I
103D CONGRESS
1ST SESSION
H. R. 1141
To amend the Internal Revenue Code of 1986 to allow a credit for a portion
of employer social security taxes paid with respect to employee cash tips.
IN THE HOUSE OF REPRESENTATIVES
FEBRUARY 25, 1993
Mr. ANDREWS of Texas (for himself and Mr. SUNDQUIST) 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
credit for a portion of employer social security taxes
paid with respect to employee cash tips.
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled,
SECTION 1. CREDIT FOR PORTION OF EMPLOYER SOCIAL
SECURITY TAXES PAID WITH RESPECT TO
EMPLOYEE CASH TIPS.
(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:
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‘‘SEC. 45A. CREDIT FOR PORTION OF EMPLOYER SOCIAL
SECURITY TAXES PAID WITH RESPECT TO
EMPLOYEE CASH TIPS.
‘‘(a) GENERAL RULE.—For purposes of section 38,
the employer social security credit determined under this
section for the taxable year is an amount equal to the ex-
cess employer social security tax paid or incurred by the
taxpayer during the taxable year.
‘‘(b) EXCESS EMPLOYER SOCIAL SECURITY TAX.—
For purposes of this section, the term ‘excess employer
social security tax’ means any tax paid by an employer
under section 3111 with respect to tips received by an em-
ployee during any month, to the extent such tips—
‘‘(1) are deemed to have been paid by the em-
ployer to the employee pursuant to section 3121(q),
and
‘‘(2) exceed the amount by which the wages (ex-
cluding tips) paid by the employer to the employee
during such month are less than the total amount
which would be payable (with respect to such em-
ployment) at the minimum wage rate applicable to
such individual under section 6(a)(1) of the Fair
Labor Standards Act of 1938 (determined without
regard to section 3(m) of such Act).
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‘‘(c) DENIAL OF DOUBLE BENEFIT.—No deduction
shall be allowed under this chapter for any amount taken
into account in determining the credit under this section.’’
(b) CREDIT TO BE PART OF GENERAL BUSINESS
CREDIT.—
(1) IN GENERAL.—Subsection (b) of section 38
of such Code (relating to current year business cred-
it) is amended by striking ‘‘plus’’ at the end of para-
graph (7), by striking the period at the end of para-
graph (8) and inserting ‘‘, plus’’, and by adding at
the end the following new paragraph:
‘‘(9) the employer social security credit deter-
mined under section 45A(a).’’
(2) LIMITATION ON CARRYBACKS.—Subsection
(d) of section 39 of such Code (relating to transi-
tional rules) is amended by adding at the end the
following new paragraph:
‘‘(4) NO CARRYBACK OF SECTION 45A CREDIT
BEFORE
ENACTMENT.—No portion of the unused
business credit for any taxable year which is attrib-
utable to the employer social security credit deter-
mined under section 45A may be carried back to a
taxable year ending before the date of the enactment
of section 45A.’’
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(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. 45A. Employer social security credit.’’
(d) EFFECTIVE DATE.—The amendments made by
this section shall apply with respect to taxes paid after
December 31, 1992.
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