Title: JOBS Credit Act of 2020
Policy area: Taxation

Summary:
Jumpstarting Our Businesses' Success Credit Act of 2020 or the JOBS Credit Act of 2020
This bill increases the employer tax credit for the retention of employees and coordinates such credit with the Payroll Protection Program. Specifically, it increases the rate of the employee retention credit to 80% of up to $15,000 in employee wages per calendar quarter with an increased annual wage cap of $45,000 for all calendar quarters. The bill increases the maximum credit amount to $36,000.
The bill expands the definition of large employer, for credit eligibility purposes, to include employers with more than 1,500 employees and more than $41.5 million in gross receipts in 2019, and requires employers to show a significant decline in gross receipts. It also extends eligibility for the credit to state governmental agencies and Indian tribal governments.
The bill also coordinates the credit with the Paycheck Protection Program to allow employers to claim both programs subject to certain restrictions.

[Congressional Bills 116th Congress]
[From the U.S. Government Publishing Office]
[H.R. 6776 Introduced in House (IH)]

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116th CONGRESS
  2d Session
                                H. R. 6776

   To provide for improvements related to the employee retention tax 
                                credit.


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

                              May 8, 2020

   Mrs. Murphy of Florida (for herself, Mr. Katko, Ms. DelBene, Mr. 
 Fitzpatrick, and Mr. Pappas) introduced the following bill; which was 
  referred to the Committee on Ways and Means, and in addition to the 
Committee on Small Business, for a period to be subsequently determined 
 by the Speaker, in each case for consideration of such provisions as 
        fall within the jurisdiction of the committee concerned

_______________________________________________________________________

                                 A BILL


 
   To provide for improvements related to the employee retention tax 
                                credit.

    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 ``Jumpstarting Our Businesses' Success 
Credit Act of 2020'' or as the ``JOBS Credit Act of 2020''.

SEC. 2. IMPROVEMENTS TO EMPLOYEE RETENTION CREDIT.

