To provide a Federal income tax credit for State income taxes paid by individuals temporarily providing certain health or emergency services in the State, and to provide a corresponding reduction in Federal highway funds to the State.
Bill: H.R.312 | Sponsor: Rep. Posey, Bill (R-FL)
Policy area: Taxation

Summary:
This bill allows a refundable income tax credit for state income taxes paid by individuals providing services as first responders, doctors, nurses, or other health or emergency services. This credit expires after the Department of the Treasury certifies that the COVID-19 (i.e., coronavirus disease 2019) emergency period has ended.
The bill requires a reduction in federal highway funds paid to a state that corresponds to the credit amount allowed by this bill.

To provide a Federal income tax credit for State income taxes paid by 
individuals temporarily providing certain health or emergency services 
   in the State, and to provide a corresponding reduction in Federal 
                      highway funds to the State.

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

SECTION 1. CREDIT FOR STATE INCOME TAXES PAID BY INDIVIDUALS 
              TEMPORARILY PROVIDING CERTAIN HEALTH OR EMERGENCY 
              SERVICES.

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

``SEC. 36C. CREDIT FOR STATE INCOME TAXES PAID BY INDIVIDUALS 
              TEMPORARILY PROVIDING CERTAIN HEALTH OR EMERGENCY 
              SERVICES.

    ``(a) In General.--In the case of an eligible individual, there 
shall be allowed as a credit against the tax imposed by this subtitle 
for any taxable year an amount equal to the income taxes imposed by a 
service-recipient State on the wages (as defined in section 3401) paid 
to such eligible individual for providing specified health or emergency 
services in such State on a temporary basis during such taxable year.
    ``(b) Eligible Individual.--For purposes of this section, the term 
`eligible individual' means any individual legally domiciled in a State 
who provides specified health or emergency services in another State on 
a temporary basis.
    ``(c) Specified Health or Emergency Services.--For purposes of this 
section, the term `specified health or emergency services' means 
service as a first responder, doctor, nurse, or such other health or 
emergency service as may be specified by the Secretary for purposes of 
this section.
    ``(d) Service-Recipient State.--For purposes of this section, the 
term `service-recipient State' means the State referred to in 
subsection (b) in which the eligible individual provides specified 
health or emergency services on a temporary basis.
    ``(e) Determination of Tax.--The amount of the income tax referred 
to in subsection (a) shall be equal to the excess (if any) of--
            ``(1) the amount of income taxes imposed by the service-
        recipient State on the income of such eligible individual, over
            ``(2) the amount of such income taxes which would be 
        imposed without regard to the wages referred to in subsection 
        (a).
    ``(f) Termination.--Subsection (a) shall not apply with respect to 
wages paid for services which are provided after the date on which the 
Secretary certifies that the COVID-19 emergency has concluded.''.
    (b) Corresponding Reduction in Federal Highway Funds Paid to 
Service-Recipient States.--The amount made available by the Federal 
Government as Federal highway funds to any service-recipient State (as 
defined in section 36C(d) of the Internal Revenue Code of 1986) shall 
be reduced by the aggregate amount of credits (as estimated by the 
Secretary of the Treasury) allowed under section 36C of the Internal 
Revenue Code of 1986 with respect to income taxes imposed by such 
State.
    (c) Conforming Amendments.--
            (1) Section 6211(b)(4)(A) of such Code is amended by 
        inserting ``36C,'' after ``36B,''.
            (2) Section 1324(b)(2) of title 31, United States Code, is 
        amended by inserting ``36C,'' after ``36B,''.
            (3) The table of sections for subpart C of part IV of 
        subchapter A of chapter 1 of the Internal Revenue Code of 1986 
        is amended by inserting after the item relating to section 36B 
        the following new item:

``Sec. 36C. Credit for State income taxes paid by individuals 
                            temporarily providing certain health or 
                            emergency services.''.
    (d) Effective Date.--The amendments made by this section shall 
apply to wages paid for services provided after March 16, 2020.
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