Title: Paid Sick Leave Credit Act of 2020
Policy area: Taxation

Summary:
Paid Sick Leave Credit Act of 2020
This bill allows employers a payroll tax credit for required sick leave paid to their employees. The credit is equal to the excess of 90% of sick leave wages paid pursuant to the Emergency Paid Sick Leave Act over the aggregate credits allowed to employers for all prior calendar quarters. The bill limits the amount of wages that may be taken into account for purposes of the credit to $511 for any day an employee is on sick leave and $7,156 in the aggregate for any four consecutive calendar quarters.
The bill requires transfers to specified Social Security trust funds to cover any reduction in revenue due to the tax credit allowed by this bill.

[Congressional Bills 116th Congress]
[From the U.S. Government Publishing Office]
[H.R. 6221 Introduced in House (IH)]

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116th CONGRESS
  2d Session
                                H. R. 6221

To allow a tax credit for employers under the Internal Revenue Code of 
               1986 for certain mandated paid sick leave.


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

                             March 12, 2020

   Mr. Harder of California introduced the following bill; which was 
              referred to the Committee on Ways and Means

_______________________________________________________________________

                                 A BILL


 
To allow a tax credit for employers under the Internal Revenue Code of 
               1986 for certain mandated paid sick leave.

    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 ``Paid Sick Leave Credit Act of 
2020''.

SEC. 2. PAYROLL CREDIT FOR REQUIRED PAID SICK LEAVE.

    (a) In General.--In the case of a employer who elects (at such time 
and in such manner as the Secretary may provide) the application of 
this section there shall be allowed as a credit against the tax imposed 
by section 3111(a) of the Internal Revenue Code of 1986 for the first 
calendar quarter beginning after such election an amount equal to the 
excess (if any) of--
            (1) 90 percent of the qualified sick leave wages paid by an 
        employer by reason of the requirements of section 2 of the 
        Emergency Paid Sick Leave Act; over
            (2) the aggregate credits allowed under this section with 
        respect to all prior calendar quarters.
    (b) Limitations.--
            (1) Wages taken into account.--The amount of qualified sick 
        leave wages which may be taken into account under subsection 
        (a) for the taxable year with respect to any individual shall 
        not exceed--
                    (A) for any day (or portion thereof) the individual 
                is on sick leave during the taxable year, $511; and
                    (B) in the aggregate for any four consecutive 
                calendar quarters, $7,156.
            (2) Credit limited to certain employment taxes.--The credit 
        allowed by subsection (a) with respect to any calendar quarter 
        shall not exceed the tax imposed under section 3111(a) for such 
        calendar quarter on the wages paid with respect to the 
        employment of all individuals in the employ of the employer.
            (3) Carryover of unused credit.--If the amount of the 
        credit under subsection (a) exceeds the limitation of paragraph 
        (2) for any calendar quarter, such excess shall be carried to 
        the succeeding calendar quarter and allowed as a credit under 
        subsection (a) for such quarter.
    (c) Qualified Sick Leave Wages.--For purposes of this section--
            (1) In general.--The term ``qualified sick leave wages'' 
        means wages (as defined in section 51(c)(1) of the Internal 
        Revenue Code of 1986, but without regard to section 
        3306(b)(2)(B) of such Code) paid or incurred by an employer to 
        an employee with respect to employment for a period during 
        which such employee is on sick leave with the employer.
            (2) Only additional paid sick time taken into account.--In 
        the case of any employer with a sick leave plan in effect on 
        March 12, 2020, only wages in excess of the wages the employer 
        would have otherwise paid such employee (but for section 2 of 
        the Emergency Paid Sick Leave Act) under such plan shall be 
        taken into account.
            (3) Sick leave wages must meet requirements of act.--Wages 
        shall not be taken into account under this section unless such 
        wages meet the requirements of, and are required by, section 2 
        of the Emergency Paid Sick Leave Act.
    (d) Special Rules.--
            (1) Certain rules to apply.--For purposes of this section, 
        rules similar to the rules of sections 51(i)(1) and 52 of the 
        Internal Revenue Code of 1986 shall apply.
            (2) Related employers.--For purposes of this section, all 
        persons treated as a single employer under subsection (b), (c), 
        (m), or (o) of section 414 of such Code shall be treated as 1 
        employer.
            (3) Denial of double benefit.--No deduction shall be 
        allowed under such Code for the portion of wages paid or 
        incurred for the taxable year which is equal to the sum of the 
        credits determined under this section for calendar quarters 
        ending in such taxable year. Rules similar to the rules under 
        the second sentence of section 280C(a) of such Code shall apply 
        for purposes of the preceding sentence.
    (e) 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 subsection (a). 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 paragraphs not 
been enacted.
    (f) Regulations.--The Secretary shall prescribe such regulations as 
may be necessary to carry out the purposes of this subsection, 
including--
            (1) regulations to prevent the avoidance of the purposes of 
        the limitations and aggregation rules under this subsection 
        through the use of successor companies or other means,
            (2) regulations to minimize compliance and record-keeping 
        burdens under this subsection, and
            (3) regulations 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).
    (g) Termination.--This section shall not apply to any wages paid 
more than 2 years after the date of the effective date of the Emergency 
Paid Sick Leave Act.
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