II 

112TH CONGRESS 

1ST SESSION S. 1785 

To amend the Internal Revenue Code of 1986 to provide work opportunity 

tax credits for the hiring of long-term unemployed workers. 

IN THE SENATE OF THE UNITED STATES 

NOVEMBER 2, 2011 

Mr. BLUMENTHAL 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 provide 

work opportunity tax credits for the hiring of long-term 

unemployed workers. 

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 ‘‘Back to Work Tax 

5 Credit’’. 

6 SEC. 2. LONG-TERM UNEMPLOYED WORKERS WORK OP7 PORTUNITY TAX CREDITS. 

8 (a) IN GENERAL.—Paragraph (3) of section 51(b) of 

9 the Internal Revenue Code of 1986 is amended by insert10 ing ‘‘$10,000 per year in the case of any individual who 


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1 is a qualified long term unemployed individual by reason 

2 of subsection (d)(11), and’’ before ‘‘$12,000 per year’’. 

3 (b) LONG-TERM UNEMPLOYED INDIVIDUALS.— 

4 (1) IN GENERAL.—Paragraph (1) of section 

5 51(d) of the Internal Revenue Code of 1986 is 

6 amended by striking ‘‘or’’ at the end of subpara7 graph (H), by striking the period at the end of sub8 paragraph (I) and inserting ‘‘, or’’, and by adding 

9 at the end the following new subparagraph: 

10 ‘‘(J) a qualified long-term unemployed in11 dividual.’’. 

12 (2) DEFINITION.—Subsection (d) of section 51 

13 of such Code is amended by redesignating para14 graphs (11) through (14) as paragraphs (12) 

15 through (15), respectively, and by inserting after 

16 paragraph (10) the following new paragraph: 

17 ‘‘(11) QUALIFIED LONG-TERM UNEMPLOYED

18 INDIVIDUAL.— 

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

20 long-term unemployed individual’ means any in21 dividual who was not a student for at least 6 

22 months during the 1-year period ending on the 

23 hiring date and is certified by the designated 

24 local agency as having aggregate periods of unVerDate Mar 15 2010 21:52 Nov 03, 2011 Jkt 019200 PO 00000 Frm 00002 Fmt 6652 Sfmt 6201 E:\BILLS\S1785.IS S1785

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1 employment during the 1-year period ending on 

2 the hiring date which equal or exceed 6 months. 

3 ‘‘(B) STUDENT.—For purposes of this 

4 paragraph, a student is an individual enrolled 

5 at least half-time in a program that leads to a 

6 degree, certificate, or other recognized edu7 cational credential for at least 6 months wheth8 er or not consecutive during the 1-year period 

9 ending on the hiring date.’’. 

10 (c) SIMPLIFIED CERTIFICATION.—Section 51(d) of 

11 the Internal Revenue Code of 1986, as amended by sub12 section (b)(2), is amended by adding at the end the fol13 lowing new paragraph: 

14 ‘‘(16) SIMPLIFIED CERTIFICATION FOR QUALI15 FIED LONG-TERM UNEMPLOYED INDIVIDUALS.— 

16 ‘‘(A) IN GENERAL.—Any individual under 

17 paragraph (11) will be treated as certified by 

18 the designated local agency as having aggregate 

19 periods of unemployment described in such 

20 paragraph if the individual is certified by the 

21 designated local agency as being in receipt of 

22 unemployment compensation under State or 

23 Federal law for not less than 6 months during 

24 the 1-year period ending on the hiring date. 


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1 ‘‘(B) REGULATORY AUTHORITY.—The Sec2 retary in the Secretary’s discretion may provide 

3 alternative methods for certification under 

4 paragraph (11).’’. 

5 (d) CREDIT MADE AVAILABLE TO TAX-EXEMPT EM6 PLOYERS IN CERTAIN CIRCUMSTANCES.—Section 52(c) of 

7 the Internal Revenue Code of 1986 is amended— 

8 (1) by striking ‘‘No credit’’ and inserting: 

9 ‘‘(1) IN GENERAL.—Except as provided in para10 graph (2), no’’, and 

11 (2) by adding at the end the following new 

12 paragraph: 

13 ‘‘(2) EXCEPTION.— 

14 ‘‘(A) IN GENERAL.—In the case of any 

15 tax-exempt employer, there shall be treated as 

16 a credit allowable under subpart C (and not al17 lowable under subpart D) the lesser of— 

18 ‘‘(i) the amount of the work oppor19 tunity credit determined under this sub20 part with respect to such employer that is 

21 related to the hiring of qualified long-term 

22 unemployed individuals described in section 

23 51(d)(11), or 


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1 ‘‘(ii) the amount of the payroll taxes 

2 of the employer during the calendar year 

3 in which the taxable year begins. 

