Keeping the Lights On Act of 2021

To provide a payroll credit for certain fixed expenses of employers subject to closure by reason of COVID-19. 1. Short title This Act may be cited as the Keeping the Lights On Act of 2021 2. Payroll credit for certain fixed expenses of employers subject to closure by reason of COVID-19 (a) In general In the case of an eligible employer, there shall be allowed as a credit against applicable employment taxes for each calendar quarter an amount equal to 50 percent of the qualified fixed expenses paid or incurred by such employer during such calendar quarter. (b) Limitations and refundability (1) Limitation The qualified fixed expenses which may be taken into account under subsection (a) by any eligible employer for any calendar quarter shall not exceed the least of— (A) the qualified fixed expenses paid by the eligible employer in the same calendar quarter of calendar year 2019, (B) $50,000; or (C) the greater of— (i) 25 percent of the wages paid with respect to the employment of all the employees of the eligible employer for such calendar quarter; or (ii) 6.25 percent of the gross receipts of the eligible employer for calendar year 2019. (2) Credit limited to certain employment taxes The credit allowed by subsection (a) with respect to any calendar quarter shall not exceed the applicable employment taxes for such calendar quarter (reduced by any credits allowed under subsections (e) and (f) of section 3111 of such Code, sections 7001 and 7003 of the Families First Coronavirus Response Act, section 2301 of the CARES Act, and sections 101, 102, and 304 of this division, for such quarter) on the wages paid with respect to the employment of all the employees of the eligible employer for such calendar quarter. (3) Refundability of excess credit (A) In general If the amount of the credit under subsection (a) exceeds the limitation of paragraph (2) for any calendar quarter, such excess shall be treated as an overpayment that shall be refunded under sections 6402(a) and 6413(b) of the Internal Revenue Code of 1986. (B) Treatment of payments For purposes of section 1324 of title 31, United States Code, any amounts due to an employer under this paragraph shall be treated in the same manner as a refund due from a credit provision referred to in subsection (b)(2) of such section. (c) Definitions For purposes of this section— (1) Applicable employment taxes The term applicable employment taxes (A) The taxes imposed under section 3111(a) (B) So much of the taxes imposed under section 3221(a) of such Code as are attributable to the rate in effect under section 3111(a) of such Code. (2) Eligible employer (A) In general The term eligible employer (i) which was carrying on a trade or business immediately prior to the suspension described in clause (iii)(i) or immediately prior to the period described in subparagraph (B); (ii) which had either— (I) not more than 1,500 full-time equivalent employees (as determined for purposes of determining whether an employer is an applicable large employer for purposes of section 4980H(c)(2) (II) not more than $41,500,000 of gross receipts in the last taxable year ending in 2019; and (iii) with respect to any calendar quarter, for which— (I) the operation of the trade or business described in clause (i) is fully or partially suspended during the calendar quarter due to orders from an appropriate governmental authority limiting commerce, travel, or group meetings (for commercial, social, religious, or other purposes) due to the coronavirus disease 2019 (COVID–19); or (II) such calendar quarter is within the period described in subparagraph (B). (B) Significant decline in gross receipts The period described in this subparagraph is the period— (i) beginning with the first calendar quarter beginning after December 31, 2019, for which gross receipts (within the meaning of section 448(c) (ii) ending with the calendar quarter following the first calendar quarter beginning after a calendar quarter described in clause (i) for which gross receipts of such employer are greater than 80 percent of gross receipts for the same calendar quarter in the prior year. (C) Tax-Exempt organizations In the case of an organization which is described in section 501(c) (i) clauses (i) and (iii)(I) of subparagraph (A) shall apply to all operations of such organization; and (ii) any reference in this section to gross receipts shall be treated as a reference to gross receipts within the meaning of section 6033 (D) Phase-in of credit where business not suspended and reduction in gross receipts less than 50 percent (i) In general In the case of any calendar quarter with respect to which an eligible employer would not be an eligible employer if subparagraph (B)(i) were applied by substituting 50 percent 80 percent (I) the excess gross receipts percentage point amount; bears to (II) 30 percentage points. (ii) Excess gross receipts percentage point amount For purposes of this subparagraph, the term excess gross receipts percentage point amount (I) the lowest of the gross receipts percentage point amounts determined with respect to any calendar quarter during the period ending with such calendar quarter and beginning with the first calendar quarter during the period described in subparagraph (B); over (II) 50 percentage points. (iii) Gross receipts percentage point amounts For purposes of this subparagraph, the term gross receipts percentage point amount (I) the gross receipts (within the meaning of subparagraph (B)) for such calendar quarter; by (II) the gross receipts for the same calendar quarter in calendar year 2019. (3) Qualified fixed expenses (A) In general The term qualified fixed expenses (B) Application of definitions The terms covered mortgage obligation covered rent obligation covered utility payment (4) Secretary The term Secretary (5) Wages (A) In general The term wages section 3121(a) (B) Allowance for certain health plan expenses (i) In general Such term shall include amounts paid or incurred by the eligible employer to provide and maintain a group health