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PART 4—DEPENDENT CARE ASSISTANCE 
SEC. 9631. REFUNDABILITY AND ENHANCEMENT OF CHILD 
AND DEPENDENT CARE TAX CREDIT. 
(a) IN GENERAL.—Section 21 of the Internal Rev-
enue Code of 1986 is amended by adding at the end the 
following new subsection: 
‘‘(g) SPECIAL RULES FOR 2021.—In the case of any 
taxable year beginning after December 31, 2020, and be-
fore January 1, 2022— 
‘‘(1) CREDIT MADE REFUNDABLE.—If the tax-
payer (in the case of a joint return, either spouse) 
has a principal place of abode in the United States 
(determined as provided in section 32) for more than 
one-half of the taxable year, the credit allowed under 
subsection (a) shall be treated as a credit allowed 
under subpart C (and not allowed under this sub-
part). 
‘‘(2) INCREASE IN DOLLAR LIMIT ON AMOUNT 
CREDITABLE.—Subsection (c) shall be applied— 
‘‘(A) by substituting ‘$8,000’ for ‘$3,000’ 
in paragraph (1) thereof, and 
‘‘(B) by substituting ‘$16,000’ for ‘$6,000’ 
in paragraph (2) thereof. 
‘‘(3) INCREASE IN APPLICABLE PERCENTAGE.— 
Subsection (a)(2) shall be applied— 
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‘‘(A) by substituting ‘50 percent’ for ‘35 
percent ’, and 
‘‘(B) 
by 
substituting 
‘$125,000’ 
for 
‘$15,000’. 
‘‘(4) APPLICATION OF PHASEOUT TO HIGH IN-
COME INDIVIDUALS.— 
‘‘(A) IN
GENERAL.—Subsection (a)(2) 
shall be applied by substituting ‘the phaseout 
percentage’ for ‘20 percent’. 
‘‘(B) PHASEOUT PERCENTAGE.—The term 
‘phaseout percentage’ means 20 percent re-
duced (but not below zero) by 1 percentage 
point for each $2,000 (or fraction thereof) by 
which the taxpayer’s adjusted gross income for 
the taxable year exceeds $400,000.’’. 
(b) APPLICATION OF CREDIT IN POSSESSIONS.—Sec-
tion 21 of such Code, as amended by subsection (a), is 
amended by adding at the end the following new sub-
section: 
‘‘(h) APPLICATION OF CREDIT IN POSSESSIONS.— 
‘‘(1) PAYMENT TO POSSESSIONS WITH MIRROR 
CODE TAX SYSTEMS.—The Secretary shall pay to 
each possession of the United States with a mirror 
code tax system amounts equal to the loss (if any) 
to that possession by reason of the application of 
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this section (determined without regard to this sub-
section) with respect to taxable years beginning in or 
with 2021. Such amounts shall be determined by the 
Secretary based on information provided by the gov-
ernment of the respective possession. 
‘‘(2) PAYMENTS TO OTHER POSSESSIONS.—The 
Secretary shall pay to each possession of the United 
States which does not have a mirror code tax system 
amounts estimated by the Secretary as being equal 
to the aggregate benefits that would have been pro-
vided to residents of such possession by reason of 
this section with respect to taxable years beginning 
in or with 2021 if a mirror code tax system had 
been in effect in such possession. The preceding sen-
tence shall not apply unless the respective possession 
has a plan, which has been approved by the Sec-
retary, under which such possession will promptly 
distribute such payments to its residents. 
‘‘(3) COORDINATION
WITH
CREDIT
ALLOWED 
AGAINST UNITED STATES INCOME TAXES.—In the 
case of any taxable year beginning in or with 2021, 
no credit shall be allowed under this section to any 
individual— 
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‘‘(A) to whom a credit is allowable against 
taxes imposed by a possession with a mirror 
code tax system by reason of this section, or 
‘‘(B) who is eligible for a payment under 
a plan described in paragraph (2). 
‘‘(4) MIRROR
CODE
TAX
SYSTEM.—For pur-
poses of this subsection, the term ‘mirror code tax 
system’ means, with respect to any possession of the 
United States, the income tax system of such posses-
sion if the income tax liability of the residents of 
such possession under such system is determined by 
reference to the income tax laws of the United 
States as if such possession were the United States. 
‘‘(5) TREATMENT
OF
PAYMENTS.—For pur-
poses of section 1324 of title 31, United States 
Code, the payments under this subsection 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) CONFORMING AMENDMENTS.— 
(1) Section 6211(b)(4)(A) of such Code, as 
amended by the preceding provisions of this Act, is 
amended by inserting ‘‘21 by reason of subsection 
(g) thereof,’’ before ‘‘24’’. 
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(2) Section 1324(b)(2) of title 31, United 
States Code (as amended by the preceding provi-
sions of this title), is amended by inserting ‘‘21,’’ be-
fore ‘‘24’’. 
(d) EFFECTIVE DATE.—The amendments made by 
this section shall apply to taxable years beginning after 
December 31, 2020. 
SEC. 9632. INCREASE IN EXCLUSION FOR EMPLOYER-PRO-
VIDED DEPENDENT CARE ASSISTANCE. 
(a) IN GENERAL.—Section 129(a)(2) of the Internal 
Revenue Code of 1986 is amended by adding at the end 
the following new subparagraph: 
‘‘(D) SPECIAL
RULE
FOR
2021.—In the 
case of any taxable year beginning after Decem-
ber 31, 2020, and before January 1, 2022, sub-
paragraph (A) shall be applied be substituting 
‘$10,500 (half such dollar amount’ for ‘$5,000 
($2,500’.’’. 
(b) EFFECTIVE DATE.—The amendment made by 
this section shall apply to taxable years beginning after 
December 31, 2020. 
(c) RETROACTIVE PLAN AMENDMENTS.—A plan that 
otherwise satisfies all applicable requirements of sections 
125 and 129 of the Internal Revenue Code of 1986 (in-
cluding any rules or regulations thereunder) shall not fail 
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to be treated as a cafeteria plan or dependent care assist-
ance program merely because such plan is amended pursu-
ant to a provision under this section and such amendment 
is retroactive, if— 
(1) such amendment is adopted no later than 
the last day of the plan year in which the amend-
ment is effective, and 
(2) the plan is operated consistent with the 
terms of such amendment during the period begin-
ning on the effective date of the amendment and 
ending on the date the amendment is adopted. 
PART 5—CREDITS FOR PAID SICK AND FAMILY 
LEAVE 
SEC. 9641. PAYROLL CREDITS. 
(a) IN GENERAL.—Chapter 21 of the Internal Rev-
enue Code of 1986 is amended by adding at the end the 
following new subchapter: 
‘‘Subchapter D—Credits 
‘‘Sec. 3131. Credit for paid sick leave. 
‘‘Sec. 3132. Payroll credit for paid family leave. 
‘‘Sec. 3133. Special rule related to tax on employers. 
‘‘SEC. 3131. CREDIT FOR PAID SICK LEAVE. 
‘‘(a) IN GENERAL.—In the case of an employer, there 
shall be allowed as a credit against applicable employment 
taxes for each calendar quarter an amount equal to 100 
percent of the qualified sick leave wages paid by such em-
ployer with respect to such calendar quarter. 
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‘‘(b) LIMITATIONS AND REFUNDABILITY.— 
‘‘(1) WAGES
TAKEN
INTO
ACCOUNT.—The 
amount of qualified sick leave wages taken into ac-
count under subsection (a) with respect to any indi-
vidual shall not exceed $200 ($511 in the case of 
any day any portion of which is paid sick time de-
scribed in paragraph (1), (2), or (3) of section 
5102(a) of the Emergency Paid Sick Leave Act, ap-
plied with the modification described in subsection 
(c)(2)(A)(i)) for any day (or portion thereof) for 
which the individual is paid qualified sick leave 
wages. 
‘‘(2) OVERALL
LIMITATION
ON
NUMBER
OF 
DAYS TAKEN INTO ACCOUNT.—The aggregate num-
ber of days taken into account under paragraph (1) 
for any calendar quarter shall not exceed the excess 
(if any) of— 
‘‘(A) 10, over 
‘‘(B) the aggregate number of days so 
taken into account during preceding calendar 
quarters in such calendar year (other than the 
first quarter of calendar year 2021). 
‘‘(3) CREDIT
LIMITED
TO
CERTAIN
EMPLOY-
MENT TAXES.—The credit allowed by subsection (a) 
with respect to any calendar quarter shall not exceed 
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the applicable employment taxes for such calendar 
quarter on the wages paid with respect to the em-
ployment of all employees of the employer. 
‘‘(4) REFUNDABILITY OF EXCESS CREDIT.— 
‘‘(A) CREDIT
IS
REFUNDABLE.—If the 
amount of the credit under subsection (a) ex-
ceeds the limitation of paragraph (3) for any 
calendar quarter, such excess shall be treated 
as an overpayment that shall be refunded under 
sections 6402(a) and 6413(b). 
‘‘(B) ADVANCING CREDIT.—In anticipation 
of the credit, including the refundable portion 
under subparagraph (A), the credit shall be ad-
vanced, according to forms and instructions 
provided by the Secretary, up to an amount cal-
culated under subsection (a), subject to the lim-
its under paragraph (1) and (2), all calculated 
through the end of the most recent payroll pe-
riod in the quarter. 
