I 
117TH CONGRESS 
1ST SESSION H. R. 1854 
To amend the Internal Revenue Code of 1986 to allow for a credit against 
tax for employers of reservists. 
IN THE HOUSE OF REPRESENTATIVES 
MARCH 11, 2021 
Mr. RYAN (for himself, Mr. PALAZZO, Ms. SPANBERGER, Mr. KELLY of Mis-
sissippi, Mr. KILMER, Mrs. BUSTOS, Mrs. RADEWAGEN, Mr. MOORE of 
Utah, Mr. STAUBER, Mr. CROW, and Ms. STEFANIK) introduced the fol-
lowing bill; which was referred to the Committee on Ways and Means 
A BILL 
To amend the Internal Revenue Code of 1986 to allow for 
a credit against tax for employers of reservists. 
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 ‘‘Reserve Employers 
Comprehensive Relief and Uniform Incentives on Taxes 
Act of 2021’’ or as the ‘‘RECRUIT Act of 2021’’. 
SEC. 2. RESERVIST EMPLOYMENT CREDIT. 
(a) ALLOWANCE OF CREDIT.—Subpart D of part IV 
of subchapter A of chapter 1 of the Internal Revenue Code 
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of 1986 is amended by adding at the end the following 
new section: 
‘‘SEC. 45U. RESERVIST EMPLOYMENT CREDIT. 
‘‘(a) ESTABLISHMENT OF CREDIT.—For purposes of 
section 38, in the case of an eligible employer, the reservist 
employment credit for any taxable year is an amount equal 
to 40 percent of the wages paid or incurred to qualified 
reservists by such employer during such taxable year. 
‘‘(b) LIMITATION.— 
‘‘(1) IN GENERAL.—The reservist employment 
credit determined under subsection (a), with respect 
to any qualified reservist for any taxable year, shall 
not exceed the reservist credit amount. 
‘‘(2) RESERVIST
CREDIT
AMOUNT.—For pur-
poses of this section, the term ‘reservist credit 
amount’ means, with respect to a qualified reservist 
for a taxable year, an amount equal to the sum of— 
‘‘(A) $1,000, plus 
‘‘(B) in the case of a qualified reservist— 
‘‘(i) with 30 or more days, and fewer 
than 90 days, of service in the uniformed 
services during such year, $3,000, 
‘‘(ii) with 90 or more days, and fewer 
than 180 days, of service in the uniformed 
services during such year, $5,000, and 
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‘‘(iii) with 180 or more days of service 
in the uniformed services during such year, 
$10,000. 
‘‘(3) DAYS OF SERVICE.—For purposes of para-
graph (2), any day of service— 
‘‘(A) shall not be taken into account if 
such day constitutes regularly scheduled unit 
training or annual training, and 
‘‘(B) shall only be taken into account with 
respect to a qualified reservist employed by an 
eligible employer to the extent such days are 
during a period of employment of such reservist 
by such employer. 
‘‘(4) QUALIFIED RESERVIST.—The term ‘quali-
fied reservist’ means, with respect to a taxable year, 
an individual who is, at any time during such tax-
able year, a member of the National Guard or a re-
serve component of the Armed Forces, as named in 
section 10101 of title 10, United States Code (ex-
cept for a member of the Individual Ready Reserve). 
‘‘(5) OTHER DEFINITIONS.—The term ‘reserve 
component’ has the meanings given such term in 
section 101 of title 10, United States Code. The 
term ‘National Guard’ has the meaning given such 
term in section 101(3) of title 32, United States 
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Code. The term ‘service in the uniformed services’ 
has the meaning given such term in section 4303 of 
title 38, United States Code. 
‘‘(c) ELIGIBLE EMPLOYER.—For purposes of this 
section, the term ‘eligible employer’ means any employer 
which has an average of less than 500 employees employed 
on business days during the taxable year. 
‘‘(d) AGGREGATION RULE.—All persons treated as a 
single employer under subsection (b), (c), (m), or (o) of 
section 414 shall be treated as 1 employer for purposes 
of this section. 
‘‘(e) ELECTION TO HAVE CREDIT NOT APPLY.— 
‘‘(1) IN GENERAL.—A taxpayer may elect to 
have this section not apply for any taxable year. 
‘‘(2) OTHER RULES.—Rules similar to the rules 
of paragraphs (2) and (3) of section 51(j) shall 
apply for purposes of this subsection. 
‘‘(f) ELECTION TO TREAT CREDIT AS PAYROLL TAX 
CREDIT.— 
‘‘(1) IN GENERAL.—At the election of an eligi-
ble employer for any taxable year, section 3111(g) 
shall apply to the payroll tax credit portion of the 
credit otherwise determined under subsection (a) for 
the taxable year and such portion shall not be treat-
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ed (other than for purposes of section 280C) as a 
credit determined under subsection (a). 
‘‘(2) PAYROLL
TAX
CREDIT
PORTION.—For 
purposes of this subsection, the term ‘payroll tax 
credit portion’ means the lesser of— 
‘‘(A) the amount specified in the election 
made under this subsection, or 
‘‘(B) the amount of the credit otherwise 
determined under subsection (a) for the taxable 
year. 