    (a) Increase in Credit Percentage.--Section 2301(a) of the CARES 
Act is amended by striking ``50 percent'' and inserting ``80 percent''.
    (b) Increase in Per Employee Limitation.--Section 2301(b)(1) of the 
CARES Act is amended by striking ``for all calendar quarters shall not 
exceed $10,000.'' and inserting ``shall not exceed--
                    ``(A) $15,000 in any calendar quarter, and
                    ``(B) $45,000 in the aggregate for all calendar 
                quarters.''.
    (c) Modification of Threshold for Treatment as a Large Employer.--
            (1) In general.--Section 2301(c)(3)(A) of the CARES Act is 
        amended--
                    (A) by striking ``for which the average number of 
                full-time employees (within the meaning of section 
                4980H of the Internal Revenue Code of 1986) employed by 
                such eligible employer during 2019 was greater than 
                100'' in clause (i) and inserting ``which is a large 
                employer'', and
                    (B) by striking ``for which the average number of 
                full-time employees (within the meaning of section 
                4980H of the Internal Revenue Code of 1986) employed by 
                such eligible employer during 2019 was not greater than 
                100'' in clause (ii) and inserting ``which is not a 
                large employer''.
            (2) Large employer defined.--Section 2301(c) of the CARES 
        Act is amended by redesignating paragraph (6) as paragraph (7) 
        and by inserting after paragraph (5) the following new 
        paragraph:
            ``(6) Large employer.--The term `large employer' means any 
        eligible employer if--
                    ``(A) the average number of full-time 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) employed by such eligible employer during 
                calendar year 2019 was greater than 1,500, and
                    ``(B) the gross receipts (within the meaning of 
                section 448(c) of the Internal Revenue Code of 1986) of 
                such eligible employer during calendar year 2019 was 
                greater than $41,500,000.''.
    (d) Phase-In of Eligibility Based on Reduction in Gross Receipts.--
            (1) Decrease of reduction in gross receipts necessary to 
        qualify for credit.--Section 2301(c)(2)(B)(i) of the CARES Act 
        is amended by striking ``50 percent'' and inserting ``80 
        percent''.
            (2) Phase-in of credit if reduction in gross receipts is 
        less than 50 percent.--Section 2301(c)(2) of the CARES Act is 
        amended by adding at the end the following new subparagraph:
                    ``(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) Gross receipts of tax-exempt organizations.--Section 
        2301(c)(2)(C) of the CARES Act is amended--
                    (A) by striking ``of such Code, clauses (i) and 
                (ii)(I)'' and inserting ``of such Code--
                            ``(i) clauses (i) and (ii)(I)'',
                    (B) by striking the period at the end and inserting 
                ``, and'', and
                    (C) by adding at the end the following new clause:
                            ``(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 such Code.''.
    (e) Modification of Treatment of Health Plan Expenses.--
            (1) In general.--Section 2301(c)(5) of the CARES Act is 
        amended to read as follows:
            ``(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).
                    ``(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.''.
            (2) Conforming amendment.--Section 2301(c)(3) of the CARES 
        Act is amended by striking subparagraph (C).
    (f) Qualified Wages Permitted To Include Amounts for Tip 
Replacement.--
            (1) In general.--Section 2301(c)(3)(B) of the CARES Act is 
        amended by inserting ``(including tips which would have been 
        deemed to be paid by the employer under section 3121(q))'' 
        after ``would have been paid''.
            (2) Conforming amendment.--Section 2301(h)(2) of the CARES 
        Act is amended by inserting ``45B or'' before ``45S''.
    (g) Certain Governmental Employers Eligible for Credit.--
            (1) In general.--Section 2301(f) of the CARES Act is 
        amended to read as follows:
    ``(f) Certain Governmental Employers.--
            ``(1) In general.--The credit under this section shall not 
        be allowed to the Federal Government or any agency or 
        instrumentality thereof.
            ``(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.
            ``(3) Special rules.--In the case of any State government, 
        Indian tribal government, or any agency, instrumentality, or 
        political subdivision of the foregoing--
                    ``(A) clauses (i) and (ii)(I) of subsection 
                (c)(2)(A) shall apply to all operations of such entity, 
                and
                    ``(B) subclause (II) of subsection (c)(2)(A)(ii) 
                shall not apply.''.
            (2) Coordination with application of certain definitions.--
                    (A) In general.--Section 2301(c)(5)(A) of the CARES 
                Act, as amended by the preceding provisions of this 
                Act, is amended by adding at the end the following: 
                ``For purposes of the preceding sentence (other than 
                for purposes of subsection (b)(2)), wages as defined in 
                section 3121(a) of the Internal Revenue Code of 1986 
                shall be determined without regard to paragraphs (1), 
                (5), (6), (7), (8), (10), (13), (18), (19), and (22) of 
                section 3212(b) of such Code (except with respect to 
                services performed in a penal institution by an inmate 
                thereof).''.
                    (B) Conforming amendments.--Sections 2301(c)(6) of 
                the CARES Act is amended by striking ``Any term'' and 
                inserting ``Except as otherwise provided in this 
                section, any term''.
    (h) Effective Date.--The amendments made by this section shall take 
effect as if included in section 2301 of the CARES Act.

SEC. 3. IMPROVED COORDINATION BETWEEN PAYCHECK PROTECTION PROGRAM AND 
              EMPLOYEE RETENTION TAX CREDIT.

    (a) Amendment to Paycheck Protection Program.--Section 1106(a)(8) 
of the CARES Act is amended by inserting ``, except that such costs 
shall not include qualified wages taken into account in determining the 
credit allowed under section 2301 of this Act'' before the period at 
the end.
    (b) Amendments to Employee Retention Tax Credit.--
            (1) In general.--Section 2301(g) of the CARES Act is 
        amended to read as follows:
    ``(g) Election To Not Take Certain Wages Into Account.--
            ``(1) In general.--This section shall not apply to 
        qualified wages paid by an eligible employer with respect to 
        which such employer makes an election (at such time and in such 
        manner as the Secretary may prescribe) to have this section not 
        apply to such wages.
            ``(2) Coordination with paycheck protection program.--The 
        Secretary, in consultation with the Administrator of the Small 
        Business Administration, shall issue guidance providing that 
        payroll costs paid or incurred during the covered period shall 
        not fail to be treated as qualified wages 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.''.
            (2) Conforming amendments.--
                    (A) Section 2301 of the CARES Act is amended by 
                striking subsection (j).
                    (B) Section 2301(l) of the CARES Act is amended by 
                striking paragraph (3) and by redesignating paragraphs 
                (4) and (5) as paragraphs (3) and (4), respectively.
    (c) Effective Date.--The amendments made by this section shall take 
effect as if included in the provisions of the CARES Act to which they 
relate.
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