I 

111TH CONGRESS 

1ST SESSION H. R. 1836 

To amend the Internal Revenue Code of 1986 to provide a payroll tax 

holiday for small businesses. 

IN THE HOUSE OF REPRESENTATIVES 

APRIL 1, 2009 

Mr. MINNICK (for himself and Mr. SCHOCK) 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 

a payroll tax holiday for small 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 ‘‘Payroll Tax Holiday 

5 Act of 2009’’. 

6 SEC. 2. PAYROLL TAX HOLIDAY FOR SMALL BUSINESSES. 

7 (a) IN GENERAL.—Subchapter C of chapter 21 of the 

8 Internal Revenue Code of 1986 (relating to Federal Insur9 ance Contributions Act) is amended by redesignating secVerDate Nov 24 2008 06:09 Apr 02, 2009 Jkt 079200 PO 00000 Frm 00001 Fmt 6652 Sfmt 6201 E:\BILLS\H1836.IH H1836

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1 tion 3128 as section 3129 and by inserting after section 

2 3127 the following new section: 

3 ‘‘SEC. 3128. PAYROLL TAX HOLIDAY FOR SMALL BUSI4 NESSES DURING PORTION OF 2009. 

5 ‘‘(a) PAYROLL TAXES.—In the case of an eligible 

6 small business, the rate of the taxes imposed by sections 

7 3101(a) and 3111(a) shall be zero with respect to remu8 neration paid during the payroll tax holiday period, includ9 ing for purposes of determining the rates of tax under sec10 tions 3201(a) and 3221(a) with respect to compensation 

11 paid during such period. 

12 ‘‘(b) SELF-EMPLOYMENT TAXES.—In the case of an 

13 eligible small business— 

14 ‘‘(1) IN GENERAL.—For purposes of the tax im15 posed by section 1401(a), the self-employment in16 come of the taxpayer for the taxable year (deter17 mined without regard to this subsection) shall be re18 duced by the payroll tax holiday period income for 

19 such taxable year. 

20 ‘‘(2) TAX ON EMPLOYEE REPRESENTATIVES

21 UNDER THE RAILROAD RETIREMENT TAX ACT.—For 

22 purposes of the tax imposed by section 3211(a), the 

23 compensation of the taxpayer subject to tax under 

24 such section for the taxable year (determined with25 out regard to this subsection) shall be reduced by 


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1 the payroll tax holiday period income for such tax2 able year for purposes of applying so much of the 

3 rate of such tax as is determined by reference to the 

4 taxes imposed by sections 3101(a) and 3111(a). 

5 ‘‘(3) PAYROLL TAX HOLIDAY PERIOD IN6 COME.—For purposes of this subsection, the payroll 

7 tax holiday period income for any taxable year is the 

8 amount equal to the applicable percentage of— 

9 ‘‘(A) the self-employment income for such 

10 taxable year in the case of the tax imposed by 

11 section 1401(a), and 

12 ‘‘(B) the compensation subject to tax 

13 under section 3211(a) in the case of the tax im14 pose by section 3211(a). 

15 ‘‘(4) APPLICABLE PERCENTAGE.—For purposes 

16 of paragraph (3), the applicable percentage is the 

17 percentage determined by dividing— 

18 ‘‘(A) the number of days during the tax19 able year which are within the payroll tax holi20 day period, by 

21 ‘‘(B) the number of days during the tax22 able year. 

23 ‘‘(c) ELIGIBLE SMALL BUSINESS; PAYROLL TAX

24 HOLIDAY PERIOD.—For purposes of this section— 

25 ‘‘(1) ELIGIBLE SMALL BUSINESS.— 


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1 ‘‘(A) IN GENERAL.—The term ‘eligible 

2 small business’ means any person engaged in a 

3 trade or business if such person employed no 

4 more than 50 employees on the first day of the 

5 payroll tax holiday period. 

6 ‘‘(B) SPECIAL RULES.—For purposes of 

7 subparagraph (A)— 

8 ‘‘(i) all persons treated as a single em9 ployer under subsection (b), (c), (m), or 

10 (o) of section 414 shall be treated as 1 tax11 payer, and 

12 ‘‘(ii) temporary lay-offs shall be dis13 regarded. 

14 ‘‘(2) PAYROLL TAX HOLIDAY PERIOD.—The 

15 term ‘payroll tax holiday period’ means the period— 

16 ‘‘(A) after the last day of the month which 

17 includes the date of the enactment of this sec18 tion, and 

19 ‘‘(B) before January 1, 2010. 

20 ‘‘(d) LIMITATION ON REDUCTION IN EMPLOYER

21 TAXES.— 

22 ‘‘(1) IN GENERAL.—If at the close of the pay23 roll tax holiday period— 

24 ‘‘(A) the aggregate reduction under this 

25 section in the employer taxes, exceeds 


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1 ‘‘(B) the aggregate increase in employee 

2 compensation or capital expenditures during the 

3 payroll tax holiday period as compared to the 

4 comparable period ending on the day before the 

5 payroll tax holiday period, 

6 then the applicable employer tax (determined with7 out regard to this subsection) for the first payroll 

8 period beginning after the payroll tax holiday period 

9 shall be increased by such excess. 

10 ‘‘(2) EMPLOYER TAXES.—For purposes of sub11 paragraph (A), the term ‘employer taxes’ means— 

12 ‘‘(A) the taxes imposed by sections 

13 3111(a) and 3221(a), and 

14 ‘‘(B) so much of the taxes imposed by sec15 tions 1401(a) and 3211(a) as does not exceed 

16 the tax determined at the rate imposed by sec17 tion 3111(a). 

18 ‘‘(e) TRUST FUNDS HELD HARMLESS.—There are 

19 hereby appropriated (out of any money in the Treasury 

20 not otherwise appropriated) for each fiscal year to the 

21 trust funds under section 201 of the Social Security Act 

22 and the Social Security Equivalent Benefit Account under 

23 section 15A of the Railroad Retirement Act of 1974 (45 

24 U.S.C. 231n–1) an amount equal to the reduction in the 


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1 transfers to such fund for such fiscal year by reason of 

2 this section. 

3 ‘‘(f) EMPLOYER NOTIFICATION.—The Secretary shall 

4 notify small business employers of the payroll tax holiday 

5 period in any manner the Secretary deems appropriate.’’. 

6 (b) CONFORMING AMENDMENT.—The table of sec7 tions for such subchapter C is amended by redesignating 

8 the item relating to section 3128 as relating to section 

9 3129 and by inserting after the item relating to section 

10 3127 the following new item: 

‘‘Sec. 3128. Payroll tax holiday for small businesses during portion of 2009.’’. 

11 (c) EFFECTIVE DATE.— 

12 (1) IN GENERAL.—Except as provided in para13 graph (2), the amendments made by this section 

14 shall apply to remuneration paid after the last day 

15 of the month which includes the date of the enact16 ment of this Act. 

17 (2) SELF-EMPLOYMENT TAXES.—So much of 

18 section 3128 of the Internal Revenue Code of 1986 

19 (as added by this section) as relates to the taxes im20 posed by sections 1401(a) and 3211(a) shall apply 

21 to taxable years ending after such last day. 

Æ 


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