II 

116TH CONGRESS 

1ST SESSION S. 223 

To amend the Internal Revenue Code of 1986 to provide a tax credit to 

Patriot employers, and for other purposes. 

IN THE SENATE OF THE UNITED STATES 

JANUARY 24, 2019 

Mr. DURBIN (for himself and Mr. BROWN) introduced the following bill; which 

was read twice and referred to the Committee on Finance 

A BILL 

To amend the Internal Revenue Code of 1986 to provide 

a tax credit to Patriot employers, and for other purposes. 

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 ‘‘Patriot Employer Tax 

5 Credit Act’’. 

6 SEC. 2. PATRIOT EMPLOYER TAX CREDIT. 

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

9 1986 is amended by adding at the end the following new 

10 section: 


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1 ‘‘SEC. 45T. PATRIOT EMPLOYER TAX CREDIT. 

2 ‘‘(a) DETERMINATION OF AMOUNT.— 

3 ‘‘(1) IN GENERAL.—For purposes of section 38, 

4 the Patriot employer credit determined under this 

5 section with respect to any taxpayer who is a Patriot 

6 employer for any taxable year shall be equal to 10 

7 percent of the qualified wages paid or incurred by 

8 the Patriot employer. 

9 ‘‘(2) LIMITATION.—The amount of qualified 

10 wages which may be taken into account under para11 graph (1) with respect to any employee for any tax12 able year shall not exceed $15,000. 

13 ‘‘(b) PATRIOT EMPLOYER.— 

14 ‘‘(1) IN GENERAL.—For purposes of subsection 

15 (a), the term ‘Patriot employer’ means, with respect 

16 to any taxable year, any taxpayer— 

17 ‘‘(A) which— 

18 ‘‘(i) maintains its headquarters in the 

19 United States if the taxpayer (or any pred20 ecessor) has ever been headquartered in 

21 the United States, and 

22 ‘‘(ii) is not (and no predecessor of 

23 which is) an expatriated entity (as defined 

24 in section 7874(a)(2)) for the taxable year 

25 or any preceding taxable year ending after 

26 March 4, 2003, 


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1 ‘‘(B) with respect to which no assessable 

2 payment has been imposed under section 

3 4980H with respect to any month occurring 

4 during the taxable year, 

5 ‘‘(C) provides employees with— 

6 ‘‘(i) paid sick leave, or 

7 ‘‘(ii) paid family and medical leave, 

8 and 

9 ‘‘(D) in the case of— 

10 ‘‘(i) a taxpayer which employs an av11 erage of more than 50 employees on busi12 ness days during the taxable year, which— 

13 ‘‘(I) provides compensation for at 

14 least 90 percent of its employees for 

15 services provided by such employees 

16 during the taxable year at an hourly 

17 rate (or equivalent thereof) not less 

18 than an amount equal to 218 percent 

19 of the Federal poverty level for an in20 dividual for the calendar year in which 

21 the taxable year begins divided by 

22 1,750, 

23 ‘‘(II) meets the retirement plan 

24 requirements of subsection (c) with 

25 respect to at least 90 percent of its 


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1 employees providing services during 

2 the taxable year who are not highly 

3 compensated employees, and 

4 ‘‘(III) meets the additional re5 quirements of subparagraphs (A) and 

6 (B) of paragraph (2), or 

7 ‘‘(ii) any other taxpayer, which meets 

8 the requirements of either subclause (I) or 

9 (II) of clause (i) for the taxable year. 

