I 
112TH CONGRESS 
1ST SESSION 
H. R. 781 
To amend the Internal Revenue Code of 1986 to allow employers a credit 
against income tax for hiring veterans. 
IN THE HOUSE OF REPRESENTATIVES 
FEBRUARY 17, 2011 
Mr. MCCOTTER introduced the following bill; which was referred to the 
Committee on Ways and Means 
A BILL 
To amend the Internal Revenue Code of 1986 to allow 
employers a credit against income tax for hiring veterans. 
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 ‘‘Veterans’ Employment 
Transition Support Act of 2011’’ or the ‘‘VETS Act of 
2011’’. 
SEC. 2. CREDIT FOR EMPLOYERS HIRING VETERANS. 
(a) IN GENERAL.—Subpart D of part IV of sub-
chapter A of chapter 1 of the Internal Revenue Code of 
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1986 is amended by adding at the end the following new 
section: 
‘‘SEC. 45S. CREDIT FOR EMPLOYERS HIRING VETERANS. 
‘‘(a) GENERAL RULE.—For purposes of section 38, 
the military service personnel employment credit for the 
taxable year shall be equal to— 
‘‘(1) in the case of a qualified veteran, 40 per-
cent of the qualified first-year wages with respect to 
such veteran for such year, and 
‘‘(2) in the case of a qualified disabled veteran, 
the applicable percentage of the qualified first-year 
wages with respect to such veteran for such year. 
‘‘(b) VETERAN
TAKEN
INTO
ACCOUNT
ONLY 
ONCE.—No credit shall be determined under subsection 
(a) with respect to any veteran unless such veteran has 
elected (in such form and manner as the Secretary may 
require) to have his qualified first-year wages taken into 
account with respect to the employer paying such wages. 
A veteran may make only one election under this sub-
section. The Secretary shall require such reporting as the 
Secretary determines is necessary to carry out the pur-
poses of this subsection. 
‘‘(c) QUALIFIED WAGES.—For purposes of this sec-
tion— 
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‘‘(1) IN
GENERAL.—The term ‘qualified dis-
abled veteran’ means any qualified veteran who is 
certified by the designated local agency (as defined 
in section 51(d)(11)) as having a disability that has 
been determined under the laws administered by the 
Secretary of Veterans Affairs to be service-connected 
and that is rated by such Secretary (as of the date 
of the certification) as 10 percent or more disabling. 
‘‘(2) APPLICABLE
PERCENTAGE.—The term 
‘applicable percentage’ means the percentage deter-
mined in accordance with the following table: 
Applicable 
‘‘Percentage of disability: 
percentage: 
At least 10 but not over 20 ...............................................................
At least 20 but not over 30 ...............................................................
At least 30 but not over 40 ...............................................................
At least 40 but not over 50 ...............................................................
At least 50 but not over 60 ...............................................................
At least 60 but not over 70 ...............................................................
At least 70 but not over 80 ...............................................................
At least 80 but not over 90 ...............................................................
At least 90 but not over 100 .............................................................
100 percent ........................................................................................
50. 
‘‘(f) CERTAIN RULES TO APPLY.—Rules similar to 
the rules of section 52, and subsections (d)(11), (f), (g), 
(i) (as in effect on the day before the date of the enact-
ment of the Taxpayer Relief Act of 1997), (j), and (k) 
of section 51, shall apply for purposes of this section. 
‘‘(g) COORDINATION WITH WORK OPPORTUNITY 
CREDIT.—The credit allowed under this section with re-
spect to any qualified first-year wages shall be in addition 
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to any credit allowed under section 51 with respect to such 
wages.’’. 
(b) CREDIT TO BE PART OF GENERAL BUSINESS 
CREDIT.—Subsection (b) of section 38 of such Code 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 adding at the end the following 
new paragraph: 
‘‘(37) the military service personnel employment 
credit determined under section 45S(a).’’. 
(c) TECHNICAL AMENDMENTS.— 
(1) Clause (iii) of section 41(b)(2)(D) of such 
Code is amended to read as follows: 
‘‘(iii) EXCLUSION
FOR
WAGES
TO 
WHICH
EMPLOYMENT
CREDITS
APPLY.— 
The term ‘wages’ shall not include any 
amount taken into account in determining 
the credit under section 45S(a) or 51(a).’’. 
(2) Subparagraph (B) of section 45A(b)(1) of 
such Code is amended to read as follows: 
‘‘(B) COORDINATION
WITH
OTHER
EM-
PLOYMENT
CREDITS.—The 
term 
‘qualified 
wages’ shall not include wages attributable to 
service rendered during the 1-year period begin-
ning with the day the individual begins work for 
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the employer if any portion of such wages is 
taken into account in determining the credit 
under section 45S or 51.’’. 
(3) Subsection (a) of section 280C of such Code 
is amended by inserting ‘‘45S(a),’’ after ‘‘45A(a),’’. 
(4) Paragraph (3) of section 1396(c) of such 
Code is amended to read as follows: 
‘‘(3) COORDINATION
WITH
OTHER
EMPLOY-
MENT CREDITS.— 
‘‘(A) IN
GENERAL.—The term ‘qualified 
wages’ shall not include wages taken into ac-
count in determining the credit under section 
45S or 51. 
‘‘(B) COORDINATION
WITH
PARAGRAPH 
(2).—The $15,000 amount in paragraph (2) 
shall be reduced for any calendar year by the 
amount of wages paid or incurred during such 
year which are taken into account in deter-
mining the credit under section 45S or 51.’’. 
(d) CLERICAL AMENDMENT.—The table of sections 
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. Credit for employers hiring veterans.’’. 
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(e) EFFECTIVE DATE.—The amendments made by 
this section shall apply to individuals who begin work for 
the employer after the date of the enactment of this Act. 
Æ 
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