SEC. 2. EXTENSION OF DIVIDENDS RECEIVED DEDUCTION 
FOR 
DIVIDENDS 
RECEIVED 
FROM 
CON-
TROLLED FOREIGN CORPORATIONS BY COR-
PORATIONS INCREASING PAYROLL. 
(a) EXTENSION.—Subsection (f) of section 965 of the 
Internal Revenue Code of 1986 is amended to read as fol-
lows: 
‘‘(f) ELECTION.— 
‘‘(1) IN GENERAL.—An election under this sec-
tion may be made for any taxable year beginning be-
fore December 31, 2012, and shall be made at such 
time and in such manner as the Secretary may pre-
scribe, and, once made, may be revoked only with 
the consent of the Secretary. 
‘‘(2) CONTROLLED
GROUPS.—If an election 
under this section is made by a member of a con-
trolled group of corporations (within the meaning of 
section 1563(a), except that ‘more than 50 percent’ 
shall be substituted for ‘at least 80 percent’ each 
place it appears therein) then, except as otherwise 
provided by the Secretary, such election shall apply 
to all members of such controlled group.’’. 
(b) DEDUCTION LIMITED BY PAYROLL INCREASE 
AND PROPERTY PLACED IN SERVICE.—Subsection (b) of 
section 965 of such Code is amended to read as follows: 
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‘‘(b) 
DEDUCTION
LIMITED
BY
PAYROLL
IN-
CREASE.— 
‘‘(1) IN GENERAL.—The amount of dividends 
taken into account under subsection (a) for any tax-
able year shall not exceed an amount equal to the 
reinvestment amount of such employer (if any) for 
such taxable year. 
‘‘(2) REINVESTMENT AMOUNT.—For purposes 
of this subsection— 
‘‘(A) IN
GENERAL.—The term ‘reinvest-
ment amount’ means the sum of— 
‘‘(i) the employer’s payroll increase 
for the calendar year ending during the 
taxable year, plus 
‘‘(ii) the basis of qualified property 
placed in service by the taxpayer during 
the taxable year. 
‘‘(B) PAYROLL INCREASE.— 
‘‘(i) IN GENERAL.—The term ‘payroll 
increase’ means, with respect to an em-
ployer for a calendar year, the excess (if 
any) of— 
‘‘(I) the aggregate amount of 
wages paid by such employer to all 
employees for such calendar year, over 
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‘‘(II) aggregate amount of infla-
tion adjusted wages paid by such em-
ployer to all employees for the pre-
ceding calendar year. 
‘‘(ii) WAGES.—The term ‘wages’ has 
the meaning given such term by section 
3121(a) for purposes of section 3111(a). 
‘‘(iii) INFLATION ADJUSTED WAGES.— 
The term ‘inflation adjusted wages’ means 
an amount equal to— 
‘‘(I) wages with respect to an em-
ployee, multiplied by 
‘‘(II) the cost-of-living adjust-
ment determined under section 1(f)(3) 
for the calendar year for which the re-
duction in deposits under this section 
is being determined occurs, deter-
mined by substituting ‘calendar year 
2010’ for ‘calendar year 1992’ in sub-
paragraph (B) thereof. 
‘‘(C) QUALIFIED
PROPERTY.—The term 
‘qualified property’ means any tangible personal 
property with respect to which depreciation (or 
amortization in lieu of depreciation) is allow-
able. 
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‘‘(3) BONUS
REINVESTMENT
AMOUNT
FOR 
2012.—In the case of any taxable year beginning in 
2012, the taxpayer may elect to increase the rein-
vestment amount for such taxable year by an 
amount equal to— 
‘‘(A) the employer’s payroll increase for 
the calendar year ending during the preceding 
taxable year, plus 
‘‘(B) the basis of qualified property placed 
in service by the taxpayer during the preceding 
taxable year after the mid-point of such pre-
ceding taxable year. 
‘‘(4) ADJUSTMENTS
FOR
CERTAIN
ACQUISI-
TIONS, ETC.—Under regulations prescribed by the 
Secretary— 
‘‘(A) ACQUISITIONS.—If an employer ac-
quires the major portion of a trade or business 
of another person (hereafter in this paragraph 
referred to as the ‘predecessor’) or the major 
portion of a separate unit of a trade or business 
of a predecessor, then, for purposes of applying 
this section for any calendar year ending after 
such acquisition, the amount of wages or com-
pensation deemed paid by the employer during 
periods before such acquisition shall be in-
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creased by so much of such wages or compensa-
tion paid by the predecessor with respect to the 
acquired trade or business as is attributable to 
the portion of such trade or business acquired 
by the employer. 
‘‘(B) DISPOSITIONS.—If— 
‘‘(i) an employer disposes of the major 
portion of any trade or business of the em-
ployer or the major portion of a separate 
unit of a trade or business of the employer 
in a transaction to which subparagraph 
(A) applies, and 
‘‘(ii) the employer furnishes the ac-
quiring person such information as is nec-
essary for the application of subparagraph 
(A), 
then, for purposes of applying this section for 
any calendar year ending after such disposition, 
the amount of wages or compensation deemed 
paid by the employer during periods before such 
disposition shall be reduced by so much of such 
wages as is attributable to such trade or busi-
ness or separate unit.’’. 
(c) CONFORMING AMENDMENTS.— 
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