I 

111TH CONGRESS 

1ST SESSION H. R. 1647 

To amend the Internal Revenue Code of 1986 to allow employers a credit 

against income tax for hiring veterans. 

IN THE HOUSE OF REPRESENTATIVES 

MARCH 19, 2009 

Mr. MCCOTTER 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 

employers a credit against income tax for hiring veterans. 

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 ‘‘Veterans’ Employment 

5 Transition Support Act of 2009’’ or the ‘‘VETS Act of 

6 2009’’. 

7 SEC. 2. CREDIT FOR EMPLOYERS HIRING VETERANS. 

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


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1 1986 (relating to business-related credits) is amended by 

2 adding at the end the following new section: 

3 ‘‘SEC. 45R. CREDIT FOR EMPLOYERS HIRING VETERANS. 

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

5 the military service personnel employment credit for the 

6 taxable year shall be equal to— 

7 ‘‘(1) in the case of a qualified veteran, 40 per8 cent of the qualified first-year wages with respect to 

9 such veteran for such year, and 

10 ‘‘(2) in the case of a qualified disabled veteran, 

11 the applicable percentage of the qualified first-year 

12 wages with respect to such veteran for such year. 

13 ‘‘(b) VETERAN TAKEN INTO ACCOUNT ONLY

14 ONCE.—No credit shall be determined under subsection 

15 (a) with respect to any veteran unless such veteran has 

16 elected (in such form and manner as the Secretary may 

17 require) to have his qualified first-year wages taken into 

18 account with respect to the employer paying such wages. 

19 A veteran may make only one election under this sub20 section. The Secretary shall require such reporting as the 

21 Secretary determines is necessary to carry out the pur22 poses of this subsection. 

23 ‘‘(c) QUALIFIED WAGES.—For purposes of this sec24 tion— 


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1 ‘‘(1) IN GENERAL.—The term ‘qualified wages’ 

2 means, with respect to any individual, the wages 

3 paid or incurred by the employer during the taxable 

4 year to such individual. 

5 ‘‘(2) QUALIFIED FIRST-YEAR WAGES.—The 

6 term ‘qualified first-year wages’ means, with respect 

7 to any individual, qualified wages attributable to 

8 service rendered during the 1-year period beginning 

9 with the day the individual begins work for the em10 ployer. 

11 ‘‘(3) WAGES.—The term ‘wages’ has the mean12 ing given such term by section 51(c), without regard 

13 to paragraph (4) thereof. 

14 ‘‘(d) QUALIFIED VETERAN; HIRING DATE.—For pur15 poses of this section— 

16 ‘‘(1) QUALIFIED VETERAN.—The term ‘quali17 fied veteran’ means any individual who is certified 

18 by the designated local agency (as defined in section 

19 51(d)(11)) as being a veteran (as defined in section 

20 51(d)(3)(B)). 

21 ‘‘(2) HIRING DATE.—The term ‘hiring date’ has 

22 the meaning given such term by section 51(d). 

23 ‘‘(e) QUALIFIED DISABLED VETERAN; APPLICABLE

24 PERCENTAGE.— 


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1 ‘‘(1) IN GENERAL.—The term ‘qualified dis2 abled veteran’ means any qualified veteran who is 

3 certified by the designated local agency (as defined 

4 in section 51(d)(11)) as having a disability that has 

5 been determined under the laws administered by the 

6 Secretary of Veterans Affairs to be service-connected 

7 and that is rated by such Secretary (as of the date 

8 of the certification) as 10 percent or more disabling. 

9 ‘‘(2) APPLICABLE PERCENTAGE.—The term 

10 ‘applicable percentage’ means the percentage deter11 mined in accordance with the following table: 

Applicable 

‘‘Percentage of disability: percentage: 

At least 10 but not over 20 ............................................................... 41

At least 20 but not over 30 ............................................................... 42

At least 30 but not over 40 ............................................................... 43

At least 40 but not over 50 ............................................................... 44

At least 50 but not over 60 ............................................................... 45

At least 60 but not over 70 ............................................................... 46

At least 70 but not over 80 ............................................................... 47

At least 80 but not over 90 ............................................................... 48

At least 90 but not over 100 ............................................................. 49

100 percent ........................................................................................ 50. 

12 ‘‘(f) CERTAIN RULES TO APPLY.—Rules similar to 

13 the rules of section 52, and subsections (d)(11), (f), (g), 

14 (i) (as in effect on the day before the date of the enact15 ment of the Taxpayer Relief Act of 1997), (j), and (k) 

16 of section 51, shall apply for purposes of this section. 

17 ‘‘(g) COORDINATION WITH WORK OPPORTUNITY

18 CREDIT.—The credit allowed under this section with re19 spect to any qualified first-year wages shall be in addition 


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1 to any credit allowed under section 51 with respect to such 

2 wages.’’. 

3 (b) CREDIT TO BE PART OF GENERAL BUSINESS

4 CREDIT.—Subsection (b) of section 38 of such Code is 

5 amended by striking ‘‘plus’’ at the end of paragraph (34), 

6 by striking the period at the end of paragraph (35) and 

7 inserting ‘‘, plus’’, and by adding at the end the following 

8 new paragraph: 

9 ‘‘(36) the military service personnel employment 

10 credit determined under section 45R(a).’’. 

11 (c) TECHNICAL AMENDMENTS.— 

12 (1) Clause (iii) of section 41(b)(2)(D) of such 

13 Code is amended to read as follows: 

14 ‘‘(iii) EXCLUSION FOR WAGES TO

15 WHICH EMPLOYMENT CREDITS APPLY.— 

16 The term ‘wages’ shall not include any 

17 amount taken into account in determining 

18 the credit under section 45R(a) or 51(a).’’. 

19 (2) Subparagraph (B) of section 45A(b)(1) of 

20 such Code is amended to read as follows: 

21 ‘‘(B) COORDINATION WITH OTHER EM22 PLOYMENT CREDITS.—The term ‘qualified 

23 wages’ shall not include wages attributable to 

24 service rendered during the 1-year period begin25 ning with the day the individual begins work for 


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1 the employer if any portion of such wages is 

2 taken into account in determining the credit 

3 under section 45R or 51.’’. 

4 (3) Subsection (a) of section 280C of such Code 

5 is amended by inserting ‘‘45R(a),’’ after ‘‘45A(a),’’. 

6 (4) Paragraph (3) of section 1396(c) of such 

7 Code is amended to read as follows: 

8 ‘‘(3) COORDINATION WITH OTHER EMPLOY9 MENT CREDITS.— 

10 ‘‘(A) IN GENERAL.—The term ‘qualified 

11 wages’ shall not include wages taken into ac12 count in determining the credit under section 

13 45R or 51. 

14 ‘‘(B) COORDINATION WITH PARAGRAPH

15 (2).—The $15,000 amount in paragraph (2) 

16 shall be reduced for any calendar year by the 

17 amount of wages paid or incurred during such 

18 year which are taken into account in deter19 mining the credits under sections 45R and 

20 51.’’. 

21 (d) CLERICAL AMENDMENT.—The table of sections 

22 for subpart D of part IV of subchapter A of chapter 1 

23 of such Code is amended by adding at the end the fol24 lowing new item: 

‘‘Sec. 45R. Credit for employers hiring veterans.’’. 


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1 (e) EFFECTIVE DATE.—The amendments made by 

2 this section shall apply to individuals who begin work for 

3 the employer after the date of the enactment of this Act. 

Æ 


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