II 

109TH CONGRESS 

1ST SESSION S. 1292 

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

income tax for expenses incurred in teleworking. 

IN THE SENATE OF THE UNITED STATES 

JUNE 23, 2005 

Mr. SANTORUM 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 allow a 

credit against income tax for expenses incurred in teleworking.

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 ‘‘Telework Tax Incen5 tive Act’’. 

6 SEC. 2. FINDINGS. 

7 The Congress finds as follows: 

8 (1) Federal, State, and local governments spend 

9 billions of dollars annually on the Nation’s transpor10 tation needs. 
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1 (2) Congestion on the Nation’s roads costs over 

2 $63,000,000,000 annually in lost work time, fuel 

3 consumption, and costs of infrastructure and equip4 ment repair. 

5 (3) On average, on-road-vehicles contribute 34 

6 percent of nitrogen oxides emissions. 

7 (4) It is estimated that staying at home to work 

8 requires 3 times less energy consumption than com9 muting to work. 

10 (5) In 2000, it was reported that if an identi11 fied 10 to 20 percent of commuters switched to tele12 working, 1,800,000 tons of regulated pollutants 

13 would be eliminated, 3,500,000,000 gallons of gas 

14 would be saved, 3,100,000,000 hours of personal 

15 time would be freed up, and maintenance and infra16 structure costs would decrease by $500,000,000 an17 nually because of reduced congestion and reduced 

18 vehicle miles traveled. 

19 (6) The average American daily commute is 49 

20 minutes for a 24-mile round-trip (a total of 100 

21 hours per year). 

22 (7) The increase in work from 1969 to 1996, 

23 the increase in hours mothers spend in paid work, 

24 combined with a shift toward single-parent families 

25 resulted in families on average experiencing a de-
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1 crease of 22 hours a week (14 percent) in parental 

2 time available outside of paid work they could spend 

3 with their children. 

4 (8) Today 60 percent of the workforce is in5 volved in information work (an increase of 43 per6 cent since 1990) allowing and encouraging decen7 tralization of paid work to occur. 

8 (9) Estimates indicate that about 40,000,000 

9 Americans are currently teleworking. 

10 SEC. 3. CREDIT FOR TELEWORKING. 

11 (a) IN GENERAL.—Subpart B of part IV of sub12 chapter A of chapter 1 of the Internal Revenue Code of 

13 1986 (relating to foreign tax credit, etc.) is amended by 

14 adding at the end the following new section: 

15 ‘‘SEC. 30B. TELEWORKING CREDIT. 

16 ‘‘(a) ALLOWANCE OF CREDIT.—In the case of an eli17 gible taxpayer, there shall be allowed as a credit against 

18 the tax imposed by this chapter for the taxable year an 

19 amount equal to the qualified teleworking expenses paid 

20 or incurred by the taxpayer during such year. 

21 ‘‘(b) MAXIMUM CREDIT.— 

22 ‘‘(1) PER TELEWORKER LIMITATION.—The 

23 credit allowed by subsection (a) for a taxable year 

24 with respect to qualified teleworking expenses paid 
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1 or incurred by or on behalf of an individual tele2 worker shall not exceed $500. 

3 ‘‘(2) REDUCTION FOR TELEWORKING LESS

4 THAN FULL YEAR.—In the case of an individual who 

5 is in a teleworking arrangement for less than a full 

6 taxable year, the amount referred to paragraph (1) 

7 shall be reduced by an amount which bears the same 

8 ratio to $500 as the number of months in which 

9 such individual is not in a teleworking arrangement 

10 bears to 12. For purposes of the preceding sentence, 

11 an individual shall be treated as being in a tele12 working arrangement for a month if the individual 

13 is subject to such arrangement for any day of such 

14 month. 

15 ‘‘(c) DEFINITIONS.—For purposes of this section— 

16 ‘‘(1) ELIGIBLE TAXPAYER.—The term ‘eligible 

17 taxpayer’ means— 

18 ‘‘(A) in the case of an individual, an indi19 vidual who performs services for an employer 

20 under a teleworking arrangement, and 

21 ‘‘(B) in the case of an employer, an em22 ployer for whom employees perform services 

23 under a teleworking arrangement. 

