I

104TH CONGRESS

2D SESSION H. R. 3836

To amend the Internal Revenue Code of 1986 to allow a small business

family and medical leave credit and a credit for wages paid to employees

who are allowed to shift hours of employment or work at home in

order to reduce child care needs.

IN THE HOUSE OF REPRESENTATIVES

JULY 17, 1996

Ms. ROYBAL-ALLARD (for herself and Ms. WOOLSEY) 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 a

small business family and medical leave credit and a

credit for wages paid to employees who are allowed to

shift hours of employment or work at home in order

to reduce child care needs.

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 Incentives for

5 Family-Friendly Workplaces Act of 1996’’.
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1 SEC. 2. SMALL BUSINESS FAMILY AND MEDICAL LEAVE

2 CREDIT.

3 (a) IN GENERAL.—Subpart D of part IV of sub4 chapter A of chapter 1 of the Internal Revenue Code of

5 1986 (relating to business related credits) is amended by

6 adding at the end the following new section:

7 ‘‘SEC. 45C. SMALL BUSINESS FAMILY AND MEDICAL LEAVE

8 CREDIT.

9 ‘‘(a) AMOUNT OF CREDIT.—For purposes of section

10 38, in the case of an eligible small business employer, the

11 amount of the small business family and medical leave

12 credit determined under this section for any taxable year

13 shall be an amount equal to 50 percent of the qualified

14 family and medical leave costs paid or incurred by the tax15 payer during such taxable year.

16 ‘‘(b) LIMITATION ON CREDIT.—The credit allowed by

17 subsection (a) with respect to each employee for qualified

18 family and medical leave costs paid or incurred by the tax19 payer during the taxable year with respect to such em20 ployee shall not exceed $2,000.

21 ‘‘(c) DEFINITIONS.—For purposes of this section—

22 ‘‘(1) ELIGIBLE SMALL BUSINESS EMPLOYER.—

23 The term ‘eligible small business employer’ means

24 any employer who complies with title I of the Family

25 and Medical Leave Act of 1993 but who is not re26 quired to comply with such title by reason of em-
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1 ploying fewer than 50 employees during the periods

2 described in section 101(4)(A) of such Act.

3 ‘‘(2) QUALIFIED FAMILY AND MEDICAL LEAVE

4 COSTS.—The term ‘qualified family and medical

5 leave costs’ means expenses incurred in connection

6 with complying with title I of the Family and Medi7 cal Leave Act of 1993.

8 ‘‘(d) DENIAL OF DOUBLE BENEFIT.—No deduction

9 shall be allowed under this chapter for that portion of the

10 qualified family and medical leave costs otherwise allow11 able as a deduction for the taxable year which is equal

12 to the amount of the credit determined for such taxable

13 year under this section.’’

14 (b) CONFORMING AMENDMENT.—Subsection (b) of

15 section 38 of such Code is amended by striking ‘‘plus’’

16 at the end of paragraph (10), by striking the period at

17 the end of paragraph (11) and inserting ‘‘, plus’’, and by

18 adding at the end the following new paragraph:

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

20 employer (as defined in section 45C(c)), the small

21 business family and medical leave credit determined

22 under section 45C.’’

23 (c) CLERICAL AMENDMENT.—The table of sections

24 for subpart D of part IV of subchapter A of chapter 1
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1 of such Code is amended by adding at the end the follow2 ing new item:

‘‘Sec. 45C. Small business family and medical leave credit.’’

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

4 this section shall apply to expenses paid or incurred after

5 the date which is 6 months after the date of the enactment

6 of this Act.

