II 

111TH CONGRESS 

2D SESSION S. 2973 

To amend the Internal Revenue Code of 1986 to provide a temporary payroll 

increase tax credit for certain employers. 

IN THE SENATE OF THE UNITED STATES 

FEBRUARY 1, 2010 

Mr. CASEY (for himself, Mrs. GILLIBRAND, Mr. LEVIN, and Mr. BEGICH) 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 temporary payroll increase tax credit for certain employers. 

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 ‘‘Small Business Job 

5 Creation Tax Act of 2010’’. 

6 SEC. 2. EMPLOYER PAYROLL INCREASE CREDIT. 

7 (a) IN GENERAL.—Subchapter B of chapter 65 of the 

8 Internal Revenue Code of 1986 is amended by adding at 

9 the end the following new section: 


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1 ‘‘SEC. 6433. EMPLOYER PAYROLL INCREASE CREDITS. 

2 ‘‘(a) IN GENERAL.—Each qualified employer shall be 

3 treated as having made a payment against the tax imposed 

4 by section 3111(a) or section 3221(a), whichever is appli5 cable, for each qualified quarter an amount equal to the 

6 credit amount. 

7 ‘‘(b) CREDIT AMOUNT.— 

8 ‘‘(1) IN GENERAL.—For purposes of this sec9 tion, the credit amount with respect to any qualified 

10 quarter is equal to the applicable percentage of the 

11 qualified payroll increase of such employer for such 

12 qualified quarter. 

13 ‘‘(2) APPLICABLE PERCENTAGE.—For purposes 

14 of paragraph (1), the applicable percentage with re15 spect to any qualified quarter is— 

16 ‘‘(A) in the case of an employer that em17 ploys fewer than 100 employees during such 

18 quarter, 20 percent, and 

19 ‘‘(B) in the case of an employer that em20 ploys 100 or more employees during such quar21 ter, 15 percent. 

22 ‘‘(c) DOLLAR LIMITATION.—The total credit amount 

23 with respect to any employer shall not exceed $500,000 

24 for all qualified quarters. 

25 ‘‘(d) QUALIFIED EMPLOYER.—For purposes of this 

26 section, the term ‘qualified employer’ means any American 


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1 employer other than the United States, any State, or any 

2 instrumentality thereof. 

3 ‘‘(e) QUALIFIED PAYROLL INCREASE.—For purposes 

4 of this section— 

5 ‘‘(1) IN GENERAL.—The term ‘qualified payroll 

6 increase’ with respect to any qualified quarter means 

7 the amount, if any, by which a qualified employer’s 

8 qualified payroll for such quarter exceeds the quali9 fied payroll for such quarter of the calendar year 

10 preceding the year in which such qualified quarter 

11 falls. 

12 ‘‘(2) QUALIFIED PAYROLL.—The term ‘quali13 fied payroll’ means the amount of all wages (within 

14 the meaning of section 3121(a)) paid or incurred by 

15 a qualified employer to the employees of such em16 ployer, except that, with respect to each such em17 ployee for any quarter of the employer, such wages 

18 shall be taken into account only to the extent that 

19 such wages do not exceed the contribution and ben20 efit base as determined under section 230 of the So21 cial Security Act. 

22 ‘‘(3) RAILWAY LABOR.—In the case of remu23 neration subject to the tax imposed by section 

24 3221(a), paragraph (1) shall be applied by sub25 stituting ‘all compensation (within the meaning of 


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1 section 3231(e))’ for ‘all wages (within the meaning 

2 of section 3121(a))’. 

3 ‘‘(4) SPECIAL RULE FOR LARGE EMPLOYERS.— 

4 In the case of an employer described in subsection 

5 (b)(2)(B), no qualified payroll increase shall be 

6 taken into account for any qualified quarter unless 

7 the qualified payroll increase with respect to such 

8 qualified quarter exceeds 3 percent of the qualified 

9 payroll for such quarter of the calendar year pre10 ceding the year in which such qualified quarter falls. 

11 ‘‘(f) QUALIFIED QUARTER.—For purposes of this 

12 section, the term ‘qualified quarter’ means— 

13 ‘‘(1) the calendar quarter which includes the 

14 date of the enactment of the Small Business Job 

15 Creation Tax Act of 2010, and 

16 ‘‘(2) each of the 3 calendar quarters following 

17 such quarter. 

18 ‘‘(g) DEFINITIONS.—Except as provided in sub19 section (h)(1), any term used in this section which is also 

20 used in section 3111 has the same meaning as when used 

21 in such section. 

