Veterans Back to Work Act of 2019

I 116TH CONGRESS 1ST SESSION H. R. 5250 To amend the Internal Revenue Code of 1986 to make permanent the work opportunity tax credit for veterans and to allow an exemption from an employer’s employment taxes in an amount equivalent to the value of such credit in the case of veterans. IN THE HOUSE OF REPRESENTATIVES NOVEMBER 21, 2019 Mr. WRIGHT (for himself and Mr. BISHOP of Georgia) introduced the following bill; which was referred to the Committee on Ways and Means A BILL To amend the Internal Revenue Code of 1986 to make permanent the work opportunity tax credit for veterans and to allow an exemption from an employer’s employ- ment taxes in an amount equivalent to the value of such credit in the case of veterans. 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 ‘‘Veterans Back to Work 4 Act of 2019’’. 5 VerDate Sep 11 2014 21:50 Dec 04, 2019 Jkt 099200 PO 00000 Frm 00001 Fmt 6652 Sfmt 6201 E:\BILLS\H5250.IH H5250 kjohnson on DSK79L0C42 with BILLS 2 •HR 5250 IH SEC. 2. EXTENSION AND IMPROVEMENT OF WORK OPPOR- 1 TUNITY TAX CREDIT FOR VETERANS. 2 (a) CREDIT MADE PERMANENT FOR VETERANS.— 3 Section 51(c)(4) of the Internal Revenue Code of 1986 4 is amended by inserting ‘‘(other than a qualified veteran)’’ 5 after ‘‘an individual’’. 6 (b) ELECTION TO CLAIM CREDIT AS EXEMPTION 7 FROM EMPLOYMENT TAXES.— 8 (1) IN GENERAL.—Section 3111 of the Internal 9 Revenue Code of 1986 is amended by adding at the 10 end the following new subsection: 11 ‘‘(g) SPECIAL EXEMPTION FOR CERTAIN VET- 12 ERANS.— 13 ‘‘(1) IN GENERAL.—Subsection (a) shall not 14 apply to first-year wages paid after the date of the 15 enactment of this subsection by a qualified employer 16 with respect to employment of any specified veteran 17 for services performed— 18 ‘‘(A) in a trade or business of such quali- 19 fied employer, or 20 ‘‘(B) in the case of a qualified employer ex- 21 empt from tax under section 501(a), in further- 22 ance of the activities related to the purpose or 23 function constituting the basis of the employer’s 24 exemption under section 501. 25 VerDate Sep 11 2014 21:50 Dec 04, 2019 Jkt 099200 PO 00000 Frm 00002 Fmt 6652 Sfmt 6201 E:\BILLS\H5250.IH H5250 kjohnson on DSK79L0C42 with BILLS 3 •HR 5250 IH ‘‘(2) LIMITATION.—With respect to any speci- 1 fied veteran employed by a qualified employer, the 2 amount of wages to which paragraph (1) applies 3 shall not exceed— 4 ‘‘(A) $125,490 in the case of an individual 5 who is a qualified veteran by reason of section 6 51(d)(3)(A)(ii)(II), 7 ‘‘(B) $73,203 in the case of an individual 8 who is a qualified veteran by reason of section 9 51(d)(3)(A)(iv), 10 ‘‘(C) $62,745 in the case of an individual 11 who is a qualified veteran by reason of section 12 51(d)(3)(A)(ii)(I), and 13 ‘‘(D) $31,373 in the case of any other 14 qualified veteran. 15 ‘‘(3) QUALIFIED EMPLOYER.—For purposes of 16 this subsection— 17 ‘‘(A) IN GENERAL.—The term ‘qualified 18 employer’ means any employer other than the 19 United States, any State, or any political sub- 20 division thereof, or any instrumentality of the 21 foregoing. 22 ‘‘(B) TREATMENT OF EMPLOYEES OF 23 POST-SECONDARY EDUCATIONAL INSTITU- 24 TIONS.—Notwithstanding subparagraph (A), 25 VerDate Sep 11 2014 21:50 Dec 04, 2019 Jkt 099200 PO 00000 Frm 00003 Fmt 6652 Sfmt 6201 E:\BILLS\H5250.IH H5250 kjohnson on DSK79L0C42 with BILLS 4 •HR 5250 IH the term ‘qualified employer’ includes any em- 1 ployer which is a public institution of higher 2 education (as defined in section 101(b) of the 3 Higher Education Act of 1965). 4 ‘‘(4) SPECIFIED VETERAN.—For purposes of 5 this subsection— 6 ‘‘(A) IN GENERAL.—The term ‘specified 7 veteran’ means any individual who— 8 ‘‘(i) begins employment with a quali- 9 fied employer after the date of the enact- 10 ment of this subsection, 11 ‘‘(ii) certifies by signed affidavit, 12 under penalties of perjury, that such indi- 13 vidual is a qualified veteran and whether 14 such individual is a qualified veteran de- 15 scribed in subparagraph (A), (B), or (C) of 16 paragraph (2), 17 ‘‘(iii) is not employed by the qualified 18 employer to replace another employee of 19 such employer unless such other employee 20 separated from employment voluntarily or 21 for cause, and 22 ‘‘(iv) is not an individual described in 23 section 51(i)(1) (applied by substituting 24 VerDate Sep 11 2014 21:50 Dec 04, 2019 Jkt 099200 PO 00000 Frm 00004 Fmt 6652 Sfmt 6201 E:\BILLS\H5250.IH H5250 kjohnson on DSK79L0C42 with BILLS 5 •HR 5250 IH ‘qualified employer’ for ‘taxpayer’ each 1 place it appears). 