Veterans Back to Work Act of 2017

Summary: Veterans Back to Work Act of 2017   This bill amends the Internal Revenue Code to: (1) make permanent the work opportunity tax credit for hiring qualified veterans (veterans receiving compensation for a service-connected disability and other federal assistance), and (2) allow employers who hire qualified veterans to elect to claim the tax credit as an exemption from employment and railroad retirement taxes for such veterans' first-year wages, subject to specified limitations.  The bill appropriates amounts to the Social Security trust funds and the Social Security Equivalent Benefit Account to cover any revenue loss to such funds resulting from this bill. 

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Veterans Back to Work Act of 2017''.

SEC. 2. EXTENSION AND IMPROVEMENT OF WORK OPPORTUNITY TAX CREDIT FOR 
              VETERANS.

    (a) Credit Made Permanent for Veterans.--Section 51(c)(4) of the 
Internal Revenue Code of 1986 is amended by inserting ``(other than a 
qualified veteran)'' after ``an individual''.
    (b) Election To Claim Credit as Exemption From Employment Taxes.--
            (1) In general.--Section 3111 of the Internal Revenue Code 
        of 1986 is amended by adding at the end the following new 
        subsection:
    ``(g) Special Exemption for Certain Veterans.--
            ``(1) In general.--Subsection (a) shall not apply to first-
        year wages paid after the date of the enactment of this 
        subsection by a qualified employer with respect to employment 
        of any specified veteran for services performed--
                    ``(A) in a trade or business of such qualified 
                employer, or
                    ``(B) in the case of a qualified employer exempt 
                from tax under section 501(a), in furtherance of the 
                activities related to the purpose or function 
                constituting the basis of the employer's exemption 
                under section 501.
            ``(2) Limitation.--With respect to any specified veteran 
        employed by a qualified employer, the amount of wages to which 
        paragraph (1) applies shall not exceed--
                    ``(A) $125,490 in the case of an individual who is 
                a qualified veteran by reason of section 
                51(d)(3)(A)(ii)(II),
                    ``(B) $73,203 in the case of an individual who is a 
                qualified veteran by reason of section 51(d)(3)(A)(iv),
                    ``(C) $62,745 in the case of an individual who is a 
                qualified veteran by reason of section 
                51(d)(3)(A)(ii)(I), and
                    ``(D) $31,373 in the case of any other qualified 
                veteran.
            ``(3) Qualified employer.--For purposes of this 
        subsection--
                    ``(A) In general.--The term `qualified employer' 
                means any employer other than the United States, any 
                State, or any political subdivision thereof, or any 
                instrumentality of the foregoing.
                    ``(B) Treatment of employees of post-secondary 
                educational institutions.--Notwithstanding subparagraph 
                (A), the term `qualified employer' includes any 
                employer which is a public institution of higher 
                education (as defined in section 101(b) of the Higher 
                Education Act of 1965).
            ``(4) Specified veteran.--For purposes of this subsection--
                    ``(A) In general.--The term `specified veteran' 
                means any individual who--
                            ``(i) begins employment with a qualified 
                        employer after the date of the enactment of 
                        this subsection,
                            ``(ii) certifies by signed affidavit, under 
                        penalties of perjury, that such individual is a 
                        qualified veteran and whether such individual 
                        is a qualified veteran described in 
                        subparagraph (A), (B), or (C) of paragraph (2),
                            ``(iii) is not employed by the qualified 
                        employer to replace another employee of such 
                        employer unless such other employee separated 
                        from employment voluntarily or for cause, and
                            ``(iv) is not an individual described in 
                        section 51(i)(1) (applied by substituting 
                        `qualified employer' for `taxpayer' each place 
                        it appears).
                    ``(B) Qualified veteran.--The term `qualified 
                veteran' has the meaning given such term by section 
                51(d)(3), but applied without regard to whether such 
                individual has been certified by the designated local 
                agency.
            ``(5) First-year wages.--For purposes of this subsection, 
        the term `first-year wages' means, with respect to any 
        individual, wages for services rendered during the 1-year 
        period beginning with the day the individual begins work for 
        the employer.
            ``(6) Coordination with credit for employment of qualified 
        veterans by qualified tax-exempt organizations.--This 
        subsection shall not apply with respect to the first-year wages 
        of any individual if such wages are taken into account in 
        determining the credit allowed under subsection (e).
            ``(7) Election.--A qualified employer may elect to have 
        this subsection not apply with respect to the first-year wages 
        of any individual. Such election shall be made in such manner 
        as the Secretary may require.''.
            (2) Coordination with work opportunity credit.--Section 
        51(c) of such Code is amended by adding at the end the 
        following new paragraph:
            ``(6) Coordination with payroll tax exemption for qualified 
        veterans.--The credit determined under this section with 
        respect to any qualified veteran for any taxable year shall be 
        reduced by an amount equal to 7.65 percent of the qualified 
        first-year wages paid or incurred by the taxpayer to such 
        veteran during such taxable year to which section 3111(g) or 
        3221(d) applied.''.
