Keeping the Lights On Act of 2021
Bill: H.R.615 | Sponsor: Rep. Thompson, Mike (D-CA)
Policy area: Taxation

Summary:
Keeping the Lights On Act of 2021
This bill allows an eligible employer a payroll tax credit equal to 50% of a limited amount of qualified fixed expenses paid by such employer in a calendar quarter. Qualified fixed expenses include a mortgage, rent, or a utility payment.
An employer is eligible for such payroll credit if the employer was carrying on a trade or business that had not more than 1,500 full-time employees or not more than $41.5 million in gross receipts in 2019. The employer's business must have been suspended in a calendar quarter due to COVID-19 (i.e., coronavirus disease 2019) and have experienced a significant decline in gross receipts due to that pandemic.
The credit may not be claimed by the federal government or by any state or tribal government, or by U.S. possessions, but may be claimed by tax-exempt organizations.

To provide a payroll credit for certain fixed expenses of employers 
               subject to closure by reason of COVID-19.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Keeping the Lights On Act of 2021''.

SEC. 2. PAYROLL CREDIT FOR CERTAIN FIXED EXPENSES OF EMPLOYERS SUBJECT 
              TO CLOSURE BY REASON OF COVID-19.

    (a) In General.--In the case of an eligible employer, there shall 
be allowed as a credit against applicable employment taxes for each 
calendar quarter an amount equal to 50 percent of the qualified fixed 
expenses paid or incurred by such employer during such calendar 
quarter.
    (b) Limitations and Refundability.--
            (1) Limitation.--The qualified fixed expenses which may be 
        taken into account under subsection (a) by any eligible 
        employer for any calendar quarter shall not exceed the least 
        of--
                    (A) the qualified fixed expenses paid by the 
                eligible employer in the same calendar quarter of 
                calendar year 2019,
                    (B) $50,000; or
                    (C) the greater of--
                            (i) 25 percent of the wages paid with 
                        respect to the employment of all the employees 
                        of the eligible employer for such calendar 
                        quarter; or
                            (ii) 6.25 percent of the gross receipts of 
                        the eligible employer for calendar year 2019.
            (2) Credit limited to certain employment taxes.--The credit 
        allowed by subsection (a) with respect to any calendar quarter 
        shall not exceed the applicable employment taxes for such 
        calendar quarter (reduced by any credits allowed under 
        subsections (e) and (f) of section 3111 of such Code, sections 
        7001 and 7003 of the Families First Coronavirus Response Act, 
        section 2301 of the CARES Act, and sections 101, 102, and 304 
        of this division, for such quarter) on the wages paid with 
        respect to the employment of all the employees of the eligible 
        employer for such calendar quarter.
            (3) Refundability of excess credit.--
                    (A) In general.--If the amount of the credit under 
                subsection (a) exceeds the limitation of paragraph (2) 
                for any calendar quarter, such excess shall be treated 
                as an overpayment that shall be refunded under sections 
                6402(a) and 6413(b) of the Internal Revenue Code of 
                1986.
                    (B) Treatment of payments.--For purposes of section 
                1324 of title 31, United States Code, any amounts due 
                to an employer under this paragraph shall be treated in 
                the same manner as a refund due from a credit provision 
                referred to in subsection (b)(2) of such section.
    (c) Definitions.--For purposes of this section--
            (1) Applicable employment taxes.--The term ``applicable 
        employment taxes'' means the following:
                    (A) The taxes imposed under section 3111(a) of the 
                Internal Revenue Code of 1986.
                    (B) So much of the taxes imposed under section 
                3221(a) of such Code as are attributable to the rate in 
                effect under section 3111(a) of such Code.
            (2) Eligible employer.--
                    (A) In general.--The term ``eligible employer'' 
                means any employer--
                            (i) which was carrying on a trade or 
                        business immediately prior to the suspension 
                        described in clause (iii)(i) or immediately 
                        prior to the period described in subparagraph 
                        (B);
                            (ii) which had either--
                                    (I) not more than 1,500 full-time 
                                equivalent employees (as determined for 
                                purposes of determining whether an 
                                employer is an applicable large 
                                employer for purposes of section 
                                4980H(c)(2) of the Internal Revenue 
                                Code of 1986) for calendar year 2019; 
                                or
                                    (II) not more than $41,500,000 of 
                                gross receipts in the last taxable year 
                                ending in 2019; and
                            (iii) with respect to any calendar quarter, 
                        for which--
                                    (I) the operation of the trade or 
                                business described in clause (i) is 
                                fully or partially suspended during the 
                                calendar quarter due to orders from an 
                                appropriate governmental authority 
                                limiting commerce, travel, or group 
                                meetings (for commercial, social, 
                                religious, or other purposes) due to 
                                the coronavirus disease 2019 (COVID-
                                19); or
                                    (II) such calendar quarter is 
                                within the period described in 
                                subparagraph (B).
