To provide a Federal income tax credit for State income taxes paid by individuals temporarily providing certain health or emergency services in the State, and to provide a corresponding reduction in Federal highway funds to the State.

To provide a Federal income tax credit for State income taxes paid by individuals temporarily providing certain health or emergency services in the State, and to provide a corresponding reduction in Federal highway funds to the State. 1. Credit for State income taxes paid by individuals temporarily providing certain health or emergency services (a) In general Subpart C of part IV of subchapter A of chapter 1 36C. Credit for State income taxes paid by individuals temporarily providing certain health or emergency services (a) In general In the case of an eligible individual, there shall be allowed as a credit against the tax imposed by this subtitle for any taxable year an amount equal to the income taxes imposed by a service-recipient State on the wages (as defined in section 3401) paid to such eligible individual for providing specified health or emergency services in such State on a temporary basis during such taxable year. (b) Eligible individual For purposes of this section, the term eligible individual (c) Specified health or emergency services For purposes of this section, the term specified health or emergency services (d) Service-Recipient State For purposes of this section, the term service-recipient State (e) Determination of tax The amount of the income tax referred to in subsection (a) shall be equal to the excess (if any) of— (1) the amount of income taxes imposed by the service-recipient State on the income of such eligible individual, over (2) the amount of such income taxes which would be imposed without regard to the wages referred to in subsection (a). (f) Termination Subsection (a) shall not apply with respect to wages paid for services which are provided after the date on which the Secretary certifies that the COVID–19 emergency has concluded. . (b) Corresponding reduction in Federal highway funds paid to service-Recipient States The amount made available by the Federal Government as Federal highway funds to any service-recipient State (as defined in section 36C(d) section 36C (c) Conforming amendments (1) Section 6211(b)(4)(A) of such Code is amended by inserting 36C, 36B, (2) Section 1324(b)(2) of title 31, United States Code, is amended by inserting 36C, 36B, (3) The table of sections for subpart C of part IV of subchapter A of chapter 1 Sec. 36C. Credit for State income taxes paid by individuals temporarily providing certain health or emergency services. . (d) Effective date The amendments made by this section shall apply to wages paid for services provided after March 16, 2020.

Summary: This bill allows a refundable income tax credit for state income taxes paid by individuals providing services as first responders, doctors, nurses, or other health or emergency services. This credit expires after the Department of the Treasury certifies that the COVID-19 (i.e., coronavirus disease 2019) emergency period has ended. The bill requires a reduction in federal highway funds paid to a state that corresponds to the credit amount allowed by this bill.