I 
109TH CONGRESS 
1ST SESSION 
H. R. 446 
To amend the Internal Revenue Code of 1986 to provide to employers a 
tax credit for compensation paid during the period employees are per-
forming service as members of the Ready Reserve or the National Guard. 
IN THE HOUSE OF REPRESENTATIVES 
FEBRUARY 1, 2005 
Mr. BILIRAKIS 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 provide 
to employers a tax credit for compensation paid during 
the period employees are performing service as members 
of the Ready Reserve or the National Guard. 
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled, 
SECTION 1. READY RESERVE-NATIONAL GUARD EMPLOYEE 
CREDIT 
ADDED 
TO 
GENERAL 
BUSINESS 
CREDIT. 
(a) READY RESERVE-NATIONAL GUARD CREDIT.— 
Subpart D of part IV of subchapter A of chapter 1 of 
the Internal Revenue Code of 1986 (relating to business-
related credits) is amended by adding at the end the fol-
lowing new section: 
‘‘SEC. 45J. READY RESERVE-NATIONAL GUARD EMPLOYEE 
CREDIT. 
‘‘(a) GENERAL RULE.—For purposes of section 38, 
the Ready Reserve-National Guard employee credit deter-
mined under this section for the taxable year is an amount 
equal to 50 percent of the actual compensation amount 
for the taxable year. 
‘‘(b) 
DEFINITION
OF
ACTUAL
COMPENSATION 
AMOUNT.—For purposes of this section, the term ‘actual 
compensation amount’ means the amount of compensation 
paid or incurred by an employer with respect to a Ready 
Reserve-National Guard employee on any day during a 
taxable year when the employee was absent from employ-
ment for the purpose of performing qualified active duty. 
‘‘(c) LIMITATIONS.— 
‘‘(1) MAXIMUM CREDIT.—The maximum credit 
allowable under subsection (a) shall not exceed 
$2,000 in any taxable year with respect to any one 
Ready Reserve-National Guard employee. 
‘‘(2) DAYS
OTHER
THAN
WORK
DAYS.—No 
credit shall be allowed with respect to a Ready Re-
serve-National Guard employee who performs quali-
fied active duty on any day on which the employee
was not scheduled to work (for a reason other than 
to participate in qualified active duty) and ordinarily 
would not have worked. 
‘‘(d) DEFINITIONS.—For purposes of this section— 
‘‘(1) QUALIFIED
ACTIVE
DUTY.—The term 
‘qualified active duty’ means— 
‘‘(A) active duty in connection with which 
an employee is entitled to reemployment rights 
and other benefits or to a leave of absence from 
employment under chapter 43 of title 38, 
United States Code, and 
‘‘(B) hospitalization incident to such duty. 
Such term shall not include training duty specified 
in section 10147 of title 10, United States Code (re-
lating to training requirements for the Ready Re-
serve), or section 502(a) of title 32, United States 
Code (relating to required drills and field exercises 
for the National Guard). 
‘‘(2) COMPENSATION.—The term ‘compensa-
tion’ means any remuneration for employment, 
whether in cash or in kind, which is paid or incurred 
by a taxpayer and which is deductible from the tax-
payer’s gross income under section 162(a)(1). 
‘‘(3) READY
RESERVE-NATIONAL
GUARD
EM-
PLOYEE.—The term ‘Ready Reserve-National Guard
employee’ means an employee who is a member of 
the Ready Reserve or of the National Guard. 
‘‘(4) NATIONAL
GUARD.—The term ‘National 
Guard’ has the meaning given such term by section 
101(c)(1) of title 10, United States Code. 
‘‘(5) READY RESERVE.—The term ‘Ready Re-
serve’ has the meaning given such term by section 
10142 of title 10, United States Code.’’. 
(b) 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 (18), by striking the period 
at the end of paragraph (19) and inserting ‘‘, plus’’, and 
by adding at the end the following new paragraph: 
‘‘(20) the Ready Reserve-National Guard em-
ployee credit determined under section 45J(a).’’. 
(c) 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 inserting after the item 
relating to section 45I the following new item: 
‘‘Sec. 45J. Ready Reserve-National Guard employee credit.’’. 
(d) EFFECTIVE DATE.—The amendments made by 
this section shall apply to taxable years beginning after 
December 31, 2004. 
Æ