II 

117TH CONGRESS 

1ST SESSION S. 551 

To amend the Internal Revenue Code of 1986 to expand the Employee 

Retention Tax Credit to include certain startup businesses. 

IN THE SENATE OF THE UNITED STATES 

MARCH 2 (legislative day, MARCH 1), 2021 

Ms. HASSAN (for herself and Mr. BRAUN) introduced the following bill; which 

was read twice and referred to the Committee on Finance 

A BILL 

To amend the Internal Revenue Code of 1986 to expand 

the Employee Retention Tax Credit to include certain 

startup businesses. 

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled, 

3 SECTION 1. SHORT TITLE. 

4 This Act may be cited as the ‘‘Recovery Startup As5 sistance Act’’. 

6 SEC. 2. EXPANSION OF EMPLOYEE RETENTION TAX CREDIT 

7 TO INCLUDE CERTAIN STARTUP BUSINESSES. 

8 (a) IN GENERAL.—Section 2301 of the CARES Act, 

9 as amended by sections 206 and 207 of the Taxpayer CerVerDate Sep 11 2014 04:00 Apr 01, 2021 Jkt 019200 PO 00000 Frm 00001 Fmt 6652 Sfmt 6201 E:\BILLS\S551.IS S551

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•S 551 IS

1 tainty and Disaster Tax Relief Act of 2020 (Public Law 

2 116–260), is amended— 

3 (1) in subsection (c)— 

4 (A) in paragraph (2)(A)(ii)— 

5 (i) in subclause (I), by striking ‘‘or’’ 

6 at the end, 

7 (ii) in subclause (II), by striking the 

8 period at the end and inserting ‘‘, or’’, and 

9 (iii) by inserting after subclause (II) 

10 the following: 

11 ‘‘(III) the employer is a recovery 

12 startup business (as defined in para13 graph (6)).’’, 

14 (B) by redesignating paragraph (6) as 

15 paragraph (7), and 

16 (C) by inserting after paragraph (5) the 

17 following: 

18 ‘‘(6) RECOVERY STARTUP BUSINESS.— 

19 ‘‘(A) IN GENERAL.—The term ‘recovery 

20 startup business’ means any employer which— 

21 ‘‘(i) began carrying on a trade or 

22 business after February 15, 2020, 

23 ‘‘(ii) had less than 50 full-time em24 ployees (as defined in section 4980H(c)(4) 

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1 cept that subparagraph (A) of such section 

2 shall be applied by substituting ‘quarter’ 

3 for ‘month’) during the calendar quarter 

4 for which the credit is determined under 

5 subsection (a), 

6 ‘‘(iii) did not have gross receipts (as 

7 determined under the rules of section 

8 448(c)(3) of such Code, without regard to 

9 subparagraph (A) thereof) in excess of 

10 $25,000 for any taxable year preceding the 

11 5-taxable-year period ending with the tax12 able year preceding such quarter, and 

13 ‘‘(iv) elected to have this paragraph 

14 apply for such quarter. 

15 ‘‘(B) PHASEOUT OF CREDIT.—In the case 

16 of any recovery startup business, the amount of 

17 the credit allowed under subsection (a) for any 

18 calendar quarter (as determined without regard 

19 to this subparagraph) shall be reduced (but not 

20 below zero) by an amount equal to 1 percent of 

21 the amount of such credit for each $40,000 (or 

22 fraction thereof) by which the gross receipts (as 

23 determined under the rules of section 448(c)(3) 

24 of the Internal Revenue Code of 1986, without 

25 regard to subparagraph (A) thereof) of such 


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1 business for the last taxable year ending before 

2 such quarter exceeds $1,000,000. 

3 ‘‘(C) EXTENSIONS AND MODIFICATIONS.— 

4 ‘‘(i) LIMITATION ON NUMBER OF EM5 PLOYEES.—In the case of a recovery start6 up business, the amount of qualified wages 

7 which may be taken into account under 

8 subsection (a) by such employer for any 

9 calendar quarter shall not exceed $50,000. 

10 ‘‘(ii) LIMITATION ON NUMBER OF

11 QUARTERS.— 

12 ‘‘(I) IN GENERAL.—Subject to 

13 subclause (II), in the case of a recov14 ery startup business, the credit al15 lowed under subsection (a) shall only 

16 apply to wages paid during any period 

17 of 2 consecutive calendar quarters (as 

18 elected by such business), as reduced 

19 by the total number of calendar quar20 ters in which the recovery startup 

21 business— 

22 ‘‘(aa) claimed the credit 

23 under this section, and 


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1 ‘‘(bb) did not make an elec2 tion described in subparagraph 

3 (A)(iv). 

4 ‘‘(II) EXCLUSION.—The period 

5 described in subclause (I) shall not in6 clude any calendar quarter which ends 

7 before the later of— 

8 ‘‘(aa) the date of enactment 

9 of the Recovery Startup Assist10 ance Act, or 

11 ‘‘(bb) the date on which 

12 such business began operations. 

13 ‘‘(iii) EXTENSION.—In the case of a 

14 recovery startup business, subsection (m) 

15 shall be applied by substituting ‘January 

16 1, 2022’ for ‘July 1, 2021’.’’, 

17 (2) in subsection (j)(2), by adding at the end 

18 the following: 

19 ‘‘(D) RECOVERY STARTUP BUSINESS.— 

20 Without regard to subparagraphs (A) through 

21 (C), under rules provided by the Secretary, a 

22 recovery startup business may elect for any cal23 endar quarter to receive an advance payment of 

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1 tion of subsection (c)(6)) for such quarter.’’, 

2 and 

3 (3) in subsection (l)— 

4 (A) in paragraph (2), by striking ‘‘and’’ at 

5 the end, 

6 (B) in paragraph (3), by striking the pe7 riod at the end and inserting ‘‘, and’’, and 

8 (C) by inserting after paragraph (3) the 

9 following: 

10 ‘‘(4) to prevent fraudulent and abusive claims 

11 of the credit allowed under subsection (a) by recov12 ery startup businesses.’’. 

13 (b) EFFECTIVE DATE.—The amendments made by 

14 this section shall apply to calendar quarters beginning 

15 after December 31, 2020. 

Æ 


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