I 

112TH CONGRESS 

1ST SESSION H. R. 3681 

To amend the Internal Revenue Code of 1986 to allow a credit to passthru entities for hiring individuals who are unemployed and receive 

unemployment benefits. 

IN THE HOUSE OF REPRESENTATIVES 

DECEMBER 15, 2011 

Mr. WEBSTER introduced the following bill; which was referred to the 

Committee on Ways and Means 

A BILL 

To amend the Internal Revenue Code of 1986 to allow a 

credit to pass-thru entities for hiring individuals who 

are unemployed and receive unemployment benefits. 

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 ‘‘One New Employee 

5 Act of 2011’’. 

6 SEC. 2. BUSINESS CREDIT FOR PASS-THRU ENTITIES HIR7 ING THE UNEMPLOYED. 

8 (a) IN GENERAL.—Subpart F of part IV of sub9 chapter A of chapter 1 of the Internal Revenue Code of 


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1 1986 is amended by inserting after section 51 the fol2 lowing new section: 

3 ‘‘SEC. 51A. PASS-THRU ENTITIES HIRING THE UNEM4 PLOYED. 

5 ‘‘(a) DETERMINATION OF AMOUNT.—In the case of 

6 an eligible entity, for purposes of section 38, the amount 

7 of the hiring the unemployed credit determined under this 

8 section for the taxable year shall be the aggregate of the 

9 applicable amounts for a qualified individual during the 

10 taxable year. 

11 ‘‘(b) LIMITATION.—The maximum amount allowed as 

12 a credit under subsection (a) to an eligible entity for a 

13 taxable year shall not exceed $5,000. 

14 ‘‘(c) APPLICABLE AMOUNT.—For purposes of this 

15 section— 

16 ‘‘(1) IN GENERAL.—The applicable amount 

17 shall be $1,250 for any quarter in the taxable year 

18 for which a qualified individual is an employee of the 

19 eligible entity, beginning with the first quarter of the 

20 taxable year after the quarter in which such indi21 vidual is hired. 

22 ‘‘(2) NUMBER OF EMPLOYEES.—The applicable 

23 amount for any quarter shall be zero if the number 

24 of employees who received wages in such quarter 

25 does not exceed the number of employees who reVerDate Mar 15 2010 23:04 Dec 20, 2011 Jkt 019200 PO 00000 Frm 00002 Fmt 6652 Sfmt 6201 E:\BILLS\H3681.IH H3681

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1 ceived wages in the quarter ending before the date 

2 the qualified individual was hired. 

3 ‘‘(3) NUMBER OF QUALIFIED INDIVIDUALS.— 

4 Not more than one qualified individual may be taken 

5 into account in a taxable year under subsection (a). 

6 ‘‘(d) QUALIFIED INDIVIDUAL.—For purposes of this 

7 section— 

8 ‘‘(1) IN GENERAL.—The term ‘qualified indi9 vidual’ means an individual who— 

10 ‘‘(A) on the day the individual is hired by 

11 the employer, was in receipt of unemployment 

12 compensation under State or Federal law for 

13 not less than 1 week during the 1-year period 

14 ending on such day, and 

15 ‘‘(B) while employed does not receive any 

16 unemployment compensation under State or 

17 Federal law for any period after such day. 

18 ‘‘(2) CONTINUOUS EMPLOYMENT IN SUC19 CEEDING TAXABLE YEARS.—The term ‘qualified in20 dividual’ includes any individual with respect to 

21 whom a credit was allowed under subsection (a) in 

22 a preceding taxable year and who has been employed 

23 by the employer since such day of hiring without a 

24 break in service. 


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1 ‘‘(e) ELIGIBLE ENTITY.—For purposes of this sec2 tion, the term ‘eligible entity’ means any entity engaged 

3 in a trade or business as— 

4 ‘‘(1) an S corporation, partnership, trust, or es5 tate, 

6 ‘‘(2) an organization to which part I of sub7 chapter T applies, or 

8 ‘‘(3) a trade or business conducted by an indi9 vidual as a sole proprietor. 

10 ‘‘(f) COORDINATION WITH OTHER CREDITS AND DE11 DUCTIONS.—The credit allowed under this section is in ad12 dition to any credit or deduction allowable under this 

13 chapter with respect to a qualified individual. 

14 ‘‘(g) TERMINATION.—Subsection (a) shall not apply 

15 to any taxable year beginning after December 31, 2016.’’. 

16 (b) CREDIT ALLOWED AS PART OF GENERAL BUSI17 NESS CREDIT.—Section 38(b) of such Code (defining cur18 rent year business credit) is amended by striking ‘‘plus’’ 

19 at the end of paragraph (35), by striking the period at 

20 the end of paragraph (36) and inserting ‘‘, plus’’, and by 

21 adding at the end the following new paragraph: 

22 ‘‘(37) the hiring the unemployed credit deter23 mined under section 51A.’’. 

24 (c) CLERICAL AMENDMENT.—The table of sections 

25 for subpart F of part IV of subchapter A of chapter 1 


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1 of such Code is amended by inserting after the item relat2 ing to section 51 the following new item: 

‘‘Sec. 51A. Pass-thru entities hiring the unemployed.’’. 

3 (d) EFFECTIVE DATE.—The amendments made by 

4 this section shall apply to individuals who begin work for 

5 the employer in taxable years ending after the date of the 

6 enactment of this Act. 

Æ 


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