I 

116TH CONGRESS 

2D SESSION H. R. 7058 

To provide a payroll tax credit for certain bonuses paid to employees who 

worked continuously during the COVID-19 pandemic. 

IN THE HOUSE OF REPRESENTATIVES 

MAY 28, 2020 

Mr. REED (for himself, Mr. GOTTHEIMER, Mr. SCHWEIKERT, and Mr. 

CUELLAR) introduced the following bill; which was referred to the Committee on Ways and Means 

A BILL 

To provide a payroll tax credit for certain bonuses paid 

to employees who worked continuously during the 

COVID-19 pandemic. 

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 ‘‘Rewarding American 

5 Workers Act of 2020’’. 


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1 SEC. 2. PAYROLL CREDIT FOR BONUSES PAID TO EMPLOY2 EES WHO WORKED CONTINUOUSLY DURING 

3 THE COVID-19 PANDEMIC. 

4 (a) IN GENERAL.—In the case of an employer, there 

5 shall be allowed as a credit against applicable employment 

6 taxes for the calendar quarter which includes the last day 

7 of the covered period an amount equal to 100 percent of 

8 the qualified bonuses paid to eligible employees of such 

9 employer during such calendar quarter. 

10 (b) QUALIFIED BONUS.—For the purposes of this 

11 section— 

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

13 means, with respect to any eligible employee of any 

14 employer, a supplemental wage (within the meaning 

15 of the rules and regulations under section 3402) 

16 equal to— 

17 (A) in the case of an eligible employee 

18 whose annualized covered period wages do not 

19 exceed $55,000, an amount equal to the appli20 cable percentage of the wages (as defined in 

21 section 3401) paid by such employer to such 

22 employee during the covered period, and 

23 (B) in the case of an eligible employee 

24 whose annualized covered period wages exceed 

25 $55,000 but do not exceed $99,000, $600. 


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1 (2) APPLICABLE PERCENTAGE.—The term ‘‘ap2 plicable percentage’’ means, with respect to any eli3 gible employee of any employer, 30 percent reduced 

4 (but not below zero) by 0.1 percent for each $100 

5 that the such employee’s annualized covered period 

6 wages exceeds $30,000. 

7 (3) ANNUALIZED COVERED PERIOD WAGES.— 

8 The term ‘‘annualized covered period wages’’ means, 

9 with respect to any eligible employee of any em10 ployer, the amount of wages (as defined in section 

11 3401 and determined without regard to any quali12 fied bonuses) which would have been paid to such 

13 employee by such employer during a 365-day period 

14 if such employee were paid at the same rate during 

15 all of such period as such employee was paid during 

16 the covered period. 

17 (c) ELIGIBLE EMPLOYEE.—For purposes of this sec18 tion, the term ‘‘eligible employee’’ means, with respect to 

19 any employer, any employee if— 

20 (1) such employee had taxes withheld by such 

21 employer under section 3101 for the entirety of the 

22 covered period, and 

23 (2) such employee’s annualized covered period 

24 wages do not exceed $99,000. 


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1 (d) COVERED PERIOD.—For purposes of this section, 

2 the term ‘‘covered period’’ means the period beginning on 

3 March 13, 2020, and ending on the earlier of July 31, 

4 2020, or the end of the National Emergency Concerning 

5 the Novel Coronavirus Disease (COVID-19) Outbreak. 

6 (e) REFUNDABILITY.— 

7 (1) CREDIT LIMITED TO EMPLOYMENT

8 TAXES.—The credit allowed by subsection (a) with 

9 respect to any calendar quarter shall not exceed the 

10 applicable employment taxes (reduced by any credits 

11 allowed under subsections (e) and (f) of section 

12 3111 of the Internal Revenue Code of 1986, sections 

13 7001 and 7003 of the Families First Coronavirus 

14 Response Act, and section 2301 of the CARES Act) 

15 on the wages paid with respect to the employment 

16 of all the employees of the eligible employer for such 

17 calendar quarter. 

18 (2) REFUNDABILITY OF EXCESS CREDIT.— 

19 (A) IN GENERAL.—If the amount of the 

20 credit under subsection (a) exceeds the limita21 tion of paragraph (1) for any calendar quarter, 

22 such excess shall be treated as an overpayment 

23 that shall be refunded under sections 6402(a) 

24 and 6413(b) of the Internal Revenue Code of 

25 1986. 


