Title: Patriot Bonus Tax Credit Act of 2020
Policy area: Taxation

Summary:
Patriot Bonus Tax Credit Act of 2020
This bill allows employers a employment tax credit for qualified bonuses paid to their employees after March 12, 2020, and before January 1, 2021. The credit is equal to 50% of such bonuses paid in a calendar quarter taking into account not more than $25,000 for any employee for all calendar quarters.
The bill defines qualified bonus as wages paid to an employee that include overtime or hazardous pay, supplemental payments made for the convenience of the employer, payments to retain staff at essential facilities, or other payments made to employees due to extraordinary businesses and economic conditions.

[Congressional Bills 116th Congress]
[From the U.S. Government Publishing Office]
[H.R. 6629 Introduced in House (IH)]

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116th CONGRESS
  2d Session
                                H. R. 6629

   To provide a payroll tax credit to employers for employee bonuses.


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

                             April 28, 2020

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

_______________________________________________________________________

                                 A BILL


 
   To provide a payroll tax credit to employers for employee bonuses.

    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 ``Patriot Bonus Tax Credit Act of 
2020''.

SEC. 2. PAYROLL TAX CREDIT TO EMPLOYERS FOR EMPLOYEE BONUSES.

    (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 50 percent of the qualified bonuses with 
respect to each employee of such employer for such calendar quarter.
    (b) Limitations and Refundability.--
            (1) Bonuses taken into account.--The amount of qualified 
        bonuses with respect to any employee which may be taken into 
        account under subsection (a) by the employer for all calendar 
        quarters shall not exceed $25,000.
            (2) Credit limited to employment taxes.--The credit allowed 
        by subsection (a) with respect to any calendar quarter shall 
        not exceed the applicable employment taxes (reduced by any 
        credits allowed under subsections (e) and (f) of section 3111 
        of the Internal Revenue Code of 1986, sections 7001 and 7003 of 
        the Families First Coronavirus Response Act, and section 2301 
        of the CARES Act) 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 the 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) Definitions.--For purposes of this section--
            (1) Applicable employment taxes.--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.
            (2) Qualified bonus.--The term ``qualified bonus'' means 
        any wages paid by an employer to an employee for any period 
        with respect to a period for which such employee is providing 
        services to such employer. Such term shall not include any 
        wages except to the extent that such wages are in excess of the 
        wages which would ordinarily be paid to such employee. Wages 
        not ordinarily paid to an employee include amounts paid by the 
        employer in excess of the necessary and customary amounts paid 
        to the employee under normal business circumstances. Such 
        amounts include, but are not limited to, extraordinary payments 
        for overtime or hazardous pay, supplemental payments or 
        allowances given to the employee whether for the convenience of 
        the employer or otherwise, sequestration payments to retain 
        staff at essential facilities, or other payments for services 
        rendered which the employee would not be accustomed to 
        receiving absent the extraordinary business and economic 
        conditions existing during the applicable period.
            (3) Secretary.--The term ``Secretary'' means the Secretary 
        of the Treasury or the Secretary's delegate.
            (4) Wages.--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).
            (5) Other terms.--Any term used in this section which is 
        also used in chapter 21 or 22 of the Internal Revenue Code of 
        1986 shall have the same meaning as when used in such chapter.
    (d) Certain Rules To Apply.--For purposes of this section, rules 
similar to the rules of sections 51(i)(1) and 280C(a) of the Internal 
Revenue Code of 1986 shall apply.
    (e) Certain Governmental Employers.--This credit shall not apply to 
the Government of the United States, the government of any State or 
political subdivision thereof, or any agency or instrumentality of any 
of the foregoing.
    (f) Election Not To Have Section Apply.--This section shall not 
apply with respect to any employer for any calendar quarter if such 
employer elects (at such time and in such manner as the Secretary may 
prescribe) not to have this section apply.
    (g) Third-Party Payors.--Any credit allowed under this section 
shall be treated as a credit described in section 3511(d)(2) of such 
Code.
    (h) Transfers to Federal Old-Age and Survivors Insurance Trust 
Fund.--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. 14 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.
    (i) Treatment of Deposits.--The Secretary shall waive any penalty 
under section 6656 of the Internal Revenue Code of 1986 for any failure 
to make a deposit of any applicable employment taxes if the Secretary 
determines that such failure was due to the reasonable anticipation of 
the credit allowed under this section.
    (j) Regulations and Guidance.--The Secretary shall issue such 
forms, instructions, regulations, and guidance as are necessary--
            (1) to allow the advance payment of the credit 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 advanced at the time of filing the 
        return of tax for the applicable calendar quarter or taxable 
        year; and
            (3) with respect to the application of the credit under 
        subsection (a) to third-party payors (including professional 
        employer organizations, certified professional employer 
        organizations, or agents under section 3504 of the Internal 
        Revenue Code of 1986).
    (k) Application.--This section shall only apply to qualified 
bonuses paid after March 12, 2020, and before January 1, 2021.
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