Blue Collar Bonus Act of 2021
Bill: S.536 | Sponsor: Sen. Hawley, Josh (R-MO)
Policy area: Taxation

Summary:
Blue Collar Bonus Act of 2021
This bill allows a refundable income tax credit to supplement wages received by an individual taxpayer that are less than the median wage. The bill defines median wage as $16.50 per hour, increased by annual inflation adjustments beginning after 2021. The bill also provides for advance payments of the credit.
The bill requires taxpayers to provide their Social Security account numbers on their tax returns to be eligible for the credit. The credit expires after 2023.

To amend the Internal Revenue Code of 1986 to provide a credit for 
   wages received by individuals that are less than the median wage.

    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 ``Blue Collar Bonus Act of 2021''.

SEC. 2. BLUE COLLAR BONUS TAX CREDIT.

    (a) In General.--
            (1) Allowance of credit.--Subpart C of part IV of 
        subchapter A of chapter 1 of the Internal Revenue Code of 1986 
        is amended by inserting after section 36B the following:

``SEC. 36C. CREDIT FOR WAGES PAID AT A RATE LESS THAN THE MEDIAN WAGE.

    ``(a) Credit Allowed.--
            ``(1) In general.--In the case of an individual, there 
        shall be allowed as a credit against the tax imposed by this 
        subtitle for any taxable year an amount equal to the sum of the 
        amounts determined under paragraph (2) for each individual 
        included on the taxpayer's return of tax for the taxable year.
            ``(2) Amount per individual.--The amount determined under 
        this paragraph with respect to any individual shall be the 
        product of--
                    ``(A) the blue collar bonus amount of such 
                individual for the taxable year, and
                    ``(B) the number of hours for which the individual 
                performed services for which wages were paid during 
                such taxable year.
    ``(b) Blue Collar Bonus Amount.--For purposes of this section--
            ``(1) In general.--The term `blue collar bonus amount' 
        means, with respect to any individual for any taxable year, 50 
        percent of the excess (if any) of--
                    ``(A) the median wage rate for such taxable year, 
                over
                    ``(B) the average hourly wages received by the 
                individual during the taxable year.
            ``(2) Non-hourly wage rate.--For purposes of paragraph 
        (1)(A), in the case of any individual who is not paid on an 
        hourly wage rate, the wages of such employee shall be prorated 
        to an hourly wage rate under regulations established by the 
        Secretary.
            ``(3) Median wage rate.--
                    ``(A) In general.--The median wage rate is $16.50 
                per hour.
                    ``(B) Adjustment.--
                            ``(i) In general.--In the case of any 
                        taxable year beginning in a calendar year after 
                        2021, the $16.50 amount under subparagraph (A) 
                        shall each be increased by an amount equal to--
                                    ``(I) such dollar amount, 
                                multiplied by
                                    ``(II) the cost-of-living 
                                adjustment determined under section 
                                1(f)(3) for the calendar year in which 
                                the taxable year begins, determined by 
                                substituting in subparagraph (A)(ii) 
                                thereof `calendar year 2020' for 
                                `calendar year 2016'.
                            ``(ii) Rounding.--If any amount as adjusted 
                        under paragraph (1) is not a multiple of $0.10, 
                        such dollar amount shall be rounded to the next 
                        lowest multiple of $0.10.
    ``(c) Number of Hours Taken Into Account.--For purposes of 
subsection (a)(2)(B) and for purposes of determining the average hourly 
wages of an individual under subsection (b)(1)(B), the number of hours 
taken into account shall not exceed--
            ``(1) for any week, 40, and
            ``(2) for any taxable year, 2080.
    ``(d) Other Definitions and Special Rules.--
            ``(1) Wages.--The term `wages' has the meaning given such 
        term by subsection (b) of section 3306 (determined without 
        regard to any dollar limitation contained in such section).
            ``(2) Treatment of dependents.--If a deduction under 
        section 151 with respect to an individual is allowed to another 
        taxpayer for a taxable year beginning in the calendar year in 
        which such individual's taxable year begins, no credit shall be 
        allowed under subsection (a) to such individual for such 
        individual's taxable year.
            ``(3) Nonresident aliens.--This section shall not apply to 
        any taxpayer that is a nonresident alien for the taxable year.
    ``(e) Identification Requirement.--No credit shall be allowed under 
this section to a taxpayer with respect to any individual unless the 
