Providing Essentials for Frontline Workers Act

I 116TH CONGRESS 2D SESSION H. R. 6787 To provide a payroll credit for certain pandemic-related employee benefit expenses paid by employers. IN THE HOUSE OF REPRESENTATIVES MAY 8, 2020 Ms. SA´NCHEZ introduced the following bill; which was referred to the Committee on Ways and Means A BILL To provide a payroll credit for certain pandemic-related employee benefit expenses paid by employers. 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 ‘‘Providing Essentials 4 for Frontline Workers Act’’. 5 SEC. 2. PAYROLL CREDIT FOR CERTAIN PANDEMIC-RE- 6 LATED EMPLOYEE BENEFIT EXPENSES PAID 7 BY EMPLOYERS. 8 (a) IN GENERAL.—In the case of an employer, there 9 shall be allowed as a credit against applicable employment 10 VerDate Sep 11 2014 18:45 May 21, 2020 Jkt 099200 PO 00000 Frm 00001 Fmt 6652 Sfmt 6201 E:\BILLS\H6787.IH H6787 pamtmann on DSKBC07HB2PROD with BILLS 2 •HR 6787 IH taxes for each calendar quarter an amount equal to the 1 applicable percentage of the qualified pandemic-related 2 employee benefit expenses paid by such employer with re- 3 spect to such calendar quarter. 4 (b) LIMITATIONS AND REFUNDABILITY.— 5 (1) DOLLAR LIMITATION PER EMPLOYEE.—The 6 qualified pandemic-related employee benefit expenses 7 which may be taken into account under subsection 8 (a) with respect to any employee for any calendar 9 quarter shall not exceed $5,000. 10 (2) CREDIT LIMITED TO CERTAIN EMPLOYMENT 11 TAXES.—The credit allowed by subsection (a) with 12 respect to any calendar quarter shall not exceed the 13 applicable employment taxes for such calendar quar- 14 ter (reduced by any credits allowed under sub- 15 sections (e) and (f) of section 3111 of such Code, 16 sections 7001 and 7003 of the Families First 17 Coronavirus Response Act, and section 2301 of the 18 CARES Act, for such quarter) on the wages paid 19 with respect to the employment of all the employees 20 of the employer for such calendar quarter. 21 (3) REFUNDABILITY OF EXCESS CREDIT.— 22 (A) IN GENERAL.—If the amount of the 23 credit under subsection (a) exceeds the limita- 24 tion of paragraph (2) for any calendar quarter, 25 VerDate Sep 11 2014 18:45 May 21, 2020 Jkt 099200 PO 00000 Frm 00002 Fmt 6652 Sfmt 6201 E:\BILLS\H6787.IH H6787 pamtmann on DSKBC07HB2PROD with BILLS 3 •HR 6787 IH such excess shall be treated as an overpayment 1 that shall be refunded under sections 6402(a) 2 and 6413(b) of the Internal Revenue Code of 3 1986. 4 (B) TREATMENT OF PAYMENTS.—For pur- 5 poses of section 1324 of title 31, United States 6 Code, any amounts due to an employer under 7 this paragraph shall be treated in the same 8 manner as a refund due from a credit provision 9 referred to in subsection (b)(2) of such section. 10 (c) QUALIFIED PANDEMIC-RELATED EMPLOYEE 11 BENEFIT EXPENSES.—For purposes of this section, the 12 term ‘‘qualified pandemic-related employee benefit ex- 13 penses’’ means any amount paid to or for the benefit of 14 an employee in the employment of the employer if— 15 (1) such amount is excludible from the gross in- 16 come of the employee under section 139 of the Inter- 17 nal Revenue Code of 1986 by reason of being a 18 qualified disaster relief payment described in sub- 19 section (b)(1) of such section with respect to a quali- 20 fied disaster described in subsection (c)(2) of such 21 section which was declared by reason of COVID-19, 22 and 23 (2) the employer elects (at such time and in 24 such manner as the Secretary may provide) to treat 25 VerDate Sep 11 2014 18:45 May 21, 2020 Jkt 099200 PO 00000 Frm 00003 Fmt 6652 Sfmt 6201 E:\BILLS\H6787.IH H6787 pamtmann on DSKBC07HB2PROD with BILLS 4 •HR 6787 IH such amount as a qualified pandemic-related em- 1 ployee benefit expense. 