I 

117TH CONGRESS 

1ST SESSION H. R. 1854 

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

tax for employers of reservists. 

IN THE HOUSE OF REPRESENTATIVES 

MARCH 11, 2021 

Mr. RYAN (for himself, Mr. PALAZZO, Ms. SPANBERGER, Mr. KELLY of Mississippi, Mr. KILMER, Mrs. BUSTOS, Mrs. RADEWAGEN, Mr. MOORE of 

Utah, Mr. STAUBER, Mr. CROW, and Ms. STEFANIK) 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 for 

a credit against tax for employers of reservists. 

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 ‘‘Reserve Employers 

5 Comprehensive Relief and Uniform Incentives on Taxes 

6 Act of 2021’’ or as the ‘‘RECRUIT Act of 2021’’. 

7 SEC. 2. RESERVIST EMPLOYMENT CREDIT. 

8 (a) ALLOWANCE OF CREDIT.—Subpart D of part IV 

9 of subchapter A of chapter 1 of the Internal Revenue Code 


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1 of 1986 is amended by adding at the end the following 

2 new section: 

3 ‘‘SEC. 45U. RESERVIST EMPLOYMENT CREDIT. 

4 ‘‘(a) ESTABLISHMENT OF CREDIT.—For purposes of 

5 section 38, in the case of an eligible employer, the reservist 

6 employment credit for any taxable year is an amount equal 

7 to 40 percent of the wages paid or incurred to qualified 

8 reservists by such employer during such taxable year. 

9 ‘‘(b) LIMITATION.— 

10 ‘‘(1) IN GENERAL.—The reservist employment 

11 credit determined under subsection (a), with respect 

12 to any qualified reservist for any taxable year, shall 

13 not exceed the reservist credit amount. 

14 ‘‘(2) RESERVIST CREDIT AMOUNT.—For pur15 poses of this section, the term ‘reservist credit 

16 amount’ means, with respect to a qualified reservist 

17 for a taxable year, an amount equal to the sum of— 

18 ‘‘(A) $1,000, plus 

19 ‘‘(B) in the case of a qualified reservist— 

20 ‘‘(i) with 30 or more days, and fewer 

21 than 90 days, of service in the uniformed 

22 services during such year, $3,000, 

23 ‘‘(ii) with 90 or more days, and fewer 

24 than 180 days, of service in the uniformed 

25 services during such year, $5,000, and 


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1 ‘‘(iii) with 180 or more days of service 

2 in the uniformed services during such year, 

3 $10,000. 

4 ‘‘(3) DAYS OF SERVICE.—For purposes of para5 graph (2), any day of service— 

6 ‘‘(A) shall not be taken into account if 

7 such day constitutes regularly scheduled unit 

8 training or annual training, and 

9 ‘‘(B) shall only be taken into account with 

10 respect to a qualified reservist employed by an 

11 eligible employer to the extent such days are 

12 during a period of employment of such reservist 

13 by such employer. 

14 ‘‘(4) QUALIFIED RESERVIST.—The term ‘quali15 fied reservist’ means, with respect to a taxable year, 

16 an individual who is, at any time during such tax17 able year, a member of the National Guard or a re18 serve component of the Armed Forces, as named in 

19 section 10101 of title 10, United States Code (ex20 cept for a member of the Individual Ready Reserve). 

21 ‘‘(5) OTHER DEFINITIONS.—The term ‘reserve 

22 component’ has the meanings given such term in 

23 section 101 of title 10, United States Code. The 

24 term ‘National Guard’ has the meaning given such 

25 term in section 101(3) of title 32, United States 


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1 Code. The term ‘service in the uniformed services’ 

2 has the meaning given such term in section 4303 of 

3 title 38, United States Code. 

4 ‘‘(c) ELIGIBLE EMPLOYER.—For purposes of this 

5 section, the term ‘eligible employer’ means any employer 

6 which has an average of less than 500 employees employed 

7 on business days during the taxable year. 

8 ‘‘(d) AGGREGATION RULE.—All persons treated as a 

9 single employer under subsection (b), (c), (m), or (o) of 

10 section 414 shall be treated as 1 employer for purposes 

11 of this section. 

12 ‘‘(e) ELECTION TO HAVE CREDIT NOT APPLY.— 

13 ‘‘(1) IN GENERAL.—A taxpayer may elect to 

14 have this section not apply for any taxable year. 

15 ‘‘(2) OTHER RULES.—Rules similar to the rules 

16 of paragraphs (2) and (3) of section 51(j) shall 

17 apply for purposes of this subsection. 

18 ‘‘(f) ELECTION TO TREAT CREDIT AS PAYROLL TAX

19 CREDIT.— 

20 ‘‘(1) IN GENERAL.—At the election of an eligi21 ble employer for any taxable year, section 3111(g) 

22 shall apply to the payroll tax credit portion of the 

23 credit otherwise determined under subsection (a) for 

24 the taxable year and such portion shall not be treatVerDate Sep 11 2014 20:58 May 03, 2021 Jkt 019200 PO 00000 Frm 00004 Fmt 6652 Sfmt 6201 E:\BILLS\H1854.IH H1854

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1 ed (other than for purposes of section 280C) as a 

2 credit determined under subsection (a). 

3 ‘‘(2) PAYROLL TAX CREDIT PORTION.—For 

4 purposes of this subsection, the term ‘payroll tax 

5 credit portion’ means the lesser of— 

6 ‘‘(A) the amount specified in the election 

7 made under this subsection, or 

8 ‘‘(B) the amount of the credit otherwise 

9 determined under subsection (a) for the taxable 

10 year. 

