JOBS Credit Act of 2020

I 116TH CONGRESS 2D SESSION H. R. 6776 To provide for improvements related to the employee retention tax credit. IN THE HOUSE OF REPRESENTATIVES MAY 8, 2020 Mrs. MURPHY of Florida (for herself, Mr. KATKO, Ms. DELBENE, Mr. FITZPATRICK, and Mr. PAPPAS) introduced the following bill; which was referred to the Committee on Ways and Means, and in addition to the Committee on Small Business, for a period to be subsequently determined by the Speaker, in each case for consideration of such provisions as fall within the jurisdiction of the committee concerned A BILL To provide for improvements related to the employee retention tax credit. 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 ‘‘Jumpstarting Our 4 Businesses’ Success Credit Act of 2020’’ or as the ‘‘JOBS 5 Credit Act of 2020’’. 6 VerDate Sep 11 2014 23:23 May 20, 2020 Jkt 099200 PO 00000 Frm 00001 Fmt 6652 Sfmt 6201 E:\BILLS\H6776.IH H6776 pamtmann on DSKBC07HB2PROD with BILLS 2 •HR 6776 IH SEC. 2. IMPROVEMENTS TO EMPLOYEE RETENTION CRED- 1 IT. 2 (a) INCREASE IN CREDIT PERCENTAGE.—Section 3 2301(a) of the CARES Act is amended by striking ‘‘50 4 percent’’ and inserting ‘‘80 percent’’. 5 (b) INCREASE IN PER EMPLOYEE LIMITATION.—Sec- 6 tion 2301(b)(1) of the CARES Act is amended by striking 7 ‘‘for all calendar quarters shall not exceed $10,000.’’ and 8 inserting ‘‘shall not exceed— 9 ‘‘(A) $15,000 in any calendar quarter, and 10 ‘‘(B) $45,000 in the aggregate for all cal- 11 endar quarters.’’. 12 (c) MODIFICATION OF THRESHOLD FOR TREATMENT 13 AS A LARGE EMPLOYER.— 14 (1) IN GENERAL.—Section 2301(c)(3)(A) of the 15 CARES Act is amended— 16 (A) by striking ‘‘for which the average 17 number of full-time employees (within the 18 meaning of section 4980H of the Internal Rev- 19 enue Code of 1986) employed by such eligible 20 employer during 2019 was greater than 100’’ in 21 clause (i) and inserting ‘‘which is a large em- 22 ployer’’, and 23 (B) by striking ‘‘for which the average 24 number of full-time employees (within the 25 meaning of section 4980H of the Internal Rev- 26 VerDate Sep 11 2014 23:23 May 20, 2020 Jkt 099200 PO 00000 Frm 00002 Fmt 6652 Sfmt 6201 E:\BILLS\H6776.IH H6776 pamtmann on DSKBC07HB2PROD with BILLS 3 •HR 6776 IH enue Code of 1986) employed by such eligible 1 employer during 2019 was not greater than 2 100’’ in clause (ii) and inserting ‘‘which is not 3 a large employer’’. 4 (2) LARGE EMPLOYER DEFINED.—Section 5 2301(c) of the CARES Act is amended by redesig- 6 nating paragraph (6) as paragraph (7) and by in- 7 serting after paragraph (5) the following new para- 8 graph: 9 ‘‘(6) LARGE EMPLOYER.—The term ‘large em- 10 ployer’ means any eligible employer if— 11 ‘‘(A) the average number of full-time em- 12 ployees (as determined for purposes of deter- 13 mining whether an employer is an applicable 14 large employer for purposes of section 15 4980H(c)(2) of the Internal Revenue Code of 16 1986) employed by such eligible employer dur- 17 ing calendar year 2019 was greater than 1,500, 18 and 19 ‘‘(B) the gross receipts (within the mean- 20 ing of section 448(c) of the Internal Revenue 21 Code of 1986) of such eligible employer during 22 calendar year 2019 was greater than 23 $41,500,000.’’. 