Community Employment Partnership Act of 1997

Summary: Community Employment Partnership Act of 1997 - Amends the Internal Revenue Code to set forth, as a general rule, that the amount equal to the work opportunity credit amount with respect to any wages paid for any calendar quarter by an eligible tax-exempt employer shall be treated as payment by such employer of such employer's tax liability for such calendar quarter.

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Community Employment Partnership Act 
of 1997''.

SEC. 2. TREATMENT OF WORK OPPORTUNITY WAGES AS PAYMENT OF EMPLOYMENT 
              TAX LIABILITY.

    (a) In General.--Chapter 25 of the Internal Revenue Code of 1986 
(relating to general provisions relating to employment taxes) is 
amended by inserting after section 3510 the following new section:

``SEC. 3511. TREATMENT OF WORK OPPORTUNITY WAGES AS PAYMENT OF 
              EMPLOYMENT TAX LIABILITY.

    ``(a) General Rule.--For purposes of this title, the amount equal 
to the work opportunity credit amount with respect to any wages paid 
for any calendar quarter by an eligible tax-exempt employer shall be 
treated as a payment by such employer of such employer's employment tax 
liability for such calendar quarter.
    ``(b) Work Opportunity Credit Amount.--For purposes of this 
section, the work opportunity credit amount for any calendar quarter is 
the amount of the credit determined under section 51 (relating to work 
opportunity credit) in accordance with the following:
            ``(1) Applicable percentages.--
                    ``(A) Individuals performing at least 400 hours of 
                services.--In the case of an individual who has 
                completed at least 400 hours of services performed for 
                the eligible tax-exempt employer, subsection (a) of 
                section 51 shall be applied by substituting `30 
                percent' for `40 percent'.
                    ``(B) Individuals performing fewer than 400 hours 
                of services.--In the case of an individual who has 
                completed at least 120 hours, but less than 400 hours, 
                of services performed for the eligible tax-exempt 
                employer, subsection (a) of section 51 shall be applied 
                by substituting `20 percent' for `40 percent'.
                    ``(C) Denial of credit for individuals performing 
                fewer than 120 hours of services.--No wages shall be 
                taken into account for purposes of this section with 
                respect to any individual unless such individual has 
                completed at least 120 hours of services performed for 
                the employer.
                    ``(D) Quarterly estimate of annual hours of 
                services to be performed.--For purposes of 
                subparagraphs (A), (B), and (C), in lieu of the hours 
                of services actually performed by an individual during 
                any of the first 3 quarters of a calendar year, an 
                employer may make an estimate of the hours of services 
                an individual is reasonably expected to perform for the 
                employer in such calendar year. The employer shall 
adjust the deemed payments in accordance with subsection (c) for the 
last quarter of such calendar year to reflect the hours of services 
actually performed by such individual in such calendar year.
            ``(2) Eligible tax-exempt employer.--The term `eligible 
        tax-exempt employer' means any organization which is exempt 
        from tax under subtitle A other than--
                    ``(A) any governmental unit, and
                    ``(B) any agency or instrumentality of a 
                governmental unit.
    ``(c) Coordination With Depository Requirements.--
            ``(1) In general.--Any employer who is entitled to treat 
        any amount as a payment under subsection (a) for any calendar 
        quarter may reduce, in such manner as the Secretary may by 
        regulations prescribe, by a like amount, the amount otherwise 
        required to be deposited during such quarter by reason of the 
        employment tax liability of such employer.
            ``(2) Quarterly determinations.--The amount of reduction 
        permitted under paragraph (1) for any calendar quarter shall be 
        based on a separate estimate for such quarter of the amount of 
        deemed payments to which the employer reasonably expects to be 
        entitled under subsection (a) for the calendar year which 
        includes such quarter and shall be properly adjusted (under 
        regulations prescribed by the Secretary) to reflect the amount 
        by which prior reductions under subsection (a) during such 
        calendar year were in excess of, or less than, the amounts 
        which would be proper under such estimate.
            ``(3) Year-end adjustments.--
                    ``(A) Excess of deemed payments allowable over 
                depository benefit claimed.--If the amount of deemed 
                payments to which an employer is entitled under 
                subsection (a) for any calendar year exceeds the amount 
                claimed by the employer under paragraph (1) during such 
                year, such excess shall be treated for purposes of this 
                title as an overpayment made by such employer. For 
                purposes of determining interest, such overpayment 
                shall be treated as made on January 31 of the following 
                calendar year.
                    ``(B) Depository benefit claimed exceeds deemed 
                payment allowable.--If the amount claimed by the 
                employer under paragraph (1) during the calendar year 
                exceeds the amount of deemed payments to which such 
                employer is entitled under subsection (a) for such 
                year, such excess shall be treated for purposes of this 
                title as an underpayment of the tax imposed by this 
                chapter for such calendar year. For purposes of 
                determining interest, such underpayment shall be 
                allocated ratably among the calendar quarters in such 
                year (or in such other manner as the Secretary may by 
                regulations prescribe).
    ``(d) Payment Treated as Made on Due Date.--Notwithstanding 
subsection (c), for purposes of determining interest, any deemed 
payment under subsection (a) for any calendar quarter shall be treated 
as made on the due date for the return for such quarter.
    ``(e) Employment Tax Liability.--For purposes of this section, the 
term `employment tax liability' means liability for the taxes imposed 
by chapters 21 and 24.
    ``(f) Social Security Trust Funds.--This section shall not be 
construed to affect amounts appropriated under sections 201 and 1817(a) 
of the Social Security Act.''
    (b) Clerical Amendment.--The table of sections for chapter 25 of 
such Code is amended by adding at the end the following new item:

                              ``Sec. 3511. Treatment of work 
                                        opportunity wages as payment of 
                                        employment tax liability.''
    (c) 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.