I 

111TH CONGRESS 

2D SESSION H. R. 4730 

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

credit for increasing employment. 

IN THE HOUSE OF REPRESENTATIVES 

MARCH 2, 2010 

Mr. SCHAUER 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 ‘‘Tax Credits for Jobs 

5 Now Act of 2010’’. 

6 SEC. 2. CREDIT FOR INCREASING EMPLOYMENT. 

7 (a) IN GENERAL.—Subpart C of part IV of sub8 chapter A of chapter 1 of the Internal Revenue Code of 

9 1986 (relating to refundable credits) is amended by insert10 ing after section 36A the following new section: 


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

2 ‘‘(a) IN GENERAL.—There shall be allowed as a cred3 it against the tax imposed by this subtitle— 

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

5 amount equal to 60 percent of the excess of— 

6 ‘‘(A) the aggregate wages paid during 

7 2010, over 

8 ‘‘(B) the aggregate wages paid during 

9 2009, and 

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

11 amount equal to 40 percent of the excess of— 

12 ‘‘(A) the aggregate wages paid during 

13 2011, over 

14 ‘‘(B) the aggregate inflation-adjusted 

15 wages paid during 2010. 

16 ‘‘(b) HIGHER CREDIT FOR INCREASED EMPLOYMENT

17 IN STATES WITH HIGH UNEMPLOYMENT.— 

18 ‘‘(1) IN GENERAL.—The amount of credit al19 lowable by subsection (a) (without regard to this 

20 subsection) shall be increased by— 

21 ‘‘(A) 30 percent of the increased high un22 employment State wages for any taxable year 

23 beginning in 2010, and 

24 ‘‘(B) 20 percent of such wages for any tax25 able year beginning in 2011. 


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1 ‘‘(2) DEFINITIONS.—For purposes of this sub2 section— 

3 ‘‘(A) INCREASED HIGH UNEMPLOYMENT

4 STATE WAGES.—The term ‘increased high un5 employment State wages’ means, with respect 

6 to each high unemployment State, the excess 

7 which would be determined under subsection (a) 

8 for the taxable year (after the application of 

9 subsections (e) and (f)) if only wages paid to 

10 qualified employees with respect to such State 

11 were taken into account. 

12 ‘‘(B) QUALIFIED EMPLOYEE.—The term 

13 ‘qualified employee’ means, with respect to any 

14 State, any employee of an employer if— 

15 ‘‘(i) substantially all of the services 

16 performed during the taxable year by such 

17 employee for such employer are performed 

18 within such State in a trade or business of 

19 the employer, and 

20 ‘‘(ii) the principal place of abode of 

21 such employee while performing such serv22 ices is within such State. 

23 Rules similar to the rules of paragraphs (2) and 

24 (3) of section 1396(d) shall apply for purposes 

25 of this subparagraph. 


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1 ‘‘(C) HIGH UNEMPLOYMENT STATE.—The 

2 term ‘high unemployment State’ means any 

3 State having an unemployment rate (using the 

4 most recent available data) as of the beginning 

5 of the taxable year for which the credit is being 

6 determined of at least 8.5 percent. 

7 ‘‘(3) MAXIMUM WAGES TAKEN INTO AC8 COUNT.—The aggregate increased high unemploy9 ment State wages which may be taken into account 

10 with respect to all high unemployment States for 

11 any taxable year shall not exceed the excess deter12 mined under subsection (a) for such year. 

13 ‘‘(c) MAXIMUM CREDIT.—The amount of the credit 

14 allowable under this section for any employer with respect 

15 to any calendar year shall not exceed $500,000. 

16 ‘‘(d) SPECIAL RULES FOR EMPLOYERS WHICH ARE

17 EXEMPT FROM INCOME TAX OR WHICH HAVE INSUFFI18 CIENT INCOME TAX LIABILITY.— 

19 ‘‘(1) IN GENERAL.—In the case of an employer 

20 to which this subsection applies for any payroll pe21 riod, the payroll taxes otherwise required to be paid 

22 to the Secretary with respect to such payroll period 

23 shall be reduced (but not below zero) by such peri24 od’s proportionate share of the employer’s estimated 


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1 credit under subsection (a) for the taxable year 

2 which includes such period. 

3 ‘‘(2) EMPLOYERS WHO WHICH SUBSECTION AP4 PLIES.—This subsection shall apply to— 

5 ‘‘(A) any employer which is exempt from 

6 tax under section 501(a), and 

7 ‘‘(B) any employer which estimates that 

8 the tax imposed by this subtitle for the taxable 

9 year will not exceed the credit allowable under 

10 subsection (a) for such year. 

11 ‘‘(3) PAYROLL TAXES.—For purposes of this 

12 subsection, the term ‘payroll taxes’ means— 

13 ‘‘(A) amounts required to be deducted and 

14 withheld for the payroll period under section 

15 3401 (relating to wage withholding), 

16 ‘‘(B) amounts required to be deducted for 

17 the payroll period under section 3102 (relating 

18 to FICA employee taxes), and 

19 ‘‘(C) amounts of the taxes imposed for the 

20 payroll period under section 3111 (relating to 

21 FICA employer taxes). 

22 ‘‘(4) AMOUNTS TREATED AS PAID TO SEC23 RETARY.—The amount of the reduction under para24 graph (1) shall be treated as paid to the Secretary 


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1 on the day such amount would be required to be so 

2 paid without regard to this subsection. 

3 ‘‘(5) RECONCILIATION.— 

4 ‘‘(A) IN GENERAL.—If there is a reduction 

5 under this subsection for 1 or more payroll pe6 riods ending during a taxable year, then the tax 

7 imposed by this chapter for such taxable year 

8 shall be increased by the aggregate amount of 

9 such reductions. 