‘‘(c) QUALIFIED SICK LEAVE WAGES.—For purposes 
of this section— 
‘‘(1) IN
GENERAL.—The term ‘qualified sick 
leave wages’ means wages paid by an employer 
which would be required to be paid by reason of the 
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Emergency Paid Sick Leave Act as if such Act ap-
plied after March 31, 2021. 
‘‘(2) RULES OF APPLICATION.—For purposes of 
determining whether wages are qualified sick leave 
wages under paragraph (1)— 
‘‘(A) IN GENERAL.—The Emergency Paid 
Sick Leave Act shall be applied— 
‘‘(i) by inserting ‘, the employee is 
seeking or awaiting the results of a diag-
nostic test for, or a medical diagnosis of, 
COVID-19 and such employee has been ex-
posed to COVID-19 or the employee’s em-
ployer has requested such test or diag-
nosis, or the employee is obtaining immu-
nization related to COVID–19 or recov-
ering from any injury, disability, illness, or 
condition related to such immunization’ 
after 
‘medical 
diagnosis’ 
in 
section 
5102(a)(3) thereof, and 
‘‘(ii) by applying section 5102(b)(1) of 
such Act separately with respect to each 
calendar year after 2020 (and, in the case 
of calendar year 2021, without regard to 
the first quarter thereof). 
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‘‘(B) 
LEAVE
MUST
MEET
REQUIRE-
MENTS.—If an employer fails to comply with 
any requirement of such Act (determined with-
out regard to section 5109 thereof) with respect 
to paid sick time (as defined in section 5110 of 
such Act), amounts paid by such employer with 
respect to such paid sick time shall not be 
taken into account as qualified sick leave wages. 
For purposes of the preceding sentence, an em-
ployer which takes an action described in sec-
tion 5104 of such Act shall be treated as failing 
to meet a requirement of such Act. 
‘‘(d) ALLOWANCE OF CREDIT FOR CERTAIN HEALTH 
PLAN EXPENSES.— 
‘‘(1) IN GENERAL.—The amount of the credit 
allowed under subsection (a) shall be increased by so 
much of the employer’s qualified health plan ex-
penses as are properly allocable to the qualified sick 
leave wages for which such credit is so allowed. 
‘‘(2) QUALIFIED HEALTH PLAN EXPENSES.— 
For purposes of this subsection, the term ‘qualified 
health plan expenses’ means amounts paid or in-
curred by the employer to provide and maintain a 
group health plan (as defined in section 5000(b)(1)), 
but only to the extent that such amounts are ex-
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cluded from the gross income of employees by reason 
of section 106(a). 
‘‘(3) ALLOCATION
RULES.—For purposes of 
this section, qualified health plan expenses shall be 
allocated to qualified sick leave wages in such man-
ner as the Secretary may prescribe. Except as other-
wise provided by the Secretary, such allocation shall 
be treated as properly made if made on the basis of 
being pro rata among covered employees and pro 
rata on the basis of periods of coverage (relative to 
the time periods of leave to which such wages re-
late). 
‘‘(e) DEFINITIONS AND SPECIAL RULES.— 
‘‘(1) APPLICABLE
EMPLOYMENT
TAXES.—For 
purposes of this section, the term ‘applicable employ-
ment taxes’ means the following: 
‘‘(A) The taxes imposed under section 
3111(b). 
‘‘(B) So much of the taxes imposed under 
section 3221(a) as are attributable to the rate 
in effect under section 3111(b). 
‘‘(2) WAGES.—For purposes of this section, the 
term ‘wages’ means wages (as defined in section 
3121(a), determined without regard to paragraphs 
(1) through (22) of section 3121(b)) and compensa-
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tion (as defined in section 3231(e), determined with-
out regard to the sentence in paragraph (1) thereof 
which begins ‘Such term does not include remunera-
tion’). 
‘‘(3) DENIAL OF DOUBLE BENEFIT.—For pur-
poses of chapter 1, the gross income of the em-
ployer, for the taxable year which includes the last 
day of any calendar quarter with respect to which a 
credit is allowed under this section, shall be in-
creased by the amount of such credit. Any wages 
taken into account in determining the credit allowed 
under this section shall not be taken into account for 
purposes of determining the credit allowed under 
sections 45A, 45P, 45S, 51, 3132, and 3134. In the 
case of any credit allowed under section 2301 of the 
CARES Act or section 41 with respect to wages 
taken into account under this section, the credit al-
lowed under this section shall be reduced by the por-
tion of the credit allowed under such section 2301 
or section 41 which is attributable to such wages. 
‘‘(4) ELECTION TO NOT TAKE CERTAIN WAGES 
INTO ACCOUNT.—This section shall not apply to so 
much of the qualified sick leave wages paid by an el-
igible employer as such employer elects (at such time 
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and in such manner as the Secretary may prescribe) 
to not take into account for purposes of this section. 
‘‘(5) CERTAIN GOVERNMENTAL EMPLOYERS.— 
No credit shall be allowed under this section to the 
Government of the United States or to any agency 
or instrumentality thereof. The preceding sentence 
shall not apply to any organization described in sec-
tion 501(c)(1) and exempt from tax under section 
501(a). 
‘‘(6) EXTENSION OF LIMITATION ON ASSESS-
MENT.—Notwithstanding section 6501, the limita-
tion on the time period for the assessment of any 
amount attributable to a credit claimed under this 
section shall not expire before the date that is 5 
years after the later of— 
‘‘(A) the date on which the original return 
which includes the calendar quarter with re-
spect to which such credit is determined is filed, 
or 
‘‘(B) the date on which such return is 
treated as filed under section 6501(b)(2). 
‘‘(f) REGULATIONS.—The Secretary shall prescribe 
such regulations or other guidance as may be necessary 
to carry out the purposes of this section, including— 
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‘‘(1) regulations or other guidance to prevent 
the avoidance of the purposes of the limitations 
under this section, 
‘‘(2) regulations or other guidance to minimize 
compliance and record-keeping burdens under this 
section, 
‘‘(3) regulations or other guidance providing for 
waiver of penalties for failure to deposit amounts in 
anticipation of the allowance of the credit allowed 
under this section, 
‘‘(4) regulations or other guidance for recap-
turing the benefit of credits determined under this 
section in cases where there is a subsequent adjust-
ment to the credit determined under subsection (a), 
‘‘(5) regulations or other guidance to ensure 
that the wages taken into account under this section 
conform with the paid sick time required to be pro-
vided under the Emergency Paid Sick Leave Act, 
and 
‘‘(6) regulations or other guidance to permit the 
advancement of the credit determined under sub-
section (a). 
‘‘(g) APPLICATION OF SECTION.—This section shall 
apply only to wages paid with respect to the period begin-
ning on April 1, 2021, and ending on September 30, 2021. 
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‘‘(h) TREATMENT
OF DEPOSITS.—The Secretary 
shall waive any penalty under section 6656 for any failure 
to make a deposit of applicable employment taxes if the 
Secretary determines that such failure was due to the an-
ticipation of the credit allowed under this section. 
‘‘(i) 
NON-DISCRIMINATION
REQUIREMENT.—No 
credit shall be allowed under this section to any employer 
for any calendar quarter if such employer, with respect 
to the availability of the provision of qualified sick leave 
wages to which this section otherwise applies for such cal-
endar quarter, discriminates in favor of highly com-
pensated employees (within the meaning of section 
414(q)), full-time employees, or employees on the basis of 
employment tenure with such employer. 
‘‘SEC. 3132. PAYROLL CREDIT FOR PAID FAMILY LEAVE. 
‘‘(a) IN GENERAL.—In the case of an employer, there 
shall be allowed as a credit against applicable employment 
taxes for each calendar quarter an amount equal to 100 
percent of the qualified family leave wages paid by such 
employer with respect to such calendar quarter. 
‘‘(b) LIMITATIONS AND REFUNDABILITY.— 
‘‘(1) WAGES
TAKEN
INTO
ACCOUNT.—The 
amount of qualified family leave wages taken into 
account under subsection (a) with respect to any in-
dividual shall not exceed— 
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‘‘(A) for any day (or portion thereof) for 
which the individual is paid qualified family 
leave wages, $200, and 
‘‘(B) in the aggregate with respect to all 
calendar quarters, $12,000. 
‘‘(2) CREDIT
LIMITED
TO
CERTAIN
EMPLOY-
MENT TAXES.—The credit allowed by subsection (a) 
with respect to any calendar quarter shall not exceed 
the applicable employment taxes for such calendar 
quarter (reduced by any credits allowed under sec-
tion 3131) on the wages paid with respect to the em-
ployment of all employees of the employer. 
‘‘(3) REFUNDABILITY OF EXCESS CREDIT.— 
‘‘(A) CREDIT
IS
REFUNDABLE.—If the 
amount of the credit under subsection (a) ex-
ceeds the limitation of paragraph (2) for any 
calendar quarter, such excess shall be treated 
as an overpayment that shall be refunded under 
sections 6402(a) and 6413(b). 