taxpayer includes the social security number of such individual on the 
return of tax for the taxable year. For purposes of the preceding 
sentence, the term `social security number' means a social security 
number issued to an individual by the Social Security Administration, 
but only if the social security number is issued--
            ``(1) to a citizen of the United States or pursuant to 
        subclause (I) (or that portion of subclause (III) that relates 
        to subclause (I)) of section 205(c)(2)(B)(i) of the Social 
        Security Act, and
            ``(2) before the due date for such return.
    ``(f) Restrictions on Taxpayers Who Improperly Claimed Credit in 
Prior Year.--
            ``(1) Taxpayers making prior fraudulent or reckless 
        claims.--
                    ``(A) In general.--No credit shall be allowed under 
                this section for any taxable year in the disallowance 
                period.
                    ``(B) Disallowance period.--For purposes of 
                subparagraph (A), the disallowance period is the period 
                of 2 taxable years after the most recent taxable year 
                for which there was a final determination that the 
                taxpayer's claim of credit under this section was due 
                to fraud or to reckless or intentional disregard of 
                rules and regulations.
    ``(g) Reconciliation of Credit and Advance Credit.--
            ``(1) In general.--The amount of the credit allowed under 
        this section to any taxpayer for any taxable year shall be 
        reduced (but not below zero) by the aggregate amount of 
        payments made under section 7527A to such taxpayer during such 
        taxable year. Any failure to so reduce the credit shall be 
        treated as arising out of a mathematical or clerical error and 
        assessed according to section 6213(b)(1).
            ``(2) Excess advance payments.--
                    ``(A) In general.--If the aggregate amount of 
                payments under section 7527A to the taxpayer during the 
                taxable year exceeds the amount of the credit allowed 
                under this section to such taxpayer for such taxable 
                year (determined without regard to paragraph (1)), the 
                tax imposed by this chapter for such taxable year shall 
                be increased by the amount of such excess. Any failure 
                to so increase the tax shall be treated as arising out 
                of a mathematical or clerical error and assessed 
                according to section 6213(b)(1).
                    ``(B) Safe harbor based on modified adjusted gross 
                income.--
                            ``(i) In general.--Subparagraph (A) shall 
                        not apply to any taxpayer whose adjusted gross 
                        income for the taxable year does not exceed 
                        $50,000 ($100,000, in the case of a joint 
                        return).
                            ``(ii) Limitation on increase.--In the case 
                        of a taxpayer whose adjusted gross income 
                        exceeds $50,000 ($100,000, in the case of a 
                        joint return), the amount of the increase under 
                        subparagraph (A) shall not exceed the excess 
                        of--
                                    ``(I) the adjusted gross income of 
                                the taxpayer for the taxable year, over
                                    ``(II) $50,000 ($100,000, in the 
                                case of a joint return).
    ``(h) Regulations.--The Secretary may prescribe such rules or other 
guidance as may be necessary to carry out the purposes of this section 
and section 7527A, including--
            ``(1) rules or guidance related to the treatment of tipped 
        workers,
            ``(2) rules or guidance related to minimizing compliance 
        and record-keeping burdens,
            ``(3) rules or guidance related to individuals who receive 
        wages from multiple employers, and
            ``(4) in consultation with the Secretary of Labor, rules or 
        guidance related to the prevention of reduced wages or hours 
        worked on account of the benefit provided under this section.
    ``(i) Termination.--This section shall not apply to any taxable 
year beginning after December 31, 2023.''.
            (2) Conforming amendments.--
                    (A) Paragraph (2) of section 1324(b) of title 31, 
                United States Code, is amended by inserting ``36C,'' 
                after ``36B,''.
                    (B) The table of sections for subpart C of part IV 
                of subchapter A of chapter 1 of such Code is amended by 
                inserting after the item related to section 36B the 
                following new item:

``Sec. 36C. Credit for wages paid at a rate less than the median 
                            wage.''.
    (b) Advance Payment of Credit.--
            (1) In general.--Chapter 77 of such Code is amended by 
        inserting after section 7527 the following new section:

``SEC. 7527A. ADVANCE PAYMENT OF WAGE TAX CREDIT.

