SEC. 2. EXTENSION AND IMPROVEMENT OF WORK OPPOR-
TUNITY TAX CREDIT FOR VETERANS. 
(a) EXTENSION OF CREDIT FOR VETERANS.—Clause 
(i) of section 51(c)(4)(B) of the Internal Revenue Code 
of 1986 is amended by striking ‘‘December 31, 2012’’ and 
inserting ‘‘December 31, 2013’’. 
(b) ELECTION TO CLAIM CREDIT AS EXEMPTION 
FROM EMPLOYMENT TAXES.— 
(1) IN GENERAL.—Section 3111 of the Internal 
Revenue Code of 1986 is amended by adding at the 
end the following new subsection: 
‘‘(e) SPECIAL
EXEMPTION
FOR
CERTAIN
VET-
ERANS.— 
‘‘(1) IN
GENERAL.—Subsection (a) shall not 
apply to wages paid by a qualified employer with re-
spect to employment during the period beginning on 
the day after the date of the enactment of this sub-
section and ending on December 31, 2013, of any 
specified veteran for services performed— 
‘‘(A) in a trade or business of such quali-
fied employer, or 
‘‘(B) in the case of a qualified employer ex-
empt from tax under section 501(a), in further-
ance of the activities related to the purpose or 
function constituting the basis of the employer’s 
exemption under section 501. 
VerDate Mar 15 2010 
22:19 May 29, 2012
Jkt 019200
PO 00000
Frm 00002
Fmt 6652
Sfmt 6201
E:\BILLS\H5845.IH
H5845
ebenthall on DSK5SPTVN1PROD with BILLS
‘‘(2) LIMITATION.—With respect to any speci-
fied veteran employed by a qualified employer, the 
amount of wages to which paragraph (1) applies 
shall not exceed— 
‘‘(A) $125,490 in the case of an individual 
who is a qualified veteran by reason of section 
51(d)(3)(A)(ii)(II), 
‘‘(B) $73,203 in the case of an individual 
who is a qualified veteran by reason of section 
51(d)(3)(A)(iv), 
‘‘(C) $62,745 in the case of an individual 
who is a qualified veteran by reason of section 
51(d)(3)(A)(ii)(I), and 
‘‘(D) $31,373 in the case of any other 
qualified veteran. 
‘‘(3) QUALIFIED EMPLOYER.—For purposes of 
this subsection— 
‘‘(A) IN
GENERAL.—The term ‘qualified 
employer’ means any employer other than the 
United States, any State, or any political sub-
division thereof, or any instrumentality of the 
foregoing. 
‘‘(B) TREATMENT
OF
EMPLOYEES
OF 
POST-SECONDARY
EDUCATIONAL
INSTITU-
TIONS.—Notwithstanding 
subparagraph 
(A), 
VerDate Mar 15 2010 
22:19 May 29, 2012
Jkt 019200
PO 00000
Frm 00003
Fmt 6652
Sfmt 6201
E:\BILLS\H5845.IH
H5845
ebenthall on DSK5SPTVN1PROD with BILLS
the term ‘qualified employer’ includes any em-
ployer which is a public institution of higher 
education (as defined in section 101(b) of the 
Higher Education Act of 1965). 
‘‘(4) SPECIFIED
VETERAN.—For purposes of 
this subsection— 
‘‘(A) IN
GENERAL.—The term ‘specified 
veteran’ means any individual who— 
‘‘(i) begins employment with a quali-
fied employer after the date of the enact-
ment of this subsection, and before Janu-
ary 1, 2014, 
‘‘(ii) certifies by signed affidavit, 
under penalties of perjury, that such indi-
vidual is a qualified veteran and whether 
such individual is a qualified veteran de-
scribed in subparagraph (A), (B), or (C) of 
paragraph (2), 
‘‘(iii) is not employed by the qualified 
employer to replace another employee of 
such employer unless such other employee 
separated from employment voluntarily or 
for cause, and 
‘‘(iv) is not an individual described in 
section 51(i)(1) (applied by substituting 
VerDate Mar 15 2010 
22:19 May 29, 2012
Jkt 019200
PO 00000
Frm 00004
Fmt 6652
Sfmt 6201
E:\BILLS\H5845.IH
H5845
ebenthall on DSK5SPTVN1PROD with BILLS
‘qualified employer’ for ‘taxpayer’ each 
place it appears). 
‘‘(B) QUALIFIED
VETERAN.—The term 
‘qualified veteran’ has the meaning given such 
term by section 51(d)(3), but applied without 
regard to whether such individual has been cer-
tified by the designated local agency. 
‘‘(5) ELECTION.—A qualified employer may 
elect to have this subsection not apply. Such election 
shall be made in such manner as the Secretary may 
require.’’. 
(2) COORDINATION WITH WORK OPPORTUNITY 
CREDIT.—Section 51(c) of such Code is amended by 
adding at the end the following new paragraph: 
‘‘(6) COORDINATION WITH PAYROLL TAX EX-
EMPTION
FOR
QUALIFIED
VETERANS.—The credit 
determined under this section with respect to any 
qualified veteran for any taxable year shall be re-
duced by an amount equal to 7.65 percent of the 
qualified first-year wages paid or incurred by the 
taxpayer to such veteran during such taxable year to 
which section 3111(e) applied.’’. 