‘‘(B) ADVANCING CREDIT.—In anticipation 
of the credit, including the refundable portion 
under subparagraph (A), the credit shall be ad-
vanced, according to forms and instructions 
provided by the Secretary, up to an amount cal-
culated under subsection (a), subject to the lim-
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its under paragraph (1) and (2), all calculated 
through the end of the most recent payroll pe-
riod in the quarter. 
‘‘(c) QUALIFIED FAMILY LEAVE WAGES.— 
‘‘(1) IN GENERAL.—For purposes of this sec-
tion, the term ‘qualified family leave wages’ means 
wages paid by an employer which would be required 
to be paid by reason of the Emergency Family and 
Medical Leave Expansion Act (including the amend-
ments made by such Act) as if such Act (and 
amendments made by such Act) applied after March 
31, 2021. 
‘‘(2) RULES OF APPLICATION.— 
‘‘(A) IN GENERAL.—For purposes of deter-
mining whether wages are qualified family leave 
wages under paragraph (1)— 
‘‘(i) section 110(a)(2)(A) of the Fam-
ily and Medical Leave Act of 1993 shall be 
applied by inserting ‘or any reason for 
leave described in section 5102(a) of the 
Families First Coronavirus Response Act, 
or the employee is seeking or awaiting the 
results of a diagnostic test for, or a med-
ical diagnosis of, COVID-19 and such em-
ployee has been exposed to COVID-19 or 
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the employee’s employer has requested 
such test or diagnosis, or the employee is 
obtaining immunization related to COVID– 
19 or recovering from any injury, dis-
ability, illness, or condition related to such 
immunization’ after ‘public health emer-
gency’, and 
‘‘(ii) section 110(b) of such Act shall 
be applied— 
‘‘(I) without regard to paragraph 
(1) thereof, 
‘‘(II) by striking ‘after taking 
leave after such section for 10 days’ 
in paragraph (2)(A) thereof, and 
‘‘(III) by substituting ‘$12,000’ 
for ‘$10,000’ in paragraph (2)(B)(ii) 
thereof. 
‘‘(B) 
LEAVE
MUST
MEET
REQUIRE-
MENTS.—For purposes of determining whether 
wages would be required to be paid under para-
graph (1), if an employer fails to comply with 
any requirement of the Family and Medical 
Leave Act of 1993 or the Emergency Family 
and Medical Leave Expansion Act (determined 
without regard to any time limitation under sec-
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tion 102(a)(1)(F) of the Family and Medical 
Leave Act of 1994) with respect to any leave 
provided for a qualifying need related to a pub-
lic health emergency (as defined in section 110 
of such Act, applied as described in subpara-
graph (A)(i)), amounts paid by such employer 
with respect to such leave shall not be taken 
into account as qualified family leave wages. 
For purposes of the preceding sentence, an em-
ployer which takes an action described in sec-
tion 105 of the Family and Medical Leave Act 
of 1993 shall be treated as failing to meet a re-
quirement of such Act. 
‘‘(d) ALLOWANCE OF CREDIT FOR CERTAIN HEALTH 
PLAN EXPENSES.— 
‘‘(1) IN GENERAL.—The amount of the credit 
allowed under subsection (a) shall be increased by so 
much of the employer’s qualified health plan ex-
penses as are properly allocable to the qualified fam-
ily leave wages for which such credit is so allowed. 
‘‘(2) QUALIFIED HEALTH PLAN EXPENSES.— 
For purposes of this subsection, the term ‘qualified 
health plan expenses’ means amounts paid or in-
curred by the employer to provide and maintain a 
group health plan (as defined in section 5000(b)(1)), 
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but only to the extent that such amounts are ex-
cluded from the gross income of employees by reason 
of section 106(a). 
‘‘(3) ALLOCATION
RULES.—For purposes of 
this section, qualified health plan expenses shall be 
allocated to qualified family leave wages in such 
manner as the Secretary may prescribe. Except as 
otherwise provided by the Secretary, such allocation 
shall be treated as properly made if made on the 
basis of being pro rata among covered employees 
and pro rata on the basis of periods of coverage (rel-
ative to the time periods of leave to which such 
wages relate). 
‘‘(e) DEFINITIONS AND SPECIAL RULES.— 
‘‘(1) APPLICABLE
EMPLOYMENT
TAXES.—For 
purposes of this section, the term ‘applicable employ-
ment taxes’ means the following: 
‘‘(A) The taxes imposed under section 
3111(b). 
‘‘(B) So much of the taxes imposed under 
section 3221(a) as are attributable to the rate 
in effect under section 3111(b). 
‘‘(2) WAGES.—For purposes of this section, the 
term ‘wages’ means wages (as defined in section 
3121(a), determined without regard to paragraphs 
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(1) through (22) of section 3121(b)) and compensa-
tion (as defined in section 3231(e), determined with-
out regard to the sentence in paragraph (1) thereof 
which begins ‘Such term does not include remunera-
tion’). 
‘‘(3) DENIAL OF DOUBLE BENEFIT.—For pur-
poses of chapter 1, the gross income of the em-
ployer, for the taxable year which includes the last 
day of any calendar quarter with respect to which a 
credit is allowed under this section, shall be in-
creased by the amount of such credit. Any wages 
taken into account in determining the credit allowed 
under this section shall not be taken into account for 
purposes of determining the credit allowed under 
sections 45A, 45P, 45S, 51, 3131, and 3134. In the 
case of any credit allowed under section 2301 of the 
CARES Act or section 41 with respect to wages 
taken into account under this section, the credit al-
lowed under this section shall be reduced by the por-
tion of the credit allowed under such section 2301 
or section 41 which is attributable to such wages. 
‘‘(4) ELECTION TO NOT TAKE CERTAIN WAGES 
INTO ACCOUNT.—This section shall not apply to so 
much of the qualified family leave wages paid by an 
eligible employer as such employer elects (at such 
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time and in such manner as the Secretary may pre-
scribe) to not take into account for purposes of this 
section. 
‘‘(5) CERTAIN GOVERNMENTAL EMPLOYERS.— 
No credit shall be allowed under this section to the 
Government of the United States or to any agency 
or instrumentality thereof. The preceding sentence 
shall not apply to any organization described in sec-
tion 501(c)(1) and exempt from tax under section 
501(a). 
‘‘(6) EXTENSION OF LIMITATION ON ASSESS-
MENT.—Notwithstanding section 6501, the limita-
tion on the time period for the assessment of any 
amount attributable to a credit claimed under this 
section shall not expire before the date that is 5 
years after the later of— 
‘‘(A) the date on which the original return 
which includes the calendar quarter with re-
spect to which such credit is determined is filed, 
or 
‘‘(B) the date on which such return is 
treated as filed under section 6501(b)(2). 
‘‘(f) REGULATIONS.—The Secretary shall prescribe 
such regulations or other guidance as may be necessary 
to carry out the purposes of this section, including— 
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‘‘(1) regulations or other guidance to prevent 
the avoidance of the purposes of the limitations 
under this section, 
‘‘(2) regulations or other guidance to minimize 
compliance and record-keeping burdens under this 
section, 
‘‘(3) regulations or other guidance providing for 
waiver of penalties for failure to deposit amounts in 
anticipation of the allowance of the credit allowed 
under this section, 
‘‘(4) regulations or other guidance for recap-
turing the benefit of credits determined under this 
section in cases where there is a subsequent adjust-
ment to the credit determined under subsection (a), 
‘‘(5) regulations or other guidance to ensure 
that the wages taken into account under this section 
conform with the paid leave required to be provided 
under the Emergency Family and Medical Leave Ex-
pansion Act (including the amendments made by 
such Act), and 
‘‘(6) regulations or other guidance to permit the 
advancement of the credit determined under sub-
section (a). 
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‘‘(g) APPLICATION OF SECTION.—This section shall 
apply only to wages paid with respect to the period begin-
ning on April 1, 2021, and ending on September 30, 2021. 
‘‘(h) TREATMENT
OF DEPOSITS.—The Secretary 
shall waive any penalty under section 6656 for any failure 
to make a deposit of applicable employment taxes if the 
Secretary determines that such failure was due to the an-
ticipation of the credit allowed under this section. 
‘‘(i) 
NON-DISCRIMINATION
REQUIREMENT.—No 
credit shall be allowed under this section to any employer 
for any calendar quarter if such employer, with respect 
to the availability of the provision of qualified family leave 
wages to which this section otherwise applies for such cal-
endar quarter, discriminates in favor of highly com-
pensated employees (within the meaning of section 
414(q)), full-time employees, or employees on the basis of 
employment tenure with such employer. 
‘‘SEC. 3133. SPECIAL RULE RELATED TO TAX ON EMPLOY-
ERS. 
‘‘(a) IN GENERAL.—The credit allowed by section 
3131 and the credit allowed by section 3132 shall each 
be increased by the amount of the taxes imposed by sub-
sections (a) and (b) of section 3111 and section 3221(a) 
on qualified sick leave wages, or qualified family leave 
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wages, for which credit is allowed under such section 3131 
or 3132 (respectively). 
‘‘(b) DENIAL OF DOUBLE BENEFIT.—For denial of 
double benefit with respect to the credit increase under 
subsection (a), see sections 3131(e)(3) and 3132(e)(3).’’. 