    ``(a) In General.--As soon as practical but not later than 90 days 
after the date of the enactment of this section, the Secretary shall 
establish a program for making periodic payments to taxpayers in an 
amount equal to the amount of the credit the taxpayer would receive 
under section 36C if the last day of the taxable year were the last day 
of the applicable period for which the payment is made.
    ``(b) Length of Period.--Payments under the program established 
under subsection (a) shall be made not less than quarterly.
    ``(c) Adjustments.--The Secretary may adjust the amount of any 
payment to properly take into account the amount by which any payment 
made before such date was greater than or less than the amount that 
such payment would have been on the basis of data for any subsequent 
period.
    ``(d) Information Reporting.--The Secretary shall require the 
submission of additional information concerning the wages paid by 
employers for purposes of providing advance payments under this 
section. Such information may be provided as part of existing reporting 
requirements.
    ``(e) On-Line Information Portal.--The Secretary shall establish an 
on-line portal which allows taxpayers to--
            ``(1) elect not to receive payments under this section, and
            ``(2) provide such information as the Secretary may require 
        to facilitate an advance payment of the credit to the eligible 
        individual.
    ``(f) Notice of Payments.--Not later than January 31 of the 
calendar year following any calendar year during which the Secretary 
makes one or more payments to any taxpayer under this section, the 
Secretary shall provide such taxpayer with a written notice which 
includes the taxpayer's taxpayer identity (as defined in section 
6103(b)(6)), the aggregate amount of such payments made to such 
taxpayer during such calendar year, and such other information as the 
Secretary determines appropriate.
    ``(g) Administrative Provisions.--
            ``(1) Application of direct deposit requirement.--Solely 
        for purposes of section 3332 of title 31, United States Code 
        (and notwithstanding the last sentence of subsection (j)(3) 
        thereof), the payments made by the Secretary under subsection 
        (a) shall be treated as Federal payments.
            ``(2) Delivery of payments.--Notwithstanding any other 
        provision of law, the Secretary may certify and disburse 
        refunds payable under this section electronically to--
                    ``(A) any account to which the payee received or 
                authorized, on or after January 1, 2019, a refund of 
                taxes under this title or a Federal payment (as defined 
                in section 3332 of title 31, United States Code),
                    ``(B) any account belonging to a payee from which 
                that individual, on or after January 1, 2019, made a 
                payment of taxes under this title, or
                    ``(C) any Treasury-sponsored account (as defined in 
                section 208.2 of title 31, Code of Federal 
                Regulations).
            ``(3) Waiver of certain rules.--Notwithstanding section 
        3325 of title 31, United States Code, or any other provision of 
        law, with respect to any payment of a refund under this 
        section, a disbursing official in the executive branch of the 
        United States Government may modify payment information 
        received from an officer or employee described in section 
        3325(a)(1)(B) of such title for the purpose of facilitating the 
        accurate and efficient delivery of such payment. Except in 
        cases of fraud or reckless neglect, no liability under section 
        3325, 3527, 3528, or 3529 of title 31, United States Code, 
        shall be imposed with respect to payments made under this 
        paragraph.
            ``(4) Exception from reduction or offset.--Any payment made 
        to any individual under this section shall not be--
                    ``(A) subject to reduction or offset pursuant to 
                section 3716 or 3720A of title 31, United States Code,
                    ``(B) subject to reduction or offset pursuant to 
                subsection (d), (e), or (f) of section 6402, or
                    ``(C) reduced or offset by other assessed Federal 
                taxes that would otherwise be subject to levy or 
                collection.''.
            (2) Conforming amendments.--
                    (A) Section 26(b)(2) of such Code is amended by 
                striking ``and'' at the end of subparagraph (X), by 
                striking the period at the end of subparagraph (Y) and 
                inserting ``, and'', and by adding at the end the 
                following new subparagraph:
                    ``(Z) section 36C(g)(2) (relating to excess advance 
                payments).''.
                    (B) Section 6211(b)(4)(A) of such Code, as amended 
                by the preceding provisions of this subtitle, is 
                amended--
                            (i) by inserting ``36C'' after ``36B'', and
                            (ii) by striking ``and 6428A'' and 
                        inserting ``6428A, and 7527A''.
                    (C) Paragraph (2) of section 1324(b) of title 31, 
                United States Code, is amended by striking ``or 6431'' 
                and inserting ``6431, or 7527A''.
                    (D) The table of sections for chapter 77 of the 
                Internal Revenue Code of 1986 is amended by inserting 
                after the item relating to section 7527 the following 
                new item:

``Sec. 7527A. Advance payment of wage tax credit.''.
    (c) Effective Date.--The amendments made by this section shall 
apply to taxable years beginning after December 31, 2020.
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