A bill to amend the Tax Equity and Fiscal Responsibility Act of 1982 with respect to the effect of the 1985 increase in the Federal unemployment tax rate on certain small business provisions contained in State unemployment compensation laws.
PL 98-601 (H.R.6112), enacted 10/30/1984

PUBLIC LAW 98-601—OCT. 30, 1984 
98 STAT. 3147 
Public Law 98-601 
98th Congress 
An Act 
To amend the Tax Equity and Fiscal Responsibility Act of 1982 with respect to the 
Q-X QQ ^004 
effect of the 1985 increase in the Federal unemployment tax rate on certain snuall 
' 
business provisions contained in State unemployment compensation laws. 
[H.R. 6112] 
Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled, That (a) the subsec-
tion (b) of section 271 of the Tax Equity and Fiscal Responsibility 
Act of 1982, relating to effective dates for such section, is redesig- 
26 use 3301 
nated as subsection (d) and is amended by adding at the end thereof 
note, 3302 note, 
the following new paragraph: 
"(4) TRANSITIONAL RULE FOR CERTAIN SMALL BUSINESSES.— 
26 use 3302 
"(A) IN GENERAL.—Notwithstanding section 3303 of the 
note. 
Internal Revenue Code of 1954, in the case of taxable years 
26 use 3303. 
beginning after December 31, 1984, and before January 1, 
1989, a taxpayer shall be allowed the additional credit 
under section 3302(b) of such Code with respect to any 
employee covered by a qualified small business provision if 
the requirements of subparagraph (B) are met with respect 
to such employee. 
"(B) REQUIREMENTS.—The requirements of this subpara-
graph are met for any taxable year with respect to any 
employee covered by a qualified small business provision if 
the amount of contributions required to be paid for the 
taxable year to the unemployment fund of the State with 
respect to such employee are not less than the product of 
the required rate multiplied by the wages paid by the 
employer during the taxable year. 
(C) REQUIRED RATE.—For purposes of subparagraph (B), 
the required rate for any taxable year is the sum of— 
(i) 3.1 percent, plus 
"(ii) the applicable percentage (as defined in para-
graph (3)(D)) of the excess of 5.4 percent over the rate 
described in clause (i). 
"(D) QUALIFIED SMALL BUSINESS PROVISION.—For purposes 
of this paragraph, the term 'qualified small business provi-
sion' means a provision contained in a State unemployment 
compensation law (as in effect on the date of the enactment 
of this paragraph) which provides a maximum rate at 
which an employer is subject to contribution for wages paid 
during a calendar quarter if the total wages paid by such 
employer during such calendar quarter are less than 
$50,000. 
"(E) DEFINITION.—For purposes of this paragraph, the 
term 'wages' means the remuneration subject to contribu-
tions under the State unemployment compensation law, 
except that for purposes of subparagraph (D) the amount of 
98 STAT. 3148 
PUBLIC LAW 98-601—OCT. 30, 1984 
total wages paid by an employer shall be determined with-
out regard to any limitation on the amount subject to 
contribution." 
Effective date. 
(b) The amendment made by subsection (a) shall apply to remu-
26^usc 3302 
neration paid after December 31,1984. 
Approved October 30, 1984. 
LEGISLATIVE HISTORY—H.R. 6112: 
HOUSE REPORT No. 98-1043 (Comm. on Ways and Means). 
CONGRESSIONAL RECORD, Vol. 130 (1984): 
Oct. 1, considered and passed House. 
Oct. 11, considered and passed Senate.