Title: Providing Essentials for Frontline Workers Act
Policy area: Taxation

Summary:
Providing Essentials for Frontline Workers Act
This bill allows an employer a payroll tax credit for certain pandemic-related employee benefit expenses paid by such employer after March 12, 2020, and before January 1, 2021. The amount of such credit is 50% of the pandemic-related expenses of essential employees and 30% for other employees. The amount of expenses taken into account for purposes of the credit for any employee may not exceed $5,000 in any calendar quarter.
The bill defines qualified pandemic-related employee benefit expenses as amounts paid to an employee that are excludible from gross income as disaster relief payments related to COVID-19 (i.e., coronavirus disease 2019) and that the employee has elected to treat as a pandemic-related expense.
The credit is not allowed to the federal government or its agencies, except for tax-exempt organizations.

[Congressional Bills 116th Congress]
[From the U.S. Government Publishing Office]
[H.R. 6787 Introduced in House (IH)]

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116th CONGRESS
  2d Session
                                H. R. 6787

   To provide a payroll credit for certain pandemic-related employee 
                  benefit expenses paid by employers.


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

                              May 8, 2020

 Ms. Sanchez introduced the following bill; which was referred to the 
                      Committee on Ways and Means

_______________________________________________________________________

                                 A BILL


 
   To provide a payroll credit for certain pandemic-related employee 
                  benefit expenses paid by employers.

    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 ``Providing Essentials for Frontline 
Workers Act''.

SEC. 2. PAYROLL CREDIT FOR CERTAIN PANDEMIC-RELATED EMPLOYEE BENEFIT 
              EXPENSES PAID BY EMPLOYERS.

    (a) In General.--In the case of an employer, there shall be allowed 
as a credit against applicable employment taxes for each calendar 
quarter an amount equal to the applicable percentage of the qualified 
pandemic-related employee benefit expenses paid by such employer with 
respect to such calendar quarter.
    (b) Limitations and Refundability.--
            (1) Dollar limitation per employee.--The qualified 
        pandemic-related employee benefit expenses which may be taken 
        into account under subsection (a) with respect to any employee 
        for any calendar quarter shall not exceed $5,000.
            (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, 
        and section 2301 of the CARES Act, for such quarter) on the 
        wages paid with respect to the employment of all the employees 
        of the 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) Qualified Pandemic-Related Employee Benefit Expenses.--For 
purposes of this section, the term ``qualified pandemic-related 
employee benefit expenses'' means any amount paid to or for the benefit 
of an employee in the employment of the employer if--
            (1) such amount is excludible from the gross income of the 
        employee under section 139 of the Internal Revenue Code of 1986 
        by reason of being a qualified disaster relief payment 
        described in subsection (b)(1) of such section with respect to 
        a qualified disaster described in subsection (c)(2) of such 
        section which was declared by reason of COVID-19, and
            (2) the employer elects (at such time and in such manner as 
        the Secretary may provide) to treat such amount as a qualified 
        pandemic-related employee benefit expense.
    (d) Applicable Percentage.--For purposes of this section--
            (1) In general.--The term ``applicable percentage'' means--
                    (A) 50 percent, in the case of qualified pandemic-
                related employee benefit expenses paid with respect to 
                an essential employee, and
                    (B) 30 percent, in any other case.
            (2) Essential employee.--The term ``essential employee'' 
        means, with respect to any employer for any calendar quarter, 
        any employee of such employer if a substantial portion of the 
        services performed by such employee for such employer during 
        such calendar quarter are essential work.
            (3) Essential work.--Not later than 30 days after the date 
        of the enactment of this Act, the Director of the Cybersecurity 
        and Infrastructure Security Agency shall issue a definition of 
        essential work for the purposes of this section. In defining 
        the term ``essential work'', the Cybersecurity and 
        Infrastructure Security Agency shall take into consideration 
        its April 17th ``Advisory Memorandum on Identification of 
        Essential Critical Infrastructure Workers During Covid-19 
        Response'' and shall solicit public input.
    (e) Special Rules; Other Definitions.--
            (1) Application of certain non-discrimination rules.--No 
        credit shall be allowed under this section to any employer for 
        any calendar quarter if qualified pandemic-related employee 
        benefit expenses are provided by such employer to employees for 
        such calendar quarter in a manner which discriminates in favor 
        of highly compensated individuals (within the meaning of 
        section 125) as to eligibility for, or the amount of, such 
        benefit expenses. An employer may elect with respect to any 
        calendar quarter to apply this paragraph separately with 
        respect to essential employees and with respect to all other 
        employees.
            (2) Denial of double benefit.--For purposes of chapter 1 of 
        such Code, no deduction or credit (other than the credit 
        allowed under this section) shall be allowed for so much of 
        qualified pandemic-related employee benefit expenses as is 
        equal to the credit allowed under this section.
            (3) Third party payors.--Any credit allowed under this 
        section shall be treated as a credit described in section 
        3511(d)(2) of such Code.
            (4) Applicable employment taxes.--For purposes of this 
        section, 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.
            (5) Secretary.--For purposes of this section, the term 
        ``Secretary'' means the Secretary of the Treasury or the 
        Secretary's delegate.
            (6) Certain terms.--
                    (A) In general.--Any term used in this section 
                which is also used in chapter 21 or 22 of such Code 
                shall have the same meaning as when used in such 
                chapter (as the case may be).
                    (B) Certain provisions not taken into account 
                except for purposes of limiting credit to employment 
                taxes.--For purposes of subparagraph (A) (other than 
                with respect to subsection (b)(2)), section 3121(b) of 
                such Code shall be applied without regard to paragraphs 
                (1), (5), (6), (7), (8), (10), (13), (18), (19), and 
                (22) thereof (except with respect to services performed 
                in a penal institution by an inmate thereof) and 
                section 3231(e)(1) shall be applied without regard to 
                the sentence that begins ``Such term does not include 
                remuneration''.
    (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.
    (g) 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.
    (h) Regulations.--The Secretary shall prescribe such regulations or 
other guidance as may be necessary to carry out the purposes of this 
section, including regulations or other guidance--
            (1) to allow the advance payment of the credit determined 
        under subsection (a), subject to the limitations provided in 
        this section, based on such information as the Secretary shall 
        require,
            (2) 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) 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), and
            (4) with respect to the application of the credit to third 
        party payors (including professional employer organizations, 
        certified professional employer organizations, or agents under 
        section 3504 of such Code), including to allow such payors to 
        submit documentation necessary to substantiate eligibility for, 
        and the amount of, the credit allowed under this section.
    (i) Application of Section.--This section shall apply only to 
qualified pandemic-related employee benefit expenses paid after March 
12, 2020, and before January 1, 2021.
    (j) 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.
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