Reducing Long-Term Unemployment Act

To amend the Internal Revenue Code of 1986 to provide a payroll tax exemption for hiring long-term unemployed individuals. 1. Short title This Act may be cited as the Reducing Long-Term Unemployment Act 2. Payroll tax exemption for hiring long-term unemployed individuals (a) Extension Paragraph (1) of section 3111(d) or on the day after the date of the enactment of the Reducing Long-Term Unemployment Act December 31, 2010, (b) Modification (1) Unemployment requirement Subparagraph (B) of section 3111(d)(3) of such Code is amended to read as follows: (B) certifies by signed affidavit (under penalties of perjury) that such individual, during the entire 27-week period ending on the hiring date— (i) was in receipt of unemployment compensation under State or Federal law, or (ii) was unemployed and would have been so in receipt but for having exhausted the right to such unemployment compensation during such period, . (2) Limitation Subsection (d) of section 3111 of such Code is amended by adding at the end the following new paragraph: (6) Limitation The aggregate reduction in tax imposed under subsection (a) by reason of paragraph (1) with respect to each qualified individual in the employer’s employ shall not exceed $5,000. . (c) Application to railroad retirement taxes (1) Extension Paragraph (1) of section 3221(c) of such Code is amended by inserting or on the day after the date of the enactment of the Reducing Long-Term Unemployment Act December 31, 2010, (2) Modification (A) Unemployment requirement Subparagraph (B) of section 3221(c)(3) of such Code is amended to read as follows: (B) certifies by signed affidavit (under penalties of perjury) that such individual, during the entire 27-week period ending on the hiring date— (i) was in receipt of unemployment compensation under State or Federal law, or (ii) was unemployed and would have been so in receipt but for having exhausted the right to such unemployment compensation during such period, . (3) Limitation Subsection (c) of section 3221 of such Code is amended by adding at the end the following new paragraph: (6) Limitation The aggregate reduction in tax imposed under subsection (a) by reason of paragraph (1) with respect to each qualified individual in the employer’s employ shall not exceed $5,000. . (d) Special rule for certain calendar quarters For purposes of section 3111(d) and 3221(c) of such Code, if the day after the date of the enactment of this Act is not the first day of a calendar quarter, then rules similar to the rules of section 3111(d)(5) and 3221(c)(5) of such Code, respectively, shall apply with respect to the last calendar quarter beginning before such day. (e) Effective dates (1) In general Except as provided in paragraph (2), the amendments made by this subsection shall apply to wages paid after the date of the enactment of this Act. (2) Railroad retirement taxes The amendments made by subsection (c) shall apply to compensation paid after the date of the enactment of this Act.

Summary: Reducing Long-Term Unemployment Act This bill amends the Internal Revenue Code to extend until December 31, 2018, the suspension of employment and railroad retirement taxes for employers who hire unemployed individuals.  The aggregate reduction in taxes from such suspension is limited to $5,000 per employee. The bill modifies the unemployment requirement to require a signed affidavit from the unemployed individual that, during the entire 27-week period ending on the hiring date, such individual: (1) was receiving federal or state unemployment compensation, or (2) was unemployed and would have received unemployment compensation except for having exhausted the right to receive such compensation during such period.