I 

111TH CONGRESS 

1ST SESSION H. R. 4056 

To amend the Internal Revenue Code of 1986 to allow small businesses 

a credit against income tax for increasing employment. 

IN THE HOUSE OF REPRESENTATIVES 

NOVEMBER 6, 2009 

Mr. SESTAK 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 small 

businesses a credit against income tax for increasing 

employment. 

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 ‘‘Jobs Opportunity and 

5 Business Stability Act of 2009’’. 

6 SEC. 2. CREDIT FOR SMALL BUSINESSES THAT INCREASE 

7 EMPLOYMENT. 

8 (a) IN GENERAL.—Subpart D of part IV of sub9 chapter A of chapter 1 of the Internal Revenue Code of 


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1 1986 (relating to business-related credits) is amended by 

2 adding at the end the following new section: 

3 ‘‘SEC. 45R. CREDIT FOR SMALL BUSINESSES THAT IN4 CREASE EMPLOYMENT. 

5 ‘‘(a) GENERAL RULE.—In the case of an eligible 

6 small business employer, the increased small business em7 ployment credit determined under this section shall be— 

8 ‘‘(1) for any taxable year beginning in 2010, an 

9 amount equal to 15 percent of the excess of— 

10 ‘‘(A) the aggregate wages paid during 

11 2010, over 

12 ‘‘(B) 102 percent of the aggregate wages 

13 paid during 2009, and 

14 ‘‘(2) for any taxable year beginning in 2011, an 

15 amount equal to 10 percent of the excess of— 

16 ‘‘(A) the aggregate wages paid during 

17 2011, over 

18 ‘‘(B) 102 percent of the aggregate wages 

19 paid during 2010. 

20 ‘‘(b) MINIMUM PRECEDING YEAR WAGES.—For pur21 poses of subsection (a)— 

22 ‘‘(1) the amount taken into account under para23 graph (1)(B) thereof shall not be less than 50 per24 cent of the amount described in paragraph (1)(A) 

25 thereof, and 


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1 ‘‘(2) the amount taken into account under para2 graph (2)(B) thereof shall not be less than 50 per3 cent of the amount described in paragraph (2)(A) 

4 thereof. 

5 ‘‘(c) TOTAL WAGES MUST INCREASE.—The amount 

6 of credit determined under this section for any taxable 

7 year shall not exceed the amount which would be so deter8 mined for such year (without regard to subsection (b)) 

9 if— 

10 ‘‘(1) the aggregate amounts taken into account 

11 as wages were determined without any dollar limita12 tion, and 

13 ‘‘(2) ‘105 percent’ were substituted for ‘102 

14 percent’ in the appropriate subparagraph of sub15 section (a). 

16 ‘‘(d) ELIGIBLE SMALL BUSINESS EMPLOYER.—For 

17 purposes of this section, the term ‘eligible small business 

18 employer’ means, with respect to any taxable year, any 

19 employer if— 

20 ‘‘(1) such employer employed an average of less 

21 than 20 employees on business days during the pre22 ceding taxable year, and 

23 ‘‘(2) such employer (and any predecessor) met 

24 the gross receipts test of section 448(c) for the pre25 ceding taxable year. 


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1 ‘‘(e) WAGES.—For purposes of this section— 

2 ‘‘(1) IN GENERAL.—Except as provided in para3 graph (2), the term ‘wages’ has the meaning given 

4 to such term by section 3121(a) with respect to the 

5 tax imposed by section 3101(a). 

6 ‘‘(2) RAILWAY LABOR.—In the case of remu7 neration subject to the tax imposed by 3201(a), the 

8 term ‘wages’ means so much of compensation (as de9 fined in section 3231(e)) for the calendar year as 

10 does not exceed the contribution and benefit base de11 termined under section 230 of the Social Security 

12 Act for such calendar year. 

13 ‘‘(f) CERTAIN RULES TO APPLY.—Rules similar to 

14 the following rules shall apply for purposes of this section: 

15 ‘‘(1) Section 51(f) (relating to remuneration 

16 must be for trade or business employment). 

17 ‘‘(2) Section 51(k) (relating to treatment of 

18 successor employers; treatment of employees per19 forming services for other persons). 

20 ‘‘(3) Subsections (a) and (b) of section 52 (re21 lating to controlled groups). 

