I 
111TH CONGRESS 
1ST SESSION H. R. 1025 
To amend the Internal Revenue Code of 1986 to provide for residents of 
Puerto Rico who participate in cafeteria plans under the Puerto Rican 
tax laws an exclusion from employment taxes which is comparable to 
the exclusion that applies to cafeteria plans under such Code. 
IN THE HOUSE OF REPRESENTATIVES 
FEBRUARY 12, 2009 
Mr. BECERRA 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 
for residents of Puerto Rico who participate in cafeteria 
plans under the Puerto Rican tax laws an exclusion 
from employment taxes which is comparable to the exclu-
sion that applies to cafeteria plans under such Code. 
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled, 
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SECTION 1. EXCLUSION FROM EMPLOYMENT TAXES FOR 
RESIDENTS OF PUERTO RICO FOR PAYMENTS 
MADE UNDER A CAFETERIA PLAN WHICH 
ARE EXCLUDABLE FROM THE PUERTO RICAN 
INCOME TAX. 
(a) SOCIAL SECURITY TAXES.— 
(1) IN
GENERAL.—Paragraph (5) of section 
3121(a) of the Internal Revenue Code of 1986 (de-
fining wages) is amended by striking ‘‘or’’ at the end 
of subparagraph (H), by striking the semicolon at 
the end of subparagraph (I) and inserting ‘‘, or’’, 
and by inserting after subparagraph (I) the fol-
lowing new subparagraph: 
‘‘(J) under a plan established under sec-
tion 1022(l) of the Puerto Rico Internal Rev-
enue Code of 1994 if such payment would not 
be treated as wages without regard to such plan 
and it would be reasonable to believe that (if 
such section 1022(l) applied for purposes of 
this section) such section 1022(l) would not 
treat any wages as constructively received;’’. 
(2) SOCIAL SECURITY ACT.—Paragraph (4) of 
section 209(a) of the Social Security Act (defining 
wages) is amended by adding at the end the fol-
lowing: ‘‘or (L) under a plan established under sec-
tion 1022(l) of the Puerto Rico Internal Revenue 
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Code of 1994 if such payment would not be treated 
as wages without regard to such plan and it would 
be reasonable to believe that (if such section 1022(l) 
applied for purposes of this section) such section 
1022(l) would not treat any wages as constructively 
received;’’. 
(b) UNEMPLOYMENT INSURANCE.—Paragraph (5) of 
section 3306(b) of such Code (defining wages) is amended 
by striking ‘‘or’’ at the end of subparagraph (G), by add-
ing ‘‘or’’ at the end of subparagraph (H), and by inserting 
after subparagraph (H) the following new subparagraph: 
‘‘(I) under a plan established under section 
1022(l) of the Puerto Rico Internal Revenue 
Code of 1994 if such payment would not be 
treated as wages without regard to such plan 
and it would be reasonable to believe that (if 
such section 1022(l) applied for purposes of 
this section) such section 1022(l) would not 
treat any wages as constructively received;’’. 
(c) EFFECTIVE DATE.—The amendments made by 
this section shall apply to remuneration paid after the date 
of the enactment of this Act. 
Æ 
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