2 ‘‘(B) QUALIFIED VETERAN.—The term 3 ‘qualified veteran’ has the meaning given such 4 term by section 51(d)(3), but applied without 5 regard to whether such individual has been cer- 6 tified by the designated local agency. 7 ‘‘(5) FIRST-YEAR WAGES.—For purposes of this 8 subsection, the term ‘first-year wages’ means, with 9 respect to any individual, wages for services ren- 10 dered during the 1-year period beginning with the 11 day the individual begins work for the employer. 12 ‘‘(6) COORDINATION WITH CREDIT FOR EM- 13 PLOYMENT OF QUALIFIED VETERANS BY QUALIFIED 14 TAX-EXEMPT ORGANIZATIONS.—This subsection 15 shall not apply with respect to the first-year wages 16 of any individual if such wages are taken into ac- 17 count in determining the credit allowed under sub- 18 section (e). 19 ‘‘(7) ELECTION.—A qualified employer may 20 elect to have this subsection not apply with respect 21 to the first-year wages of any individual. Such elec- 22 tion shall be made in such manner as the Secretary 23 may require.’’. 24 VerDate Sep 11 2014 21:50 Dec 04, 2019 Jkt 099200 PO 00000 Frm 00005 Fmt 6652 Sfmt 6201 E:\BILLS\H5250.IH H5250 kjohnson on DSK79L0C42 with BILLS 6 •HR 5250 IH (2) COORDINATION WITH WORK OPPORTUNITY 1 CREDIT.—Section 51(c) of such Code is amended by 2 adding at the end the following new paragraph: 3 ‘‘(6) COORDINATION WITH PAYROLL TAX EX- 4 EMPTION FOR QUALIFIED VETERANS.—The credit 5 determined under this section with respect to any 6 qualified veteran for any taxable year shall be re- 7 duced by an amount equal to 7.65 percent of the 8 qualified first-year wages paid or incurred by the 9 taxpayer to such veteran during such taxable year to 10 which section 3111(g) or 3221(d) applied.’’. 11 (3) COORDINATION WITH CREDIT FOR EMPLOY- 12 MENT OF QUALIFIED VETERANS BY QUALIFIED TAX- 13 EXEMPT ORGANIZATIONS.—Section 3111(e) of such 14 Code is amended by adding at the end the following 15 new paragraph: 16 ‘‘(6) ELECTION.— 17 ‘‘(A) IN GENERAL.—A qualified tax-ex- 18 empt organization may elect to determine the 19 credit allowed under this section without regard 20 to the qualified first-year wages of any indi- 21 vidual. 22 ‘‘(B) COORDINATION WITH EXEMPTION 23 FOR FIRST-YEAR WAGES OF SPECIFIED VET- 24 ERANS.—For exemption for first-year wages of 25 VerDate Sep 11 2014 21:50 Dec 04, 2019 Jkt 099200 PO 00000 Frm 00006 Fmt 6652 Sfmt 6201 E:\BILLS\H5250.IH H5250 kjohnson on DSK79L0C42 with BILLS 7 •HR 5250 IH specified veterans to which this subsection does 1 not apply, see subsection (f).’’. 2 (4) TRANSFERS TO FEDERAL OLD-AGE AND 3 SURVIVORS INSURANCE TRUST FUND.—There are 4 hereby appropriated to the Federal Old-Age and 5 Survivors Trust Fund and the Federal Disability In- 6 surance Trust Fund established under section 201 7 of the Social Security Act (42 U.S.C. 401) amounts 8 equal to the reduction in revenues to the Treasury 9 by reason of the amendments made by paragraph 10 (1). Amounts appropriated by the preceding sen- 11 tence shall be transferred from the general fund at 12 such times and in such manner as to replicate to the 13 extent possible the transfers which would have oc- 14 curred to such Trust Fund had such amendments 15 not been enacted. 16 (5) APPLICATION TO RAILROAD RETIREMENT 17 TAXES.— 18 (A) IN GENERAL.—Section 3221 of the In- 19 ternal Revenue Code of 1986 is amended by re- 20 designating subsection (d) as subsection (e) and 21 by inserting after subsection (c) the following 22 new subsection: 23 ‘‘(d) SPECIAL EXEMPTION FOR CERTAIN VET- 24 ERANS.— 25 VerDate Sep 11 2014 21:50 Dec 04, 2019 Jkt 099200 PO 00000 Frm 00007 Fmt 6652 Sfmt 6201 E:\BILLS\H5250.IH H5250 kjohnson on DSK79L0C42 with BILLS 8 •HR 5250 IH ‘‘(1) IN GENERAL.