I
104TH CONGRESS
2D SESSION
H. R. 3836
To amend the Internal Revenue Code of 1986 to allow a small business
family and medical leave credit and a credit for wages paid to employees
who are allowed to shift hours of employment or work at home in
order to reduce child care needs.
IN THE HOUSE OF REPRESENTATIVES
JULY 17, 1996
Ms. ROYBAL-ALLARD (for herself and Ms. WOOLSEY) introduced the following
bill; which was referred to the Committee on Ways and Means
A BILL
To amend the Internal Revenue Code of 1986 to allow a
small business family and medical leave credit and a
credit for wages paid to employees who are allowed to
shift hours of employment or work at home in order
to reduce child care needs.
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ‘‘Tax Incentives for
Family-Friendly Workplaces Act of 1996’’.
SEC. 2. SMALL BUSINESS FAMILY AND MEDICAL LEAVE
CREDIT.
(a) IN GENERAL.—Subpart D of part IV of sub-
chapter A of chapter 1 of the Internal Revenue Code of
1986 (relating to business related credits) is amended by
adding at the end the following new section:
‘‘SEC. 45C. SMALL BUSINESS FAMILY AND MEDICAL LEAVE
CREDIT.
‘‘(a) AMOUNT OF CREDIT.—For purposes of section
38, in the case of an eligible small business employer, the
amount of the small business family and medical leave
credit determined under this section for any taxable year
shall be an amount equal to 50 percent of the qualified
family and medical leave costs paid or incurred by the tax-
payer during such taxable year.
‘‘(b) LIMITATION ON CREDIT.—The credit allowed by
subsection (a) with respect to each employee for qualified
family and medical leave costs paid or incurred by the tax-
payer during the taxable year with respect to such em-
ployee shall not exceed $2,000.
‘‘(c) DEFINITIONS.—For purposes of this section—
‘‘(1) ELIGIBLE SMALL BUSINESS EMPLOYER.—
The term ‘eligible small business employer’ means
any employer who complies with title I of the Family
and Medical Leave Act of 1993 but who is not re-
quired to comply with such title by reason of em-
ploying fewer than 50 employees during the periods
described in section 101(4)(A) of such Act.
‘‘(2) QUALIFIED FAMILY AND MEDICAL LEAVE
COSTS.—The term ‘qualified family and medical
leave costs’ means expenses incurred in connection
with complying with title I of the Family and Medi-
cal Leave Act of 1993.
‘‘(d) DENIAL OF DOUBLE BENEFIT.—No deduction
shall be allowed under this chapter for that portion of the
qualified family and medical leave costs otherwise allow-
able as a deduction for the taxable year which is equal
to the amount of the credit determined for such taxable
year under this section.’’
(b) CONFORMING AMENDMENT.—Subsection (b) of
section 38 of such Code is amended by striking ‘‘plus’’
at the end of paragraph (10), by striking the period at
the end of paragraph (11) and inserting ‘‘, plus’’, and by
adding at the end the following new paragraph:
‘‘(12) in the case of an eligible small business
employer (as defined in section 45C(c)), the small
business family and medical leave credit determined
under section 45C.’’
(c) CLERICAL AMENDMENT.—The table of sections
for subpart D of part IV of subchapter A of chapter 1
of such Code is amended by adding at the end the follow-
ing new item:
‘‘Sec. 45C. Small business family and medical leave credit.’’
(d) EFFECTIVE DATE.—The amendments made by
this section shall apply to expenses paid or incurred after
the date which is 6 months after the date of the enactment
of this Act.
SEC. 3. CREDIT FOR WAGES PAID TO EMPLOYEE WHO IS AL-
LOWED TO SHIFT HOURS OF EMPLOYMENT
OR TO WORK AT HOME IN ORDER TO REDUCE
CHILD CARE NEEDS.
(a) IN GENERAL.—Subpart D of part IV of sub-
chapter A of chapter 1 of the Internal Revenue Code of
1986 (relating to business related credits), as amended by
section 2, is amended by adding at the end the following
new section:
‘‘SEC. 45D. WAGES PAID TO EMPLOYEE WHO IS ALLOWED
TO SHIFT HOURS OF EMPLOYMENT OR WORK
AT HOME IN ORDER TO REDUCE CHILD CARE
NEEDS.
‘‘(a) IN GENERAL.—For purposes of section 38, the
amount of the child care-related wage credit determined
under this section for any taxable year shall be an amount
equal to 1⁄3 of the aggregate wages paid or incurred during
such year which are attributable to services performed by
an employee of the taxpayer during the 1-year period be-
ginning on the date the employee first becomes a qualified
employee of the taxpayer.
‘‘(b) QUALIFIED EMPLOYEE.—For purposes of this
section, the term ‘qualified employee’ means any full-time
employee if—
‘‘(1) such employee is permitted by the em-
ployer, solely in order to reduce the amount of de-
pendent care services provided (to a dependent of
the employee) outside the employee’s household, to
perform services for the employer—
‘‘(A) at the employee’s home, or
‘‘(B) during a period which is not within
the normal business hours of the employer, and
‘‘(2) as a result of the services performed for
the employer as described in subparagraphs (A) and
(B) of paragraph (1), there is at least a 20 percent
reduction in the amount of time dependent care
services are provided to a dependent of the employee
outside the employee’s household.
‘‘(c) OTHER DEFINITIONS AND SPECIAL RULES.—
For purposes of this section—
‘‘(1) EMPLOYEE
MUST
BE
QUALIFIED
EM-
PLOYEE FOR ENTIRE YEAR.—No credit shall be de-
termined under subsection (a) with respect to any
employee unless such employee is a qualified em-
ployee throughout the 1-year period described in
subsection (a).
‘‘(2) ONLY $6,000 OF WAGES PER YEAR TAKEN
INTO ACCOUNT.—The amount of the wages which
may be taken into account with respect to any em-
ployee shall not exceed $6,000 per year.
‘‘(3) WAGES.—The term ‘wages’ has the mean-
ing given such term by section 51(c) (determined
without regard to paragraph (4) thereof).
‘‘(4) CERTAIN RULES TO APPLY.—Rules similar
to the rules of section 52 and subsections (f), (g),
(h), (i), and (k) of section 51 shall apply.’’
(b) CONFORMING AMENDMENT.—Subsection (b) of
section 38 of such Code (relating to current year business
credit), as amended by section 2(b), is amended by strik-
ing ‘‘plus’’ at the end of paragraph (11), by striking the
period at the end of paragraph (12) and inserting ‘‘, plus’’,
and by adding at the end the following new paragraph:
‘‘(13) the child care-related wage credit deter-
mined under section 45D(a).’’
(c) CLERICAL AMENDMENT.—The table of sections
for subpart D of part IV of subchapter A of chapter 1
of such Code is amended by adding at the end the follow-
ing new item:
‘‘Sec. 45D. Wages paid to employee who is allowed to shift hours
of employment or work at home in order to reduce
child care needs.’’
(d) EFFECTIVE DATE.—
(1) IN GENERAL.—The amendments made by
this section shall apply to wages paid or incurred
after the date which is 6 months after the date of
the enactment of this Act.
(2) EMPLOYER PRACTICES BEFORE EFFECTIVE
DATE.—For purposes of section 45D(b)(2) of the
Internal Revenue Code of 1986, as added by this
section, no reduction before the 1st taxable year to
which such section applies shall be taken into ac-
count.
Æ