(3) TRANSFERS
TO
FEDERAL
OLD-AGE
AND 
SURVIVORS
INSURANCE
TRUST
FUND.—There are 
hereby appropriated to the Federal Old-Age and 
VerDate Mar 15 2010 
22:19 May 29, 2012
Jkt 019200
PO 00000
Frm 00005
Fmt 6652
Sfmt 6201
E:\BILLS\H5845.IH
H5845
ebenthall on DSK5SPTVN1PROD with BILLS
Survivors Trust Fund and the Federal Disability In-
surance Trust Fund established under section 201 
of the Social Security Act (42 U.S.C. 401) amounts 
equal to the reduction in revenues to the Treasury 
by reason of the amendments made by paragraph 
(1). Amounts appropriated by the preceding sen-
tence shall be transferred from the general fund at 
such times and in such manner as to replicate to the 
extent possible the transfers which would have oc-
curred to such Trust Fund had such amendments 
not been enacted. 
(4) APPLICATION
TO
RAILROAD
RETIREMENT 
TAXES.— 
(A) IN GENERAL.—Section 3221 of the In-
ternal Revenue Code of 1986 is amended by re-
designating subsection (d) as subsection (e) and 
by inserting after subsection (c) the following 
new subsection: 
‘‘(d) SPECIAL
EXEMPTION
FOR
CERTAIN
VET-
ERANS.— 
‘‘(1) IN GENERAL.—In the case of compensa-
tion paid by a qualified employer during the period 
beginning on the day after the date of the enactment 
of this subsection and ending on December 31, 
2013, with respect to having a specified veteran in 
VerDate Mar 15 2010 
22:19 May 29, 2012
Jkt 019200
PO 00000
Frm 00006
Fmt 6652
Sfmt 6201
E:\BILLS\H5845.IH
H5845
ebenthall on DSK5SPTVN1PROD with BILLS
the employer’s employ for services rendered to such 
qualified employer, the applicable percentage under 
subsection (a) shall be equal to the rate of tax in ef-
fect under section 3111(b) for the calendar year. 
‘‘(2) LIMITATION.—With respect to any speci-
fied veteran employed by a qualified employer, the 
amount of compensation to which paragraph (1) ap-
plies shall not exceed— 
‘‘(A) $125,490 in the case of an individual 
who is a qualified veteran by reason of section 
51(d)(3)(A)(ii)(II), 
‘‘(B) $73,203 in the case of an individual 
who is a qualified veteran by reason of section 
51(d)(3)(A)(iv), 
‘‘(C) $62,745 in the case of an individual 
who is a qualified veteran by reason of section 
51(d)(3)(A)(ii)(I), and 
‘‘(D) $31,373 in the case of any other 
qualified veteran. 
‘‘(3) QUALIFIED EMPLOYER.—The term ‘quali-
fied employer’ means any employer other than the 
United States, any State, or any political subdivision 
thereof, or any instrumentality of the foregoing. 
‘‘(4) SPECIFIED
VETERAN.—For purposes of 
this subsection— 
VerDate Mar 15 2010 
22:19 May 29, 2012
Jkt 019200
PO 00000
Frm 00007
Fmt 6652
Sfmt 6201
E:\BILLS\H5845.IH
H5845
ebenthall on DSK5SPTVN1PROD with BILLS
‘‘(A) IN
GENERAL.—The term ‘specified 
veteran’ means any individual who— 
‘‘(i) begins employment with a quali-
fied employer after the date of the enact-
ment of this subsection, and before Janu-
ary 1, 2014, 
‘‘(ii) certifies by signed affidavit, 
under penalties of perjury, that such indi-
vidual is a qualified veteran and whether 
such individual is a qualified veteran de-
scribed in subparagraph (A), (B), or (C) of 
paragraph (2), 
‘‘(iii) is not employed by the qualified 
employer to replace another employee of 
such employer unless such other employee 
separated from employment voluntarily or 
for cause, and 
‘‘(iv) is not an individual described in 
section 51(i)(1) (applied by substituting 
‘qualified employer’ for ‘taxpayer’ each 
place it appears). 
‘‘(B) QUALIFIED
VETERAN.—The term 
‘qualified veteran’ has the meaning given such 
term by section 51(d)(3), but applied without 
VerDate Mar 15 2010 
22:19 May 29, 2012
Jkt 019200
PO 00000
Frm 00008
Fmt 6652
Sfmt 6201
E:\BILLS\H5845.IH
H5845
ebenthall on DSK5SPTVN1PROD with BILLS
regard to whether such individual has been cer-
tified by the designated local agency. 
‘‘(5) ELECTION.—A qualified employer may 
elect to have this subsection not apply. Such election 
shall be made in such manner as the Secretary may 
require.’’. 
(B) TRANSFERS
TO
SOCIAL
SECURITY 
EQUIVALENT
BENEFIT
ACCOUNT.—There are 
hereby appropriated to the Social Security 
Equivalent Benefit Account established under 
section 15A(a) of the Railroad Retirement Act 
of 1974 (45 U.S.C. 231n–1(a)) amounts equal 
to the reduction in revenues to the Treasury by 
reason of the amendments made by subpara-
graph (A). Amounts appropriated by the pre-
ceding sentence shall be transferred from the 
general fund at such times and in such manner 
as to replicate to the extent possible the trans-
fers which would have occurred to such Account 
had such amendments not been enacted. 
(c) EFFECTIVE DATE.—The amendments made by 
this section shall apply to amounts paid after the date of 
the enactment of this Act. 
Æ 
VerDate Mar 15 2010 
22:22 May 30, 2012
Jkt 019200
PO 00000
Frm 00009
Fmt 6652
Sfmt 6301
E:\BILLS\H5845.IH
H5845
ebenthall on DSK5SPTVN1PROD with BILLS