To provide a payroll tax credit for certain costs of providing employees with testing for COVID-19.

To provide a payroll tax credit for certain costs of providing employees with testing for COVID-19. 1. Employee testing tax credit (a) In general In the case of an 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 employee testing expenses paid or incurred by the employer during such calendar quarter. (b) Limitations and refundability (1) Overall dollar limitation on credit (A) In general The amount of the credit allowed under subsection (a) with respect to any employer for any calendar quarter shall not exceed the excess (if any) of— (i) the applicable dollar limit with respect to such employer for such calendar quarter, over (ii) the aggregate credits allowed under subsection (a) with respect to such employer for all preceding calendar quarters. (B) Applicable dollar limit The term applicable dollar limit (i) $500, multiplied so much of the average number of full-time employees (as determined for purposes of determining whether an employer is an applicable large employer for purposes of section 4980H(c)(2) (ii) $375, multiplied by so much of such average number of full-time employees as exceeds 500 but does not exceed 1,000, plus (iii) $250, multiplied by so much of such average number of full-time employees as exceeds 1,000. (2) 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 (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 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. (c) Qualified employee testing expenses For purposes of this section, the term qualified employee testing expenses (d) 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 Any term used in this section (other than subsection (b)(1)(B)) 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. (e) Certain governmental employers This credit shall not apply to the Government of the United States, the government of any State or political subdivision thereof, or any agency or instrumentality of any of the foregoing. (f) Special rules (1) Aggregation rule All persons treated as a single employer under subsection (a) or (b) of section 52 (2) Denial of double benefit Rules similar to the rules of section 280C(a) (3) Third-party payors Any credit allowed under this section shall be treated as a credit described in section 3511(d)(2) of such Code. (4) 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. (g) 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. 14 (h) Treatment of deposits The Secretary shall waive any penalty under section 6656 (i) Regulations and guidance The Secretary shall prescribe such regulations and other guidance as may be necessary or appropriate to carry out the purposes of this section, including— (1) 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 (2) regulations or other guidance to prevent abusive transactions. (j) Application This section shall only apply to amounts paid or incurred after March 12, 2020, and before January 1, 2021.

Summary: This bill allows employers a payroll tax credit for 50% of employee testing expenses for COVID-19 (i.e., coronavirus disease 2019). The credit does not apply to the federal government or any state or local government.