                    (B) Significant decline in gross receipts.--The 
                period described in this subparagraph is the period--
                            (i) beginning with the first calendar 
                        quarter beginning after December 31, 2019, for 
                        which gross receipts (within the meaning of 
                        section 448(c) of the Internal Revenue Code of 
                        1986) for the calendar quarter are less than 80 
                        percent of gross receipts for the same calendar 
                        quarter in the prior year; and
                            (ii) ending with the calendar quarter 
                        following the first calendar quarter beginning 
                        after a calendar quarter described in clause 
                        (i) for which gross receipts of such employer 
                        are greater than 80 percent of gross receipts 
                        for the same calendar quarter in the prior 
                        year.
                    (C) Tax-exempt organizations.--In the case of an 
                organization which is described in section 501(c) of 
                the Internal Revenue Code of 1986 and exempt from tax 
                under section 501(a) of such Code--
                            (i) clauses (i) and (iii)(I) of 
                        subparagraph (A) shall apply to all operations 
                        of such organization; and
                            (ii) any reference in this section to gross 
                        receipts shall be treated as a reference to 
                        gross receipts within the meaning of section 
                        6033 of the Internal Revenue Code of 1986.
                    (D) Phase-in of credit where business not suspended 
                and reduction in gross receipts less than 50 percent.--
                            (i) In general.--In the case of any 
                        calendar quarter with respect to which an 
                        eligible employer would not be an eligible 
                        employer if subparagraph (B)(i) were applied by 
                        substituting ``50 percent'' for ``80 percent'', 
                        the amount of the credit allowed under 
                        subsection (a) shall be reduced by the amount 
                        which bears the same ratio to the amount of 
                        such credit (determined without regard to this 
                        subparagraph) as--
                                    (I) the excess gross receipts 
                                percentage point amount; bears to
                                    (II) 30 percentage points.
                            (ii) Excess gross receipts percentage point 
                        amount.--For purposes of this subparagraph, the 
                        term ``excess gross receipts percentage point 
                        amount'' means, with respect to any calendar 
                        quarter, the excess of--
                                    (I) the lowest of the gross 
                                receipts percentage point amounts 
                                determined with respect to any calendar 
                                quarter during the period ending with 
                                such calendar quarter and beginning 
                                with the first calendar quarter during 
                                the period described in subparagraph 
                                (B); over
                                    (II) 50 percentage points.
                            (iii) Gross receipts percentage point 
                        amounts.--For purposes of this subparagraph, 
                        the term ``gross receipts percentage point 
                        amount'' means, with respect to any calendar 
                        quarter, the percentage (expressed as a number 
                        of percentage points) obtained by dividing--
                                    (I) the gross receipts (within the 
                                meaning of subparagraph (B)) for such 
                                calendar quarter; by
                                    (II) the gross receipts for the 
                                same calendar quarter in calendar year 
                                2019.
            (3) Qualified fixed expenses.--
                    (A) In general.--The term ``qualified fixed 
                expenses'' means the payment or accrual of any covered 
                mortgage obligation, covered rent obligation, or 
                covered utility payment. Such term shall not include 
                the prepayment of any obligation for a period in excess 
                of a month unless the payment for such period is 
                customarily due in advance.
                    (B) Application of definitions.--The terms 
                ``covered mortgage obligation'', ``covered rent 
                obligation'', and ``covered utility payment'' shall 
                each have the same meaning as when used in section 1106 
                of the CARES Act.
            (4) Secretary.--The term ``Secretary'' means the Secretary 
        of the Treasury or the Secretary's delegate.
            (5) Wages.--
                    (A) In general.--The term ``wages'' means wages (as 
                defined in section 3121(a) of the Internal Revenue Code 
                of 1986) and compensation (as defined in section 
                3231(e) of such Code). For purposes of the preceding 
                sentence (other than for purposes of subsection 
                (b)(2)), wages as defined in section 3121(a) of such 
                Code shall be determined without regard to paragraphs 
                (1), (8), (10), (13), (18), (19), and (22) of section 
                3121(b) of such Code.
                    (B) Allowance for certain health plan expenses.--
                            (i) In general.--Such term shall include 
                        amounts paid or incurred by the eligible 
                        employer to provide and maintain a group health 
                        plan (as defined in section 5000(b)(1) of the 
                        Internal Revenue Code of 1986), but only to the 
                        extent that such amounts are excluded from the 
                        gross income of employees by reason of section 
                        106(a) of such Code.
                            (ii) Allocation rules.--For purposes of 
                        this section, amounts treated as wages under 
                        clause (i) shall be treated as paid with 
                        respect to any employee (and with respect to 
                        any period) to the extent that such amounts are 
                        properly allocable to such employee (and to 
                        such period) in such manner as the Secretary 
                        may prescribe. Except as otherwise provided by 
                        the Secretary, such allocation shall be treated 
                        as properly made if made on the basis of being 
                        pro rata among periods of coverage.
