Blue Collar Bonus Act of 2021

II 117TH CONGRESS 1ST SESSION S. 536 To amend the Internal Revenue Code of 1986 to provide a credit for wages received by individuals that are less than the median wage. IN THE SENATE OF THE UNITED STATES MARCH 2 (legislative day, MARCH 1), 2021 Mr. HAWLEY introduced the following bill; which was read twice and referred to the Committee on Finance A BILL To amend the Internal Revenue Code of 1986 to provide a credit for wages received by individuals that are less than the median wage. Be it enacted by the Senate and House of Representa- 1 tives of the United States of America in Congress assembled, 2 SECTION 1. SHORT TITLE. 3 This Act may be cited as the ‘‘Blue Collar Bonus Act 4 of 2021’’. 5 SEC. 2. BLUE COLLAR BONUS TAX CREDIT. 6 (a) IN GENERAL.— 7 (1) ALLOWANCE OF CREDIT.—Subpart C of 8 part IV of subchapter A of chapter 1 of the Internal 9 VerDate Sep 11 2014 03:32 Apr 01, 2021 Jkt 019200 PO 00000 Frm 00001 Fmt 6652 Sfmt 6201 E:\BILLS\S536.IS S536 pbinns on DSKJLVW7X2PROD with BILLS 2 •S 536 IS Revenue Code of 1986 is amended by inserting after 1 section 36B the following: 2 ‘‘SEC. 36C. CREDIT FOR WAGES PAID AT A RATE LESS THAN 3 THE MEDIAN WAGE. 4 ‘‘(a) CREDIT ALLOWED.— 5 ‘‘(1) IN GENERAL.—In the case of an indi- 6 vidual, there shall be allowed as a credit against the 7 tax imposed by this subtitle for any taxable year an 8 amount equal to the sum of the amounts determined 9 under paragraph (2) for each individual included on 10 the taxpayer’s return of tax for the taxable year. 11 ‘‘(2) AMOUNT PER INDIVIDUAL.—The amount 12 determined under this paragraph with respect to any 13 individual shall be the product of— 14 ‘‘(A) the blue collar bonus amount of such 15 individual for the taxable year, and 16 ‘‘(B) the number of hours for which the in- 17 dividual performed services for which wages 18 were paid during such taxable year. 19 ‘‘(b) BLUE COLLAR BONUS AMOUNT.—For purposes 20 of this section— 21 ‘‘(1) IN GENERAL.—The term ‘blue collar bonus 22 amount’ means, with respect to any individual for 23 any taxable year, 50 percent of the excess (if any) 24 of— 25 VerDate Sep 11 2014 03:32 Apr 01, 2021 Jkt 019200 PO 00000 Frm 00002 Fmt 6652 Sfmt 6201 E:\BILLS\S536.IS S536 pbinns on DSKJLVW7X2PROD with BILLS 3 •S 536 IS ‘‘(A) the median wage rate for such tax- 1 able year, over 2 ‘‘(B) the average hourly wages received by 3 the individual during the taxable year. 4 ‘‘(2) NON-HOURLY WAGE RATE.—For purposes 5 of paragraph (1)(A), in the case of any individual 6 who is not paid on an hourly wage rate, the wages 7 of such employee shall be prorated to an hourly 8 wage rate under regulations established by the Sec- 9 retary. 10 ‘‘(3) MEDIAN WAGE RATE.— 11 ‘‘(A) IN GENERAL.—The median wage rate 12 is $16.50 per hour. 13 ‘‘(B) ADJUSTMENT.— 14 ‘‘(i) IN GENERAL.—In the case of any 15 taxable year beginning in a calendar year 16 after 2021, the $16.50 amount under sub- 17 paragraph (A) shall each be increased by 18 an amount equal to— 19 ‘‘(I) such dollar amount, multi- 20 plied by 21 ‘‘(II) the cost-of-living adjust- 22 ment determined under section 1(f)(3) 23 for the calendar year in which the tax- 24 able year begins, determined by sub- 25 VerDate Sep 11 2014 03:32 Apr 01, 2021 Jkt 019200 PO 00000 Frm 00003 Fmt 6652 Sfmt 6201 E:\BILLS\S536.IS S536 pbinns on DSKJLVW7X2PROD with BILLS 4 •S 536 IS stituting in subparagraph (A)(ii) 1 thereof ‘calendar year 2020’ for ‘cal- 2 endar year 2016’. 3 ‘‘(ii) ROUNDING.—If any amount as 4 adjusted under paragraph (1) is not a mul- 5 tiple of $0.10, such dollar amount shall be 6 rounded to the next lowest multiple of 7 $0.10. 8 ‘‘(c) NUMBER OF HOURS TAKEN INTO ACCOUNT.