I 

111TH CONGRESS 

2D SESSION H. R. 4565 

To amend the Internal Revenue Code of 1986 to allow employers a refundable 

credit for increasing employment. 

IN THE HOUSE OF REPRESENTATIVES 

FEBRUARY 2, 2010 

Mr. OWENS (for himself, Mr. TEAGUE, Mr. ARCURI, and Mr. MINNICK) 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 

employers a refundable credit 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 ‘‘Rural Jobs Tax Credit 

5 Act of 2010’’. 

6 SEC. 2. REFUNDABLE CREDIT FOR INCREASING EMPLOY7 MENT. 

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

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1 1986 (relating to refundable credits) is amended by insert2 ing after section 36A the following new section: 

3 ‘‘SEC. 36B. CREDIT FOR INCREASING EMPLOYMENT. 

4 ‘‘(a) IN GENERAL.—In the case of an eligible em5 ployer, there shall be allowed as a credit against the tax 

6 imposed by this subtitle— 

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

8 amount equal to 15 percent of the excess (if any) 

9 of— 

10 ‘‘(A) the aggregate wages paid during 

11 2010, over 

12 ‘‘(B) the inflation-adjusted wages paid dur13 ing 2009, and 

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

15 amount equal to 10 percent of the excess (if any) 

16 of— 

17 ‘‘(A) the aggregate wages paid during 

18 2011, over 

19 ‘‘(B) the inflation-adjusted wages paid dur20 ing 2010. 

21 ‘‘(b) ELIGIBLE EMPLOYER.—For purposes of this 

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

23 which conducts an active trade or business in an area 

24 other than— 

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1 ‘‘(1) a city or town with a population of more 

2 than 50,000 inhabitants (based on the most recent 

3 available census data), or 

4 ‘‘(2) any urbanized area contiguous and adja5 cent to such a city or town. 

6 ‘‘(c) QUARTERLY ADVANCE PAYMENTS OF CRED7 IT.— 

8 ‘‘(1) IN GENERAL.—The Secretary shall pay 

9 (without interest) to each employer for each calendar 

10 quarter an amount equal to the credit percentage of 

11 the excess (if any) of— 

12 ‘‘(A) the aggregate wages paid by the em13 ployer during such quarter, over 

14 ‘‘(B) the inflation-adjusted wages paid by 

15 the employer during the comparable quarter of 

16 the preceding calendar year. 

17 ‘‘(2) CREDIT PERCENTAGE.—For purposes of 

18 paragraph (1), the credit percentage is— 

19 ‘‘(A) 15 percent in the case of the calendar 

20 quarters of 2010, and 

21 ‘‘(B) 10 percent in the case of the calendar 

22 quarters of 2011. 

23 ‘‘(3) RECONCILIATION.— 

24 ‘‘(A) IN GENERAL.—If there is a payment 

25 under paragraph (1) for 1 or more calendar 

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1 quarters ending with or within a taxable year, 

2 then the tax imposed by this chapter for such 

3 taxable year shall be increased by the aggregate 

4 amount of such payments. 

5 ‘‘(B) RECONCILIATION.—Any increase in 

6 tax under subparagraph (A) shall not be treat7 ed as tax imposed by this chapter for purposes 

8 of determining the amount of any credit (other 

9 than the credit under subsection (a)) allowable 

10 under this part. 

11 ‘‘(4) TIME FOR FILING CLAIM.—No claim shall 

12 be allowed under this subsection with respect to any 

13 calendar quarter unless filed on or before the earlier 

14 of— 

15 ‘‘(A) the last day of the succeeding quar16 ter, or 

17 ‘‘(B) the time prescribed by law for filing 

18 the return of tax imposed by this chapter for 

19 the taxable year in which or with which such 

20 quarter ends. 

21 ‘‘(5) INTEREST.—Notwithstanding paragraph 

22 (1), if the Secretary has not paid pursuant to a 

23 claim filed under this subsection within 45 days of 

24 the date of the filing of such claim (20 days in the 

25 case of an electronic claim), the claim shall be paid 

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1 with interest from such date determined by using 

2 the overpayment rate and method under section 

3 6621. 

4 ‘‘(d) TOTAL WAGES MUST INCREASE.—The amount 

5 of credit allowed under this section for any taxable year 

6 shall not exceed the amount which would be so allowed 

7 for such year if— 

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

9 as wages were determined without any dollar limita10 tion, and 

11 ‘‘(2) 103 percent of the amount of wages other12 wise required to be taken into account under sub13 section (a)(1)(B) or subsection (a)(2)(B), as the 

14 case may be, were taken into account. 

15 ‘‘(e) INFLATION-ADJUSTED WAGES; WAGES.—For 

16 purposes of this section— 

17 ‘‘(1) INFLATION-ADJUSTED WAGES.— 

18 ‘‘(A) IN GENERAL.—The term ‘inflation19 adjusted wages’ means, for any period— 

20 ‘‘(i) the aggregate wages paid by the 

21 employer during such period, increased by 

22 ‘‘(ii) an amount equal to the inflation 

23 percentage of such wages. 

24 ‘‘(B) INFLATION PERCENTAGE.—The infla25 tion percentage is— 

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1 ‘‘(i) 3 percent for purposes of deter2 mining inflation-adjusted wages for periods 

3 during 2009, and 

4 ‘‘(ii) 5 percent for purposes of deter5 mining inflation-adjusted wages for periods 

6 during 2010. 

