FLEX Act

To amend the Internal Revenue Code of 1986 to allow a refundable credit against tax for farmers who hire unemployed workers. 1. Short title This Act may be cited as the Farm Labor Expansion Act of 2020 FLEX Act 2. Displaced farm worker credit (a) In general Subpart C of part IV of subchapter A of chapter 1 is amended by inserting before section 37 the following new section: 36C. Displaced farm worker credit (a) In general In the case of a taxpayer engaged in the trade or business of farming, there shall be allowed as a credit against the tax imposed by this subtitle an amount equal to 40 percent of the qualified first-year wages of an eligible replacement worker. (b) Definitions and special rules For purposes of this section— (1) Qualified first-year wages (A) In general The term qualified first-year wages (B) Wages The term wages (C) Limitation The amount of wages taken into account with respect to any employee for all taxable years shall not exceed $25,000. (2) Eligible replacement worker For purposes of this section, the term eligible replacement worker (A) began a period of unemployment after March 27, 2020, and during which time the individual was receiving unemployment compensation under State or Federal law, and (B) performs for the employer substantially the same job functions as an H–2A worker taken into account under paragraph (4). (3) H–2A worker The term H–2A worker 8 U.S.C. 1101(a)(15)(H)(ii)(a) (4) Limitation on number of workers taken into account The number of eligible replacement workers taken into account under this section, shall not exceed the average number of H–2A workers employed by the taxpayer during the preceding taxable year. (5) Controlled groups and common control All persons which are treated as a single employer under subsections (a) and (b) of section 52 shall be treated as a single taxpayer for purposes of this section. (6) Application of other rules Rules similar to the following rules shall apply for purposes of this section: (A) Section 51(i) (relating to certain individuals ineligible). (B) Section 51(k) (relating to treatment of successor employers; treatment of employees performing services for other persons). (c) Termination No credit shall be allowed under this section with respect to any wages paid more than 2 years after the date of the enactment of this section. . (b) Conforming amendments (1) Section 6211(b)(4)(A) is amended by inserting 36C, 36B, (2) Paragraph (2) of section 1324(b) of title 31, United States Code, is amended by inserting 36C, 36B, (c) Clerical amendment The table of sections for subpart C of part IV of subchapter A of chapter 1 of such Code is amended by inserting before section 37 the following new item: Sec. 36C. Displaced farm worker credit. . (d) Effective date The amendments made by this section shall apply wages paid in taxable years ending after the date of the enactment of this Act.

Summary: Farm Labor Expansion Act of 2020 or the FLEX Act This bill allows farmers a new tax credit for 40% of the first-year wages paid to eligible replacement workers. The bill defines an eligible replacement worker as any individual who began a period of unemployment after March 27, 2020, and was receiving unemployment compensation during such period, and performs for the employer substantially the same job functions as temporary agricultural workers. The bill limits the amount of wages taken into account for any employee for purposes of the credit to $25,000 for all taxable years and terminates the credit two years after the enactment of this bill.