— 9 For purposes of subsection (a)(2)(B) and for purposes of 10 determining the average hourly wages of an individual 11 under subsection (b)(1)(B), the number of hours taken 12 into account shall not exceed— 13 ‘‘(1) for any week, 40, and 14 ‘‘(2) for any taxable year, 2080. 15 ‘‘(d) OTHER DEFINITIONS AND SPECIAL RULES.— 16 ‘‘(1) WAGES.—The term ‘wages’ has the mean- 17 ing given such term by subsection (b) of section 18 3306 (determined without regard to any dollar limi- 19 tation contained in such section). 20 ‘‘(2) TREATMENT OF DEPENDENTS.—If a de- 21 duction under section 151 with respect to an indi- 22 vidual is allowed to another taxpayer for a taxable 23 year beginning in the calendar year in which such 24 individual’s taxable year begins, no credit shall be al- 25 VerDate Sep 11 2014 03:32 Apr 01, 2021 Jkt 019200 PO 00000 Frm 00004 Fmt 6652 Sfmt 6201 E:\BILLS\S536.IS S536 pbinns on DSKJLVW7X2PROD with BILLS 5 •S 536 IS lowed under subsection (a) to such individual for 1 such individual’s taxable year. 2 ‘‘(3) NONRESIDENT ALIENS.—This section shall 3 not apply to any taxpayer that is a nonresident alien 4 for the taxable year. 5 ‘‘(e) IDENTIFICATION REQUIREMENT.—No credit 6 shall be allowed under this section to a taxpayer with re- 7 spect to any individual unless the taxpayer includes the 8 social security number of such individual on the return 9 of tax for the taxable year. For purposes of the preceding 10 sentence, the term ‘social security number’ means a social 11 security number issued to an individual by the Social Se- 12 curity Administration, but only if the social security num- 13 ber is issued— 14 ‘‘(1) to a citizen of the United States or pursu- 15 ant to subclause (I) (or that portion of subclause 16 (III) that relates to subclause (I)) of section 17 205(c)(2)(B)(i) of the Social Security Act, and 18 ‘‘(2) before the due date for such return. 19 ‘‘(f) RESTRICTIONS ON TAXPAYERS WHO IMPROP- 20 ERLY CLAIMED CREDIT IN PRIOR YEAR.— 21 ‘‘(1) TAXPAYERS MAKING PRIOR FRAUDULENT 22 OR RECKLESS CLAIMS.— 23 VerDate Sep 11 2014 03:32 Apr 01, 2021 Jkt 019200 PO 00000 Frm 00005 Fmt 6652 Sfmt 6201 E:\BILLS\S536.IS S536 pbinns on DSKJLVW7X2PROD with BILLS 6 •S 536 IS ‘‘(A) IN GENERAL.—No credit shall be al- 1 lowed under this section for any taxable year in 2 the disallowance period. 3 ‘‘(B) DISALLOWANCE PERIOD.—For pur- 4 poses of subparagraph (A), the disallowance pe- 5 riod is the period of 2 taxable years after the 6 most recent taxable year for which there was a 7 final determination that the taxpayer’s claim of 8 credit under this section was due to fraud or to 9 reckless or intentional disregard of rules and 10 regulations. 11 ‘‘(g) RECONCILIATION OF CREDIT AND ADVANCE 12 CREDIT.— 13 ‘‘(1) IN GENERAL.—The amount of the credit 14 allowed under this section to any taxpayer for any 15 taxable year shall be reduced (but not below zero) by 16 the aggregate amount of payments made under sec- 17 tion 7527A to such taxpayer during such taxable 18 year. Any failure to so reduce the credit shall be 19 treated as arising out of a mathematical or clerical 20 error and assessed according to section 6213(b)(1). 21 ‘‘(2) EXCESS ADVANCE PAYMENTS.— 22 ‘‘(A) IN GENERAL.—If the aggregate 23 amount of payments under section 7527A to 24 the taxpayer during the taxable year exceeds 25 VerDate Sep 11 2014 03:32 Apr 01, 2021 Jkt 019200 PO 00000 Frm 00006 Fmt 6652 Sfmt 6201 E:\BILLS\S536.IS S536 pbinns on DSKJLVW7X2PROD with BILLS 7 •S 536 IS the amount of the credit allowed under this sec- 1 tion to such taxpayer for such taxable year (de- 2 termined without regard to paragraph (1)), the 3 tax imposed by this chapter for such taxable 4 year shall be increased by the amount of such 5 excess. Any failure to so increase the tax shall 6 be treated as arising out of a mathematical or 7 clerical error and assessed according to section 8 6213(b)(1). 