7 ‘‘(2) WAGES.— 

8 ‘‘(A) IN GENERAL.—Except as provided in 

9 subparagraph (B), the term ‘wages’ means, 

10 with respect to any calendar year, so much of 

11 wages (as defined in section 3121(a)) as does 

12 not exceed the median household income in the 

13 United States for the preceding calendar year. 

14 ‘‘(B) RAILWAY LABOR.—In the case of re15 muneration subject to the tax imposed by 

16 3201(a), the term ‘wages’ means, with respect 

17 to any calendar year, so much of compensation 

18 (as defined in section 3231(e)) as does not ex19 ceed the median household income in the 

20 United States for the preceding calendar year. 

21 ‘‘(f) SPECIAL RULES.— 

22 ‘‘(1) ADJUSTMENTS FOR CERTAIN ACQUISI23 TIONS, ETC.— 

24 ‘‘(A) ACQUISITIONS.—If, after December 

25 31, 2008, an employer acquires the major pormstockstill on DSKH9S0YB1PROD with BILLS

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1 tion of a trade or business of another person 

2 (hereinafter in this subparagraph referred to as 

3 the ‘predecessor’) or the major portion of a sep4 arate unit of a trade or business of a prede5 cessor, then, for purposes of applying this sec6 tion for any calendar year ending after such ac7 quisition, the amount of wages deemed paid by 

8 the employer during periods before such acqui9 sition shall be increased by so much of such 

10 wages paid by the predecessor with respect to 

11 the acquired trade or business as is attributable 

12 to the portion of such trade or business ac13 quired by the employer. 

14 ‘‘(B) DISPOSITIONS.—If, after December 

15 31, 2008— 

16 ‘‘(i) an employer disposes of the major 

17 portion of any trade or business of the em18 ployer or the major portion of a separate 

19 unit of a trade or business of the employer 

20 in a transaction to which subparagraph 

21 (A) applies, and 

22 ‘‘(ii) the employer furnishes the ac23 quiring person such information as is nec24 essary for the application of subparagraph 

25 (A), 

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1 then, for purposes of applying this section for 

2 any calendar year ending after such disposition, 

3 the amount of wages deemed paid by the em4 ployer during periods before such disposition 

5 shall be decreased by so much of such wages as 

6 is attributable to such trade or business or sep7 arate unit. 

8 ‘‘(2) CHANGE IN STATUS FROM SELF-EM9 PLOYED TO EMPLOYEE.—If— 

10 ‘‘(A) during 2009 or 2010 an individual 

11 has net earnings from self-employment (as de12 fined in section 1402(a)) which are attributable 

13 a trade or business, and 

14 ‘‘(B) for any portion of the succeeding cal15 endar year such individual is an employee of 

16 such trade or business, 

17 then, for purposes of determining the credit allow18 able for a taxable year beginning in such succeeding 

19 calendar year, the employer’s aggregate wages for 

20 2009 or 2010, as the case may be, shall be increased 

21 by an amount equal to so much of the net earnings 

22 referred to in subparagraph (A) as does not exceed 

23 the median household income in the United States 

24 for 2009 or 2010, as the case may be. 

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1 ‘‘(3) CERTAIN OTHER RULES TO APPLY.—Rules 

2 similar to the following rules shall apply for pur3 poses of this section: 

4 ‘‘(A) Section 51(f) (relating to remunera5 tion must be for trade or business employment). 

6 ‘‘(B) Section 51(k) (relating to treatment 

7 of successor employers; treatment of employees 

8 performing services for other persons). 

9 ‘‘(C) Section 52 (relating to special rules). 

10 ‘‘(4) SHORT TAXABLE YEARS.—If the employer 

11 has more than 1 taxable year beginning in 2010 or 

12 2011, the credit under this section shall be deter13 mined for the employer’s last taxable year beginning 

14 in 2010 or 2011, as the case may be. 

15 ‘‘(g) TAX-EXEMPT EMPLOYERS TREATED AS TAX16 PAYERS.—Solely for purposes of this section and section 

17 6402, employers exempt from tax under section 501(a) 

18 shall be treated as taxpayers.’’. 

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

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

21 ‘‘36B(a),’’ before ‘‘45A(a)’’. 

22 (c) CONFORMING AMENDMENTS.— 

23 (1) Section 1324(b)(2) of title 31, United 

24 States Code, is amended by inserting ‘‘36B,’’ after 

25 ‘‘36A,’’. 

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1 (2) The table of sections for subpart C of part 

2 IV of subchapter A of chapter 1 of such Code is 

3 amended by inserting after the item relating to sec4 tion 36A the following new item: 

‘‘Sec. 36B. Credit for increasing employment.’’. 

5 (d) EFFECTIVE DATE.—The amendments made by 

6 this section shall apply to taxable years beginning after 

7 December 31, 2009. 

8 (e) NOTICE OF AVAILABILITY OF CREDIT.—The Sec9 retary of the Treasury shall work with the State Employ10 ment Security Agencies to inform businesses of the avail11 ability of section 36B of the Internal Revenue Code of 

12 1986 (as added by this Act). 

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