22 ‘‘(h) SPECIAL RULES.—For purposes of this sec23 tion— 

24 ‘‘(1) EMPLOYEE.—The term ‘employee’ includes 

25 only individuals who are citizens or lawful residents 


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1 of the United States who receive wages, remunera2 tion, compensation, or tips from an employer for 

3 work performed within a State or a possession of the 

4 United States. 

5 ‘‘(2) MAINTENANCE OF BASE EMPLOYMENT RE6 QUIREMENT.—This section shall not apply to any 

7 qualified employer for any qualified quarter if the 

8 total number of employees of such employer during 

9 such quarter is less than the total number of such 

10 employees during the quarter preceding such quar11 ter, determined by not taking into account any em12 ployee who is a seasonal employee during such pre13 ceding quarter. 

14 ‘‘(3) CONTROLLED GROUPS.—All employers 

15 treated as a single employer under section (a) or (b) 

16 of section 52 shall be treated as a single employer 

17 for purposes of the dollar limitation under sub18 section (c), except that any employer which is not an 

19 American employer shall not be taken into account. 

20 ‘‘(4) NEW EMPLOYERS.— 

21 ‘‘(A) IN GENERAL.—In the case of a quali22 fied employer which comes into existence after 

23 the date of the enactment of the Small Business 

24 Job Creation Tax Act of 2010 and before Janu25 ary 1, 2012— 


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1 ‘‘(i) the term ‘qualified quarter’ 

2 means— 

3 ‘‘(I) the first calendar quarter for 

4 which such qualified employer is in 

5 existence, and 

6 ‘‘(II) each of the 3 quarters fol7 lowing such quarter, 

8 ‘‘(ii) the qualified payroll increase of 

9 such employer for the quarter described in 

10 clause (i)(I) shall be equal to the amount 

11 of the employer’s qualified payroll for such 

12 quarter, and 

13 ‘‘(iii) the qualified payroll increase of 

14 such employer for any quarter described in 

15 clause (i)(II) shall be the amount, if any, 

16 by which the employer’s qualified payroll 

17 for such quarter exceeds the qualified pay18 roll of the quarter preceding such quarter. 

19 ‘‘(B) TRANSITION RULE.— 

20 ‘‘(i) IN GENERAL.—In the case of a 

21 qualified employer which comes into exist22 ence— 

23 ‘‘(I) after the last day of the cal24 endar quarter which is 5 calendar 

25 quarters before the date of the enactVerDate Nov 24 2008 00:29 Feb 02, 2010 Jkt 089200 PO 00000 Frm 00006 Fmt 6652 Sfmt 6201 E:\BILLS\S2973.IS S2973

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1 ment of the Small Business Job Cre2 ation Tax Act of 2010, and 

3 ‘‘(II) before such date of enact4 ment, 

5 the qualified payroll increase of such em6 ployer for any transition quarter shall be 

7 the amount, if any, by which the employ8 er’s qualified payroll for such quarter ex9 ceeds the qualified payroll of the quarter 

10 preceding such quarter. 

11 ‘‘(ii) TRANSITION QUARTER.—For 

12 purposes of clause (i), the term ‘transition 

13 quarter’ means a qualified quarter with re14 spect to which the qualified payroll in15 crease cannot be determined under sub16 section (e)(1) solely because the employer 

17 was not in existence during such quarter of 

18 the calendar year preceding the year in 

19 which such qualified quarter falls.’’. 

20 (b) CLERICAL AMENDMENT.—The table of sections 

21 for subchapter B of chapter 65 of the Internal Revenue 

22 Code of 1986 is amended by adding at the end the fol23 lowing new item: 

‘‘Sec. 6433. Employer payroll increase credits.’’. 

24 (c) NOTIFICATION.—Not later than 30 days after the 

25 date of the enactment of this Act, the Commissioner of 


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1 Internal Revenue shall notify all employers required to 

2 withhold employment taxes under chapter 21 or 22 of the 

3 Internal Revenue Code of 1986 of the enactment and ap4 plicability of section 6433 of the Internal Revenue Code 

5 of 1986, as added by this Act. 

6 (d) INVESTIGATION AND REPORT ON ENFORCEMENT

7 ACTIONS.—Not later than 6 months after the date of the 

8 enactment of this Act, and quarterly thereafter, the Com9 missioner of Internal Revenue shall submit a report to the 

10 Committee on Finance of the Senate and the Committee 

11 on Ways and Means of the House of Representatives on 

12 the enforcement measures taken to prevent and penalize 

13 fraud related to section 6433 of the Internal Revenue 

14 Code of 1986, including such information as— 

15 (1) general statistics related to the application 

16 of such section, 

17 (2) cases of fraud, and 

18 (3) the status of investigatory and prosecutorial 

19 actions related to such cases. 

20 (e) EFFECTIVE DATE.—The amendments made by 

21 subsections (a) and (b) shall apply to calendar quarters 

22 beginning with the calendar quarter which includes the 

23 date of the enactment of this Act. 

Æ 


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