9 ‘‘(B) SAFE HARBOR BASED ON MODIFIED 10 ADJUSTED GROSS INCOME.— 11 ‘‘(i) IN GENERAL.—Subparagraph (A) 12 shall not apply to any taxpayer whose ad- 13 justed gross income for the taxable year 14 does not exceed $50,000 ($100,000, in the 15 case of a joint return). 16 ‘‘(ii) LIMITATION ON INCREASE.—In 17 the case of a taxpayer whose adjusted 18 gross income exceeds $50,000 ($100,000, 19 in the case of a joint return), the amount 20 of the increase under subparagraph (A) 21 shall not exceed the excess of— 22 ‘‘(I) the adjusted gross income of 23 the taxpayer for the taxable year, over 24 VerDate Sep 11 2014 03:32 Apr 01, 2021 Jkt 019200 PO 00000 Frm 00007 Fmt 6652 Sfmt 6201 E:\BILLS\S536.IS S536 pbinns on DSKJLVW7X2PROD with BILLS 8 •S 536 IS ‘‘(II) $50,000 ($100,000, in the 1 case of a joint return). 2 ‘‘(h) REGULATIONS.—The Secretary may prescribe 3 such rules or other guidance as may be necessary to carry 4 out the purposes of this section and section 7527A, includ- 5 ing— 6 ‘‘(1) rules or guidance related to the treatment 7 of tipped workers, 8 ‘‘(2) rules or guidance related to minimizing 9 compliance and record-keeping burdens, 10 ‘‘(3) rules or guidance related to individuals 11 who receive wages from multiple employers, and 12 ‘‘(4) in consultation with the Secretary of 13 Labor, rules or guidance related to the prevention of 14 reduced wages or hours worked on account of the 15 benefit provided under this section. 16 ‘‘(i) TERMINATION.—This section shall not apply to 17 any taxable year beginning after December 31, 2023.’’. 18 (2) CONFORMING AMENDMENTS.— 19 (A) Paragraph (2) of section 1324(b) of 20 title 31, United States Code, is amended by in- 21 serting ‘‘36C,’’ after ‘‘36B,’’. 22 (B) The table of sections for subpart C of 23 part IV of subchapter A of chapter 1 of such 24 VerDate Sep 11 2014 03:32 Apr 01, 2021 Jkt 019200 PO 00000 Frm 00008 Fmt 6652 Sfmt 6201 E:\BILLS\S536.IS S536 pbinns on DSKJLVW7X2PROD with BILLS 9 •S 536 IS Code is amended by inserting after the item re- 1 lated to section 36B the following new item: 2 ‘‘Sec. 36C. Credit for wages paid at a rate less than the median wage.’’. (b) ADVANCE PAYMENT OF CREDIT.— 3 (1) IN GENERAL.—Chapter 77 of such Code is 4 amended by inserting after section 7527 the fol- 5 lowing new section: 6 ‘‘SEC. 7527A. ADVANCE PAYMENT OF WAGE TAX CREDIT. 7 ‘‘(a) IN GENERAL.—As soon as practical but not 8 later than 90 days after the date of the enactment of this 9 section, the Secretary shall establish a program for mak- 10 ing periodic payments to taxpayers in an amount equal 11 to the amount of the credit the taxpayer would receive 12 under section 36C if the last day of the taxable year were 13 the last day of the applicable period for which the payment 14 is made. 15 ‘‘(b) LENGTH OF PERIOD.—Payments under the pro- 16 gram established under subsection (a) shall be made not 17 less than quarterly. 18 ‘‘(c) ADJUSTMENTS.—The Secretary may adjust the 19 amount of any payment to properly take into account the 20 amount by which any payment made before such date was 21 greater than or less than the amount that such payment 22 would have been on the basis of data for any subsequent 23 period. 24 VerDate Sep 11 2014 03:32 Apr 01, 2021 Jkt 019200 PO 00000 Frm 00009 Fmt 6652 Sfmt 6201 E:\BILLS\S536.IS S536 pbinns on DSKJLVW7X2PROD with BILLS 10 •S 536 IS ‘‘(d) INFORMATION REPORTING.—The Secretary 1 shall require the submission of additional information con- 2 cerning the wages paid by employers for purposes of pro- 3 viding advance payments under this section. Such infor- 4 mation may be provided as part of existing reporting re- 5 quirements. 