subsection (a) shall be equal to the rate of tax in ef-
fect under section 3111(b) for the calendar year. 
‘‘(2) QUALIFIED EMPLOYER.—The term ‘quali-
fied employer’ means any employer other than the 
United States, any State, or any political subdivision 
thereof, or any instrumentality of the foregoing. 
‘‘(3) QUALIFIED INDIVIDUAL.—For purposes of 
this subsection, the term ‘qualified individual’ means 
any individual who— 
‘‘(A) begins employment with a qualified 
employer after June 30, 2011, and before Jan-
uary 1, 2013, 
‘‘(B) is a current member of the National 
Guard or other reserve component of the Armed 
Forces or a veteran (as defined in section 101 
of title 38, United States Code), 
‘‘(C) within 18 months before beginning 
such employment, returned from a deployment 
of at least 180 days in support of a contingency 
operation (as defined in section 101 of title 10, 
United States Code) or under section 502(f) of 
title 32, United States Code, 
‘‘(D) is not employed by the qualified em-
ployer to replace another employee of such em-
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ployer unless such other employee separated 
from employment voluntarily or for cause, and 
‘‘(E) is not an individual described in sec-
tion 51(i)(1) (applied by substituting ‘qualified 
employer’ for ‘taxpayer’ each place it appears). 
‘‘(4) ELECTION.—A qualified employer may 
elect to have this subsection not apply. Such election 
shall be made in such manner as the Secretary may 
require.’’. 
(2) TRANSFERS TO SOCIAL SECURITY EQUIVA-
LENT BENEFIT ACCOUNT.—There are hereby appro-
priated to the Social Security Equivalent Benefit Ac-
count established under section 15A(a) of the Rail-
road Retirement Act of 1974 (45 U.S.C. 231n–1(a)) 
amounts equal to the reduction in revenues to the 
Treasury by reason of the amendments made by 
paragraph (1). Amounts appropriated by the pre-
ceding sentence shall be transferred from the general 
fund at such times and in such manner as to rep-
licate to the extent possible the transfers which 
would have occurred to such Account had such 
amendments not been enacted. 
(e) EFFECTIVE DATE.— 
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(1) IN GENERAL.—The amendments made by 
this section shall apply to wages paid after the date 
of the enactment of this Act. 
(2) 
RAILROAD
RETIREMENT
TAXES.—The 
amendments made by subsection (d) shall apply to 
compensation paid after the date of the enactment 
of this Act. 
SEC. 3. BUSINESS CREDIT FOR RETENTION OF CERTAIN 
NEWLY HIRED VETERANS. 
(a) IN GENERAL.—In the case of any taxable year 
ending after the date of the enactment of this Act, the 
current year business credit determined under section 
38(b) of the Internal Revenue Code of 1986 for such tax-
able year shall be increased by an amount equal to the 
product of— 
(1) $1,000, and 
(2) the number of retained workers with respect 
to which subsection (b)(2) is first satisfied during 
such taxable year. 
(b) RETAINED WORKER.—For purposes of this sec-
tion, the term ‘‘retained worker’’ means any qualified indi-
vidual (as defined in section 3111(e)(3) of the Internal 
Revenue Code of 1986)— 
(1) who was employed by the taxpayer on any 
date during the taxable year, 
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(2) who was so employed by the taxpayer for a 
period of not less than 52 consecutive weeks, and 
(3) whose wages for such employment during 
the last 26 weeks of such period equaled at least 80 
percent of such wages for the first 26 weeks of such 
period. 
(c) LIMITATION ON CARRYBACKS.—No portion of the 
unused business credit under section 38 of the Internal 
Revenue Code of 1986 for any taxable year which is attrib-
utable to the increase in the current year business credit 
under this section may be carried to a taxable year begin-
ning before the date of the enactment of this section. 
(d) TREATMENT OF POSSESSIONS.— 
(1) PAYMENTS TO POSSESSIONS.— 
(A) MIRROR
CODE
POSSESSIONS.—The 
Secretary of the Treasury shall pay to each pos-
session of the United States with a mirror code 
tax system amounts equal to the loss to that 
possession by reason of the application of this 
section (other than this subsection). Such 
amounts shall be determined by the Secretary 
of the Treasury based on information provided 
by the government of the respective possession. 
(B) OTHER POSSESSIONS.—The Secretary 
of the Treasury shall pay to each possession of 
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the United States which does not have a mirror 
code tax system amounts estimated by the Sec-
retary of the Treasury as being equal to the ag-
gregate benefits that would have been provided 
to residents of such possession by reason of the 
application of this section (other than this sub-
section) if a mirror code tax system had been 
in effect in such possession. The preceding sen-
tence shall not apply with respect to any posses-
sion of the United States unless such possession 
has a plan, which has been approved by the 
Secretary of the Treasury, under which such 
possession will promptly distribute such pay-
ments to the residents of such possession. 
(2) COORDINATION
WITH
CREDIT
ALLOWED 
AGAINST UNITED STATES INCOME TAXES.—No in-
crease in the credit determined under section 38(b) 
of the Internal Revenue Code of 1986 against 
United States income taxes for any taxable year de-
termined under subsection (a) shall be taken into ac-
count with respect to any person— 
(A) to whom a credit is allowed against 
taxes imposed by the possession by reason of 
this section for such taxable year, or 
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(B) who is eligible for a payment under a 
plan described in paragraph (1)(B) with respect 
to such taxable year. 
(3) DEFINITIONS AND SPECIAL RULES.— 
(A) 
POSSESSION
OF
THE
UNITED 
STATES.—For purposes of this subsection, the 
term ‘‘possession of the United States’’ includes 
the Commonwealth of Puerto Rico and the 
Commonwealth of the Northern Mariana Is-
lands. 
(B) MIRROR CODE TAX SYSTEM.—For pur-
poses of this subsection, the term ‘‘mirror code 
tax system’’ means, with respect to any posses-
sion of the United States, the income tax sys-
tem of such possession if the income tax liabil-
ity of the residents of such possession under 
such system is determined by reference to the 
income tax laws of the United States as if such 
possession were the United States. 
(C) TREATMENT OF PAYMENTS.—For pur-
poses of section 1324(b)(2) of title 31, United 
States Code, rules similar to the rules of section 
1001(b)(3)(C) of the American Recovery and 
Reinvestment Tax Act of 2009 shall apply. 
Æ 
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