I 

108TH CONGRESS 

1ST SESSION H. R. 350

To amend the Internal Revenue Code of 1986 to provide to employers a 

tax credit for compensation paid during the period employees are performing service as members of the Ready Reserve or the National Guard. 

IN THE HOUSE OF REPRESENTATIVES 

JANUARY 27, 2003

Mr. BILIRAKIS 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 provide 

to employers a tax credit for compensation paid during 

the period employees are performing service as members 

of the Ready Reserve or the National Guard.

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

3 SECTION 1. READY RESERVE-NATIONAL GUARD EMPLOYEE 

4 CREDIT ADDED TO GENERAL BUSINESS 

5 CREDIT. 

6 (a) READY RESERVE-NATIONAL GUARD CREDIT.—

7 Subpart D of part IV of subchapter A of chapter 1 of 

8 the Internal Revenue Code of 1986 (relating to business-
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1 related credits) is amended by adding at the end the fol2 lowing new section: 

3 ‘‘SEC. 45G. READY RESERVE-NATIONAL GUARD EMPLOYEE 

4 CREDIT. 

5 ‘‘(a) GENERAL RULE.—For purposes of section 38, 

6 the Ready Reserve-National Guard employee credit deter7 mined under this section for the taxable year is an amount 

8 equal to 50 percent of the actual compensation amount 

9 for the taxable year. 

10 ‘‘(b) DEFINITION OF ACTUAL COMPENSATION

11 AMOUNT.—For purposes of this section, the term ‘actual 

12 compensation amount’ means the amount of compensation 

13 paid or incurred by an employer with respect to a Ready 

14 Reserve-National Guard employee on any day during a 

15 taxable year when the employee was absent from employ16 ment for the purpose of performing qualified active duty. 

17 ‘‘(c) LIMITATIONS.—

18 ‘‘(1) MAXIMUM CREDIT.—The maximum credit 

19 allowable under subsection (a) shall not exceed 

20 $2,000 in any taxable year with respect to any one 

21 Ready Reserve-National Guard employee. 

22 ‘‘(2) DAYS OTHER THAN WORK DAYS.—No 

23 credit shall be allowed with respect to a Ready Re24 serve-National Guard employee who performs quali25 fied active duty on any day on which the employee 
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1 was not scheduled to work (for a reason other than 

2 to participate in qualified active duty) and ordinarily 

3 would not have worked. 

4 ‘‘(d) DEFINITIONS.—For purposes of this section—

5 ‘‘(1) QUALIFIED ACTIVE DUTY.—The term 

6 ‘qualified active duty’ means—

7 ‘‘(A) active duty in connection with which 

8 an employee is entitled to reemployment rights 

9 and other benefits or to a leave of absence from 

10 employment under chapter 43 of title 38, 

11 United States Code, and 

12 ‘‘(B) hospitalization incident to such duty. 

13 Such term shall not include training duty specified 

14 in section 10147 of title 10, United States Code (re15 lating to training requirements for the Ready Re16 serve), or section 502(a) of title 32, United States 

17 Code (relating to required drills and field exercises 

18 for the National Guard). 

19 ‘‘(2) COMPENSATION.—The term ‘compensa20 tion’ means any remuneration for employment, 

21 whether in cash or in kind, which is paid or incurred 

22 by a taxpayer and which is deductible from the tax23 payer’s gross income under section 162(a)(1). 

24 ‘‘(3) READY RESERVE-NATIONAL GUARD EM25 PLOYEE.—The term ‘Ready Reserve-National Guard 
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1 employee’ means an employee who is a member of 

2 the Ready Reserve or of the National Guard. 

3 ‘‘(4) NATIONAL GUARD.—The term ‘National 

4 Guard’ has the meaning given such term by section 

5 101(c)(1) of title 10, United States Code. 

6 ‘‘(5) READY RESERVE.—The term ‘Ready Re7 serve’ has the meaning given such term by section 

8 10142 of title 10, United States Code.’’. 

9 (b) CREDIT TO BE PART OF GENERAL BUSINESS

10 CREDIT.—Subsection (b) of section 38 of such Code (re11 lating to general business credit) is amended by striking 

12 ‘‘plus’’ at the end of paragraph (14), by striking the period 

13 at the end of paragraph (15) and inserting ‘‘, plus’’, and 

14 by adding at the end the following new paragraph: 

15 ‘‘(16) the Ready Reserve-National Guard em16 ployee credit determined under section 45G(a).’’. 

17 (c) CONFORMING AMENDMENT.—The table of sec18 tions for subpart D of part IV of subchapter A of chapter 

19 1 of the Internal Revenue Code of 1986 is amended by 

20 inserting after the item relating to section 45F the fol21 lowing new item:

‘‘Sec. 45G. Ready Reserve-National Guard employee credit.’’.

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

23 this section shall apply to taxable years beginning after 

24 December 31, 2002.

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