24 VerDate Sep 11 2014 23:23 May 20, 2020 Jkt 099200 PO 00000 Frm 00003 Fmt 6652 Sfmt 6201 E:\BILLS\H6776.IH H6776 pamtmann on DSKBC07HB2PROD with BILLS 4 •HR 6776 IH (d) PHASE-IN OF ELIGIBILITY BASED ON REDUC- 1 TION IN GROSS RECEIPTS.— 2 (1) DECREASE OF REDUCTION IN GROSS RE- 3 CEIPTS NECESSARY TO QUALIFY FOR CREDIT.—Sec- 4 tion 2301(c)(2)(B)(i) of the CARES Act is amended 5 by striking ‘‘50 percent’’ and inserting ‘‘80 per- 6 cent’’. 7 (2) PHASE-IN OF CREDIT IF REDUCTION IN 8 GROSS RECEIPTS IS LESS THAN 50 PERCENT.—Sec- 9 tion 2301(c)(2) of the CARES Act is amended by 10 adding at the end the following new subparagraph: 11 ‘‘(D) PHASE-IN OF CREDIT WHERE BUSI- 12 NESS NOT SUSPENDED AND REDUCTION IN 13 GROSS RECEIPTS LESS THAN 50 PERCENT.— 14 ‘‘(i) IN GENERAL.—In the case of any 15 calendar quarter with respect to which an 16 eligible employer would not be an eligible 17 employer if subparagraph (B)(i) were ap- 18 plied by substituting ‘50 percent’ for ‘80 19 percent’, the amount of the credit allowed 20 under subsection (a) shall be reduced by 21 the amount which bears the same ratio to 22 the amount of such credit (determined 23 without regard to this subparagraph) as— 24 VerDate Sep 11 2014 23:23 May 20, 2020 Jkt 099200 PO 00000 Frm 00004 Fmt 6652 Sfmt 6201 E:\BILLS\H6776.IH H6776 pamtmann on DSKBC07HB2PROD with BILLS 5 •HR 6776 IH ‘‘(I) the excess gross receipts per- 1 centage point amount, bears to 2 ‘‘(II) 30 percentage points. 3 ‘‘(ii) EXCESS GROSS RECEIPTS PER- 4 CENTAGE POINT AMOUNT.—For purposes 5 of this subparagraph, the term ‘excess 6 gross receipts percentage point amount’ 7 means, with respect to any calendar quar- 8 ter, the excess of— 9 ‘‘(I) the lowest of the gross re- 10 ceipts percentage point amounts de- 11 termined with respect to any calendar 12 quarter during the period ending with 13 such calendar quarter and beginning 14 with the first calendar quarter during 15 the period described in subparagraph 16 (B), over 17 ‘‘(II) 50 percentage points. 18 ‘‘(iii) GROSS RECEIPTS PERCENTAGE 19 POINT AMOUNTS.—For purposes of this 20 subparagraph, the term ‘gross receipts per- 21 centage point amount’ means, with respect 22 to any calendar quarter, the percentage 23 (expressed as a number of percentage 24 points) obtained by dividing— 25 VerDate Sep 11 2014 23:23 May 20, 2020 Jkt 099200 PO 00000 Frm 00005 Fmt 6652 Sfmt 6201 E:\BILLS\H6776.IH H6776 pamtmann on DSKBC07HB2PROD with BILLS 6 •HR 6776 IH ‘‘(I) the gross receipts (within 1 the meaning of subparagraph (B)) for 2 such calendar quarter, by 3 ‘‘(II) the gross receipts for the 4 same calendar quarter in calendar 5 year 2019.’’. 6 (3) GROSS RECEIPTS OF TAX-EXEMPT ORGANI- 7 ZATIONS.—Section 2301(c)(2)(C) of the CARES Act 8 is amended— 9 (A) by striking ‘‘of such Code, clauses (i) 10 and (ii)(I)’’ and inserting ‘‘of such Code— 11 ‘‘(i) clauses (i) and (ii)(I)’’, 12 (B) by striking the period at the end and 13 inserting ‘‘, and’’, and 14 (C) by adding at the end the following new 15 clause: 16 ‘‘(ii) any reference in this section to 17 gross receipts shall be treated as a ref- 18 erence to gross receipts within the meaning 19 of section 6033 of such Code.’’. 20 (e) MODIFICATION OF TREATMENT OF HEALTH 21 PLAN EXPENSES.— 22 (1) IN GENERAL.—Section 2301(c)(5) of the 23 CARES Act is amended to read as follows: 24 ‘‘(5) WAGES.