10 ‘‘(2) ADDITIONAL REQUIREMENTS FOR LARGE

11 EMPLOYERS.— 

12 ‘‘(A) UNITED STATES EMPLOYMENT.—The 

13 requirements of this subparagraph are met for 

14 any taxable year if— 

15 ‘‘(i) in any case in which the taxpayer 

16 increases the number of employees per17 forming substantially all of their services 

18 for the taxable year outside the United 

19 States, the taxpayer either— 

20 ‘‘(I) increases the number of em21 ployees performing substantially all of 

22 their services inside the United States 

23 by an amount not less than the in24 crease in such number for employees 

25 outside the United States, or 


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1 ‘‘(II) has a percentage increase 

2 in such employees inside the United 

3 States which is not less than the per4 centage increase in such employees 

5 outside the United States, 

6 ‘‘(ii) in any case in which the taxpayer 

7 decreases the number of employees per8 forming substantially all of their services 

9 for the taxable year inside the United 

10 States, the taxpayer either— 

11 ‘‘(I) decreases the number of em12 ployees performing substantially all of 

13 their services outside the United 

14 States by an amount not less than the 

15 decrease in such number for employ16 ees inside the United States, or 

17 ‘‘(II) has a percentage decrease 

18 in employees outside the United 

19 States which is not less than the per20 centage decrease in such employees 

21 inside the United States, and 

22 ‘‘(iii) there is not a decrease in the 

23 number of employees performing substan24 tially all of their services for the taxable 

25 year inside the United States by reason of 


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1 the taxpayer contracting out such services 

2 to persons who are not employees of the 

3 taxpayer. 

4 ‘‘(B) TREATMENT OF INDIVIDUALS IN THE

5 UNIFORMED SERVICES AND THE DISABLED.— 

6 The requirements of this subparagraph are met 

7 for any taxable year if— 

8 ‘‘(i) the taxpayer provides differential 

9 wage payments (as defined in section 

10 3401(h)(2)) to each employee described in 

11 section 3401(h)(2)(A) for any period dur12 ing the taxable year in an amount not less 

13 than the difference between the wages 

14 which would have been received from the 

15 employer during such period and the 

16 amount of pay and allowances which the 

17 employee receives for service in the uni18 formed services during such period, and 

19 ‘‘(ii) the taxpayer has in place at all 

20 times during the taxable year a written 

21 policy for the recruitment of employees 

22 who have served in the uniformed services 

23 or who are disabled. 


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1 ‘‘(3) SPECIAL RULES FOR APPLYING THE MIN2 IMUM WAGE AND RETIREMENT PLAN REQUIRE3 MENTS.— 

4 ‘‘(A) MINIMUM WAGE.—In determining 

5 whether the minimum wage requirements of 

6 paragraph (1)(D)(i)(I) are met with respect to 

7 90 percent of a taxpayer’s employees for any 

8 taxable year— 

9 ‘‘(i) a taxpayer may elect to exclude 

10 from such determination apprentices or 

11 learners that an employer may exclude 

12 under the regulations under section 14(a) 

13 of the Fair Labor Standards Act of 1938, 

14 and 

15 ‘‘(ii) if a taxpayer meets the require16 ments of paragraph (2)(B)(i) with respect 

17 to providing differential wage payments to 

18 any employee for any period (without re19 gard to whether such requirements apply 

20 to the taxpayer), the hourly rate (or equiv21 alent thereof) for such payments shall be 

22 determined on the basis of the wages which 

23 would have been paid by the employer dur24 ing such period if the employee had not 


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1 been providing service in the uniformed 

2 services. 

3 ‘‘(B) RETIREMENT PLAN.—In determining 

4 whether the retirement plan requirements of 

5 paragraph (1)(D)(i)(II) are met with respect to 

6 90 percent of a taxpayer’s employees for any 

7 taxable year, a taxpayer may elect to exclude 

8 from such determination— 

9 ‘‘(i) employees not meeting the age or 

10 service requirements under section 

11 410(a)(1) (or such lower age or service re12 quirements as the employer provides), and 

13 ‘‘(ii) employees described in section 

14 410(b)(3). 

15 ‘‘(c) RETIREMENT PLAN REQUIREMENTS.— 

16 ‘‘(1) IN GENERAL.—The requirements of this 

17 subsection are met for any taxable year with respect 

18 to an employee of the taxpayer who is not a highly 

19 compensated employee if the employee is eligible to 

20 participate in 1 or more applicable eligible retire21 ment plans maintained by the employer for a plan 

22 year ending with or within the taxable year. 