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

11 tax under subparagraph (A) shall not be treat12 ed as tax imposed by this chapter for purposes 

13 of determining the amount of any credit (other 

14 than the credit under subsection (a)) allowable 

15 under this part. 

16 ‘‘(e) MINIMUM PRECEDING YEAR WAGES.—For pur17 poses of subsection (a)— 

18 ‘‘(1) the amount taken into account under para19 graph (1)(B) thereof shall not be less than 50 per20 cent of the amount described in paragraph (1)(A) 

21 thereof, and 

22 ‘‘(2) the amount taken into account under para23 graph (2)(B) thereof shall not be less than 50 per24 cent of the amount described in paragraph (2)(A) 

25 thereof. 


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1 ‘‘(f) TOTAL WAGES MUST INCREASE.—The amount 

2 of credit allowed under this section for any taxable year 

3 shall not exceed the amount which would be so allowed 

4 for such year (without regard to subsection (e)) if— 

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

6 as wages were determined without any dollar limita7 tion, and 

8 ‘‘(2) 103 percent of the amount of wages other9 wise required to be taken into account under sub10 section (a)(1)(B) or subsection (a)(2)(B), as the 

11 case may be, were taken into account. 

12 ‘‘(g) WAGES; INFLATION-ADJUSTED WAGES.—For 

13 purposes of this section— 

14 ‘‘(1) IN GENERAL.—Except as provided in para15 graph (2), the term ‘wages’ has the meaning given 

16 to such term by section 3306(b). 

17 ‘‘(2) RAILWAY AND AGRICULTURAL LABOR.— 

18 Rules similar to the rules of section 51(h) shall 

19 apply for purposes of this section. 

20 ‘‘(3) INFLATION-ADJUSTED WAGES.—The term 

21 ‘inflation-adjusted wages’ means the aggregate 

22 wages paid during 2010 increased by an amount 

23 equal to— 

24 ‘‘(A) such aggregate wages, multiplied by 


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1 ‘‘(B) the cost-of-living adjustment deter2 mined under section 1(f)(3) for 2010, deter3 mined by substituting ‘calendar year 2008’ for 

4 ‘calendar year 1992’ in subparagraph (B) 

5 thereof. 

6 Any increase determined under the preceding sen7 tence shall be rounded in such manner as the Sec8 retary shall prescribe. 

9 ‘‘(h) SPECIAL RULES.— 

10 ‘‘(1) ADJUSTMENTS FOR CERTAIN ACQUISI11 TIONS, ETC.— 

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

13 31, 2008, an employer acquires the major por14 tion of a trade or business of another person 

15 (hereinafter in this subparagraph referred to as 

16 the ‘predecessor’) or the major portion of a sep17 arate unit of a trade or business of a prede18 cessor, then, for purposes of applying this sec19 tion for any calendar year ending after such ac20 quisition, the amount of wages deemed paid by 

21 the employer during periods before such acqui22 sition shall be increased by so much of such 

23 wages paid by the predecessor with respect to 

24 the acquired trade or business as is attributable 


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1 to the portion of such trade or business ac2 quired by the employer. 

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

4 31, 2008— 

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

6 portion of any trade or business of the em7 ployer or the major portion of a separate 

8 unit of a trade or business of the employer 

9 in a transaction to which subparagraph 

10 (A) applies, and 

11 ‘‘(ii) the employer furnishes the ac12 quiring person such information as is nec13 essary for the application of subparagraph 

14 (A), 

15 then, for purposes of applying this section for 

16 any calendar year ending after such disposition, 

17 the amount of wages deemed paid by the em18 ployer during periods before such disposition 

19 shall be decreased by so much of such wages as 

20 is attributable to such trade or business or sep21 arate unit. 

22 ‘‘(2) CHANGE IN STATUS FROM SELF-EM23 PLOYED TO EMPLOYEE.—If— 

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

25 has net earnings from self-employment (as deVerDate Nov 24 2008 03:53 Mar 04, 2010 Jkt 089200 PO 00000 Frm 00009 Fmt 6652 Sfmt 6201 E:\BILLS\H4730.IH H4730

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1 fined in section 1402(a)) which are attributable 

2 a trade or business, and 

3 ‘‘(B) for any portion of the succeeding cal4 endar year such individual is an employee of 

5 such trade or business, 

6 then, for purposes of determining the credit allow7 able for a taxable year beginning in such succeeding 

8 calendar year, the employer’s aggregate wages for 

9 2009 or 2010, as the case may be, shall be increased 

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

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

12 the median household income in the United States 

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

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

15 similar to the following rules shall apply for pur16 poses of this section: 

17 ‘‘(A) Section 51(f) (relating to remunera18 tion must be for trade or business employment). 

19 ‘‘(B) Section 51(1)(1) (relating to related 

20 individuals ineligible). 

21 ‘‘(C) Section 51(k) (relating to treatment 

22 of successor employers; treatment of employees 

23 performing services for other persons). 

24 ‘‘(D) Section 52 (relating to special rules). 


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

2 has more than 1 taxable year beginning in 2010 or 

3 2011, the credit under this section shall be deter4 mined for the employer’s last taxable year beginning 

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

6 ‘‘(i) TAX-EXEMPT EMPLOYERS TREATED AS TAX7 PAYERS.—Solely for purposes of this section and section 

8 6402, employers exempt from tax under section 501(a) 

9 shall be treated as taxpayers.’’. 

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

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

12 ‘‘36B(a),’’ before ‘‘45A(a)’’. 

13 (c) CONFORMING AMENDMENTS.— 

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

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

16 ‘‘36A,’’. 

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

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

19 amended by inserting after the item relating to sec20 tion 36A the following new item: 

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

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

22 this section shall apply to taxable years beginning after 

23 December 31, 2009. 

Æ 


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