I 
112TH CONGRESS 
1ST SESSION H. R. 2826 
To amend the Internal Revenue Code of 1986 to provide an exemption 
from employer social security taxes with respect to service members 
and veterans, and to provide a business credit for the retention of 
such individuals for at least 1 year. 
IN THE HOUSE OF REPRESENTATIVES 
AUGUST 26, 2011 
Mr. BRALEY of Iowa 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 
an exemption from employer social security taxes with 
respect to service members and veterans, and to provide 
a business credit for the retention of such individuals 
for at least 1 year. 
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 ‘‘Combat Veterans Back 
to Work Act of 2011’’. 
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SEC. 2. PAYROLL TAX FORGIVENESS FOR HIRING COMBAT 
VETERANS. 
(a) IN GENERAL.—Section 3111 of the Internal Rev-
enue Code of 1986 is amended by adding at the end the 
following new subsection: 
‘‘(e) SPECIAL EXEMPTION FOR CERTAIN INDIVID-
UALS HIRED IN 2011 AND 2012.— 
‘‘(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, 2012, of any 
qualified individual 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. 
‘‘(2) 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-
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division thereof, or any instrumentality of the 
foregoing. 
‘‘(B) TREATMENT
OF
EMPLOYEES
OF 
POST-SECONDARY
EDUCATIONAL
INSTITU-
TIONS.—Notwithstanding 
subparagraph 
(A), 
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). 
‘‘(3) QUALIFIED INDIVIDUAL.—For purposes of 
this subsection, the term ‘qualified individual’ means 
any individual who— 
‘‘(A) begins employment with a qualified 
employer after June 30, 2011, and before Jan-
uary 1, 2013, 
‘‘(B) is a current member of the National 
Guard or other reserve component of the Armed 
Forces or a veteran (as defined in section 101 
of title 38, United States Code), 
‘‘(C) within 18 months before beginning 
such employment, returned from a deployment 
of at least 180 days in support of a contingency 
operation (as defined in section 101 of title 10, 
United States Code) or under section 502(f) of 
title 32, United States Code, 
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‘‘(D) is not employed by the qualified em-
ployer to replace another employee of such em-
ployer unless such other employee separated 
from employment voluntarily or for cause, and 
‘‘(E) is not an individual described in sec-
tion 51(i)(1) (applied by substituting ‘qualified 
employer’ for ‘taxpayer’ each place it appears). 
‘‘(4) 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) COORDINATION
WITH
WORK
OPPORTUNITY 
CREDIT.—Section 51(c) of such Code is amended by add-
ing at the end the following new paragraph: 
‘‘(6) COORDINATION WITH PAYROLL TAX FOR-
GIVENESS.—The term ‘wages’ shall not include any 
amount paid or incurred to a qualified individual (as 
defined in section 3111(e)(3)) during the 1-year pe-
riod beginning on the hiring date of such individual 
by a qualified employer (as defined in section 
3111(e)) unless such qualified employer makes an 
election not to have section 3111(e) apply.’’. 
(c) TRANSFERS TO FEDERAL OLD-AGE AND SUR-
VIVORS INSURANCE TRUST FUND.—There are hereby ap-
propriated to the Federal Old-Age and Survivors Trust 
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Fund and the Federal Disability Insurance Trust Fund 
established under section 201 of the Social Security Act 
(42 U.S.C. 401) amounts equal to the reduction in reve-
nues to the Treasury by reason of the amendments made 
by subsection (a). Amounts appropriated by the preceding 
sentence shall be transferred from the general fund at 
such times and in such manner as to replicate to the ex-
tent possible the transfers which would have occurred to 
such Trust Fund had such amendments not been enacted. 
(d) 
APPLICATION
TO
RAILROAD
RETIREMENT 
TAXES.— 
(1) IN GENERAL.—Section 3221 of the Internal 
Revenue Code of 1986 is amended by redesignating 
subsection (d) as subsection (e) and by inserting 
after subsection (c) the following new subsection: 
‘‘(d) SPECIAL RATE
FOR CERTAIN INDIVIDUALS 
HIRED IN 2011 AND 2012.— 
‘‘(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, 
2012, with respect to having a qualified individual in 
the employer’s employ for services rendered to such 
qualified employer, the applicable percentage under 
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