23 ‘‘(2) APPLICABLE ELIGIBLE RETIREMENT

24 PLAN.—For purposes of this subsection, the term 

25 ‘applicable eligible retirement plan’ means an eligible 


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1 retirement plan which, with respect to the plan year 

2 described in paragraph (1), is either— 

3 ‘‘(A) a defined contribution plan which— 

4 ‘‘(i) requires the employer to make 

5 nonelective contributions of at least 5 per6 cent of the compensation of the employee, 

7 or 

8 ‘‘(ii) both— 

9 ‘‘(I) includes an eligible auto10 matic contribution arrangement (as 

11 defined in section 414(w)(3)) under 

12 which the uniform percentage de13 scribed in section 414(w)(3)(B) is at 

14 least 5 percent, and 

15 ‘‘(II) requires the employer to 

16 make matching contributions of 100 

17 percent of the elective deferrals (as 

18 defined in section 414(u)(2)(C)) of 

19 the employee to the extent such defer20 rals do not exceed the percentage 

21 specified by the plan (not less than 5 

22 percent) of the employee’s compensa23 tion, or 

24 ‘‘(B) a defined benefit plan— 


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1 ‘‘(i) with respect to which the accrued 

2 benefit of the employee derived from em3 ployer contributions, when expressed as an 

4 annual retirement benefit, is not less than 

5 the product of— 

6 ‘‘(I) the lesser of 2 percent multi7 plied by the employee’s years of serv8 ice (determined under the rules of 

9 paragraphs (4), (5), and (6) of section 

10 411(a)) with the employer or 20 per11 cent, multiplied by 

12 ‘‘(II) the employee’s final average 

13 pay, or 

14 ‘‘(ii) which is an applicable defined 

15 benefit plan (as defined in section 

16 411(a)(13)(C))— 

17 ‘‘(I) which meets the interest 

18 credit requirements of section 

19 411(b)(5)(B)(i) with respect to the 

20 plan year, and 

21 ‘‘(II) under which the employee 

22 receives a pay credit for the plan year 

23 which is not less than 5 percent of 

24 compensation. 


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1 ‘‘(3) DEFINITIONS AND SPECIAL RULES.—For 

2 purposes of this subsection— 

3 ‘‘(A) ELIGIBLE RETIREMENT PLAN.—The 

4 term ‘eligible retirement plan’ has the meaning 

5 given such term by section 402(c)(8)(B), except 

6 that in the case of an account or annuity de7 scribed in clause (i) or (ii) thereof, such term 

8 shall only include an account or annuity which 

9 is a simplified employee pension (as defined in 

10 section 408(k)). 

11 ‘‘(B) FINAL AVERAGE PAY.—For purposes 

12 of paragraph (2)(B)(i)(II), final average pay 

13 shall be determined using the period of consecu14 tive years (not exceeding 5) during which the 

15 employee had the greatest compensation from 

16 the taxpayer. 

17 ‘‘(C) ALTERNATIVE PLAN DESIGNS.—The 

18 Secretary may prescribe regulations for a tax19 payer to meet the requirements of this sub20 section through a combination of defined con21 tribution plans or defined benefit plans de22 scribed in paragraph (1) or through a combina23 tion of both such types of plans. 

24 ‘‘(D) PLANS MUST MEET REQUIREMENTS

25 WITHOUT TAKING INTO ACCOUNT SOCIAL SECUVerDate Sep 11 2014 01:04 Feb 01, 2019 Jkt 089200 PO 00000 Frm 00011 Fmt 6652 Sfmt 6201 E:\BILLS\S223.IS S223

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1 RITY AND SIMILAR CONTRIBUTIONS AND BENE2 FITS.—A rule similar to the rule of section 

3 416(e) shall apply. 