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1 (B) TREATMENT OF PAYMENTS.—For pur2 poses of section 1324 of title 31, United States 

3 Code, any amounts due to the employer under 

4 this paragraph shall be treated in the same 

5 manner as a refund due from a credit provision 

6 referred to in subsection (b)(2) of such section. 

7 (f) OTHER DEFINITIONS.—For purposes of this sec8 tion— 

9 (1) APPLICABLE EMPLOYMENT TAXES.—The 

10 term ‘‘applicable employment taxes’’ means the fol11 lowing: 

12 (A) The taxes imposed under section 

13 3111(a) of the Internal Revenue Code of 1986. 

14 (B) So much of the taxes imposed under 

15 section 3221(a) of such Code as are attrib16 utable to the rate in effect under section 

17 3111(a) of such Code. 

18 (2) SECRETARY.—The term ‘‘Secretary’’ means 

19 the Secretary of the Treasury or the Secretary’s del20 egate. 

21 (3) OTHER TERMS.—Except as otherwise pro22 vided in this section, any term used in this section 

23 which is also used in chapter 21 or 22 of the Inter24 nal Revenue Code of 1986 shall have the same 

25 meaning as when used in such chapter. 


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1 (g) AGGREGATION RULE.—All persons treated as a 

2 single employer under subsection (a) or (b) of section 52 

3 of the Internal Revenue Code of 1986, or subsection (m) 

4 or (o) of section 414 of such Code, shall be treated as 

5 one employer for purposes of this section. 

6 (h) CERTAIN RULES TO APPLY.—For purposes of 

7 this section, rules similar to the rules of sections 51(i)(1) 

8 and 280C(a) of the Internal Revenue Code of 1986 shall 

9 apply. 

10 (i) ELECTION NOT TO HAVE SECTION APPLY.—This 

11 section shall not apply with respect to any eligible em12 ployer for any calendar quarter if such employer elects (at 

13 such time and in such manner as the Secretary may pre14 scribe) not to have this section apply. 

15 (j) THIRD-PARTY PAYORS.—Any credit allowed 

16 under this section shall be treated as a credit described 

17 in section 3511(d)(2) of such Code. 

18 (k) TRANSFERS TO FEDERAL OLD-AGE AND SUR19 VIVORS INSURANCE TRUST FUND.—There are hereby ap20 propriated to the Federal Old-Age and Survivors Insur21 ance Trust Fund and the Federal Disability Insurance 

22 Trust Fund established under section 201 of the Social 

23 Security Act (42 U.S.C. 401) and the Social Security 

24 Equivalent Benefit Account established under section 

25 15A(a) of the Railroad Retirement Act of 1974 (45 U.S.C. 


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1 14 231n–1(a)) amounts equal to the reduction in revenues 

2 to the Treasury by reason of this section (without regard 

3 to this subsection). Amounts appropriated by the pre4 ceding sentence shall be transferred from the general fund 

5 at such times and in such manner as to replicate to the 

6 extent possible the transfers which would have occurred 

7 to such Trust Fund or Account had this section not been 

8 enacted. 

9 (l) TREATMENT OF DEPOSITS.—The Secretary shall 

10 waive any penalty under section 6656 of the Internal Rev11 enue Code of 1986 for any failure to make a deposit of 

12 any applicable employment taxes if the Secretary deter13 mines that such failure was due to the reasonable anticipa14 tion of the credit allowed under this section. 

15 (m) REGULATIONS AND GUIDANCE.—The Secretary 

16 shall issue such forms, instructions, regulations, and guid17 ance as are necessary— 

18 (1) to allow the advance payment of the credit 

19 under subsection (a), subject to the limitations pro20 vided in this section, based on such information as 

21 the Secretary shall require, 

22 (2) to provide for the reconciliation of such ad23 vance payment with the amount advanced at the 

24 time of filing the return of tax for the applicable cal25 endar quarter or taxable year, and 


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1 (3) with respect to the application of the credit 

2 under subsection (a) to third-party payors (including 

3 professional employer organizations, certified profes4 sional employer organizations, or agents under sec5 tion 3504 of the Internal Revenue Code of 1986), 

6 including regulations or guidance allowing such 

7 payors to submit documentation necessary to sub8 stantiate the eligible employer status of employers 

9 that use such payors. 

Æ 


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