6 ‘‘(e) ON-LINE INFORMATION PORTAL.—The Sec- 7 retary shall establish an on-line portal which allows tax- 8 payers to— 9 ‘‘(1) elect not to receive payments under this 10 section, and 11 ‘‘(2) provide such information as the Secretary 12 may require to facilitate an advance payment of the 13 credit to the eligible individual. 14 ‘‘(f) NOTICE OF PAYMENTS.—Not later than January 15 31 of the calendar year following any calendar year during 16 which the Secretary makes one or more payments to any 17 taxpayer under this section, the Secretary shall provide 18 such taxpayer with a written notice which includes the tax- 19 payer’s taxpayer identity (as defined in section 20 6103(b)(6)), the aggregate amount of such payments 21 made to such taxpayer during such calendar year, and 22 such other information as the Secretary determines appro- 23 priate. 24 ‘‘(g) ADMINISTRATIVE PROVISIONS.— 25 VerDate Sep 11 2014 03:32 Apr 01, 2021 Jkt 019200 PO 00000 Frm 00010 Fmt 6652 Sfmt 6201 E:\BILLS\S536.IS S536 pbinns on DSKJLVW7X2PROD with BILLS 11 •S 536 IS ‘‘(1) APPLICATION OF DIRECT DEPOSIT RE- 1 QUIREMENT.—Solely for purposes of section 3332 of 2 title 31, United States Code (and notwithstanding 3 the last sentence of subsection (j)(3) thereof), the 4 payments made by the Secretary under subsection 5 (a) shall be treated as Federal payments. 6 ‘‘(2) DELIVERY OF PAYMENTS.—Notwith- 7 standing any other provision of law, the Secretary 8 may certify and disburse refunds payable under this 9 section electronically to— 10 ‘‘(A) any account to which the payee re- 11 ceived or authorized, on or after January 1, 12 2019, a refund of taxes under this title or a 13 Federal payment (as defined in section 3332 of 14 title 31, United States Code), 15 ‘‘(B) any account belonging to a payee 16 from which that individual, on or after January 17 1, 2019, made a payment of taxes under this 18 title, or 19 ‘‘(C) any Treasury-sponsored account (as 20 defined in section 208.2 of title 31, Code of 21 Federal Regulations). 22 ‘‘(3) WAIVER OF CERTAIN RULES.—Notwith- 23 standing section 3325 of title 31, United States 24 Code, or any other provision of law, with respect to 25 VerDate Sep 11 2014 03:32 Apr 01, 2021 Jkt 019200 PO 00000 Frm 00011 Fmt 6652 Sfmt 6201 E:\BILLS\S536.IS S536 pbinns on DSKJLVW7X2PROD with BILLS 12 •S 536 IS any payment of a refund under this section, a dis- 1 bursing official in the executive branch of the United 2 States Government may modify payment information 3 received from an officer or employee described in 4 section 3325(a)(1)(B) of such title for the purpose 5 of facilitating the accurate and efficient delivery of 6 such payment. Except in cases of fraud or reckless 7 neglect, no liability under section 3325, 3527, 3528, 8 or 3529 of title 31, United States Code, shall be im- 9 posed with respect to payments made under this 10 paragraph. 11 ‘‘(4) EXCEPTION FROM REDUCTION OR OFF- 12 SET.—Any payment made to any individual under 13 this section shall not be— 14 ‘‘(A) subject to reduction or offset pursu- 15 ant to section 3716 or 3720A of title 31, 16 United States Code, 17 ‘‘(B) subject to reduction or offset pursu- 18 ant to subsection (d), (e), or (f) of section 19 6402, or 20 ‘‘(C) reduced or offset by other assessed 21 Federal taxes that would otherwise be subject 22 to levy or collection.’’. 23 (2) CONFORMING AMENDMENTS.— 24 VerDate Sep 11 2014 03:32 Apr 01, 2021 Jkt 019200 PO 00000 Frm 00012 Fmt 6652 Sfmt 6201 E:\BILLS\S536.IS S536 pbinns on DSK [Text truncated for display. Full text available on Congress.gov.]