VOW to Hire Heroes Extension Act of 2021
Bill: H.R.2963 | Sponsor: Rep. Brownley, Julia (D-CA)
Policy area: Taxation

Summary:
VOW to Hire Heroes Extension Act of 2021
This bill (1) makes permanent the work opportunity tax credit with respect to qualified veterans, (2) revises tax credit eligibility requirements for documenting the status of veterans and their receipt of unemployment compensation, and (3) extends the payroll tax offset for such credit to certain for-profit employers.
The Internal Revenue Service must make annual reports to Congress on the effectiveness and cost-effectiveness of this bill in increasing the employment of veterans.
The bill directs the Department of the Treasury to pay to each U.S. possession (i.e., American Samoa, Guam, the Commonwealth of the Northern Mariana Islands, the Commonwealth of Puerto Rico, and the U.S. Virgin Islands) amounts equal to the losses to such possessions due to this bill.

To amend the Internal Revenue Code of 1986 to extend the work 
    opportunity credit for hiring veterans, and for other purposes.

    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 ``VOW to Hire Heroes Extension Act of 
2021''.

SEC. 2. EXTENSION OF WORK OPPORTUNITY CREDIT FOR VETERANS.

    (a) In General.--Section 51(c) of the Internal Revenue Code of 1986 
is amended by adding at the end the following: ``The preceding sentence 
shall not apply in the case of amounts paid or incurred to a qualified 
veteran.''.
    (b) Effective Date.--The amendment made by this section shall apply 
to individuals who begin work for the employer after the date of the 
enactment of this Act.

SEC. 3. SIMPLIFIED CERTIFICATION OF VETERAN STATUS.

    (a) In General.--Subparagraph (D) of section 51(d)(13) of the 
Internal Revenue Code of 1986 is amended to read as follows:
                    ``(D) Pre-screening of qualified veterans.--
                            ``(i) In general.--Subparagraph (A) shall 
                        be applied without regard to subclause (II) of 
                        clause (ii) thereof in the case of an 
                        individual seeking treatment as a qualified 
                        veteran with respect to whom the pre-screening 
                        notice contains--
                                    ``(I) qualified veteran status 
                                documentation,
                                    ``(II) qualified proof of 
                                unemployment compensation, and
                                    ``(III) an affidavit furnished by 
                                the individual stating, under penalty 
                                of perjury, that the information 
                                provided under subclauses (I) and (II) 
                                is true.
                            ``(ii) Qualified veteran status 
                        documentation.--For purposes of clause (i), the 
                        term `qualified veteran status documentation' 
                        means any documentation provided to an 
                        individual by the Department of Defense or the 
                        National Guard upon release or discharge from 
                        the Armed Forces which includes information 
                        sufficient to establish that such individual is 
                        a veteran.
                            ``(iii) Qualified proof of unemployment 
                        compensation.--For purposes of clause (i), the 
                        term `qualified proof of unemployment 
                        compensation' means, with respect to an 
                        individual, checks or other proof of receipt of 
                        payment of unemployment compensation to such 
                        individual for periods aggregating not less 
                        than 4 weeks (in the case of an individual 
                        seeking treatment under paragraph (3)(A)(iii)), 
                        or not less than 6 months (in the case of an 
                        individual seeking treatment under clause 
                        (ii)(II) or (iv) of paragraph (3)(A)), during 
                        the 1-year period ending on the hiring date.''.
    (b) Effective Date.--The amendment made by this section shall apply 
to individuals who begin work for the employer after the date of the 
enactment of this Act.

SEC. 4. CREDIT MADE AVAILABLE AGAINST PAYROLL TAXES IN CERTAIN 
              CIRCUMSTANCES.

