I 
112TH CONGRESS 
1ST SESSION H. R. 1948 
To amend the Internal Revenue Code of 1986 to allow employers a credit 
against income tax equal to 50 percent of the compensation paid to 
employees while they are performing active duty service as members 
of the Ready Reserve or the National Guard and of the compensation 
paid to temporary replacement employees. 
IN THE HOUSE OF REPRESENTATIVES 
MAY 23, 2011 
Mr. POE of Texas (for himself, Mr. CONNOLLY of Virginia, Mr. COURTNEY, 
Mrs. MILLER of Michigan, and Mr. SENSENBRENNER) 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 em-
ployers a credit against income tax equal to 50 percent 
of the compensation paid to employees while they are 
performing active duty service as members of the Ready 
Reserve or the National Guard and of the compensation 
paid to temporary replacement employees. 
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled, 
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SECTION 1. SHORT TITLE, ETC. 
(a) SHORT TITLE.—This Act may be cited as the 
‘‘Ready Employers Willing to Assist Reservists’ Deploy-
ment Act of 2011’’ or as the ‘‘REWARD Act of 2011’’. 
(b) FINDINGS.—The Congress finds the following: 
(1) The Secretary of Defense presents Freedom 
Awards to employers who demonstrate exceptional 
understanding and support for employees who are 
deployed as members of the Ready Reserve and Na-
tional Guard. 
(2) Since the Freedom Awards program was es-
tablished in 1996, more than 100 employers have re-
ceived the prestigious Freedom Award. 
SEC. 2. EMPLOYER CREDIT FOR COMPENSATION PAID TO 
EMPLOYEES WHILE SERVING ON ACTIVE 
DUTY AS MEMBERS OF READY RESERVE OR 
THE NATIONAL GUARD. 
(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. 45S. EMPLOYER CREDIT FOR COMPENSATION PAID 
TO EMPLOYEES WHILE SERVING ON ACTIVE 
DUTY AS MEMBERS OF READY RESERVE OR 
THE NATIONAL GUARD AND FOR COMPENSA-
TION PAID TO TEMPORARY REPLACEMENT 
EMPLOYEES. 
‘‘(a) GENERAL RULE.—For purposes of section 38, 
in the case of an employer, the employer Ready Reserve- 
National Guard active duty credit determined under this 
section for the taxable year is an amount equal to— 
‘‘(1) 50 percent of the compensation paid or in-
curred to each Ready Reserve-National Guard em-
ployee of the taxpayer while the employee is absent 
from employment while performing qualified active 
duty, and 
‘‘(2) 50 percent of the compensation paid or in-
curred to each qualified replacement employee of the 
taxpayer. 
‘‘(b) LIMITATION APPLICABLE TO READY RESERVE- 
NATIONAL GUARD EMPLOYEES.— 
‘‘(1) IN GENERAL.—The amount of compensa-
tion taken into account under subsection (a) for any 
period of qualified active duty with respect to a 
Ready Reserve-National Guard employee shall not 
exceed the active duty wage differential of such em-
ployee for such period. 
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‘‘(2) ACTIVE DUTY WAGE DIFFERENTIAL.— 
‘‘(A) IN GENERAL.—For purposes of this 
section, the active duty wage differential of a 
Ready Reserve-National Guard employee for 
any period of qualified active duty is the 
amount equal to the product of— 
‘‘(i) the daily wage differential of such 
employee for such period, multiplied by 
‘‘(ii) the number of days that such 
employee is on qualified active duty during 
such period. 
‘‘(B) DAILY
WAGE
DIFFERENTIAL.—For 
purposes of subparagraph (A), the daily wage 
differential of a Ready Reserve-National Guard 
employee for any period is an amount equal to 
the excess of— 
‘‘(i) such employee’s average daily em-
ployer-provided compensation for such pe-
riod, over 
‘‘(ii) such employee’s average daily 
military pay for such period. 
‘‘(C) AVERAGE
DAILY
EMPLOYER-PRO-
VIDED COMPENSATION.— 
‘‘(i) IN
GENERAL.—For purposes of 
subparagraph (B), an employee’s average 
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daily employer-provided compensation for 
any period is the average daily compensa-
tion paid by the employer to the employee 
for the 1-year period ending on the day be-
fore the date that the employee begins 
qualified active duty, adjusted for cost-of- 
living and other increases generally appli-
cable to employees of the employer for 
such period. 
‘‘(ii) 
EMPLOYER-PROVIDED
COM-
PENSATION.—The 
term 
‘compensation’ 
means any remuneration for employment, 
whether in cash or in kind, which is allow-
able 
as 
a 
deduction 
under 
section 
162(a)(1). 
‘‘(D) AVERAGE DAILY MILITARY PAY.— 
‘‘(i) IN
GENERAL.—For purposes of 
subparagraph (B), a Ready Reserve-Na-
tional Guard employee’s average daily mili-
tary pay is the average daily military pay 
and allowances received by the employee on 
account of the employee’s performance of 
qualified active duty during the period. 
