I
103D CONGRESS
2D SESSION
H. R. 3923
To amend the Internal Revenue Code of 1986 to provide tax credits to
businesses with employees performing services in their residences or
in telecommuting centers.
IN THE HOUSE OF REPRESENTATIVES
MARCH 1, 1994
Mr. BAKER of California (for himself, Mr. DOOLITTLE, and Mr. LEVY) intro-
duced 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
tax credits to businesses with employees performing serv-
ices in their residences or in telecommuting centers.
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 ‘‘Telecommuting Tax
Credit Act of 1994’’.
SEC. 2. TELECOMMUTING TAX CREDIT.
(a) GENERAL RULE.—Subpart B of part IV of sub-
chapter A of chapter 1 of the Internal Revenue Code of
1986 is amended by adding at the end thereof the follow-
ing new section:
‘‘SEC. 30A. TELECOMMUTING TAX CREDIT.
‘‘(a) GENERAL RULE.—In the case of an employer
with 1 or more telecommuting employees, there shall be
allowed as a credit against the tax imposed by this chapter
for the taxable year an amount equal the per employee
credit determined for each such employee.
‘‘(b) PER-EMPLOYEE CREDIT.—For purposes of this
section—
‘‘(1) RESIDENTIAL TELECOMMUTING EMPLOY-
EES.—The per employee credit determined for any
residential telecommuting employee for any taxable
year is an amount which bears the same ratio to
$500 as—
‘‘(A) the average number of hours per
week for which the employee performs services
(which are part of the employee’s normal work-
week) in the employee’s residence, bears to
‘‘(B) 40.
In no event shall the amount determined under the
preceding sentence exceed $500.
‘‘(2) OTHER
TELECOMMUTING
EMPLOYEES.—
The per employee credit determined for any
telecommuting employee (other than a residential
telecommuting employee) for any taxable year is an
amount which bears the same ratio to $250 as—
‘‘(A) the average number of hours per
week for which the employee performs services
(which are part of the employee’s normal work-
week) in a telecommuting center, bears to
‘‘(B) 40.
In no event shall the amount determined under the
preceding sentence exceed $250.
‘‘(3) SPECIAL RULE FOR PART-YEAR EMPLOY-
EES.—In the case of an employee who was not em-
ployed by the taxpayer at all times during the tax-
able year, the dollar amounts set forth in paragraph
(1) or (2), whichever is applicable, shall be reduced
by a percentage based on the portion of the taxable
year during which the employee was not employed by
the taxpayer.
‘‘(c) DEFINITIONS.—For purposes of this section—
‘‘(1) TELECOMMUTING EMPLOYEE.—The term
‘telecommuting employee’ means any employee of
the taxpayer if, pursuant to an agreement between
the taxpayer and the employee, such employee per-
forms services which are part of the employee’s nor-
mal workweek—
‘‘(A) in such employee’s residence, or
‘‘(B) in a telecommuting center but only if
such center is closer to such employee’s resi-
dence than the central worksite of the employer.
‘‘(2) 
RESIDENTIAL
TELECOMMUTING
EM-
PLOYEE.—The term ‘residential telecommuting em-
ployee’ means any telecommuting employee described
in paragraph (1)(A).
‘‘(3) TELECOMMUTING
CENTER.—The term
‘telecommuting center’ means any facility where em-
ployees of 2 or more employers or separate business
units of the same employer perform services if such
facility is separate from the central worksites of
such employers or business units.
‘‘(d) LIMITATION.—The credit allowed by subsection
(a) for any taxable year shall not exceed 50 percent of
the sum of—
‘‘(1) the regular tax for the taxable year re-
duced by the sum of the credits allowable under sub-
part A and the preceding sections of this subpart,
and
‘‘(2) the minimum tax imposed by section 55
for the taxable year.’’
(b) CLERICAL AMENDMENT.—The table of sections
for subpart B of part IV of subchapter A of chapter 1
of such Code is amended by adding at the end thereof
the following new item:
‘‘Sec. 30A. Telecommuting tax credit.’’
(c) EFFECTIVE DATE.—The amendments made by
this section shall apply to taxable years beginning after
the date of the enactment of this Act.
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