(b) REFUNDS.—Paragraph (2) of section 1324(b) of 
title 31, United States Code, is amended by inserting 
‘‘3131, 3132,’’ before ‘‘6428’’. 
(c) CLERICAL AMENDMENT.—The table of sub-
chapters for chapter 21 of the Internal Revenue Code of 
1986 is amended by adding at the end the following new 
item: 
‘‘SUBCHAPTER D—CREDITS’’. 
(d) EFFECTIVE DATE.—The amendments made by 
this section shall apply to amounts paid with respect to 
calendar quarters beginning after March 31, 2021. 
SEC. 9642. CREDIT FOR SICK LEAVE FOR CERTAIN SELF- 
EMPLOYED INDIVIDUALS. 
(a) IN GENERAL.—In the case of an eligible self-em-
ployed individual, there shall be allowed as a credit against 
the tax imposed by chapter 1 of the Internal Revenue Code 
of 1986 for any taxable year an amount equal to the quali-
fied sick leave equivalent amount with respect to the indi-
vidual. 
(b) ELIGIBLE SELF-EMPLOYED INDIVIDUAL.—For 
purposes of this section— 
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(1) IN GENERAL.—The term ‘‘eligible self-em-
ployed individual’’ means an individual who— 
(A) regularly carries on any trade or busi-
ness within the meaning of section 1402 of the 
Internal Revenue Code of 1986, and 
(B) would be entitled to receive paid leave 
during the taxable year pursuant to the Emer-
gency Paid Sick Leave Act if— 
(i) the individual were an employee of 
an employer (other than himself or her-
self), and 
(ii) such Act applied after March 31, 
2021. 
(2) RULES OF APPLICATION.—For purposes of 
paragraph (1)(B), in determining whether an indi-
vidual would be entitled to receive paid leave under 
the Emergency Paid Sick Leave Act, such Act shall 
be applied— 
(A) by inserting ‘‘, the employee is seeking 
or awaiting the results of a diagnostic test for, 
or a medical diagnosis of, COVID-19 and such 
employee has been exposed to COVID-19 or is 
unable to work pending the results of such test 
or diagnosis, or the employee is obtaining im-
munization related to COVID–19 or recovering 
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from any injury, disability, illness, or condition 
related to such immunization’’ after ‘‘medical 
diagnosis’’ in section 5102(a)(3) of such Act, 
and 
(B) by applying section 5102(b)(1) of such 
Act separately with respect to each taxable 
year. 
(c) 
QUALIFIED
SICK
LEAVE
EQUIVALENT 
AMOUNT.—For purposes of this section— 
(1) IN
GENERAL.—The term ‘‘qualified sick 
leave equivalent amount’’ means, with respect to any 
eligible self-employed individual, an amount equal 
to— 
(A) the number of days during the taxable 
year (but not more than 10) that the individual 
is unable to perform services in any trade or 
business referred to in section 1402 of the In-
ternal Revenue Code of 1986 for a reason with 
respect to which such individual would be enti-
tled to receive sick leave as described in sub-
section (b), multiplied by 
(B) the lesser of— 
(i) $200 ($511 in the case of any day 
of paid sick time described in paragraph 
(1), (2), or (3) of section 5102(a) of the 
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Emergency Paid Sick Leave Act, applied 
with the modification described in sub-
section (b)(2)(A)) of this section, or 
(ii) 67 percent (100 percent in the 
case of any day of paid sick time described 
in paragraph (1), (2), or (3) of section 
5102(a) of the Emergency Paid Sick Leave 
Act) of the average daily self-employment 
income of the individual for the taxable 
year. 
(2) AVERAGE
DAILY
SELF-EMPLOYMENT
IN-
COME.—For purposes of this subsection, the term 
‘‘average daily self-employment income’’ means an 
amount equal to— 
(A) the net earnings from self-employment 
of the individual for the taxable year, divided by 
(B) 260. 
(3) ELECTION TO USE PRIOR YEAR NET EARN-
INGS
FROM
SELF-EMPLOYMENT
INCOME.—In the 
case of an individual who elects (at such time and 
in such manner as the Secretary may provide) the 
application of this paragraph, paragraph (2)(A) shall 
be applied by substituting ‘‘the prior taxable year’’ 
for ‘‘the taxable year’’. 
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(4) ELECTION TO NOT TAKE DAYS INTO AC-
COUNT.—Any day shall not be taken into account 
under paragraph (1)(A) if the eligible self-employed 
individual elects (at such time and in such manner 
as the Secretary may prescribe) to not take such day 
into account for purposes of such paragraph. 
(d) CREDIT REFUNDABLE.— 
(1) IN GENERAL.—The credit determined under 
this section shall be treated as a credit allowed to 
the taxpayer under subpart C of part IV of sub-
chapter A of chapter 1 of such Code. 
(2) TREATMENT OF PAYMENTS.—For purposes 
of section 1324 of title 31, United States Code, any 
refund due from the credit determined under this 
section shall be treated in the same manner as a re-
fund due from a credit provision referred to in sub-
section (b)(2) of such section. 
(e) SPECIAL RULES.— 
(1) DOCUMENTATION.—No credit shall be al-
lowed under this section unless the individual main-
tains such documentation as the Secretary may pre-
scribe to establish such individual as an eligible self- 
employed individual. 
(2) DENIAL OF DOUBLE BENEFIT.—In the case 
of an individual who receives wages (as defined in 
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section 3121(a) of the Internal Revenue Code of 
1986) or compensation (as defined in section 
3231(e) of such Code) paid by an employer which 
are required to be paid by reason of the Emergency 
Paid Sick Leave Act, the qualified sick leave equiva-
lent amount otherwise determined under subsection 
(c) of this section shall be reduced (but not below 
zero) to the extent that the sum of the amount de-
scribed in such subsection and in section 3131(b)(1) 
of such Code exceeds $2,000 ($5,110 in the case of 
any day any portion of which is paid sick time de-
scribed in paragraph (1), (2), or (3) of section 
5102(a) of the Emergency Paid Sick Leave Act). 
(f) APPLICATION OF SECTION.—Only days occurring 
during the period beginning on April 1, 2021, and ending 
on September 30, 2021, may be taken into account under 
subsection (c)(1)(A). 
(g) APPLICATION OF CREDIT IN CERTAIN POSSES-
SIONS.— 
(1) PAYMENTS TO POSSESSIONS WITH MIRROR 
CODE TAX SYSTEMS.—The Secretary shall pay to 
each possession of the United States which has a 
mirror code tax system amounts equal to the loss (if 
any) to that possession by reason of the application 
of the provisions of this section. Such amounts shall 
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be determined by the Secretary based on information 
provided by the government of the respective posses-
sion. 
(2) PAYMENTS TO OTHER POSSESSIONS.—The 
Secretary shall pay to each possession of the United 
States which does not have a mirror code tax system 
amounts estimated by the Secretary as being equal 
to the aggregate benefits (if any) that would have 
been provided to residents of such possession by rea-
son of the provisions of this section if a mirror code 
tax system had been in effect in such possession. 
The preceding sentence shall not apply unless the re-
spective possession has a plan, which has been ap-
proved by the Secretary, under which such posses-
sion will promptly distribute such payments to its 
residents. 
(3) MIRROR CODE TAX SYSTEM.—For purposes 
of this section, the term ‘‘mirror code tax system’’ 
means, with respect to any possession of the United 
States, the income tax system of such possession if 
the income tax liability of the residents of such pos-
session under such system is determined by ref-
erence to the income tax laws of the United States 
as if such possession were the United States. 
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(4) TREATMENT OF PAYMENTS.—For purposes 
of section 1324 of title 31, United States Code, the 
payments under this subsection shall be treated in 
the same manner as a refund due from a credit pro-
vision referred to in subsection (b)(2) of such sec-
tion. 
(h) REGULATIONS.—The Secretary shall prescribe 
such regulations or other guidance as may be necessary 
to carry out the purposes of this section, including— 
(1) regulations or other guidance to effectuate 
the purposes of this section, and 
(2) regulations or other guidance to minimize 
compliance and record-keeping burdens under this 
section. 
SEC. 9643. CREDIT FOR FAMILY LEAVE FOR CERTAIN SELF- 
EMPLOYED INDIVIDUALS. 
(a) IN GENERAL.—In the case of an eligible self-em-
ployed individual, there shall be allowed as a credit against 
the tax imposed by chapter 1 of the Internal Revenue Code 
of 1986 for any taxable year an amount equal to 100 per-
cent of the qualified family leave equivalent amount with 
respect to the individual. 
(b) ELIGIBLE SELF-EMPLOYED INDIVIDUAL.—For 
purposes of this section— 
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(1) IN GENERAL.—The term ‘‘eligible self-em-
ployed individual’’ means an individual who— 
(A) regularly carries on any trade or busi-
ness within the meaning of section 1402 of the 
Internal Revenue Code of 1986, and 
(B) would be entitled to receive paid leave 
during the taxable year pursuant to the Emer-
gency Family and Medical Leave Expansion Act 
if— 
(i) the individual were an employee of 
an employer (other than himself or her-
self), 
(ii) section 102(a)(1)(F) of the Fam-
ily and Medical Leave Act of 1993 applied 
after March 31, 2021. 