7 SEC. 3. CREDIT FOR WAGES PAID TO EMPLOYEE WHO IS AL8 LOWED TO SHIFT HOURS OF EMPLOYMENT

9 OR TO WORK AT HOME IN ORDER TO REDUCE

10 CHILD CARE NEEDS.

11 (a) IN GENERAL.—Subpart D of part IV of sub12 chapter A of chapter 1 of the Internal Revenue Code of

13 1986 (relating to business related credits), as amended by

14 section 2, is amended by adding at the end the following

15 new section:

16 ‘‘SEC. 45D. WAGES PAID TO EMPLOYEE WHO IS ALLOWED

17 TO SHIFT HOURS OF EMPLOYMENT OR WORK

18 AT HOME IN ORDER TO REDUCE CHILD CARE

19 NEEDS.

20 ‘‘(a) IN GENERAL.—For purposes of section 38, the

21 amount of the child care-related wage credit determined

22 under this section for any taxable year shall be an amount

equal to 1 23 ⁄3 of the aggregate wages paid or incurred during

24 such year which are attributable to services performed by

25 an employee of the taxpayer during the 1-year period be-
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1 ginning on the date the employee first becomes a qualified

2 employee of the taxpayer.

3 ‘‘(b) QUALIFIED EMPLOYEE.—For purposes of this

4 section, the term ‘qualified employee’ means any full-time

5 employee if—

6 ‘‘(1) such employee is permitted by the em7 ployer, solely in order to reduce the amount of de8 pendent care services provided (to a dependent of

9 the employee) outside the employee’s household, to

10 perform services for the employer—

11 ‘‘(A) at the employee’s home, or

12 ‘‘(B) during a period which is not within

13 the normal business hours of the employer, and

14 ‘‘(2) as a result of the services performed for

15 the employer as described in subparagraphs (A) and

16 (B) of paragraph (1), there is at least a 20 percent

17 reduction in the amount of time dependent care

18 services are provided to a dependent of the employee

19 outside the employee’s household.

20 ‘‘(c) OTHER DEFINITIONS AND SPECIAL RULES.—

21 For purposes of this section—

22 ‘‘(1) EMPLOYEE MUST BE QUALIFIED EM23 PLOYEE FOR ENTIRE YEAR.—No credit shall be de24 termined under subsection (a) with respect to any

25 employee unless such employee is a qualified em-
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1 ployee throughout the 1-year period described in

2 subsection (a).

3 ‘‘(2) ONLY $6,000 OF WAGES PER YEAR TAKEN

4 INTO ACCOUNT.—The amount of the wages which

5 may be taken into account with respect to any em6 ployee shall not exceed $6,000 per year.

7 ‘‘(3) WAGES.—The term ‘wages’ has the mean8 ing given such term by section 51(c) (determined

9 without regard to paragraph (4) thereof).

10 ‘‘(4) CERTAIN RULES TO APPLY.—Rules similar

11 to the rules of section 52 and subsections (f), (g),

12 (h), (i), and (k) of section 51 shall apply.’’

13 (b) CONFORMING AMENDMENT.—Subsection (b) of

14 section 38 of such Code (relating to current year business

15 credit), as amended by section 2(b), is amended by strik16 ing ‘‘plus’’ at the end of paragraph (11), by striking the

17 period at the end of paragraph (12) and inserting ‘‘, plus’’,

18 and by adding at the end the following new paragraph:

19 ‘‘(13) the child care-related wage credit deter20 mined under section 45D(a).’’

21 (c) CLERICAL AMENDMENT.—The table of sections

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

23 of such Code is amended by adding at the end the follow24 ing new item:

‘‘Sec. 45D. Wages paid to employee who is allowed to shift hours

of employment or work at home in order to reduce

child care needs.’’
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1 (d) EFFECTIVE DATE.—

2 (1) IN GENERAL.—The amendments made by

3 this section shall apply to wages paid or incurred

4 after the date which is 6 months after the date of

5 the enactment of this Act.

6 (2) EMPLOYER PRACTICES BEFORE EFFECTIVE

7 DATE.—For purposes of section 45D(b)(2) of the

8 Internal Revenue Code of 1986, as added by this

9 section, no reduction before the 1st taxable year to

10 which such section applies shall be taken into ac11 count.

Æ