11 ‘‘(3) ELECTION.—Any election under this sub12 section for any taxable year— 

13 ‘‘(A) shall specify the amount of the credit 

14 to which such election applies, 

15 ‘‘(B) shall be made on or before the due 

16 date (including extensions) of— 

17 ‘‘(i) in the case of an eligible employer 

18 which is a partnership, the return required 

19 to be filed under section 6031, 

20 ‘‘(ii) in the case of an eligible em21 ployer which is an S corporation, the re22 turn required to be filed under section 

23 6037, and 


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1 ‘‘(iii) in the case of any other eligible 

2 employer, the return of tax for the taxable 

3 year, and 

4 ‘‘(C) may be revoked only with the consent 

5 of the Secretary.’’. 

6 (b) CREDIT PART OF GENERAL BUSINESS CREDIT.— 

7 Section 38(b) of the Internal Revenue Code of 1986 is 

8 amended by striking ‘‘plus’’ at the end of paragraph (32), 

9 by striking the period at the end of paragraph (33) and 

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

11 new paragraph: 

12 ‘‘(34) in the case of an eligible employer (as de13 fined in section 45U(c)), the reservist employment 

14 credit determined under section 45U(a).’’. 

15 (c) CREDIT ALLOWED AGAINST AMT.—Subpara16 graph (B) of section 38(c)(4) of the Internal Revenue 

17 Code of 1986 is amended by redesignating clauses (x) 

18 through (xii) as clauses (xi) through (xiii), respectively, 

19 and by inserting after clause (ix) the following new clause: 

20 ‘‘(x) the credit determined under sec21 tion 45U,’’. 

22 (d) PAYROLL TAX CREDIT.—Section 3111 of the In23 ternal Revenue Code of 1986 is amended by adding at the 

24 end the following new subsection: 

25 ‘‘(g) RESERVIST EMPLOYMENT CREDIT.— 


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1 ‘‘(1) IN GENERAL.—In the case of a taxpayer 

2 which has made an election under section 45U(f) for 

3 a taxable year, there shall be allowed as a credit 

4 against the tax imposed by subsection (a) for the 

5 first calendar quarter which begins after the date on 

6 which the taxpayer files the return specified in sec7 tion 45U(f)(3)(B) an amount equal to the payroll 

8 tax credit portion determined under section 

9 45U(f)(2). 

10 ‘‘(2) LIMITATION.— 

11 ‘‘(A) IN GENERAL.—The credit allowed by 

12 paragraph (1) shall not exceed the tax imposed 

13 by subsection (a) for any calendar quarter on 

14 the wages paid with respect to the employment 

15 of all individuals in the employ of the employer. 

16 The limitation imposed by the preceding sen17 tence shall be applied to appropriately take into 

18 account any other credits allowed against such 

19 tax in such manner as the Secretary may pro20 vide. 

21 ‘‘(B) TEMPORARY REFUNDABILITY.—In 

22 the case of any credit allowed by paragraph (1) 

23 with respect to a payroll tax credit portion de24 termined for a taxable year beginning in 2021 

25 or 2022, if the amount of such credit exceeds 


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1 the limitation of subparagraph (A) for the cal2 endar quarter, such excess shall be treated as 

3 an overpayment that shall be refunded under 

4 sections 6402(a) and 6413(b) of such Code. 

5 For purposes of section 1324 of title 31, United 

6 States Code, any amounts due to an employer 

7 under this subparagraph shall be treated in the 

8 same manner as a refund due from a credit 

9 provision referred to in subsection (b)(2) of 

10 such section. 

11 ‘‘(C) CARRYOVER.—In the case of any 

12 credit allowed by paragraph (1) with respect to 

13 a payroll tax credit portion determined for a 

14 taxable year beginning after 2022, if the 

15 amount of such credit exceeds the limitation of 

16 subparagraph (A) for any calendar quarter, 

17 such excess shall be carried to the succeeding 

18 calendar quarter and allowed as a credit under 

19 paragraph (1) for such quarter. 

20 ‘‘(3) DEDUCTION ALLOWED FOR CREDITED

21 AMOUNTS.—The credit allowed under paragraph (1) 

22 shall not be taken into account for purposes of de23 termining the amount of any deduction allowed 

24 under chapter 1 for taxes imposed under subsection 

25 (a).’’. 


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1 (e) CONFORMING AMENDMENTS.— 

2 (1) DENIAL OF DOUBLE BENEFIT.—Section 

3 280C(a) of the Internal Revenue Code of 1986 is 

4 amended by inserting ‘‘45U(a),’’ after ‘‘45S(a),’’. 

5 (2) ELECTION TO HAVE CREDIT NOT APPLY.— 

6 Section 6501(m) of the Internal Revenue Code of 

7 1986 is amended by inserting ‘‘45U(d),’’ after 

8 ‘‘45H(g),’’. 

9 (3) CLERICAL AMENDMENT.—The table of sec10 tions for subpart D of part IV of subchapter A of 

11 chapter 1 of the Internal Revenue Code of 1986 is 

12 amended by adding at the end the following new 

13 item: 

‘‘Sec. 45U. Reservist employment credit.’’. 

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

15 this section shall apply to wages paid in taxable years be16 ginning after December 31, 2020. 

Æ 


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