(2) RULES OF APPLICATION.—For purposes of 
paragraph (1)(B), in determining whether an indi-
vidual would be entitled to receive paid leave under 
the Emergency Family and Medical Leave Act— 
(A) section 110(a)(2)(A) of the Family and 
Medical Leave Act of 1993 shall be applied by 
inserting ‘‘or any reason for leave described in 
section 
5102(a) 
of 
the 
Families 
First 
Coronavirus Response Act, or the employee is 
seeking or awaiting the results of a diagnostic 
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test for, or a medical diagnosis of, COVID-19 
and such employee has been exposed to 
COVID-19 or is unable to work pending the re-
sults of such test or diagnosis, or the employee 
is obtaining immunization related to COVID– 
19 or recovering from any injury, disability, ill-
ness, or condition related to such immuniza-
tion’’ after ‘‘public health emergency’’, and 
(B) section 110(b) of such Act shall be ap-
plied— 
(i) without regard to paragraph (1) 
thereof, and 
(ii) by striking ‘‘after taking leave 
after such section for 10 days’’ in para-
graph (2)(A) thereof. 
(c) 
QUALIFIED
FAMILY
LEAVE
EQUIVALENT 
AMOUNT.—For purposes of this section— 
(1) IN GENERAL.—The term ‘‘qualified family 
leave equivalent amount’’ means, with respect to any 
eligible self-employed individual, an amount equal to 
the product of— 
(A) the number of days (not to exceed 60) 
during the taxable year that the individual is 
unable to perform services in any trade or busi-
ness referred to in section 1402 of the Internal 
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Revenue Code of 1986 for a reason with respect 
to which such individual would be entitled to re-
ceive paid leave as described in subsection (b) 
of this section, multiplied by 
(B) the lesser of— 
(i) 67 percent of the average daily 
self-employment income of the individual 
for the taxable year, or 
(ii) $200. 
(2) AVERAGE
DAILY
SELF-EMPLOYMENT
IN-
COME.—For purposes of this subsection, the term 
‘‘average daily self-employment income’’ means an 
amount equal to— 
(A) the net earnings from self-employment 
income of the individual for the taxable year, 
divided by 
(B) 260. 
(3) ELECTION TO USE PRIOR YEAR NET EARN-
INGS
FROM
SELF-EMPLOYMENT
INCOME.—In the 
case of an individual who elects (at such time and 
in such manner as the Secretary may provide) the 
application of this paragraph, paragraph (2)(A) shall 
be applied by substituting ‘‘the prior taxable year’’ 
for ‘‘the taxable year’’. 
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(4) COORDINATION
WITH
CREDIT
FOR
SICK 
LEAVE.—Any day taken into account in determining 
the qualified sick leave equivalent amount with re-
spect to any eligible-self employed individual under 
section 9642 shall not be take into account in deter-
mining the qualified family leave equivalent amount 
with respect to such individual under this section. 
(d) CREDIT REFUNDABLE.— 
(1) IN GENERAL.—The credit determined under 
this section shall be treated as a credit allowed to 
the taxpayer under subpart C of part IV of sub-
chapter A of chapter 1 of such Code. 
(2) TREATMENT OF PAYMENTS.—For purposes 
of section 1324 of title 31, United States Code, any 
refund due from the credit determined under this 
section shall be treated in the same manner as a re-
fund due from a credit provision referred to in sub-
section (b)(2) of such section. 
(e) SPECIAL RULES.— 
(1) DOCUMENTATION.—No credit shall be al-
lowed under this section unless the individual main-
tains such documentation as the Secretary may pre-
scribe to establish such individual as an eligible self- 
employed individual. 
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(2) DENIAL OF DOUBLE BENEFIT.—In the case 
of an individual who receives wages (as defined in 
section 3121(a) of the Internal Revenue Code of 
1986) or compensation (as defined in section 
3231(e) of such Code) paid by an employer which 
are required to be paid by reason of the Emergency 
Family and Medical Leave Expansion Act, the quali-
fied family leave equivalent amount otherwise de-
scribed in subsection (c) of this section shall be re-
duced (but not below zero) to the extent that the 
sum of the amount described in such subsection and 
in section 3132(b)(1) of such Code exceeds $12,000. 
(3) REFERENCES TO EMERGENCY FAMILY AND 
MEDICAL LEAVE EXPANSION ACT.—Any reference in 
this section to the Emergency Family and Medical 
Leave Expansion Act shall be treated as including a 
reference to the amendments made by such Act. 
(f) APPLICATION OF SECTION.—Only days occurring 
during the period beginning on April 1, 2021 and ending 
on September 30, 2021, may be taken into account under 
subsection (c)(1)(A). 
(g) APPLICATION OF CREDIT IN CERTAIN POSSES-
SIONS.— 
(1) PAYMENTS TO POSSESSIONS WITH MIRROR 
CODE TAX SYSTEMS.—The Secretary shall pay to 
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each possession of the United States which has a 
mirror code tax system amounts equal to the loss (if 
any) to that possession by reason of the application 
of the provisions of this section. Such amounts shall 
be determined by the Secretary based on information 
provided by the government of the respective posses-
sion. 
(2) PAYMENTS TO OTHER POSSESSIONS.—The 
Secretary shall pay to each possession of the United 
States which does not have a mirror code tax system 
amounts estimated by the Secretary as being equal 
to the aggregate benefits (if any) that would have 
been provided to residents of such possession by rea-
son of the provisions of this section if a mirror code 
tax system had been in effect in such possession. 
The preceding sentence shall not apply unless the re-
spective possession has a plan, which has been ap-
proved by the Secretary, under which such posses-
sion will promptly distribute such payments to its 
residents. 
(3) MIRROR CODE TAX SYSTEM.—For purposes 
of this section, the term ‘‘mirror code tax system’’ 
means, with respect to any possession of the United 
States, the income tax system of such possession if 
the income tax liability of the residents of such pos-
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session under such system is determined by ref-
erence to the income tax laws of the United States 
as if such possession were the United States. 
(4) TREATMENT OF PAYMENTS.—For purposes 
of section 1324 of title 31, United States Code, the 
payments under this subsection shall be treated in 
the same manner as a refund due from a credit pro-
vision referred to in subsection (b)(2) of such sec-
tion. 
(h) REGULATIONS.—The Secretary shall prescribe 
such regulations or other guidance as may be necessary 
to carry out the purposes of this section, including— 
(1) regulations or other guidance to prevent the 
avoidance of the purposes of this section, and 
(2) regulations or other guidance to minimize 
compliance and record-keeping burdens under this 
section. 
PART 6—EMPLOYEE RETENTION CREDIT 
SEC. 9651. EXTENSION OF EMPLOYEE RETENTION CREDIT. 
(a) IN GENERAL.—Subchapter D of chapter 21 of 
subtitle C of the Internal Revenue Code of 1986, as added 
by section 9641, is amended by adding at the end the fol-
lowing: 
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‘‘SEC. 3134. EMPLOYEE RETENTION CREDIT FOR EMPLOY-
ERS SUBJECT TO CLOSURE DUE TO COVID–19. 
‘‘(a) IN GENERAL.—In the case of an eligible em-
ployer, there shall be allowed as a credit against applicable 
employment taxes for each calendar quarter an amount 
equal to 70 percent of the qualified wages with respect 
to each employee of such employer for such calendar quar-
ter. 
‘‘(b) LIMITATIONS AND REFUNDABILITY.— 
‘‘(1) WAGES
TAKEN
INTO
ACCOUNT.—The 
amount of qualified wages with respect to any em-
ployee which may be taken into account under sub-
section (a) by the eligible employer for any calendar 
quarter shall not exceed $10,000. 
‘‘(2) 
CREDIT
LIMITED
TO
EMPLOYMENT 
TAXES.—The credit allowed by subsection (a) with 
respect to any calendar quarter shall not exceed the 
applicable employment taxes (reduced by any credits 
allowed under sections 3131 and 3132) on the wages 
paid with respect to the employment of all the em-
ployees of the eligible employer for such calendar 
quarter. 
‘‘(3) REFUNDABILITY OF EXCESS CREDIT.—If 
the amount of the credit under subsection (a) ex-
ceeds the limitation of paragraph (2) for any cal-
endar quarter, such excess shall be treated as an 
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overpayment that shall be refunded under sections 
6402(a) and 6413(b). 
‘‘(c) DEFINITIONS.—For purposes of this section— 
‘‘(1) APPLICABLE EMPLOYMENT TAXES.—The 
term ‘applicable employment taxes’ means the fol-
lowing: 
‘‘(A) The taxes imposed under section 
3111(b). 
‘‘(B) So much of the taxes imposed under 
section 3221(a) as are attributable to the rate 
in effect under section 3111(b). 
