Rewarding American Workers Act of 2020

To provide a payroll tax credit for certain bonuses paid to employees who worked continuously during the COVID-19 pandemic. 1. Short title This Act may be cited as the Rewarding American Workers Act of 2020 2. Payroll credit for bonuses paid to employees who worked continuously during the COVID-19 pandemic (a) In general In the case of an employer, there shall be allowed as a credit against applicable employment taxes for the calendar quarter which includes the last day of the covered period an amount equal to 100 percent of the qualified bonuses paid to eligible employees of such employer during such calendar quarter. (b) Qualified bonus For the purposes of this section— (1) In general The term qualified bonus (A) in the case of an eligible employee whose annualized covered period wages do not exceed $55,000, an amount equal to the applicable percentage of the wages (as defined in section 3401) paid by such employer to such employee during the covered period, and (B) in the case of an eligible employee whose annualized covered period wages exceed $55,000 but do not exceed $99,000, $600. (2) Applicable percentage The term applicable percentage (3) Annualized covered period wages The term annualized covered period wages (c) Eligible employee For purposes of this section, the term eligible employee (1) such employee had taxes withheld by such employer under section 3101 for the entirety of the covered period, and (2) such employee’s annualized covered period wages do not exceed $99,000. (d) Covered period For purposes of this section, the term covered period (e) Refundability (1) Credit limited to employment taxes The credit allowed by subsection (a) with respect to any calendar quarter shall not exceed the applicable employment taxes (reduced by any credits allowed under subsections (e) and (f) of section 3111 (2) Refundability of excess credit (A) In general If the amount of the credit under subsection (a) exceeds the limitation of paragraph (1) 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 the 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. (f) Other 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) Secretary The term Secretary (3) 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. (g) Aggregation rule All persons treated as a single employer under subsection (a) or (b) of section 52 (h) Certain rules To apply For purposes of this section, rules similar to the rules of sections 51(i)(1) and 280C(a) of the Internal Revenue Code of 1986 shall apply. (i) Election not To have section apply This section shall not apply with respect to any eligible employer for any calendar quarter if such employer elects (at such time and in such manner as the Secretary may prescribe) not to have this section apply. (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) Transfers to Federal Old-Age and Survivors Insurance Trust Fund 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. 14 (l) Treatment of deposits The Secretary shall waive any penalty under section 6656 (m) 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) to provide for the reconciliation of such advance payment with the amount advanced at the time of filing the return of tax for the applicable calendar quarter or taxable year, and (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

Summary: Rewarding American Workers Act of 2020 This bill allows employers a payroll tax credit for bonuses paid to employees whose wages did not exceed specified levels during the period beginning on March 13, 2020, and ending on the earlier of July 31, 2020, or the end of the COVID-19 (i.e., coronavirus disease 2019) emergency, and who worked for the entire period.