employer other than the United States, any State, or any 
instrumentality thereof. 
‘‘(e) QUALIFIED PAYROLL INCREASE.—For purposes 
of this section— 
‘‘(1) IN GENERAL.—The term ‘qualified payroll 
increase’ with respect to any qualified quarter means 
the amount, if any, by which a qualified employer’s 
qualified payroll for such quarter exceeds the quali-
fied payroll for such quarter of the calendar year 
preceding the year in which such qualified quarter 
falls. 
‘‘(2) QUALIFIED
PAYROLL.—The term ‘quali-
fied payroll’ means the amount of all wages (within 
the meaning of section 3121(a)) paid or incurred by 
a qualified employer to the employees of such em-
ployer, except that, with respect to each such em-
ployee for any quarter of the employer, such wages 
shall be taken into account only to the extent that 
such wages do not exceed the contribution and ben-
efit base as determined under section 230 of the So-
cial Security Act. 
‘‘(3) RAILWAY LABOR.—In the case of remu-
neration subject to the tax imposed by section 
3221(a), paragraph (1) shall be applied by sub-
stituting ‘all compensation (within the meaning of 
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dcolon on DSK2BSOYB1PROD with BILLS
section 3231(e))’ for ‘all wages (within the meaning 
of section 3121(a))’. 
‘‘(4) SPECIAL RULE FOR LARGE EMPLOYERS.— 
In the case of an employer described in subsection 
(b)(2)(B), no qualified payroll increase shall be 
taken into account for any qualified quarter unless 
the qualified payroll increase with respect to such 
qualified quarter exceeds 3 percent of the qualified 
payroll for such quarter of the calendar year pre-
ceding the year in which such qualified quarter falls. 
‘‘(f) QUALIFIED QUARTER.—For purposes of this 
section, the term ‘qualified quarter’ means— 
‘‘(1) the calendar quarter which includes the 
date of the enactment of the Small Business Job 
Creation Tax Act of 2010, and 
‘‘(2) each of the 3 calendar quarters following 
such quarter. 
‘‘(g) DEFINITIONS.—Except as provided in sub-
section (h)(1), any term used in this section which is also 
used in section 3111 has the same meaning as when used 
in such section. 
‘‘(h) SPECIAL RULES.—For purposes of this sec-
tion— 
‘‘(1) EMPLOYEE.—The term ‘employee’ includes 
only individuals who are citizens or lawful residents 
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of the United States who receive wages, remunera-
tion, compensation, or tips from an employer for 
work performed within a State or a possession of the 
United States. 
‘‘(2) MAINTENANCE OF BASE EMPLOYMENT RE-
QUIREMENT.—This section shall not apply to any 
qualified employer for any qualified quarter if the 
total number of employees of such employer during 
such quarter is less than the total number of such 
employees during the quarter preceding such quar-
ter, determined by not taking into account any em-
ployee who is a seasonal employee during such pre-
ceding quarter. 
‘‘(3) CONTROLLED
GROUPS.—All employers 
treated as a single employer under section (a) or (b) 
of section 52 shall be treated as a single employer 
for purposes of the dollar limitation under sub-
section (c), except that any employer which is not an 
American employer shall not be taken into account. 
‘‘(4) NEW EMPLOYERS.— 
‘‘(A) IN GENERAL.—In the case of a quali-
fied employer which comes into existence after 
the date of the enactment of the Small Business 
Job Creation Tax Act of 2010 and before Janu-
ary 1, 2012— 
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‘‘(i) the term ‘qualified quarter’ 
means— 
‘‘(I) the first calendar quarter for 
which such qualified employer is in 
existence, and 
‘‘(II) each of the 3 quarters fol-
lowing such quarter, 
‘‘(ii) the qualified payroll increase of 
such employer for the quarter described in 
clause (i)(I) shall be equal to the amount 
of the employer’s qualified payroll for such 
quarter, and 
‘‘(iii) the qualified payroll increase of 
such employer for any quarter described in 
clause (i)(II) shall be the amount, if any, 
by which the employer’s qualified payroll 
for such quarter exceeds the qualified pay-
roll of the quarter preceding such quarter. 
‘‘(B) TRANSITION RULE.— 
‘‘(i) IN GENERAL.—In the case of a 
qualified employer which comes into exist-
ence— 
‘‘(I) after the last day of the cal-
endar quarter which is 5 calendar 
quarters before the date of the enact-
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dcolon on DSK2BSOYB1PROD with BILLS
ment of the Small Business Job Cre-
ation Tax Act of 2010, and 
‘‘(II) before such date of enact-
ment, 
the qualified payroll increase of such em-
ployer for any transition quarter shall be 
the amount, if any, by which the employ-
er’s qualified payroll for such quarter ex-
ceeds the qualified payroll of the quarter 
preceding such quarter. 
‘‘(ii) 
TRANSITION
QUARTER.—For 
purposes of clause (i), the term ‘transition 
quarter’ means a qualified quarter with re-
spect to which the qualified payroll in-
crease cannot be determined under sub-
section (e)(1) solely because the employer 
was not in existence during such quarter of 
the calendar year preceding the year in 
which such qualified quarter falls.’’. 
(b) CLERICAL AMENDMENT.—The table of sections 
for subchapter B of chapter 65 of the Internal Revenue 
Code of 1986 is amended by adding at the end the fol-
lowing new item: 
‘‘Sec. 6433. Employer payroll increase credits.’’. 
(c) NOTIFICATION.—Not later than 30 days after the 
date of the enactment of this Act, the Commissioner of 
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