I 

111TH CONGRESS 

2D SESSION H. R. 4777 

To amend the Internal Revenue Code of 1986 to provide an exemption 

for employer payroll taxes during 2010 for wages with respect to the 

employment of new hires and to provide a credit for retaining employees. 

IN THE HOUSE OF REPRESENTATIVES 

MARCH 4, 2010 

Mr. OWENS 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 provide 

an exemption for employer payroll taxes during 2010 

for wages with respect to the employment of new hires 

and to provide a credit for retaining employees. 

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled, 

3 SECTION 1. PAYROLL TAX FORGIVENESS FOR HIRING UN4 EMPLOYED WORKERS. 

5 (a) IN GENERAL.—Section 3111 is amended by add6 ing at the end the following new subsection: 

7 ‘‘(d) SPECIAL EXEMPTION FOR CERTAIN INDIVID8 UALS HIRED IN 2010.— 


jbell on DSKDVH8Z91PROD with BILLS
2 

•HR 4777 IH

1 ‘‘(1) IN GENERAL.—Subsection (a) shall not 

2 apply to wages paid by a qualified employer with re3 spect to employment during the period beginning on 

4 the day after the date of the enactment of this sub5 section and ending on December 31, 2010, of any 

6 qualified individual for services performed— 

7 ‘‘(A) in a trade or business of such quali8 fied employer, or 

9 ‘‘(B) in the case of a qualified employer ex10 empt from tax under section 501(a), in further11 ance of the activities related to the purpose or 

12 function constituting the basis of the employer’s 

13 exemption under section 501. 

14 ‘‘(2) QUALIFIED EMPLOYER.—For purposes of 

15 this subsection— 

16 ‘‘(A) IN GENERAL.—The term ‘qualified 

17 employer’ means any employer other than the 

18 United States, any State, or any political sub19 division thereof, or any instrumentality of the 

20 foregoing. 

21 ‘‘(B) TREATMENT OF EMPLOYEES OF

22 POST-SECONDARY EDUCATIONAL INSTITU23 TIONS.—Notwithstanding subparagraph (A), 

24 the term ‘qualified employer’ includes any em25 ployer which is a public institution of higher 


jbell on DSKDVH8Z91PROD with BILLS
3 

•HR 4777 IH

1 education (as defined in section 101(b) of the 

2 Higher Education Act of 1965). 

3 ‘‘(3) QUALIFIED INDIVIDUAL.—For purposes of 

4 this subsection, the term ‘qualified individual’ means 

5 any individual who— 

6 ‘‘(A) begins employment with a qualified 

7 employer after February 3, 2010, and before 

8 January 1, 2011, 

9 ‘‘(B) certifies by signed affidavit, under 

10 penalties of perjury, that such individual has 

11 not been employed for more than 40 hours dur12 ing the 60-day period ending on the date such 

13 individual begins such employment, 

14 ‘‘(C) is not employed by the qualified em15 ployer to replace another employee of such em16 ployer unless such other employee separated 

17 from employment voluntarily or for cause, and 

18 ‘‘(D) is not an individual described in sec19 tion 51(i)(1) (applied by substituting ‘qualified 

20 employer’ for ‘taxpayer’ each place it appears). 

21 ‘‘(4) ELECTION.—A qualified employer may 

22 elect to have this subsection not apply. Such election 

23 shall be made in such manner as the Secretary may 

24 require.’’. 


jbell on DSKDVH8Z91PROD with BILLS
4 

•HR 4777 IH

1 (b) COORDINATION WITH WORK OPPORTUNITY

2 CREDIT.—Section 51(c) is amended by adding at the end 

3 the following new paragraph: 

4 ‘‘(5) COORDINATION WITH PAYROLL TAX FOR5 GIVENESS.—The term ‘wages’ shall not include any 

6 amount paid or incurred to a qualified individual (as 

7 defined in section 3111(d)(3)) during the 1-year pe8 riod beginning on the hiring date of such individual 

9 by a qualified employer (as defined in section 

10 3111(d)) unless such qualified employer makes an 

11 election not to have section 3111(d) apply.’’. 

12 (c) TRANSFERS TO FEDERAL OLD-AGE AND SUR13 VIVORS INSURANCE TRUST FUND.—There are hereby ap14 propriated to the Federal Old-Age and Survivors Trust 

15 Fund and the Federal Disability Insurance Trust Fund 

16 established under section 201 of the Social Security Act 

17 (42 U.S.C. 401) amounts equal to the reduction in reve18 nues to the Treasury by reason of the amendments made 

19 by subsection (a). Amounts appropriated by the preceding 

20 sentence shall be transferred from the general fund at 

21 such times and in such manner as to replicate to the ex22 tent possible the transfers which would have occurred to 

23 such Trust Fund had such amendments not been enacted. 


jbell on DSKDVH8Z91PROD with BILLS
5 

•HR 4777 IH

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

2 this section shall apply to wages paid after the date of 

3 the enactment of this Act. 

4 SEC. 2. BUSINESS CREDIT FOR RETENTION OF CERTAIN 

5 NEWLY HIRED INDIVIDUALS IN 2010. 

6 (a) IN GENERAL.—In the case of any taxable year 

7 ending after the date of the enactment of this Act, the 

8 current year business credit determined under section 

9 38(b) of the Internal Revenue Code of 1986 for such tax10 able year shall be increased by an amount equal to the 

11 product of— 

12 (1) $1,000, and 

13 (2) the number of retained workers with respect 

14 to which subsection (b)(2) is first satisfied during 

15 such taxable year. 

16 (b) LIMITATION.—The increase determined under 

17 subsection (a) with respect to any retained worker shall 

18 not exceed an amount equal to 4 percent of the wages (as 

19 defined in section 3401(a) of the Internal Revenue Code 

20 of 1986) with respect to such retained worker for the 52 

21 consecutive week period described in subsection (c)(2). 

22 (c) RETAINED WORKER.—For purposes of this sec23 tion, the term ‘‘retained worker’’ means any qualified indi24 vidual (as defined in section 3111(d)(3) of the Internal 

25 Revenue Code of 1986)— 


jbell on DSKDVH8Z91PROD with BILLS
6 

•HR 4777 IH

1 (1) who was employed by the taxpayer on any 

2 date during the taxable year, 

3 (2) who was so employed by the taxpayer for a 

4 period of not less than 52 consecutive weeks, and 

5 (3) whose wages for such employment during 

6 the last 26 weeks of such period equaled at least 80 

7 percent of such wages for the first 26 weeks of such 

8 period. 

9 (d) LIMITATION ON CARRYBACKS.—No portion of the 

10 unused business credit under section 38 of the Internal 

11 Revenue Code of 1986 for any taxable year which is attrib12 utable to the increase in the current year business credit 

13 under this section may be carried to a taxable year begin14 ning before the date of the enactment of this section. 

Æ 


jbell on DSKDVH8Z91PROD with BILLS