‘‘(2) ELIGIBLE EMPLOYER.— 
‘‘(A) IN GENERAL.—The term ‘eligible em-
ployer’ means any employer— 
‘‘(i) which was carrying on a trade or 
business during the calendar quarter for 
which the credit is determined under sub-
section (a), and 
‘‘(ii) with respect to any calendar 
quarter, for which— 
‘‘(I) the operation of the trade or 
business described in clause (i) is fully 
or partially suspended during the cal-
endar quarter due to orders from an 
appropriate governmental authority 
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limiting commerce, travel, or group 
meetings (for commercial, social, reli-
gious, or other purposes) due to the 
coronavirus disease 2019 (COVID– 
19), or 
‘‘(II) the gross receipts (within 
the meaning of section 448(c)) of such 
employer for such calendar quarter 
are less than 80 percent of the gross 
receipts of such employer for the same 
calendar quarter in calendar year 
2019. 
With respect to any employer for any cal-
endar quarter, if such employer was not in 
existence as of the beginning of the same 
calendar quarter in calendar year 2019, 
clause (ii)(II) shall be applied by sub-
stituting ‘2020’ for ‘2019’. 
‘‘(B) ELECTION
TO
USE
ALTERNATIVE 
QUARTER.—At the election of the employer— 
‘‘(i) subparagraph (A)(ii)(II) shall be 
applied— 
‘‘(I) by substituting ‘for the im-
mediately preceding calendar quarter’ 
for ‘for such calendar quarter’, and 
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‘‘(II) by substituting ‘the cor-
responding calendar quarter in cal-
endar year 2019’ for ‘the same cal-
endar quarter in calendar year 2019’, 
and 
‘‘(ii) the last sentence of subpara-
graph (A) shall be applied by substituting 
‘the corresponding calendar quarter in cal-
endar year 2019’ for ‘the same calendar 
quarter in calendar year 2019’. 
An election under this subparagraph shall be 
made at such time and in such manner as the 
Secretary shall prescribe. 
‘‘(C) TAX-EXEMPT
ORGANIZATIONS.—In 
the case of an organization which is described 
in section 501(c) and exempt from tax under 
section 501(a)— 
‘‘(i) clauses (i) and (ii)(I) of subpara-
graph (A) shall apply to all operations of 
such organization, and 
‘‘(ii) any reference in this section to 
gross receipts shall be treated as a ref-
erence to gross receipts within the meaning 
of section 6033. 
‘‘(3) QUALIFIED WAGES.— 
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‘‘(A) IN
GENERAL.—The term ‘qualified 
wages’ means— 
‘‘(i) in the case of an eligible employer 
for which the average number of full-time 
employees (within the meaning of section 
4980H) employed by such eligible employer 
during 2019 was greater than 500, wages 
paid by such eligible employer with respect 
to which an employee is not providing serv-
ices due to circumstances described in sub-
clause (I) or (II) of paragraph (2)(A)(ii), 
or 
‘‘(ii) in the case of an eligible em-
ployer for which the average number of 
full-time employees (within the meaning of 
section 4980H) employed by such eligible 
employer during 2019 was not greater 
than 500— 
‘‘(I) with respect to an eligible 
employer described in subclause (I) of 
paragraph (2)(A)(ii), wages paid by 
such eligible employer with respect to 
an employee during any period de-
scribed in such clause, or 
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‘‘(II) with respect to an eligible 
employer described in subclause (II) 
of such paragraph, wages paid by 
such eligible employer with respect to 
an employee during such quarter. 
‘‘(B) EXCEPTION.—The term ‘qualified 
wages’ shall not include any wages taken into 
account under sections 41, 45A, 45P, 45S, 51, 
1396, 3131, and 3132. 
‘‘(4) WAGES.— 
‘‘(A) IN
GENERAL.—The term ‘wages’ 
means wages (as defined in section 3121(a)) 
and compensation (as defined in section 
3231(e)). For purposes of the preceding sen-
tence, in the case of any organization or entity 
described in subsection (f)(2), wages as defined 
in section 3121(a) shall be determined without 
regard to paragraphs (5), (6), (7), (10), and 
(13) of section 3121(b) (except with respect to 
services performed in a penal institution by an 
inmate thereof). 
‘‘(B) ALLOWANCE FOR CERTAIN HEALTH 
PLAN EXPENSES.— 
‘‘(i) IN
GENERAL.—Such term shall 
include amounts paid by the eligible em-
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ployer to provide and maintain a group 
health 
plan 
(as 
defined 
in 
section 
5000(b)(1)), but only to the extent that 
such amounts are excluded from the gross 
income of employees by reason of section 
106(a). 
‘‘(ii) ALLOCATION RULES.—For pur-
poses of this section, amounts treated as 
wages under clause (i) shall be treated as 
paid with respect to any employee (and 
with respect to any period) to the extent 
that such amounts are properly allocable to 
such employee (and to such period) in such 
manner as the Secretary may prescribe. 
Except as otherwise provided by the Sec-
retary, such allocation shall be treated as 
properly made if made on the basis of 
being pro rata among periods of coverage. 
‘‘(5) OTHER TERMS.—Any term used in this 
section which is also used in this chapter or chapter 
22 shall have the same meaning as when used in 
such chapter. 
‘‘(d) AGGREGATION RULE.—All persons treated as a 
single employer under subsection (a) or (b) of section 52, 
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or subsection (m) or (o) of section 414, shall be treated 
as one employer for purposes of this section. 
‘‘(e) CERTAIN RULES TO APPLY.—For purposes of 
this section, rules similar to the rules of sections 51(i)(1) 
and 280C(a) shall apply. 
‘‘(f) CERTAIN GOVERNMENTAL EMPLOYERS.— 
‘‘(1) IN GENERAL.—This credit shall not apply 
to the Government of the United States, the govern-
ment of any State or political subdivision thereof, or 
any agency or instrumentality of any of the fore-
going. 
‘‘(2) EXCEPTION.—Paragraph (1) shall not 
apply to— 
‘‘(A) any organization described in section 
501(c)(1) and exempt from tax under section 
501(a), or 
‘‘(B) any entity described in paragraph (1) 
if— 
‘‘(i) such entity is a college or univer-
sity, or 
‘‘(ii) the principal purpose or function 
of such entity is providing medical or hos-
pital care. 
In the case of any entity described in subpara-
graph (B), such entity shall be treated as satis-
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fying 
the 
requirements 
of 
subsection 
(c)(2)(A)(i). 
‘‘(g) ELECTION TO NOT TAKE CERTAIN WAGES INTO 
ACCOUNT.— 
‘‘(1) IN GENERAL.—This section shall not apply 
to so much of the qualified wages paid by an eligible 
employer as such employer elects (at such time and 
in such manner as the Secretary may prescribe) to 
not take into account for purposes of this section. 
‘‘(2) APPLICATION WHERE CERTAIN LOANS NOT 
FORGIVEN.—The Secretary shall issue guidance pro-
viding that payroll costs paid during the covered pe-
riod shall not fail to be treated as qualified wages 
under this section by reason of paragraph (1) to the 
extent that— 
‘‘(A) a covered loan of the taxpayer under 
section 7(a)(37) of the Small Business Act is 
not forgiven by reason of a decision under sec-
tion 7(a)(37)(J) of such Act, or 
‘‘(B) a covered loan of the taxpayer under 
section 7A of the Small Business Act is not for-
given by reason of a decision under section 
7A(g) of such Act. 
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‘‘(h) THIRD PARTY PAYORS.—Any credit allowed 
under this section shall be treated as a credit described 
in section 3511(d)(2). 
‘‘(i) ADVANCE PAYMENTS.— 
‘‘(1) IN GENERAL.—Except as provided in para-
graph (2), no advance payment of the credit under 
subsection (a) shall be allowed. 
‘‘(2) ADVANCE PAYMENTS TO SMALL EMPLOY-
ERS.— 
‘‘(A) IN GENERAL.—Under rules provided 
by the Secretary, an eligible employer for which 
the average number of full-time employees 
(within the meaning of section 4980H) em-
ployed by such eligible employer during 2019 
was not greater than 500 may elect for any cal-
endar quarter to receive an advance payment of 
the credit under subsection (a) for such quarter 
in an amount not to exceed 70 percent of the 
average quarterly wages paid by the employer 
in calendar year 2019. 
‘‘(B) SPECIAL RULE FOR SEASONAL EM-
PLOYERS.—In the case of any employer who 
employs seasonal workers (as defined in section 
45R(d)(5)(B)), the employer may elect to sub-
stitute ‘the wages for the calendar quarter in 
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2019 which corresponds to the calendar quarter 
to which the election relates’ for ‘the average 
quarterly wages paid by the employer in cal-
endar year 2019’. 
‘‘(C) SPECIAL RULE FOR EMPLOYERS NOT 
IN EXISTENCE IN 2019.—In the case of any em-
ployer that was not in existence in 2019, sub-
paragraphs (A) and (B) shall each be applied 
by substituting ‘2020’ for ‘2019’ each place it 
appears. 
‘‘(3) RECONCILIATION
OF
CREDIT
WITH
AD-
VANCE PAYMENTS.— 
‘‘(A) IN GENERAL.—The amount of credit 
which would (but for this subsection) be allowed 
under this section shall be reduced (but not 
below zero) by the aggregate payment allowed 
to the taxpayer under paragraph (2). Any fail-
ure to so reduce the credit shall be treated as 
arising out of a mathematical or clerical error 
and assessed according to section 6213(b)(1). 
