Tax Incentives for Family-Friendly Workplaces Act of 1996

Summary: Tax Incentives for Family-Friendly Workplaces Act of 1996 - Amends the Internal Revenue Code to allow a small business family and medical leave credit and a credit for wages paid to employees who are permitted to shift employment hours or to work at home in order to reduce child care needs.

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Tax Incentives for Family-Friendly 
Workplaces Act of 1996''.

SEC. 2. SMALL BUSINESS FAMILY AND MEDICAL LEAVE CREDIT.

    (a) In General.--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 the following new section:

``SEC. 45C. SMALL BUSINESS FAMILY AND MEDICAL LEAVE CREDIT.

    ``(a) Amount of Credit.--For purposes of section 38, in the case of 
an eligible small business employer, the amount of the small business 
family and medical leave credit determined under this section for any 
taxable year shall be an amount equal to 50 percent of the qualified 
family and medical leave costs paid or incurred by the taxpayer during 
such taxable year.
    ``(b) Limitation on Credit.--The credit allowed by subsection (a) 
with respect to each employee for qualified family and medical leave 
costs paid or incurred by the taxpayer during the taxable year with 
respect to such employee shall not exceed $2,000.
    ``(c) Definitions.--For purposes of this section--
            ``(1) Eligible small business employer.--The term `eligible 
        small business employer' means any employer who complies with 
        title I of the Family and Medical Leave Act of 1993 but who is 
        not required to comply with such title by reason of employing 
        fewer than 50 employees during the periods described in section 
        101(4)(A) of such Act.
            ``(2) Qualified family and medical leave costs.--The term 
        `qualified family and medical leave costs' means expenses 
        incurred in connection with complying with title I of the 
        Family and Medical Leave Act of 1993.
    ``(d) Denial of Double Benefit.--No deduction shall be allowed 
under this chapter for that portion of the qualified family and medical 
leave costs otherwise allowable as a deduction for the taxable year 
which is equal to the amount of the credit determined for such taxable 
year under this section.''
    (b) Conforming Amendment.--Subsection (b) of section 38 of such 
Code is amended by striking ``plus'' at the end of paragraph (10), by 
striking the period at the end of paragraph (11) and inserting ``, 
plus'', and by adding at the end the following new paragraph:
            ``(12) in the case of an eligible small business employer 
        (as defined in section 45C(c)), the small business family and 
        medical leave credit determined under section 45C.''
    (c) Clerical Amendment.--The table of sections for subpart D of 
part IV of subchapter A of chapter 1 of such Code is amended by adding 
at the end the following new item:

                              ``Sec. 45C. Small business family and 
                                        medical leave credit.''
    (d) Effective Date.--The amendments made by this section shall 
apply to expenses paid or incurred after the date which is 6 months 
after the date of the enactment of this Act.

SEC. 3. CREDIT FOR WAGES PAID TO EMPLOYEE WHO IS ALLOWED TO SHIFT HOURS 
              OF EMPLOYMENT OR TO WORK AT HOME IN ORDER TO REDUCE CHILD 
              CARE NEEDS.

    (a) In General.--Subpart D of part IV of subchapter A of chapter 1 
of the Internal Revenue Code of 1986 (relating to business related 
credits), as amended by section 2, is amended by adding at the end the 
following new section:

``SEC. 45D. WAGES PAID TO EMPLOYEE WHO IS ALLOWED TO SHIFT HOURS OF 
              EMPLOYMENT OR WORK AT HOME IN ORDER TO REDUCE CHILD CARE 
              NEEDS.

    ``(a) In General.--For purposes of section 38, the amount of the 
child care-related wage credit determined under this section for any 
taxable year shall be an amount equal to \1/3\ of the aggregate wages 
paid or incurred during such year which are attributable to services 
performed by an employee of the taxpayer during the 1-year period 
beginning on the date the employee first becomes a qualified employee 
of the taxpayer.
    ``(b) Qualified Employee.--For purposes of this section, the term 
`qualified employee' means any full-time employee if--
            ``(1) such employee is permitted by the employer, solely in 
        order to reduce the amount of dependent care services provided 
        (to a dependent of the employee) outside the employee's 
        household, to perform services for the employer--
                    ``(A) at the employee's home, or
                    ``(B) during a period which is not within the 
                normal business hours of the employer, and
            ``(2) as a result of the services performed for the 
        employer as described in subparagraphs (A) and (B) of paragraph 
        (1), there is at least a 20 percent reduction in the amount of 
        time dependent care services are provided to a dependent of the 
        employee outside the employee's household.
    ``(c) Other Definitions and Special Rules.--For purposes of this 
section--
            ``(1) Employee must be qualified employee for entire 
        year.--No credit shall be determined under subsection (a) with 
        respect to any employee unless such employee is a qualified 
        employee throughout the 1-year period described in subsection 
        (a).
            ``(2) Only $6,000 of wages per year taken into account.--
        The amount of the wages which may be taken into account with 
        respect to any employee shall not exceed $6,000 per year.
            ``(3) Wages.--The term `wages' has the meaning given such 
        term by section 51(c) (determined without regard to paragraph 
        (4) thereof).
            ``(4) Certain rules to apply.--Rules similar to the rules 
        of section 52 and subsections (f), (g), (h), (i), and (k) of 
        section 51 shall apply.''
    (b) Conforming Amendment.--Subsection (b) of section 38 of such 
Code (relating to current year business credit), as amended by section 
2(b), is amended by striking ``plus'' at the end of paragraph (11), by 
striking the period at the end of paragraph (12) and inserting ``, 
plus'', and by adding at the end the following new paragraph:
            ``(13) the child care-related wage credit determined under 
        section 45D(a).''
    (c) Clerical Amendment.--The table of sections for subpart D of 
part IV of subchapter A of chapter 1 of such Code is amended by adding 
at the end the following new item:

                              ``Sec. 45D. Wages paid to employee who is 
                                        allowed to shift hours of 
                                        employment or work at home in 
                                        order to reduce child care 
                                        needs.''
    (d) Effective Date.--
            (1) In general.--The amendments made by this section shall 
        apply to wages paid or incurred after the date which is 6 
        months after the date of the enactment of this Act.
            (2) Employer practices before effective date.--For purposes 
        of section 45D(b)(2) of the Internal Revenue Code of 1986, as 
        added by this section, no reduction before the 1st taxable year 
        to which such section applies shall be taken into account.