            (3) Coordination with credit for employment of qualified 
        veterans by qualified tax-exempt organizations.--Section 
        3111(e) of such Code is amended by adding at the end the 
        following new paragraph:
            ``(6) Election.--
                    ``(A) In general.--A qualified tax-exempt 
                organization may elect to determine the credit allowed 
                under this section without regard to the qualified 
                first-year wages of any individual.
                    ``(B) Coordination with exemption for first-year 
                wages of specified veterans.--For exemption for first-
                year wages of specified veterans to which this 
                subsection does not apply, see subsection (f).''.
            (4) Transfers to federal old-age and survivors insurance 
        trust fund.--There are hereby appropriated to the Federal Old-
        Age and Survivors Trust Fund and the Federal Disability 
        Insurance Trust Fund established under section 201 of the 
        Social Security Act (42 U.S.C. 401) amounts equal to the 
        reduction in revenues to the Treasury by reason of the 
        amendments made by paragraph (1). Amounts appropriated by the 
        preceding sentence shall be transferred from the general fund 
        at such times and in such manner as to replicate to the extent 
        possible the transfers which would have occurred to such Trust 
        Fund had such amendments not been enacted.
            (5) Application to railroad retirement taxes.--
                    (A) In general.--Section 3221 of the Internal 
                Revenue Code of 1986 is amended by redesignating 
                subsection (d) as subsection (e) and by inserting after 
                subsection (c) the following new subsection:
    ``(d) Special Exemption for Certain Veterans.--
            ``(1) In general.--In the case of first-year compensation 
        paid by a qualified employer after the date of the enactment of 
        this subsection with respect to having a specified veteran in 
        the employer's employ for services rendered to such qualified 
        employer, the applicable percentage under subsection (a) shall 
        be equal to the rate of tax in effect under section 3111(b) for 
        the calendar year.
            ``(2) Limitation.--With respect to any specified veteran 
        employed by a qualified employer, the amount of compensation to 
        which paragraph (1) applies shall not exceed--
                    ``(A) $125,490 in the case of an individual who is 
                a qualified veteran by reason of section 
                51(d)(3)(A)(ii)(II),
                    ``(B) $73,203 in the case of an individual who is a 
                qualified veteran by reason of section 51(d)(3)(A)(iv),
                    ``(C) $62,745 in the case of an individual who is a 
                qualified veteran by reason of section 
                51(d)(3)(A)(ii)(I), and
                    ``(D) $31,373 in the case of any other qualified 
                veteran.
            ``(3) Qualified employer.--The term `qualified employer' 
        means any employer other than the United States, any State, or 
        any political subdivision thereof, or any instrumentality of 
        the foregoing.
            ``(4) Specified veteran.--For purposes of this subsection--
                    ``(A) In general.--The term `specified veteran' 
                means any individual who--
                            ``(i) begins employment with a qualified 
                        employer after the date of the enactment of 
                        this subsection,
                            ``(ii) certifies by signed affidavit, under 
                        penalties of perjury, that such individual is a 
                        qualified veteran and whether such individual 
                        is a qualified veteran described in 
                        subparagraph (A), (B), or (C) of paragraph (2),
                            ``(iii) is not employed by the qualified 
                        employer to replace another employee of such 
                        employer unless such other employee separated 
                        from employment voluntarily or for cause, and
                            ``(iv) is not an individual described in 
                        section 51(i)(1) (applied by substituting 
                        `qualified employer' for `taxpayer' each place 
                        it appears).
                    ``(B) Qualified veteran.--The term `qualified 
                veteran' has the meaning given such term by section 
                51(d)(3), but applied without regard to whether such 
                individual has been certified by the designated local 
                agency.
            ``(5) First-year compensation.--For purposes of this 
        subsection, the term `first-year compensation' means, with 
        respect to any individual, compensation for services rendered 
        during the 1-year period beginning with the day the individual 
        begins work for the employer.
            ``(6) Election.--A qualified employer may elect to have 
        this subsection not apply. Such election shall be made in such 
        manner as the Secretary may require.''.
                    (B) Transfers to social security equivalent benefit 
                account.--There are hereby appropriated to the Social 
                Security Equivalent Benefit Account established under 
                section 15A(a) of the Railroad Retirement Act of 1974 
                (45 U.S.C. 231n-1(a)) amounts equal to the reduction in 
                revenues to the Treasury by reason of the amendments 
                made by subparagraph (A). Amounts appropriated by the 
                preceding sentence shall be transferred from the 
                general fund at such times and in such manner as to 
                replicate to the extent possible the transfers which 
                would have occurred to such Account had such amendments 
                not been enacted.
    (c) Effective Dates.--
            (1) In general.--The amendments made by subsection (a) 
        shall apply to individuals who begin work for the employer 
        after December 31, 2016.
            (2) Exemption from employment taxes.--The amendments made 
        by subsection (b) shall apply to amounts paid after the date of 
        the enactment of this Act.