‘‘(B) EXCESS ADVANCE PAYMENTS.—If the 
advance payments to a taxpayer under para-
graph (2) for a calendar quarter exceed the 
credit allowed by this section (determined with-
out regard to subparagraph (A)), the tax im-
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posed under section 3111(b) or so much of the 
tax imposed under section 3221(a) as is attrib-
utable to the rate in effect under section 
3111(b) (whichever is applicable) for the cal-
endar quarter shall be increased by the amount 
of such excess. 
‘‘(j) TREATMENT OF DEPOSITS.—The Secretary shall 
waive any penalty under section 6656 for any failure to 
make a deposit of any applicable employment taxes if the 
Secretary determines that such failure was due to the rea-
sonable anticipation of the credit allowed under this sec-
tion. 
‘‘(k) EXTENSION OF LIMITATION ON ASSESSMENT.— 
Notwithstanding section 6501, the limitation on the time 
period for the assessment of any amount attributable to 
a credit claimed under this section shall not expire before 
the date that is 5 years after the later of— 
‘‘(1) the date on which the original return 
which includes the calendar quarter with respect to 
which such credit is determined is filed, or 
‘‘(2) the date on which such return is treated 
as filed under section 6501(b)(2). 
‘‘(l) REGULATIONS AND GUIDANCE.—The Secretary 
shall issue such forms, instructions, regulations, and guid-
ance as are necessary— 
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‘‘(1) to allow the advance payment of the credit 
under subsection (a) as provided in subsection (i)(2), 
subject to the limitations provided in this section, 
based on such information as the Secretary shall re-
quire, 
‘‘(2) with respect to the application of the cred-
it under subsection (a) to third party payors (includ-
ing professional employer organizations, certified 
professional employer organizations, or agents under 
section 3504), including regulations or guidance al-
lowing such payors to submit documentation nec-
essary to substantiate the eligible employer status of 
employers that use such payors, and 
‘‘(3) to prevent the avoidance of the purposes of 
the limitations under this section, including through 
the leaseback of employees. 
Any forms, instructions, regulations, or guidance de-
scribed in paragraph (2) shall require the customer to be 
responsible for the accounting of the credit and for any 
liability for improperly claimed credits and shall require 
the certified professional employer organization or other 
third party payor to accurately report such tax credits 
based on the information provided by the customer. 
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‘‘(m) APPLICATION.—This section shall only apply to 
wages paid after June 30, 2021, and before January 1, 
2022.’’. 
(b) REFUNDS.—Paragraph (2) of section 1324(b) of 
title 31, United States Code, is amended by inserting 
‘‘3134,’’ before ‘‘6428’’. 
(c) CLERICAL AMENDMENT.—The table of sections 
for subchapter D of chapter 21 of subtitle C of the Inter-
nal Revenue Code of 1986 is amended by adding at the 
end the following: 
‘‘Sec. 3134. Employee retention credit for employers subject to closure due to 
COVID–19.’’. 
(d) EFFECTIVE DATE.—The amendments made by 
this section shall apply to calendar quarters beginning 
after June 30, 2021. 
PART 7—PREMIUM TAX CREDIT 
SEC. 9661. IMPROVING AFFORDABILITY BY EXPANDING 
PREMIUM ASSISTANCE FOR CONSUMERS. 
(a) IN GENERAL.—Section 36B(b)(3)(A) of the In-
ternal Revenue Code of 1986 is amended by adding at the 
end the following new clause: 
‘‘(iii) TEMPORARY PERCENTAGES FOR 
2021 AND 2022.—In the case of a taxable 
year beginning in 2021 or 2022— 
‘‘(I) clause (ii) shall not apply for 
purposes of adjusting premium per-
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centages under this subparagraph, 
and 
‘‘(II) the following table shall be 
applied in lieu of the table contained 
in clause (i): 
‘‘In the case of household 
income (expressed as 
a percent of poverty line) 
within the following income tier: 
The initial 
premium 
percentage is— 
The final 
premium 
percentage is— 
Up to 150.0 percent ...................................
0.0 
0.0
150.0 percent up to 200.0 percent .............
0.0 
2.0
200.0 percent up to 250.0 percent .............
2.0 
4.0
250.0 percent up to 300.0 percent .............
4.0 
6.0
300.0 percent up to 400.0 percent .............
6.0 
8.5
400.0 percent and higher ...........................
8.5 
8.5’’. 
(b) CONFORMING AMENDMENT.—Section 36B(c)(1) 
of the Internal Revenue Code of 1986 is amended by add-
ing at the end the following new subparagraph: 
‘‘(E) TEMPORARY
RULE
FOR 2021 AND 
2022.—In the case of a taxable year beginning 
in 2021 or 2022, subparagraph (A) shall be ap-
plied without regard to ‘but does not exceed 
400 percent’.’’. 
(c) EFFECTIVE DATE.—The amendments made by 
this section shall apply to taxable years beginning after 
December 31, 2020. 
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SEC. 9662. TEMPORARY MODIFICATION OF LIMITATIONS 
ON RECONCILIATION OF TAX CREDITS FOR 
COVERAGE UNDER A QUALIFIED HEALTH 
PLAN WITH ADVANCE PAYMENTS OF SUCH 
CREDIT. 
(a) IN GENERAL.—Section 36B(f)(2)(B) of the Inter-
nal Revenue Code of 1986 is amended by adding at the 
end the following new clause: 
‘‘(iii) TEMPORARY MODIFICATION OF 
LIMITATION ON INCREASE.—In the case of 
any taxable year beginning in 2020, for 
any taxpayer who files for such taxable 
year an income tax return reconciling any 
advance payment of the credit under this 
section, the Secretary shall treat subpara-
graph (A) as not applying.’’. 
(b) EFFECTIVE DATE.—The amendment made by 
this section shall apply to taxable years beginning after 
December 31, 2019. 
SEC. 9663. APPLICATION OF PREMIUM TAX CREDIT IN CASE 
OF 
INDIVIDUALS 
RECEIVING 
UNEMPLOY-
MENT COMPENSATION DURING 2021. 
(a) IN GENERAL.—Section 36B of the Internal Rev-
enue Code of 1986 is amended by redesignating subsection 
(g) as subsection (h) and by inserting after subsection (f) 
the following new subsection: 
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‘‘(g) SPECIAL RULE FOR INDIVIDUALS WHO RE-
CEIVE UNEMPLOYMENT COMPENSATION DURING 2021.— 
‘‘(1) IN GENERAL.—For purposes of this sec-
tion, in the case of a taxpayer who has received, or 
has been approved to receive, unemployment com-
pensation for any week beginning during 2021, for 
the taxable year in which such week begins— 
‘‘(A) such taxpayer shall be treated as an 
applicable taxpayer, and 
‘‘(B) there shall not be taken into account 
any household income of the taxpayer in excess 
of 133 percent of the poverty line for a family 
of the size involved. 
‘‘(2) UNEMPLOYMENT
COMPENSATION.—For 
purposes of this subsection, the term ‘unemployment 
compensation’ has the meaning given such term in 
section 85(b). 
‘‘(3) EVIDENCE
OF
UNEMPLOYMENT
COM-
PENSATION.—For purposes of this subsection, a tax-
payer shall not be treated as having received (or 
been approved to receive) unemployment compensa-
tion for any week unless such taxpayer provides self- 
attestation of, and such documentation as the Sec-
retary shall prescribe which demonstrates, such re-
ceipt or approval. 
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‘‘(4) CLARIFICATION OF RULES REMAINING AP-
PLICABLE.— 
‘‘(A) JOINT
RETURN
REQUIREMENT.— 
Paragraph (1)(A) shall not affect the applica-
tion of subsection (c)(1)(C). 
‘‘(B) 
HOUSEHOLD
INCOME
AND 
AFFORDABILLITY.—Paragraph (1)(B) shall not 
apply to any determination of household income 
for purposes of paragraph (2)(C)(i)(II) or 
(4)(C)(ii) of subsection (c)’’. 
(b) EFFECTIVE DATE.—The amendments made by 
this section shall apply to taxable years beginning after 
December 31, 2020. 
PART 8—MISCELLANEOUS PROVISIONS 
SEC. 9671. REPEAL OF ELECTION TO ALLOCATE INTEREST, 
ETC. ON WORLDWIDE BASIS. 
(a) IN GENERAL.—Section 864 of the Internal Rev-
enue Code of 1986 is amended by striking subsection (f). 
(b) EFFECTIVE DATE.—The amendment made by 
this section shall apply to taxable years beginning after 
December 31, 2020. 
SEC. 9672. TAX TREATMENT OF TARGETED EIDL ADVANCES. 
For purposes of the Internal Revenue Code of 
1986— 
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(1) amounts received from the Administrator of 
the Small Business Administration in the form of a 
Targeted EIDL Advance shall not be included in the 
gross income of the person that receives such 
amounts, 
(2) no deduction shall be denied, no tax at-
tribute shall be reduced, and no basis increase shall 
be denied, by reason of the exclusion from gross in-
come provided by paragraph (1), and 
(3) in the case of a partnership or S corpora-
tion that receives such amounts— 
(A) any amount excluded from income by 
reason of paragraph (1) shall be treated as tax 
exempt income for purposes of sections 705 and 
1366 of the Internal Revenue Code of 1986, 
and 
(B) the Secretary of the Treasury (or the 
Secretary’s delegate) shall prescribe rules for 
determining a partner’s distributive share of 
any amount described in subparagraph (A) for 
purposes of section 705 of the Internal Revenue 
Code of 1986. 