22 ‘‘(g) ELECTION TO HAVE CREDIT NOT APPLY.— 

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

24 have this section not apply for any taxable year. 


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1 ‘‘(2) TIME FOR MAKING ELECTION.—An elec2 tion under paragraph (1) for any taxable year may 

3 be made (or revoked) at any time before the expira4 tion of the 3-year period beginning on the last date 

5 prescribed by law for filing the return for such tax6 able year (determined without regard to exten7 sions).’’. 

8 (b) DENIAL OF DOUBLE BENEFIT.—Subsection (a) 

9 of section 280C of such Code is amended by inserting 

10 ‘‘45R(a),’’ after ‘‘45P(a),’’. 

11 (c) CREDIT MADE PART OF GENERAL BUSINESS

12 CREDIT.— 

13 (1) IN GENERAL.—Subsection (b) of section 38 

14 of such Code (relating to current year business cred15 it) is amended by striking ‘‘plus’’ at the end of para16 graph (34), by striking the period at the end of 

17 paragraph (35) and inserting ‘‘, plus’’, and by add18 ing at the end the following new paragraph: 

19 ‘‘(36) in the case of an eligible small business 

20 employer (as defined in section 45R(e)), the in21 creased small business employment credit deter22 mined under section 45R(a).’’. 

23 (2) DEDUCTION FOR CERTAIN UNUSED BUSI24 NESS CREDITS.—Subsection (c) of section 196 of 

25 such Code is amended by striking ‘‘and’’ at the end 


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1 of paragraph (12), by striking the period at the end 

2 of paragraph (13) and inserting ‘‘, and’’, and by 

3 adding after paragraph (13) the following new para4 graph: 

5 ‘‘(14) the increased small business employment 

6 credit determined under section 45R(a).’’. 

7 (d) CREDIT TO BE REFUNDABLE.—Subsection (c) of 

8 section 38 of such Code (relating to limitation based on 

9 amount of tax) is amended by redesignating paragraph (5) 

10 as paragraph (6) and by inserting after paragraph (4) the 

11 following new paragraph: 

12 ‘‘(5) SPECIAL RULES FOR INCREASED SMALL

13 BUSINESS EMPLOYMENT CREDIT.—In the case of the 

14 credit determined under section 45R— 

15 ‘‘(A) this section and section 39 shall be 

16 applied separately with respect to such credit, 

17 and 

18 ‘‘(B) in applying paragraph (1) to such 

19 credit— 

20 ‘‘(i) the tentative minimum tax shall 

21 be treated as being zero, and 

22 ‘‘(ii) the limitation under paragraph 

23 (1) (as modified by clause (i)) shall be re24 duced by the credit allowed under sub25 section (a) for the taxable year (other than 


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1 the credit determined under section 45R), 

2 and 

3 ‘‘(iii) the amount of the credit deter4 mined under section 45R in excess of the 

5 limitation under paragraph (1) (as modi6 fied by clause (ii)) shall be treated as a 

7 credit under subpart C.’’. 

8 (e) CLERICAL AMENDMENT.—The table of sections 

9 for subpart D of part IV of subchapter A of chapter 1 

10 of such Code is amended by inserting after the item relat11 ing to section 45Q the following new item: 

‘‘Sec. 45R. Credit for small businesses that increase employment.’’. 

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

13 this section shall apply to taxable years beginning after 

14 December 31, 2009. 

15 (g) PUBLIC INFORMATION CAMPAIGN.—The Sec16 retary of the Treasury (or the Secretary’s delegate) shall 

17 undertake a public information campaign to make employ18 ers aware of the credit added by this Act. 

19 (h) STUDY TO PROVIDE COMPARABLE BENEFITS TO

20 NONPROFIT ORGANIZATIONS.—The Secretary of the 

21 Treasury (or the Secretary’s delegate) shall conduct a 

22 study on ways to provide benefits to nonprofit organiza23 tions which are comparable to the credit added by the Act. 

24 The results of such study shall be submitted to the Com25 mittee on Ways and Means of the House of RepresentaVerDate Nov 24 2008 19:42 Nov 07, 2009 Jkt 089200 PO 00000 Frm 00007 Fmt 6652 Sfmt 6201 E:\BILLS\H4056.IH H4056

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1 tives and the Committee on Finance of the Senate not 

2 later than 90 days after the date of the enactment of this 

3 Act. 

Æ 


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