plan (as defined in section 5000(b)(1) (ii) Allocation rules For purposes of this section, amounts treated as wages under clause (i) shall be treated as paid with respect to any employee (and with respect to any period) to the extent that such amounts are properly allocable to such employee (and to such period) in such manner as the Secretary may prescribe. Except as otherwise provided by the Secretary, such allocation shall be treated as properly made if made on the basis of being pro rata among periods of coverage. (6) Other terms Except as otherwise provided in this section, any term used in this section which is also used in chapter 21 or 22 of the Internal Revenue Code of 1986 shall have the same meaning as when used in such chapter. (d) Aggregation rule All persons treated as a single employer under subsection (a) or (b) of section 52 (e) Denial of double benefit For purposes of chapter 1 of such Code, the gross income of any eligible employer, for the taxable year which includes the last day of any calendar quarter with respect to which a credit is allowed under this section, shall be increased by the amount of such credit. (f) Certain governmental employers (1) In general The credit under this section shall not be allowed to the Federal Government, the government of any State, of the District of Columbia, or of any possession of the United States, any tribal government, or any political subdivision, agency, or instrumentality of any of the foregoing. (2) Exception Paragraph (1) shall not apply to any organization described in section 501(c)(1) (g) Election To not take certain expenses into account (1) In general If an eligible employer elects (at such time and in such manner as the Secretary may prescribe) to not take into account any amount of qualified fixed expensees for purposes of determining the credit under this section, such amount of qualified fixed expenses shall not be so taken into account. (2) Coordination with paycheck protection program The Secretary, in consultation with the Administrator of the Small Business Administration, shall issue guidance providing that covered mortgage obligations, covered rent obligations, and covered utility payments paid or incurred during the covered period shall not fail to be taken into account as qualified fixed expenses for purposes of determining the credit under this section by reason of an election under paragraph (1) to the extent that a covered loan of the eligible employer is not forgiven by reason of a decision under section 1106(g). Terms used in the preceding sentence which are also used in section 1106 shall have the same meaning as when used in such section. (h) Transfers to certain trust funds There are hereby appropriated to the Federal Old-Age and Survivors Insurance Trust Fund and the Federal Disability Insurance Trust Fund established under section 201 of the Social Security Act ( 42 U.S.C. 401 45 U.S.C. 231n–1(a) (i) Treatment of deposits The Secretary shall waive any penalty under section 6656 of such Code for any failure to make a deposit of applicable employment taxes if the Secretary determines that such failure was due to the anticipation of the credit allowed under this section. (j) Third-Party payors Any credit allowed under this section shall be treated as a credit described in section 3511(d)(2) of such Code. (k) Regulations and guidance The Secretary shall issue such forms, instructions, regulations, and guidance as are necessary— (1) to allow the advance payment of the credit under subsection (a), subject to the limitations provided in this section, based on such information as the Secretary shall require; (2) regulations or other guidance to provide for the reconciliation of such advance payment with the amount of the credit at the time of filing the return of tax for the applicable quarter or taxable year; (3) with respect to the application of the credit under subsection (a) to third-party payors (including professional employer organizations, certified professional employer organizations, or agents under section 3504 (4) for application of subsection (b)(1)(A) and subparagraphs (A)(ii)(II) and (B) of subsection (c)(2) in the case of any employer which was not carrying on a trade or business for all or part of the same calendar quarter in the prior year; and (5) for recapturing the benefit of credits determined under this section in cases where there is a subsequent adjustment to the credit determined under subsection (a). (l) Application of section This section shall apply only to qualified fixed expenses paid or accrued after March 12, 2020, and before January 1, 2022. (m) Amendment to paycheck protection program to coordination with credit for qualified fixed expenses Section 1106 of the CARES Act is amended by adding at the end the following new subsection: (l) Coordination with payroll tax credit for qualified fixed expenses For purposes of this section, any payment of interest on any covered mortgage obligation, any payment on any covered rent obligation, and any covered utility payment shall not include any qualified fixed expenses which are taken into account in determining the credit allowed under section 2 of the Keeping the Lights On Act of 2021. .

Summary: Keeping the Lights On Act of 2021 This bill allows an eligible employer a payroll tax credit equal to 50% of a limited amount of qualified fixed expenses paid by such employer in a calendar quarter. Qualified fixed expenses include a mortgage, rent, or a utility payment. An employer is eligible for such payroll credit if the employer was carrying on a trade or business that had not more than 1,500 full-time employees or not more than $41.5 million in gross receipts in 2019. The employer's business must have been suspended in a calendar quarter due to COVID-19 (i.e., coronavirus disease 2019) and have experienced a significant decline in gross receipts due to that pandemic. The credit may not be claimed by the federal government or by any state or tribal government, or by U.S. possessions, but may be claimed by tax-exempt organizations.