4 ‘‘(B) CREDIT AMOUNT.—In the case of any 

5 tax-exempt employer, the work opportunity 

6 credit under subparagraph (A) shall be deter7 mined by substituting ‘26 percent’ for ‘40 per8 cent’ in subsections (a) and (i)(3)(A) of section 

9 51 and by substituting ‘16.25 percent’ for ‘25 

10 percent’ in section 51(i)(3)(A). 

11 ‘‘(C) TAX-EXEMPT EMPLOYER.—For pur12 poses of this paragraph, the term ‘tax-exempt 

13 employer’ means an employer which is— 

14 ‘‘(i) an organization described in sec15 tion 501(c) and exempt from taxation 

16 under section 501(a), or 

17 ‘‘(ii) a public higher education institu18 tion (as defined in section 101 of the 

19 Higher Education Act of 1965). 

20 ‘‘(D) PAYROLL TAXES.—For purposes of 

21 this paragraph, the term ‘payroll taxes’ 

22 means— 

23 ‘‘(i) amounts required to be withheld 

24 from the employees of the tax-exempt em25 ployer under section 3402(a), 


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1 ‘‘(ii) amounts required to be withheld 

2 from such employees under section 3101, 

3 and 

4 ‘‘(iii) amounts of the taxes imposed on 

5 the tax-exempt employer under section 

6 3111.’’. 

7 (e) TREATMENT OF POSSESSIONS.— 

8 (1) PAYMENTS TO POSSESSIONS.— 

9 (A) MIRROR CODE POSSESSIONS.—The 

10 Secretary of the Treasury shall pay to each pos11 session of the United States with a mirror code 

12 tax system amounts equal to the loss to that 

13 possession by reason of the application of the 

14 amendments made by this section (other than 

15 this subsection). Such amounts shall be deter16 mined by the Secretary of the Treasury based 

17 on information provided by the government of 

18 the respective possession of the United States. 

19 (B) OTHER POSSESSIONS.—The Secretary 

20 of the Treasury shall pay to each possession of 

21 the United States, which does not have a mirror 

22 code tax system, amounts estimated by the Sec23 retary of the Treasury as being equal to the ag24 gregate credits that would have been provided 

25 by the possession by reason of the application 


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1 of the amendments made by this section (other 

2 than this subsection) if a mirror code tax sys3 tem had been in effect in such possession. The 

4 preceding sentence shall not apply with respect 

5 to any possession of the United States unless 

6 such possession has a plan, which has been ap7 proved by the Secretary of the Treasury, under 

8 which such possession will promptly distribute 

9 such payments. 

10 (2) COORDINATION WITH CREDIT ALLOWED

11 AGAINST UNITED STATES INCOME TAXES.—No in12 crease in the credit determined under section 38(b) 

13 of the Internal Revenue Code of 1986 that is attrib14 utable to the credit provided by the amendments 

15 made by this section (other than this subsection) 

16 shall be taken into account with respect to any per17 son— 

18 (A) to whom a credit is allowed against 

19 taxes imposed by the possession of the United 

20 States by reason of the amendments made by 

21 this section for such taxable year, or 

22 (B) who is eligible for a payment under a 

23 plan described in paragraph (1)(B) with respect 

24 to such taxable year. 

25 (3) DEFINITIONS AND SPECIAL RULES.— 


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1 (A) POSSESSION OF THE UNITED

2 STATES.—For purposes of this subsection, the 

3 term ‘‘possession of the United States’’ includes 

4 American Samoa, the Commonwealth of the 

5 Northern Mariana Islands, the Commonwealth 

6 of Puerto Rico, Guam, and the United States 

7 Virgin Islands. 

8 (B) MIRROR CODE TAX SYSTEM.—For pur9 poses of this subsection, the term ‘‘mirror code 

10 tax system’’ means, with respect to any posses11 sion of the United States, the income tax sys12 tem of such possession if the income tax liabil13 ity of the residents of such possession under 

14 such system is determined by reference to the 

15 income tax laws of the United States as if such 

16 possession were the United States. 

17 (C) TREATMENT OF PAYMENTS.—For pur18 poses of section 1324(b)(2) of title 31, United 

19 States Code, rules similar to the rules of section 

20 1001(b)(3)(C) of the American Recovery and 

21 Reinvestment Tax Act of 2009 shall apply. 

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

23 this section shall apply to individuals who begin work for 

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

Æ 


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