— 25 VerDate Sep 11 2014 23:23 May 20, 2020 Jkt 099200 PO 00000 Frm 00006 Fmt 6652 Sfmt 6201 E:\BILLS\H6776.IH H6776 pamtmann on DSKBC07HB2PROD with BILLS 7 •HR 6776 IH ‘‘(A) IN GENERAL.—The term ‘wages’ 1 means wages (as defined in section 3121(a) of 2 the Internal Revenue Code of 1986) and com- 3 pensation (as defined in section 3231(e) of such 4 Code). 5 ‘‘(B) ALLOWANCE FOR CERTAIN HEALTH 6 PLAN EXPENSES.— 7 ‘‘(i) IN GENERAL.—Such term shall 8 include amounts paid or incurred by the el- 9 igible employer to provide and maintain a 10 group health plan (as defined in section 11 5000(b)(1) of the Internal Revenue Code 12 of 1986), but only to the extent that such 13 amounts are excluded from the gross in- 14 come of employees by reason of section 15 106(a) of such Code. 16 ‘‘(ii) ALLOCATION RULES.—For pur- 17 poses of this section, amounts treated as 18 wages under clause (i) shall be treated as 19 paid with respect to any employee (and 20 with respect to any period) to the extent 21 that such amounts are properly allocable to 22 such employee (and to such period) in such 23 manner as the Secretary may prescribe. 24 Except as otherwise provided by the Sec- 25 VerDate Sep 11 2014 23:23 May 20, 2020 Jkt 099200 PO 00000 Frm 00007 Fmt 6652 Sfmt 6201 E:\BILLS\H6776.IH H6776 pamtmann on DSKBC07HB2PROD with BILLS 8 •HR 6776 IH retary, such allocation shall be treated as 1 properly made if made on the basis of 2 being pro rata among periods of cov- 3 erage.’’. 4 (2) CONFORMING AMENDMENT.—Section 5 2301(c)(3) of the CARES Act is amended by strik- 6 ing subparagraph (C). 7 (f) QUALIFIED WAGES PERMITTED TO INCLUDE 8 AMOUNTS FOR TIP REPLACEMENT.— 9 (1) IN GENERAL.—Section 2301(c)(3)(B) of the 10 CARES Act is amended by inserting ‘‘(including tips 11 which would have been deemed to be paid by the em- 12 ployer under section 3121(q))’’ after ‘‘would have 13 been paid’’. 14 (2) CONFORMING AMENDMENT.—Section 15 2301(h)(2) of the CARES Act is amended by insert- 16 ing ‘‘45B or’’ before ‘‘45S’’. 17 (g) CERTAIN GOVERNMENTAL EMPLOYERS ELIGIBLE 18 FOR CREDIT.— 19 (1) IN GENERAL.—Section 2301(f) of the 20 CARES Act is amended to read as follows: 21 ‘‘(f) CERTAIN GOVERNMENTAL EMPLOYERS.— 22 ‘‘(1) IN GENERAL.—The credit under this sec- 23 tion shall not be allowed to the Federal Government 24 or any agency or instrumentality thereof. 25 VerDate Sep 11 2014 23:23 May 20, 2020 Jkt 099200 PO 00000 Frm 00008 Fmt 6652 Sfmt 6201 E:\BILLS\H6776.IH H6776 pamtmann on DSKBC07HB2PROD with BILLS 9 •HR 6776 IH ‘‘(2) EXCEPTION.—Paragraph (1) shall not 1 apply to any organization described in section 2 501(c)(1) of the Internal Revenue Code of 1986 and 3 exempt from tax under section 501(a) of such Code. 4 ‘‘(3) SPECIAL RULES.—In the case of any State 5 government, Indian tribal government, or any agen- 6 cy, instrumentality, or political subdivision of the 7 foregoing— 8 ‘‘(A) clauses (i) and (ii)(I) of subsection 9 (c)(2)(A) shall apply to all operations of such 10 entity, and 11 ‘‘(B) subclause (II) of subsection 12 (c)(2)(A)(ii) shall not apply.’’. 13 (2) COORDINATION WITH APPLICATION OF CER- 14 TAIN DEFINITIONS.— 15 (A) IN GENERAL.