To amend the Internal Revenue Code of 1986 to provide tax relief for obtaining transportation worker identification credentials.

Summary: Tax Relief for Transportation Workers Act of 2008 - Amends the Internal Revenue Code to allow: (1) individuals a refundable tax credit for the qualified expenses incurred in obtaining a transportation worker identification credential; and (2) employers a deduction equal to 40% of the aggregate qualified expenses paid or incurred in obtaining such credentials on behalf of their employees.

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Tax Relief for Transportation 
Workers Act of 2008''.

SEC. 2. REFUNDABLE CREDIT FOR OBTAINING TRANSPORTATION WORKER 
              IDENTIFICATION CREDENTIALS.

    (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 redesignating section 36 as section 37 and by inserting 
after section 35 the following new section:

``SEC. 36. TRANSPORTATION WORKER IDENTIFICATION CREDENTIALS.

    ``(a) Allowance of Credit.--In the case of an individual, there 
shall be allowed as a credit against the tax imposed by this chapter 
for the taxable year an amount equal to the qualified expenses paid or 
incurred in obtaining a valid transportation worker identification 
credential.
    ``(b) Limitation.--
            ``(1) In general.--The amount allowed as a credit under 
        subsection (a) for a taxable year shall not exceed the sum of 
        the taxpayer's regular tax liability and Social Security taxes 
        for the taxable year.
            ``(2) Regular tax liability and social security taxes 
        defined.--For purposes of paragraph (1), the term `regular tax 
        liability' has the meaning given such term by section 26(b) and 
        the term `Social Security taxes' has the meaning given such 
        term by section 24(d)(2).
    ``(c) Definitions.--For purposes of this section--
            ``(1) Qualified expenses.--The term `qualified expenses' 
        includes--
                    ``(A) any fee imposed under section 70105 of title 
                46, United States Code, and
                    ``(B) 40 percent of reasonable legal expenses and 
                any other expense reasonably incurred in obtaining a 
                valid transportation worker identification credential.
            ``(2) Transportation worker identification credential.--The 
        term `transportation worker identification credential' means 
        the credential issued under section 70105 of title 46, United 
        States Code.
    ``(d) Denial of Double Benefit.--No credit shall be allowed under 
subsection (a) for any expense for which a deduction is allowed under 
any other provision of this chapter.''.
    (b) Conforming Amendments.--
            (1) Paragraph (2) of section 1324(b) of title 31, United 
        States Code, is amended by inserting before the period ``or 
        from section 36 of such Code''.
            (2) The table of sections for subpart C of part IV of 
        subchapter A of chapter 1 of such Code is amended by striking 
        the item relating to section 36 and inserting the following new 
        items:

``Sec. 36. Transportation worker identification credentials.
``Sec. 37. Overpayments of tax.''.
    (c) Effective Date.--The amendments made by this section shall 
apply to expenses paid or incurred before, on, or after the date of the 
enactment of this Act.

SEC. 3. DEDUCTION FOR OBTAINING TRANSPORTATION WORKER IDENTIFICATION 
              CREDENTIALS ON BEHALF OF EMPLOYEES.

    (a) In General.--Part VI of subchapter B of chapter 1 of the 
Internal Revenue Code of 1986 (relating to itemized deductions for 
individuals and corporations) is amended by adding at the end the 
following new section:

``SEC. 200. TRANSPORTATION WORKER IDENTIFICATION CREDENTIALS OBTAINED 
              ON BEHALF OF EMPLOYEES.

    ``(a) Allowance of Credit.--In the case of an employer, there shall 
be allowed as a deduction an amount equal to 40 percent of the 
aggregate qualified expenses paid or incurred in obtaining valid 
transportation worker identification credentials on behalf of its 
employees.
    ``(b) Definitions.--For purposes of this section--
            ``(1) Qualified expenses.--The term `qualified expenses' 
        includes--
                    ``(A) any fee imposed under section 70105 of title 
                46, United States Code, and
                    ``(B) reasonable legal expenses and any other 
                expenses reasonably incurred in obtaining a valid 
                transportation worker identification credential.
            ``(2) Transportation worker identification credential.--The 
        term `transportation worker identification credential' means 
        the credential issued under section 70105 of title 46, United 
        States Code.
            ``(3) Employee.--The term `employee' has the same meaning 
        as when used within the meaning of section 401(c)(1).
    ``(c) Election to Not Take Deduction.--No deduction shall be 
allowed under subsection (a) for any expense if the taxpayer elects not 
to have this section apply to such expense.''.
    (b) Clerical Amendment.--The table of sections for part VI of 
subchapter B of chapter 1 of such Code is amended by inserting at the 
end the following new item:

``Sec. 200. Transportation worker identification credentials obtained 
                            on behalf of employees.''.
    (c) Effective Date.--The amendments made by this section shall 
apply to amounts paid or incurred after the date of the enactment of 
this Act.