‘‘(3) ELECTION.—Any election under this sub-
section for any taxable year— 
‘‘(A) shall specify the amount of the credit 
to which such election applies, 
‘‘(B) shall be made on or before the due 
date (including extensions) of— 
‘‘(i) in the case of an eligible employer 
which is a partnership, the return required 
to be filed under section 6031, 
‘‘(ii) in the case of an eligible em-
ployer which is an S corporation, the re-
turn required to be filed under section 
6037, and 
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‘‘(iii) in the case of any other eligible 
employer, the return of tax for the taxable 
year, and 
‘‘(C) may be revoked only with the consent 
of the Secretary.’’. 
(b) CREDIT PART OF GENERAL BUSINESS CREDIT.— 
Section 38(b) of the Internal Revenue Code of 1986 is 
amended by striking ‘‘plus’’ at the end of paragraph (32), 
by striking the period at the end of paragraph (33) and 
inserting ‘‘, plus’’, and by adding at the end the following 
new paragraph: 
‘‘(34) in the case of an eligible employer (as de-
fined in section 45U(c)), the reservist employment 
credit determined under section 45U(a).’’. 
(c) CREDIT ALLOWED AGAINST AMT.—Subpara-
graph (B) of section 38(c)(4) of the Internal Revenue 
Code of 1986 is amended by redesignating clauses (x) 
through (xii) as clauses (xi) through (xiii), respectively, 
and by inserting after clause (ix) the following new clause: 
‘‘(x) the credit determined under sec-
tion 45U,’’. 
(d) PAYROLL TAX CREDIT.—Section 3111 of the In-
ternal Revenue Code of 1986 is amended by adding at the 
end the following new subsection: 
‘‘(g) RESERVIST EMPLOYMENT CREDIT.— 
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‘‘(1) IN GENERAL.—In the case of a taxpayer 
which has made an election under section 45U(f) for 
a taxable year, there shall be allowed as a credit 
against the tax imposed by subsection (a) for the 
first calendar quarter which begins after the date on 
which the taxpayer files the return specified in sec-
tion 45U(f)(3)(B) an amount equal to the payroll 
tax 
credit 
portion 
determined 
under 
section 
45U(f)(2). 
‘‘(2) LIMITATION.— 
‘‘(A) IN GENERAL.—The credit allowed by 
paragraph (1) shall not exceed the tax imposed 
by subsection (a) for any calendar quarter on 
the wages paid with respect to the employment 
of all individuals in the employ of the employer. 
The limitation imposed by the preceding sen-
tence shall be applied to appropriately take into 
account any other credits allowed against such 
tax in such manner as the Secretary may pro-
vide. 
‘‘(B) TEMPORARY
REFUNDABILITY.—In 
the case of any credit allowed by paragraph (1) 
with respect to a payroll tax credit portion de-
termined for a taxable year beginning in 2021 
or 2022, if the amount of such credit exceeds 
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the limitation of subparagraph (A) for the cal-
endar quarter, such excess shall be treated as 
an overpayment that shall be refunded under 
sections 6402(a) and 6413(b) of such Code. 
For purposes of section 1324 of title 31, United 
States Code, any amounts due to an employer 
under this subparagraph shall be treated in the 
same manner as a refund due from a credit 
provision referred to in subsection (b)(2) of 
such section. 
‘‘(C) CARRYOVER.—In the case of any 
credit allowed by paragraph (1) with respect to 
a payroll tax credit portion determined for a 
taxable year beginning after 2022, if the 
amount of such credit exceeds the limitation of 
subparagraph (A) for any calendar quarter, 
such excess shall be carried to the succeeding 
calendar quarter and allowed as a credit under 
paragraph (1) for such quarter. 
‘‘(3) DEDUCTION
ALLOWED
FOR
CREDITED 
AMOUNTS.—The credit allowed under paragraph (1) 
shall not be taken into account for purposes of de-
termining the amount of any deduction allowed 
under chapter 1 for taxes imposed under subsection 
(a).’’. 
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(e) CONFORMING AMENDMENTS.— 
(1) DENIAL
OF
DOUBLE
BENEFIT.—Section 
280C(a) of the Internal Revenue Code of 1986 is 
amended by inserting ‘‘45U(a),’’ after ‘‘45S(a),’’. 
(2) ELECTION TO HAVE CREDIT NOT APPLY.— 
Section 6501(m) of the Internal Revenue Code of 
1986 is amended by inserting ‘‘45U(d),’’ after 
‘‘45H(g),’’. 
(3) CLERICAL AMENDMENT.—The table of sec-
tions for subpart D of part IV of subchapter A of 
chapter 1 of the Internal Revenue Code of 1986 is 
amended by adding at the end the following new 
item: 
‘‘Sec. 45U. Reservist employment credit.’’. 
(f) EFFECTIVE DATE.—The amendments made by 
this section shall apply to wages paid in taxable years be-
ginning after December 31, 2020. 
Æ 
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