsection within 45 days of the date of the filing of such 
        claim (20 days in the case of an electronic claim), the claim 
        shall be paid with interest from such date determined by using 
        the overpayment rate and method under section 6621.
    ``(c) Total Wages Must Increase.--The amount of credit allowed 
under this section for any taxable year shall not exceed the amount 
which would be so allowed for such year if--
            ``(1) the aggregate amounts taken into account as wages 
        were determined without any dollar limitation, and
            ``(2) 103 percent of the amount of wages otherwise required 
        to be taken into account under subsection (a)(1)(B) or 
        subsection (a)(2)(B), as the case may be, were taken into 
        account.
    ``(d) Inflation-Adjusted Wages; Wages.--For purposes of this 
section--
            ``(1) Inflation-adjusted wages.--
                    ``(A) In general.--The term `inflation-adjusted 
                wages' means, for any period--
                            ``(i) the aggregate wages paid by the 
                        employer during such period, increased by
                            ``(ii) an amount equal to the inflation 
                        percentage of such wages.
                    ``(B) Inflation percentage.--The inflation 
                percentage is--
                            ``(i) 3 percent for purposes of determining 
                        inflation-adjusted wages for periods during 
                        2009, and
                            ``(ii) 5 percent for purposes of 
                        determining inflation-adjusted wages for 
                        periods during 2010.
            ``(2) Wages.--
                    ``(A) In general.--Except as provided in 
                subparagraph (B), the term `wages' means, with respect 
                to any calendar year, so much of wages (as defined in 
                section 3121(a)) as does not exceed the median 
                household income in the United States for the preceding 
                calendar year.
                    ``(B) Railway labor.--In the case of remuneration 
                subject to the tax imposed by 3201(a), the term `wages' 
                means, with respect to any calendar year, so much of 
                compensation (as defined in section 3231(e)) as does 
                not exceed the median household income in the United 
                States for the preceding calendar year.
    ``(e) Special Rules.--
            ``(1) Adjustments for certain acquisitions, etc.--
                    ``(A) Acquisitions.--If, after December 31, 2008, 
                an employer acquires the major portion of a trade or 
                business of another person (hereinafter in this 
                subparagraph referred to as the `predecessor') or the 
                major portion of a separate unit of a trade or business 
                of a predecessor, then, for purposes of applying this 
                section for any calendar year ending after such 
                acquisition, the amount of wages deemed paid by the 
                employer during periods before such acquisition shall 
                be increased by so much of such wages paid by the 
                predecessor with respect to the acquired trade or 
                business as is attributable to the portion of such 
                trade or business acquired by the employer.
                    ``(B) Dispositions.--If, after December 31, 2008--
                            ``(i) an employer disposes of the major 
                        portion of any trade or business of the 
                        employer or the major portion of a separate 
                        unit of a trade or business of the employer in 
                        a transaction to which subparagraph (A) 
                        applies, and
                            ``(ii) the employer furnishes the acquiring 
                        person such information as is necessary for the 
                        application of subparagraph (A),
                then, for purposes of applying this section for any 
                calendar year ending after such disposition, the amount 
                of wages deemed paid by the employer during periods 
                before such disposition shall be decreased by so much 
                of such wages as is attributable to such trade or 
                business or separate unit.
            ``(2) Change in status from self-employed to employee.--
        If--
                    ``(A) during 2009 or 2010 an individual has net 
                earnings from self-employment (as defined in section 
                1402(a)) which are attributable a trade or business, 
                and
                    ``(B) for any portion of the succeeding calendar 
                year such individual is an employee of such trade or 
                business,
        then, for purposes of determining the credit allowable for a 
        taxable year beginning in such succeeding calendar year, the 
        employer's aggregate wages for 2009 or 2010, as the case may 
        be, shall be increased by an amount equal to so much of the net 
        earnings referred to in subparagraph (A) as does not exceed the 
        median household income in the United States for 2009 or 2010, 
        as the case may be.
            ``(3) Certain other rules to apply.--Rules similar to the 
        following rules shall apply for purposes of this section:
                    ``(A) Section 51(f) (relating to remuneration must 
                be for trade or business employment).
                    ``(B) Section 51(k) (relating to treatment of 
                successor employers; treatment of employees performing 
                services for other persons).
                    ``(C) Section 52 (relating to special rules).
            ``(4) Short taxable years.--If the employer has more than 1 
        taxable year beginning in 2010 or 2011, the credit under this 
        section shall be determined for the employer's last taxable 
        year beginning in 2010 or 2011, as the case may be.
    ``(f) Tax-Exempt Employers Treated as Taxpayers.--Solely for 
purposes of this section and section 6402, employers exempt from tax 
under section 501(a) shall be treated as taxpayers.''.
    (b) Denial of Double Benefit.--Subsection (a) of section 280C of 
such Code is amended by inserting ``36B(a),'' before ``45A(a)''.
    (c) Conforming Amendments.--
            (1) Section 1324(b)(2) of title 31, United States Code, is 
        amended by inserting ``36B,'' after ``36A,''.
            (2) The table of sections for subpart C of part IV of 
        subchapter A of chapter 1 of such Code is amended by inserting 
        after the item relating to section 36A the following new item:

``Sec. 36B. Credit for increasing employment.''.
    (d) Effective Date.--The amendments made by this section shall 
apply to taxable years beginning after December 31, 2009.
    (e) Notice of Availability of Credit.--The Secretary of the 
Treasury shall work with the State Employment Security Agencies to 
inform businesses of the availability of section 36B of the Internal 
Revenue Code of 1986 (as added by this Act).