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SEC. 9673. TAX TREATMENT OF RESTAURANT REVITALIZA-
TION GRANTS. 
For purposes of the Internal Revenue Code of 
1986— 
(1) amounts received from the Administrator of 
the Small Business Administration in the form of a 
Restaurant Revitalization Grant shall not be in-
cluded in the gross income of the person that re-
ceives such amounts, 
(2) no deduction shall be denied, no tax at-
tribute shall be reduced, and no basis increase shall 
be denied, by reason of the exclusion from gross in-
come provided by paragraph (1), and 
(3) in the case of a partnership or S corpora-
tion that receives such amounts— 
(A) except as otherwise provided by the 
Secretary of the Treasury (or the Secretary’s 
delegate), any amount excluded from income by 
reason of paragraph (1) shall be treated as tax 
exempt income for purposes of sections 705 and 
1366 of the Internal Revenue Code of 1986, 
and 
(B) the Secretary of the Treasury (or the 
Secretary’s delegate) shall prescribe rules for 
determining a partner’s distributive share of 
any amount described in subparagraph (A) for 
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purposes of section 705 of the Internal Revenue 
Code of 1986. 
SEC. 9674. MODIFICATION OF EXCEPTIONS FOR REPORT-
ING OF THIRD PARTY NETWORK TRANS-
ACTIONS. 
(a) IN GENERAL.—Section 6050W(e) of the Internal 
Revenue Code of 1986 is amended to read as follows: 
‘‘(e) DE MINIMIS EXCEPTION FOR THIRD PARTY 
SETTLEMENT ORGANIZATIONS.—A third party settlement 
organization shall not be required to report any informa-
tion under subsection (a) with respect to third party net-
work transactions of any participating payee if the amount 
which would otherwise be reported under subsection (a)(2) 
with respect to such transactions does not exceed $600.’’. 
(b) CLARIFICATION THAT REPORTING IS NOT RE-
QUIRED ON TRANSACTIONS WHICH ARE NOT FOR GOODS 
OR SERVICES.—Section 6050W(c)(3) of such Code is 
amended 
by 
inserting 
‘‘described 
in 
subsection 
(d)(3)(A)(iii)’’ after ‘‘any transaction’’. 
(c) EFFECTIVE DATE.— 
(1) IN
GENERAL.—The amendment made by 
subsection (a) shall apply to returns for calendar 
years beginning after December 31, 2021. 
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(2) CLARIFICATION.—The amendment made by 
subsection (b) shall apply to transactions after the 
date of the enactment of this Act. 
Subtitle H—Pensions 
SEC. 9701. TEMPORARY DELAY OF DESIGNATION OF MULTI-
EMPLOYER PLANS AS IN ENDANGERED, CRIT-
ICAL, OR CRITICAL AND DECLINING STATUS. 
(a) IN GENERAL.—Notwithstanding the actuarial 
certification under section 305(b)(3) of the Employee Re-
tirement Income Security Act of 1974 and section 
432(b)(3) of the Internal Revenue Code of 1986, if a plan 
sponsor of a multiemployer plan elects the application of 
this section, then, for purposes of section 305 of such Act 
and section 432 of such Code— 
(1) the status of the plan for its first plan year 
beginning during the period beginning on March 1, 
2020, and ending on February 28, 2021, or the next 
succeeding plan year (as designated by the plan 
sponsor in such election), shall be the same as the 
status of such plan under such sections for the plan 
year preceding such designated plan year, and 
(2) in the case of a plan which was in endan-
gered or critical status for the plan year preceding 
the designated plan year described in paragraph (1), 
the plan shall not be required to update its plan or 
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schedules under section 305(c)(6) of such Act and 
section 
432(c)(6) 
of 
such 
Code, 
or 
section 
305(e)(3)(B) of such Act and section 432(e)(3)(B) 
of such Code, whichever is applicable, until the plan 
year following the designated plan year described in 
paragraph (1). 
(b) EXCEPTION
FOR PLANS BECOMING CRITICAL 
DURING ELECTION.—If— 
(1) an election was made under subsection (a) 
with respect to a multiemployer plan, and 
(2) such plan has, without regard to such elec-
tion, been certified by the plan actuary under section 
305(b)(3) of the Employee Retirement Income Secu-
rity Act of 1974 and section 432(b)(3) of the Inter-
nal Revenue Code of 1986 to be in critical status for 
the designated plan year described in subsection 
(a)(1), then such plan shall be treated as a plan in 
critical status for such plan year for purposes of ap-
plying section 4971(g)(1)(A) of such Code, section 
302(b)(3) of such Act (without regard to the second 
sentence thereof), and section 412(b)(3) of such 
Code (without regard to the second sentence there-
of). 
(c) ELECTION AND NOTICE.— 
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(1) ELECTION.—An election under subsection 
(a)— 
(A) shall be made at such time and in such 
manner as the Secretary of the Treasury or the 
Secretary’s delegate may prescribe and, once 
made, may be revoked only with the consent of 
the Secretary, and 
(B) if made— 
(i) before the date the annual certifi-
cation is submitted to the Secretary or the 
Secretary’s 
delegate 
under 
section 
305(b)(3) 
of 
such 
Act 
and 
section 
432(b)(3) of such Code, shall be included 
with such annual certification, and 
(ii) after such date, shall be submitted 
to the Secretary or the Secretary’s delegate 
not later than 30 days after the date of the 
election. 
(2) NOTICE TO PARTICIPANTS.— 
(A) IN
GENERAL.—Notwithstanding sec-
tion 305(b)(3)(D) of the Employee Retirement 
Income Security Act of 1974 and section 
432(b)(3)(D) of the Internal Revenue Code of 
1986, if, by reason of an election made under 
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subsection (a), the plan is in neither endan-
gered nor critical status— 
(i) the plan sponsor of a multiem-
ployer plan shall not be required to provide 
notice under such sections, and 
(ii) the plan sponsor shall provide to 
the participants and beneficiaries, the bar-
gaining parties, the Pension Benefit Guar-
anty Corporation, and the Secretary of 
Labor a notice of the election under sub-
section (a) and such other information as 
the Secretary of the Treasury (in consulta-
tion with the Secretary of Labor) may re-
quire— 
(I) if the election is made before 
the date the annual certification is 
submitted to the Secretary or the Sec-
retary’s 
delegate 
under 
section 
305(b)(3) of such Act and section 
432(b)(3) of such Code, not later than 
30 days after the date of the certifi-
cation, and 
(II) if the election is made after 
such date, not later than 30 days 
after the date of the election. 
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(B) NOTICE OF ENDANGERED STATUS.— 
Notwithstanding section 305(b)(3)(D) of such 
Act and section 432(b)(3)(D) of such Code, if 
the plan is certified to be in critical status for 
any plan year but is in endangered status by 
reason of an election made under subsection 
(a), the notice provided under such sections 
shall be the notice which would have been pro-
vided if the plan had been certified to be in en-
dangered status. 
SEC. 9702. TEMPORARY EXTENSION OF THE FUNDING IM-
PROVEMENT AND REHABILITATION PERIODS 
FOR MULTIEMPLOYER PENSION PLANS IN 
CRITICAL AND ENDANGERED STATUS FOR 
2020 OR 2021. 
(a) IN GENERAL.—If the plan sponsor of a multiem-
ployer plan which is in endangered or critical status for 
a plan year beginning in 2020 or 2021 (determined after 
application of section 9701) elects the application of this 
section, then, for purposes of section 305 of the Employee 
Retirement Income Security Act of 1974 and section 432 
of the Internal Revenue Code of 1986, the plan’s funding 
improvement period or rehabilitation period, whichever is 
applicable, shall be extended by 5 years. 
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(b) DEFINITIONS AND SPECIAL RULES.—For pur-
poses of this section— 
(1) ELECTION.—An election under this section 
shall be made at such time, and in such manner and 
form, as (in consultation with the Secretary of 
Labor) the Secretary of the Treasury or the Sec-
retary’s delegate may prescribe. 
(2) DEFINITIONS.—Any term which is used in 
this section which is also used in section 305 of the 
Employee Retirement Income Security Act of 1974 
and section 432 of the Internal Revenue Code of 
1986 shall have the same meaning as when used in 
such sections. 
(c) EFFECTIVE DATE.—This section shall apply to 
plan years beginning after December 31, 2019. 
SEC. 9703. ADJUSTMENTS TO FUNDING STANDARD AC-
COUNT RULES. 
(a) ADJUSTMENTS.— 
(1) AMENDMENT TO EMPLOYEE RETIREMENT 
INCOME SECURITY ACT OF 1974.—Section 304(b)(8) 
of the Employee Retirement Income Security Act of 
1974 (29 U.S.C. 1084(b)) is amended by adding at 
the end the following new subparagraph: 
‘‘(F) RELIEF FOR 2020 AND 2021.—A mul-
tiemployer plan with respect to which the sol-
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