To impose a tax on Wall Street bonuses received from TARP recipients and direct revenue to mortgage workouts.

Summary: Recoupment of Wall Street Bonus Act - Imposes an additional income tax on bonuses paid to employees or former employees of covered Troubled Asset Relief Program (TARP) recipients. Defines "covered TARP recipient" to include: (1) entities and their affiliates that received capital infusions under the Emergency Economic Stabilization Act of 2008 exceeding $5 billion; and (2) the Federal National Mortgage Association (Fannie Mae) and the Federal Home Loan Mortgage Corporation (Freddie Mac). Exempts entities that repay TARP amounts exceeding a $5 billion threshold.

Sets the rate of such tax at 100% of the lesser of: (1) the bonus amounts paid; or (2) the amount of such taxpayer's adjusted gross income exceeding $250,000 ($125,000 in the case of a married individual filing a separate return). Exempts any employee who irrevocably waives or returns a bonus payment before the close of the taxable year in which such payment is due.

Requires tax revenues generated by this Act to be paid to the Department of Housing and Urban Development (HUD) to fund community development programs.

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Recoupment of Wall Street Bonus 
Act''.

SEC. 2. BONUSES RECEIVED FROM CERTAIN TARP RECIPIENTS.

    (a) In General.--In the case of an employee or former employee of a 
covered TARP recipient, the tax imposed by chapter 1 of the Internal 
Revenue Code of 1986 for any taxable year shall not be less than the 
sum of--
            (1) the tax that would be determined under such chapter if 
        the taxable income of the taxpayer for such taxable year were 
        reduced (but not below zero) by the TARP bonus received by the 
        taxpayer during such taxable year, plus
            (2) 100 percent of the TARP bonus received by the taxpayer 
        during such taxable year.
    (b) TARP Bonus.--For purposes of this section--
            (1) In general.--The term ``TARP bonus'' means, with 
        respect to any individual for any taxable year, the lesser of--
                    (A) the aggregate disqualified bonus payments 
                received from covered TARP recipients during such 
                taxable year, or
                    (B) the excess of--
                            (i) the adjusted gross income of the 
                        taxpayer for such taxable year, over
                            (ii) $250,000 ($125,000 in the case of a 
                        married individual filing a separate return).
            (2) Disqualified bonus payment.--
                    (A) In general.--The term ``disqualified bonus 
                payment'' means any retention payment, incentive 
                payment, or other bonus which is in addition to any 
                amount payable to such individual for service performed 
                by such individual at a regular hourly, daily, weekly, 
                monthly, or similar periodic rate.
                    (B) Exceptions.--Such term shall not include 
                commissions, welfare or fringe benefits, or expense 
                reimbursements.
                    (C) Waiver or return of payments.--Such term shall 
                not include any amount if the employee irrevocably 
                waives the employee's entitlement to such payment, or 
                the employee returns such payment to the employer, 
                before the close of the taxable year in which such 
                payment is due. The preceding sentence shall not apply 
                if the employee receives any benefit from the employer 
                in connection with the waiver or return of such 
                payment.
            (3) Reimbursement of tax treated as tarp bonus.--Any 
        reimbursement by a covered TARP recipient of the tax imposed 
        under subsection (a) shall be treated as a disqualified bonus 
        payment to the taxpayer liable for such tax.
    (c) Covered TARP Recipient.--For purposes of this section--
            (1) In general.--The term ``covered TARP recipient'' 
        means--
                    (A) any person who receives after December 31, 
                2007, capital infusions under the Emergency Economic 
                Stabilization Act of 2008 which, in the aggregate, 
                exceed $5,000,000,000,
                    (B) the Federal National Mortgage Association and 
                the Federal Home Loan Mortgage Corporation,
                    (C) any person who is a member of the same 
                affiliated group (as defined in section 1504 of the 
                Internal Revenue Code of 1986, determined without 
                regard to paragraphs (2) and (3) of subsection (b)) as 
                a person described in subparagraph (A) or (B), and
                    (D) any partnership if more than 50 percent of the 
                capital or profits interests of such partnership are 
                owned directly or indirectly by one or more persons 
                described in subparagraph (A), (B), or (C).
            (2) Exception for tarp recipients who repay assistance.--A 
        person shall be treated as described in paragraph (1)(A) for 
        any period only if--
                    (A) the excess of the aggregate amount of capital 
                infusions described in paragraph (1)(A) with respect to 
                such person over the amounts repaid by such person to 
                the Federal Government with respect to such capital 
                infusions, exceeds
                    (B) $5,000,000,000.
    (d) Other Definitions.--Terms used in this section which are also 
used in the Internal Revenue Code of 1986 shall have the same meaning 
when used in this section as when used in such Code.
    (e) Coordination With Internal Revenue Code of 1986.--Any increase 
in the tax imposed under chapter 1 of the Internal Revenue Code of 1986 
by reason of subsection (a) shall not be treated as a tax imposed by 
such chapter for purposes of determining the amount of any credit under 
such chapter or for purposes of section 55 of such Code.
    (f) Regulations.--The Secretary of the Treasury, or the Secretary's 
delegate, shall prescribe such regulations or other guidance as may be 
necessary or appropriate to carry out the purposes of this section.
    (g) Effective Date.--This section shall apply to disqualified bonus 
payments received after December 31, 2008, in taxable years ending 
after such date.

SEC. 3. DEPOSIT LOCATION FOR REVENUES RECEIVED UNDER SECTION 1.

    All tax revenue received as a result of section 1 shall be 
deposited in the appropriate account at the Department of Housing and 
Urban Development to fund programs under section 4.