4 ‘‘(d) QUALIFIED WAGES AND COMPENSATION.—For 

5 purposes of this section— 

6 ‘‘(1) IN GENERAL.—The term ‘qualified wages’ 

7 means wages (as defined in section 51(c), deter8 mined without regard to paragraph (4) thereof) paid 

9 or incurred by the Patriot employer during the tax10 able year to employees— 

11 ‘‘(A) who perform substantially all of their 

12 services for such Patriot employer inside the 

13 United States, and 

14 ‘‘(B) with respect to whom— 

15 ‘‘(i) in the case of a Patriot employer 

16 which employs an average of more than 50 

17 employees on business days during the tax18 able year, the requirements of subclauses 

19 (I) and (II) of subsection (b)(1)(D)(i) are 

20 met, and 

21 ‘‘(ii) in the case of any other Patriot 

22 employer, the requirements of either sub23 clause (I) or (II) of subsection (b)(1)(D)(i) 

24 are met. 


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1 ‘‘(2) SPECIAL RULES FOR AGRICULTURAL

2 LABOR AND RAILWAY LABOR.—Rules similar to the 

3 rules of section 51(h) shall apply. 

4 ‘‘(3) COMPENSATION.—For purposes of sub5 sections (b)(1)(D)(i)(I) and (c), the term ‘compensa6 tion’ has the same meaning as qualified wages, ex7 cept that section 51(c)(2) shall be disregarded in de8 termining the amount of such wages. 

9 ‘‘(e) AGGREGATION RULES.—For purposes of this 

10 section— 

11 ‘‘(1) IN GENERAL.—All persons treated as a 

12 single employer under subsection (a) or (b) of sec13 tion 52 shall be treated as a single taxpayer. 

14 ‘‘(2) SPECIAL RULES FOR CERTAIN REQUIRE15 MENTS.—For purposes of applying paragraphs 

16 (1)(A) and (2)(A) of subsection (b)— 

17 ‘‘(A) the determination under subsections 

18 (a) and (b) of section 52 for purposes of para19 graph (1) shall be made without regard to sec20 tion 1563(b)(2)(C) (relating to exclusion of for21 eign corporations), and 

22 ‘‘(B) if any person treated as a single tax23 payer under this subsection (after application of 

24 subparagraph (A)), or any predecessor of such 

25 person, was an expatriated entity (as defined in 


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1 section 7874(a)(2)) for any taxable year ending 

2 after March 4, 2003, then all persons treated 

3 as a single taxpayer with such person shall be 

4 treated as expatriated entities. 

5 ‘‘(f) ELECTION TO HAVE CREDIT NOT APPLY.— 

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

7 have this section not apply for any taxable year. 

8 ‘‘(2) TIME FOR MAKING ELECTION.—An elec9 tion under paragraph (1) for any taxable year may 

10 be made (or revoked) at any time before the expira11 tion of the 3-year period beginning on the last date 

12 prescribed by law for filing the return for such tax13 able year (determined without regard to extensions). 

14 ‘‘(3) MANNER OF MAKING ELECTION.—An elec15 tion under paragraph (1) (or revocation thereof) 

16 shall be made in such manner as the Secretary may 

17 by regulations prescribe.’’. 

18 (b) ALLOWANCE AS GENERAL BUSINESS CREDIT.— 

19 Section 38(b) of the Internal Revenue Code of 1986 is 

20 amended by striking ‘‘plus’’ at the end of paragraph (31), 

21 by striking the period at the end of paragraph (32) and 

22 inserting ‘‘, plus’’, and by adding at the end the following: 

23 ‘‘(33) in the case of a Patriot employer (as de24 fined in section 45T(b)) for any taxable year, the 


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1 Patriot employer credit determined under section 

2 45T(a).’’. 

3 (c) DENIAL OF DOUBLE BENEFIT.—Subsection (a) 

4 of section 280C of the Internal Revenue Code of 1986 is 

5 amended by inserting ‘‘45T(a),’’ after ‘‘45S(a)’’. 

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

7 this section shall apply to taxable years beginning after 

8 December 31, 2019. 

Æ 


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