Title: Rewarding American Workers Act of 2020
Policy area: Taxation

Summary:
Rewarding American Workers Act of 2020
This bill allows employers a payroll tax credit for bonuses paid to employees whose wages did not exceed specified levels during the period beginning on March 13, 2020, and ending on the earlier of July 31, 2020, or the end of the COVID-19 (i.e., coronavirus disease 2019) emergency, and who worked for the entire period.

[Congressional Bills 116th Congress]
[From the U.S. Government Publishing Office]
[H.R. 7058 Introduced in House (IH)]

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116th CONGRESS
  2d Session
                                H. R. 7058

 To provide a payroll tax credit for certain bonuses paid to employees 
         who worked continuously during the COVID-19 pandemic.


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

                              May 28, 2020

Mr. Reed (for himself, Mr. Gottheimer, Mr. Schweikert, and Mr. Cuellar) 
 introduced the following bill; which was referred to the Committee on 
                             Ways and Means

_______________________________________________________________________

                                 A BILL


 
 To provide a payroll tax credit for certain bonuses paid to employees 
         who worked continuously during the COVID-19 pandemic.

    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 ``Rewarding American Workers Act of 
2020''.

SEC. 2. PAYROLL CREDIT FOR BONUSES PAID TO EMPLOYEES WHO WORKED 
              CONTINUOUSLY DURING THE COVID-19 PANDEMIC.

    (a) In General.--In the case of an employer, there shall be allowed 
as a credit against applicable employment taxes for the calendar 
quarter which includes the last day of the covered period an amount 
equal to 100 percent of the qualified bonuses paid to eligible 
employees of such employer during such calendar quarter.
    (b) Qualified Bonus.--For the purposes of this section--
            (1) In general.--The term ``qualified bonus'' means, with 
        respect to any eligible employee of any employer, a 
        supplemental wage (within the meaning of the rules and 
        regulations under section 3402) equal to--
                    (A) in the case of an eligible employee whose 
                annualized covered period wages do not exceed $55,000, 
                an amount equal to the applicable percentage of the 
                wages (as defined in section 3401) paid by such 
                employer to such employee during the covered period, 
                and
                    (B) in the case of an eligible employee whose 
                annualized covered period wages exceed $55,000 but do 
                not exceed $99,000, $600.
            (2) Applicable percentage.--The term ``applicable 
        percentage'' means, with respect to any eligible employee of 
        any employer, 30 percent reduced (but not below zero) by 0.1 
        percent for each $100 that the such employee's annualized 
        covered period wages exceeds $30,000.
            (3) Annualized covered period wages.--The term ``annualized 
        covered period wages'' means, with respect to any eligible 
        employee of any employer, the amount of wages (as defined in 
        section 3401 and determined without regard to any qualified 
        bonuses) which would have been paid to such employee by such 
        employer during a 365-day period if such employee were paid at 
        the same rate during all of such period as such employee was 
        paid during the covered period.
    (c) Eligible Employee.--For purposes of this section, the term 
``eligible employee'' means, with respect to any employer, any employee 
if--
            (1) such employee had taxes withheld by such employer under 
        section 3101 for the entirety of the covered period, and
            (2) such employee's annualized covered period wages do not 
        exceed $99,000.
    (d) Covered Period.--For purposes of this section, the term 
``covered period'' means the period beginning on March 13, 2020, and 
ending on the earlier of July 31, 2020, or the end of the National 
Emergency Concerning the Novel Coronavirus Disease (COVID-19) Outbreak.
    (e) Refundability.--
            (1) 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 eligible employer for 
        such calendar quarter.
            (2) Refundability of excess credit.--
                    (A) In general.--If the amount of the credit under 
                subsection (a) exceeds the limitation of paragraph (1) 
                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.
    (f) Other 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) Secretary.--The term ``Secretary'' means the Secretary 
        of the Treasury or the Secretary's delegate.
            (3) Other terms.--Except as otherwise provided in this 
        section, 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.
    (g) Aggregation Rule.--All persons treated as a single employer 
under subsection (a) or (b) of section 52 of the Internal Revenue Code 
of 1986, or subsection (m) or (o) of section 414 of such Code, shall be 
treated as one employer for purposes of this section.
    (h) 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.
    (i) Election Not To Have Section Apply.--This section shall not 
apply with respect to any eligible 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.
    (j) Third-Party Payors.--Any credit allowed under this section 
shall be treated as a credit described in section 3511(d)(2) of such 
Code.
    (k) 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.
    (l) 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.
    (m) 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), including regulations or guidance 
        allowing such payors to submit documentation necessary to 
        substantiate the eligible employer status of employers that use 
        such payors.
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