            (6) Other terms.--Except as otherwise provided in this 
        section, any term used in this section which is also used in 
        chapter 21 or 22 of the Internal Revenue Code of 1986 shall 
        have the same meaning as when used in such chapter.
    (d) Aggregation Rule.--All persons treated as a single employer 
under subsection (a) or (b) of section 52 of the Internal Revenue Code 
of 1986, or subsection (m) or (o) of section 414 of such Code, shall be 
treated as one employer for purposes of this section.
    (e) Denial of Double Benefit.--For purposes of chapter 1 of such 
Code, the gross income of any eligible employer, for the taxable year 
which includes the last day of any calendar quarter with respect to 
which a credit is allowed under this section, shall be increased by the 
amount of such credit.
    (f) Certain Governmental Employers.--
            (1) In general.--The credit under this section shall not be 
        allowed to the Federal Government, the government of any State, 
        of the District of Columbia, or of any possession of the United 
        States, any tribal government, or any political subdivision, 
        agency, or instrumentality of any of the foregoing.
            (2) Exception.--Paragraph (1) shall not apply to any 
        organization described in section 501(c)(1) of the Internal 
        Revenue Code of 1986 and exempt from tax under section 501(a) 
        of such Code.
    (g) Election To Not Take Certain Expenses Into Account.--
            (1) In general.--If an eligible employer elects (at such 
        time and in such manner as the Secretary may prescribe) to not 
        take into account any amount of qualified fixed expensees for 
        purposes of determining the credit under this section, such 
        amount of qualified fixed expenses shall not be so taken into 
        account.
            (2) Coordination with paycheck protection program.--The 
        Secretary, in consultation with the Administrator of the Small 
        Business Administration, shall issue guidance providing that 
        covered mortgage obligations, covered rent obligations, and 
        covered utility payments paid or incurred during the covered 
        period shall not fail to be taken into account as qualified 
        fixed expenses for purposes of determining the credit under 
        this section by reason of an election under paragraph (1) to 
        the extent that a covered loan of the eligible employer is not 
        forgiven by reason of a decision under section 1106(g). Terms 
        used in the preceding sentence which are also used in section 
        1106 shall have the same meaning as when used in such section.
    (h) Transfers to Certain Trust Funds.--There are hereby 
appropriated to the Federal Old-Age and Survivors Insurance Trust Fund 
and the Federal Disability Insurance Trust Fund established under 
section 201 of the Social Security Act (42 U.S.C. 401) and 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 this section 
(without regard to this subsection). 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 extent possible the 
transfers which would have occurred to such Trust Fund or Account had 
this section not been enacted.
    (i) Treatment of Deposits.--The Secretary shall waive any penalty 
under section 6656 of such Code for any failure to make a deposit of 
applicable employment taxes if the Secretary determines that such 
failure was due to the anticipation of the credit allowed under this 
section.
    (j) Third-Party Payors.--Any credit allowed under this section 
shall be treated as a credit described in section 3511(d)(2) of such 
Code.
    (k) Regulations and Guidance.--The Secretary shall issue such 
forms, instructions, regulations, and guidance as are necessary--
            (1) to allow the advance payment of the credit under 
        subsection (a), subject to the limitations provided in this 
        section, based on such information as the Secretary shall 
        require;
            (2) regulations or other guidance to provide for the 
        reconciliation of such advance payment with the amount of the 
        credit at the time of filing the return of tax for the 
        applicable quarter or taxable year;
            (3) with respect to the application of the credit under 
        subsection (a) to third-party payors (including professional 
        employer organizations, certified professional employer 
        organizations, or agents under section 3504 of the Internal 
        Revenue Code of 1986), including regulations or guidance 
        allowing such payors to submit documentation necessary to 
        substantiate the eligible employer status of employers that use 
        such payors;
            (4) for application of subsection (b)(1)(A) and 
        subparagraphs (A)(ii)(II) and (B) of subsection (c)(2) in the 
        case of any employer which was not carrying on a trade or 
        business for all or part of the same calendar quarter in the 
        prior year; and
            (5) for recapturing the benefit of credits determined under 
        this section in cases where there is a subsequent adjustment to 
        the credit determined under subsection (a).
    (l) Application of Section.--This section shall apply only to 
qualified fixed expenses paid or accrued after March 12, 2020, and 
before January 1, 2022.
    (m) Amendment to Paycheck Protection Program to Coordination With 
Credit for Qualified Fixed Expenses.--Section 1106 of the CARES Act is 
amended by adding at the end the following new subsection:
    ``(l) Coordination With Payroll Tax Credit for Qualified Fixed 
Expenses.--For purposes of this section, any payment of interest on any 
covered mortgage obligation, any payment on any covered rent 
obligation, and any covered utility payment shall not include any 
qualified fixed expenses which are taken into account in determining 
the credit allowed under section 2 of the Keeping the Lights On Act of 
2021.''.
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