24 ‘‘(2) TELEWORKING ARRANGEMENT.—The term 

25 ‘teleworking arrangement’ means an arrangement 
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1 under which an employee teleworks for an employer 

2 not less than 75 days per year. 

3 ‘‘(3) QUALIFIED TELEWORKING EXPENSES.—

4 The term ‘qualified teleworking expenses’ means ex5 penses paid or incurred under a teleworking ar6 rangement for furnishings and electronic information 

7 equipment which are used to enable an individual to 

8 telework. 

9 ‘‘(4) TELEWORK.—The term ‘telework’ means 

10 to perform work functions, using electronic informa11 tion and communication technologies, thereby reduc12 ing or eliminating the physical commute to and from 

13 the traditional worksite. 

14 ‘‘(d) LIMITATION BASED ON AMOUNT OF TAX.— 

15 ‘‘(1) LIABILITY FOR TAX.—The credit allowable 

16 under subsection (a) for any taxable year shall not 

17 exceed the excess (if any) of— 

18 ‘‘(A) the regular tax for the taxable year, 

19 reduced by the sum of the credits allowable 

20 under subpart A and the preceding sections of 

21 this subpart, over 

22 ‘‘(B) the tentative minimum tax for the 

23 taxable year. 

24 ‘‘(2) CARRYFORWARD OF UNUSED CREDIT.—If 

25 the amount of the credit allowable under subsection 
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1 (a) for any taxable year exceeds the limitation under 

2 paragraph (1) for the taxable year, the excess shall 

3 be carried to the succeeding taxable year and added 

4 to the amount allowable as a credit under subsection 

5 (a) for such succeeding taxable year. 

6 ‘‘(e) SPECIAL RULES.— 

7 ‘‘(1) BASIS REDUCTION.—The basis of any 

8 property for which a credit is allowable under sub9 section (a) shall be reduced by the amount of such 

10 credit (determined without regard to subsection (d)). 

11 ‘‘(2) RECAPTURE.—The Secretary shall, by reg12 ulations, provide for recapturing the benefit of any 

13 credit allowable under subsection (a) with respect to 

14 any property which ceases to be property eligible for 

15 such credit. 

16 ‘‘(3) PROPERTY USED OUTSIDE UNITED STATES

17 NOT QUALIFIED.—No credit shall be allowed under 

18 subsection (a) with respect to any property referred 

19 to in section 50(b)(1) or with respect to the portion 

20 of the cost of any property taken into account under 

21 section 179. 

22 ‘‘(4) ELECTION TO NOT TAKE CREDIT.—No 

23 credit shall be allowed under subsection (a) for any 

24 expense if the taxpayer elects to not have this sec25 tion apply with respect to such expense. 
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1 ‘‘(5) DENIAL OF DOUBLE BENEFIT.—No deduc2 tion or credit (other than under this section) shall 

3 be allowed under this chapter with respect to any ex4 pense which is taken into account in determining the 

5 credit under this section.’’. 

6 (b) CONFORMING AMENDMENTS.— 

7 (1) Subsection (a) of section 1016 of the Inter8 nal Revenue Code of 1986 is amended by striking 

9 ‘‘and’’ at the end of paragraph (30), by striking the 

10 period at the end of paragraph (31) and inserting ‘‘, 

11 and’’, and by adding at the end the following new 

12 paragraph: 

13 ‘‘(32) to the extent provided in section 

14 30B(e)(1), in the case of amounts with respect to 

15 which a credit has been allowed under section 

16 30B.’’. 

17 (2) Section 55(c)(3) of such Code is amended 

18 by inserting ‘‘30B(d),’’ after ‘‘30(b)(3),’’. 

19 (3) Section 6501(m) of such Code is amended 

20 by inserting ‘‘30B(e)(4),’’ after ‘‘30(d)(4),’’. 

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

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

23 of the Internal Revenue Code of 1986 is amended by add24 ing at the end the following new item:

‘‘Sec. 30B. Teleworking credit.’’.
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1 (d) EFFECTIVE DATE.—The amendments made by 

2 this section shall apply to amounts paid or incurred after 

3 the date of the enactment of this Act, in taxable years 

4 ending after such date.

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