    (a) In General.--Section 52(c) of the Internal Revenue Code of 1986 
is amended--
            (1) in the heading by striking ``Tax-exempt Organizations'' 
        and inserting ``Certain employers'',
            (2) in paragraph (2)--
                    (A) by striking ``qualified tax-exempt 
                organizations'' in the heading and inserting ``certain 
                employers'', and
                    (B) by striking ``by qualified tax-exempt 
                organizations'' in the text and inserting ``by certain 
                employers''.
    (b) Credit Allowed to Certain For-Profit Employers.--
            (1) In general.--Paragraph (1) of section 3111(e) of such 
        Code is amended by inserting ``or a qualified for-profit 
        employer'' after ``If a qualified tax-exempt organization''.
            (2) Qualified for-profit employer defined.--Paragraph (5) 
        of section 3111(e) of such Code is amended by striking ``and'' 
        at the end of subparagraph (A), by redesignating subparagraph 
        (B) as subparagraph (C), and by inserting after subparagraph 
        (A) the following new subparagraph:
                    ``(B) the term `qualified for-profit employer' 
                means, with respect to a taxable year, an employer not 
                described in subparagraph (A), but only if--
                            ``(i) such employer does not have profits 
                        for any of the 3 taxable years preceding such 
                        taxable year, and
                            ``(ii) such employer elects under section 
                        51(j) not to have section 51 apply to such 
                        taxable year, and''.
            (3) Conforming amendments.--
                    (A) Section 3111(e)(1) of such Code is amended by 
                striking ``with respect to whom a credit would be 
                allowable under section 38 by reason of section 51 if 
                the organization were not a qualified tax-exempt 
                organization''.
                    (B) Paragraphs (1) and (2) of section 3111(e) of 
                such Code are both amended by inserting ``or for-profit 
                employer'' after ``employees of the organization'' each 
                place it appears.
                    (C) Section 3111(e)(3)(C) of such Code is amended 
                by inserting ``in the case of a qualified tax-exempt 
                organization,'' before ``by only taking into account''.
                    (D) Section 3111(e)(4) of such Code is amended by 
                inserting ``or for-profit employer'' after ``the 
                organization''.
                    (E) Section 3111(e)(5)(C) of such Code, as 
                redesignated by paragraph (2), is amended to read as 
                follows:
                    ``(C) the term `qualified veteran' means a 
                qualified veteran (within the meaning of section 
                51(d)(3)) with respect to whom a credit would be 
                allowable under section 38 by reason of section 51 if 
                the employer of such veteran were not a qualified tax-
                exempt organization or a qualified for-profit 
                employer.''.
    (c) Transfers to Federal Old-Age and Survivors Insurance Trust 
Fund.--There are hereby appropriated to the Federal Old-Age and 
Survivors Trust 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 revenues to the Treasury by 
reason of the amendments made by subsections (a) and (b). 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 had such amendments not been enacted.
    (d) Effective Date.--The amendments made by subsections (a) and (b) 
shall apply to individuals who begin work for the employer after the 
date of the enactment of this Act.

SEC. 5. REPORT.

    Not later than 2 years after the date of the enactment of this Act, 
and annually thereafter, the Commissioner of Internal Revenue, in 
consultation with the Secretary of Labor, shall report to the Congress 
on the effectiveness and cost-effectiveness of the amendments made by 
sections 2, 3, and 4 in increasing the employment of veterans. Such 
report shall include the results of a survey, conducted, if needed, in 
consultation with the Veterans' Employment and Training Service of the 
Department of Labor, to determine how many veterans are hired by each 
employer that claims the credit under section 51, by reason of 
subsection (d)(1)(B) thereof, or 3111(e) of the Internal Revenue Code 
of 1986.

SEC. 6. TREATMENT OF POSSESSIONS.

    (a) Payments to Possessions.--
            (1) Mirror code possessions.--The Secretary of the Treasury 
        shall pay to each possession of the United States with a mirror 
        code tax system amounts equal to the loss to that possession by 
        reason of the amendments made by this Act. Such amounts shall 
        be determined by the Secretary of the Treasury based on 
        information provided by the government of the respective 
        possession of the United States.
            (2) Other possessions.--The Secretary of the Treasury shall 
        pay to each possession of the United States which does not have 
        a mirror code tax system the amount estimated by the Secretary 
        of the Treasury as being equal to the loss to that possession 
        that would have occurred by reason of the amendments made by 
        this Act if a mirror code tax system had been in effect in such 
        possession. The preceding sentence shall not apply with respect 
        to any possession of the United States unless such possession 
        establishes to the satisfaction of the Secretary that the 
        possession has implemented (or, at the discretion of the 
        Secretary, will implement) an income tax benefit which is 
        substantially equivalent to the income tax credit in effect 
        after the amendments made by this Act.
    (b) Coordination With Credit Allowed Against United States Income 
Taxes.--The credit allowed against United States income taxes for any 
taxable year under the amendments made by this Act to section 51 of the 
Internal Revenue Code of 1986 to any person with respect to any 
qualified veteran shall be reduced by the amount of any credit (or 
other tax benefit described in subsection (a)(2)) allowed to such 
person against income taxes imposed by the possession of the United 
States by reason of this section with respect to such qualified veteran 
for such taxable year.
    (c) Definitions and Special Rules.--
            (1) Possession of the united states.--For purposes of this 
        section, the term ``possession of the United States'' includes 
        American Samoa, Guam, the Commonwealth of the Northern Mariana 
        Islands, the Commonwealth of Puerto Rico, and the United States 
        Virgin Islands.
            (2) Mirror code tax system.--For purposes of this section, 
        the term ``mirror code tax system'' means, with respect to any 
        possession of the United States, the income tax system of such 
        possession if the income tax liability of the residents of such 
        possession under such system is determined by reference to the 
        income tax laws of the United States as if such possession were 
        the United States.
            (3) Treatment of payments.--For purposes of section 
        1324(b)(2) of title 31, United States Code, the payments under 
        this section shall be treated in the same manner as a refund 
        due from credit provisions described in such section.
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