‘‘(ii) MILITARY
PAY
AND
ALLOW-
ANCES.—For purposes of clause (i)— 
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‘‘(I) MILITARY
PAY.—The term 
‘military pay’ means pay (as defined 
in section 101(21) of title 37, United 
States Code). 
‘‘(II) ALLOWANCES.—The term 
‘allowances’ means the allowances 
payable to a member of the Armed 
Forces of the United States under 
chapter 7 of such title. 
‘‘(c) LIMITATION APPLICABLE TO QUALIFIED RE-
PLACEMENT EMPLOYEES.— 
‘‘(1) IN GENERAL.—The amount of compensa-
tion taken into account under subsection (a) with re-
spect to any qualified replacement employee for any 
period shall not exceed the amount equal to the 
product of— 
‘‘(A) the average daily employer-provided 
compensation for such period of the Ready Re-
serve-National Guard employee being replaced 
by such replacement employee for such period, 
and 
‘‘(B) the number of days that the Ready 
Reserve-National Guard employee is on quali-
fied active duty during such period. 
‘‘(d) DEFINITIONS.—For purposes of this section— 
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‘‘(1) READY
RESERVE-NATIONAL
GUARD
EM-
PLOYEE.— 
‘‘(A) IN GENERAL.—The term ‘Ready Re-
serve-National Guard employee’ means any em-
ployee— 
‘‘(i) who is a member of the Ready 
Reserve or of the National Guard, and 
‘‘(ii) who was an employee of the tax-
payer during the 1-year period ending on 
the day before the date that the employee 
begins qualified active duty. 
‘‘(B) NATIONAL GUARD.—The term ‘Na-
tional Guard’ has the meaning given such term 
by section 101(c)(1) of title 10, United States 
Code. 
‘‘(C) READY RESERVE.—The term ‘Ready 
Reserve’ has the meaning given such term by 
section 10142 of title 10, United States Code. 
‘‘(2) QUALIFIED
ACTIVE
DUTY.—The term 
‘qualified active duty’ means— 
‘‘(A) active duty under an order or call for 
a period in excess of 90 days or for an indefi-
nite period, other than the training duty speci-
fied in— 
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‘‘(i) section 10147 of title 10, United 
States Code (relating to training require-
ments for the Ready Reserve), or 
‘‘(ii) section 502(a) of title 32, United 
States Code (relating to required drills and 
field exercises for the National Guard), in 
connection with which an employee is enti-
tled to reemployment rights and other ben-
efits or to a leave of absence from employ-
ment under chapter 43 of title 38, United 
States Code, and 
‘‘(B) hospitalization incident to such active 
duty. 
‘‘(3) QUALIFIED REPLACEMENT EMPLOYEE.— 
The term ‘qualified replacement employee’ means 
any employee who is hired by the taxpayer to replace 
a Ready Reserve-National Guard employee during a 
period of qualified active duty, but only with respect 
to periods for which the taxpayer has paid such 
Ready Reserve-National Guard employee an amount 
not less than the active duty wage differential (if 
any) for such period.’’. 
(b) DENIAL OF DOUBLE BENEFIT.—Subsection (a) 
of section 280C of such Code (relating to certain expenses 
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for which credits are allowable) is amended by inserting 
‘‘45S(a),’’ after ‘‘45P(a),’’. 
(c) CREDIT TO BE PART OF GENERAL BUSINESS 
CREDIT.—Subsection (b) of section 38 of such Code (re-
lating to general business credit) is amended by striking 
‘‘plus’’ at the end of paragraph (35), by striking the period 
at the end of paragraph (36) and inserting ‘‘, plus’’, and 
by inserting after paragraph (36) the following new para-
graph: 
‘‘(37) in the case of an employer, the employer 
Ready Reserve-National Guard employee credit de-
termined under section 45S(a).’’. 
(d) CONFORMING AMENDMENT.—The table of sec-
tions for subpart D of part IV of subchapter A of chapter 
1 of such Code is amended by adding at the end the fol-
lowing new item: 
‘‘Sec. 45S. Employer credit for compensation paid to employees while serving 
on active duty as members of Ready Reserve or the National 
Guard and for compensation paid to temporary replacement 
employees.’’. 
(e) EFFECTIVE DATE.—The amendments made by 
this section shall apply to periods of qualified active duty 
(as defined in section 45S(d) of the Internal Revenue Code 
of 1986, as added by this section) in taxable years begin-
ning after December 31, 2010. 
(f) INFORMATION ON MILITARY PAY AND ALLOW-
ANCES.—The Secretary concerned (as defined in section 
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101 of title 10, United States Code) shall provide to em-
ployers and the Secretary of the Treasury such informa-
tion as is necessary to determine the proper amount of 
credit allowable to employers under section 45S of the In-
ternal Revenue Code of 1986, as added by this section. 
Æ 
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