—Section 2301(c)(5)(A) 16 of the CARES Act, as amended by the pre- 17 ceding provisions of this Act, is amended by 18 adding at the end the following: ‘‘For purposes 19 of the preceding sentence (other than for pur- 20 poses of subsection (b)(2)), wages as defined in 21 section 3121(a) of the Internal Revenue Code 22 of 1986 shall be determined without regard to 23 paragraphs (1), (5), (6), (7), (8), (10), (13), 24 (18), (19), and (22) of section 3212(b) of such 25 VerDate Sep 11 2014 23:23 May 20, 2020 Jkt 099200 PO 00000 Frm 00009 Fmt 6652 Sfmt 6201 E:\BILLS\H6776.IH H6776 pamtmann on DSKBC07HB2PROD with BILLS 10 •HR 6776 IH Code (except with respect to services performed 1 in a penal institution by an inmate thereof).’’. 2 (B) CONFORMING AMENDMENTS.—Sec- 3 tions 2301(c)(6) of the CARES Act is amended 4 by striking ‘‘Any term’’ and inserting ‘‘Except 5 as otherwise provided in this section, any 6 term’’. 7 (h) EFFECTIVE DATE.—The amendments made by 8 this section shall take effect as if included in section 2301 9 of the CARES Act. 10 SEC. 3. IMPROVED COORDINATION BETWEEN PAYCHECK 11 PROTECTION PROGRAM AND EMPLOYEE RE- 12 TENTION TAX CREDIT. 13 (a) AMENDMENT TO PAYCHECK PROTECTION PRO- 14 GRAM.—Section 1106(a)(8) of the CARES Act is amended 15 by inserting ‘‘, except that such costs shall not include 16 qualified wages taken into account in determining the 17 credit allowed under section 2301 of this Act’’ before the 18 period at the end. 19 (b) AMENDMENTS TO EMPLOYEE RETENTION TAX 20 CREDIT.— 21 (1) IN GENERAL.—Section 2301(g) of the 22 CARES Act is amended to read as follows: 23 ‘‘(g) ELECTION TO NOT TAKE CERTAIN WAGES 24 INTO ACCOUNT.— 25 VerDate Sep 11 2014 23:15 May 21, 2020 Jkt 099200 PO 00000 Frm 00010 Fmt 6652 Sfmt 6201 E:\BILLS\H6776.IH H6776 pamtmann on DSKBC07HB2PROD with BILLS 11 •HR 6776 IH ‘‘(1) IN GENERAL.—This section shall not apply 1 to qualified wages paid by an eligible employer with 2 respect to which such employer makes an election 3 (at such time and in such manner as the Secretary 4 may prescribe) to have this section not apply to such 5 wages. 6 ‘‘(2) COORDINATION WITH PAYCHECK PROTEC- 7 TION PROGRAM.—The Secretary, in consultation 8 with the Administrator of the Small Business Ad- 9 ministration, shall issue guidance providing that 10 payroll costs paid or incurred during the covered pe- 11 riod shall not fail to be treated as qualified wages 12 under this section by reason of an election under 13 paragraph (1) to the extent that a covered loan of 14 the eligible employer is not forgiven by reason of a 15 decision under section 1106(g). Terms used in the 16 preceding sentence which are also used in section 17 1106 shall have the same meaning as when used in 18 such section.’’. 19 (2) CONFORMING AMENDMENTS.— 20 (A) Section 2301 of the CARES Act is 21 amended by striking subsection (j). 22 (B) Section 2301(l) of the CARES Act is 23 amended by striking paragraph (3) and by re- 24 VerDate Sep 11 2014 23:23 May 20, 2020 Jkt 099200 PO 00000 Frm 00011 Fmt 6652 Sfmt 6201 E:\BILLS\H6776.IH H6776 pamtmann on DSKBC07HB2PROD with BILLS 12 •HR 6776 IH designating paragraphs (4) and (5) as para- 1 graphs (3) and (4), respectively. 2 (c) EFFECTIVE DATE.—The amendments made by 3 this section shall take effect as if included in the provisions 4 of the CARES Act to which they relate. 5 Æ VerDate Sep 11 2014 23:23 May 20, 2020 Jkt 099200 PO 00000 Frm 00012 Fmt 6652 Sfmt 6301 E:\BILLS\H6776.IH H6776 pamtmann on DSKBC07HB2PROD with BILLS