—In the case of first-year 1 compensation paid by a qualified employer after the 2 date of the enactment of this subsection with respect 3 to having a specified veteran in the employer’s em- 4 ploy for services rendered to such qualified employer, 5 the applicable percentage under subsection (a) shall 6 be equal to the rate of tax in effect under section 7 3111(b) for the calendar year. 8 ‘‘(2) LIMITATION.—With respect to any speci- 9 fied veteran employed by a qualified employer, the 10 amount of compensation to which paragraph (1) ap- 11 plies shall not exceed— 12 ‘‘(A) $125,490 in the case of an individual 13 who is a qualified veteran by reason of section 14 51(d)(3)(A)(ii)(II), 15 ‘‘(B) $73,203 in the case of an individual 16 who is a qualified veteran by reason of section 17 51(d)(3)(A)(iv), 18 ‘‘(C) $62,745 in the case of an individual 19 who is a qualified veteran by reason of section 20 51(d)(3)(A)(ii)(I), and 21 ‘‘(D) $31,373 in the case of any other 22 qualified veteran. 23 ‘‘(3) QUALIFIED EMPLOYER.—The term ‘quali- 24 fied employer’ means any employer other than the 25 VerDate Sep 11 2014 21:50 Dec 04, 2019 Jkt 099200 PO 00000 Frm 00008 Fmt 6652 Sfmt 6201 E:\BILLS\H5250.IH H5250 kjohnson on DSK79L0C42 with BILLS 9 •HR 5250 IH United States, any State, or any political subdivision 1 thereof, or any instrumentality of the foregoing. 2 ‘‘(4) SPECIFIED VETERAN.—For purposes of 3 this subsection— 4 ‘‘(A) IN GENERAL.—The term ‘specified 5 veteran’ means any individual who— 6 ‘‘(i) begins employment with a quali- 7 fied employer after the date of the enact- 8 ment of this subsection, 9 ‘‘(ii) certifies by signed affidavit, 10 under penalties of perjury, that such indi- 11 vidual is a qualified veteran and whether 12 such individual is a qualified veteran de- 13 scribed in subparagraph (A), (B), or (C) of 14 paragraph (2), 15 ‘‘(iii) is not employed by the qualified 16 employer to replace another employee of 17 such employer unless such other employee 18 separated from employment voluntarily or 19 for cause, and 20 ‘‘(iv) is not an individual described in 21 section 51(i)(1) (applied by substituting 22 ‘qualified employer’ for ‘taxpayer’ each 23 place it appears). 24 VerDate Sep 11 2014 21:50 Dec 04, 2019 Jkt 099200 PO 00000 Frm 00009 Fmt 6652 Sfmt 6201 E:\BILLS\H5250.IH H5250 kjohnson on DSK79L0C42 with BILLS 10 •HR 5250 IH ‘‘(B) QUALIFIED VETERAN.—The term 1 ‘qualified veteran’ has the meaning given such 2 term by section 51(d)(3), but applied without 3 regard to whether such individual has been cer- 4 tified by the designated local agency. 5 ‘‘(5) FIRST-YEAR COMPENSATION.—For pur- 6 poses of this subsection, the term ‘first-year com- 7 pensation’ means, with respect to any individual, 8 compensation for services rendered during the 1-year 9 period beginning with the day the individual begins 10 work for the employer. 11 ‘‘(6) ELECTION.—A qualified employer may 12 elect to have this subsection not apply. Such election 13 shall be made in such manner as the Secretary may 14 require.’’. 15 (B) TRANSFERS TO SOCIAL SECURITY 16 EQUIVALENT BENEFIT ACCOUNT.—There are 17 hereby appropriated to the Social Security 18 Equivalent Benefit Account established under 19 section 15A(a) of the Railroad Retirement Act 20 of 1974 (45 U.S.C. 231n–1(a)) amounts equal 21 to the reduction in revenues to the Treasury by 22 reason of the amendments made by subpara- 23 graph (A). Amounts appropriated by the pre- 24 ceding sentence shall be transferred from the 25 VerDate Sep 11 2014 21:50 Dec 04, 2019 Jkt 099200 PO 00000 Frm 00010 Fmt 6652 Sfmt 6201 E:\BILLS\H5250.IH H5250 kjohnson on DSK79L0C42 with BILLS 11 •HR 5250 IH general fund at such times and in such manner 1 as to replicate to the extent possible the trans- 2 fers which would have occurred to such Account 3 had such amendments not been enacted. 4 (c) EFFECTIVE DATES.— 5 (1) IN GENERAL.—The amendments made by 6 subsection (a) shall apply to individuals who begin 7 work for the employer after December 31, 2019. 8 (2) EXEMPTION FROM EMPLOYMENT TAXES.— 9 The amendments made by subsection (b) shall apply 10 to amounts paid after the date of the enactment of 11 this Act. 12 Æ VerDate Sep 11 2014 21:50 Dec 04, 2019 Jkt 099200 PO 00000 Frm 00011 Fmt 6652 Sfmt 6301 E:\BILLS\H5250.IH H5250 kjohnson on DSK79L0C42 with BILLS