2 (d) APPLICABLE PERCENTAGE.—For purposes of 3 this section— 4 (1) IN GENERAL.—The term ‘‘applicable per- 5 centage’’ means— 6 (A) 50 percent, in the case of qualified 7 pandemic-related employee benefit expenses 8 paid with respect to an essential employee, and 9 (B) 30 percent, in any other case. 10 (2) ESSENTIAL EMPLOYEE.—The term ‘‘essen- 11 tial employee’’ means, with respect to any employer 12 for any calendar quarter, any employee of such em- 13 ployer if a substantial portion of the services per- 14 formed by such employee for such employer during 15 such calendar quarter are essential work. 16 (3) ESSENTIAL WORK.—Not later than 30 days 17 after the date of the enactment of this Act, the Di- 18 rector of the Cybersecurity and Infrastructure Secu- 19 rity Agency shall issue a definition of essential work 20 for the purposes of this section. In defining the term 21 ‘‘essential work’’, the Cybersecurity and Infrastruc- 22 ture Security Agency shall take into consideration 23 its April 17th ‘‘Advisory Memorandum on Identifica- 24 tion of Essential Critical Infrastructure Workers 25 VerDate Sep 11 2014 18:45 May 21, 2020 Jkt 099200 PO 00000 Frm 00004 Fmt 6652 Sfmt 6201 E:\BILLS\H6787.IH H6787 pamtmann on DSKBC07HB2PROD with BILLS 5 •HR 6787 IH During Covid-19 Response’’ and shall solicit public 1 input. 2 (e) SPECIAL RULES; OTHER DEFINITIONS.— 3 (1) APPLICATION OF CERTAIN NON-DISCRIMINA- 4 TION RULES.—No credit shall be allowed under this 5 section to any employer for any calendar quarter if 6 qualified pandemic-related employee benefit expenses 7 are provided by such employer to employees for such 8 calendar quarter in a manner which discriminates in 9 favor of highly compensated individuals (within the 10 meaning of section 125) as to eligibility for, or the 11 amount of, such benefit expenses. An employer may 12 elect with respect to any calendar quarter to apply 13 this paragraph separately with respect to essential 14 employees and with respect to all other employees. 15 (2) DENIAL OF DOUBLE BENEFIT.—For pur- 16 poses of chapter 1 of such Code, no deduction or 17 credit (other than the credit allowed under this sec- 18 tion) shall be allowed for so much of qualified pan- 19 demic-related employee benefit expenses as is equal 20 to the credit allowed under this section. 21 (3) THIRD PARTY PAYORS.—Any credit allowed 22 under this section shall be treated as a credit de- 23 scribed in section 3511(d)(2) of such Code. 24 VerDate Sep 11 2014 18:45 May 21, 2020 Jkt 099200 PO 00000 Frm 00005 Fmt 6652 Sfmt 6201 E:\BILLS\H6787.IH H6787 pamtmann on DSKBC07HB2PROD with BILLS 6 •HR 6787 IH (4) APPLICABLE EMPLOYMENT TAXES.—For 1 purposes of this section, the term ‘‘applicable em- 2 ployment taxes’’ means the following: 3 (A) The taxes imposed under section 4 3111(a) of the Internal Revenue Code of 1986. 5 (B) So much of the taxes imposed under 6 section 3221(a) of such Code as are attrib- 7 utable to the rate in effect under section 8 3111(a) of such Code. 9 (5) SECRETARY.—For purposes of this section, 10 the term ‘‘Secretary’’ means the Secretary of the 11 Treasury or the Secretary’s delegate. 12 (6) CERTAIN TERMS.— 13 (A) IN GENERAL.—Any term used in this 14 section which is also used in chapter 21 or 22 15 of such Code shall have the same meaning as 16 when used in such chapter (as the case may 17 be). 18 (B) CERTAIN PROVISIONS NOT TAKEN 19 INTO ACCOUNT EXCEPT FOR PURPOSES OF LIM- 20 ITING CREDIT TO EMPLOYMENT TAXES.—For 21 purposes of subparagraph (A) (other than with 22 respect to subsection (b)(2)), section 3121(b) of 23 such Code shall be applied without regard to 24 paragraphs (1), (5), (6), (7), (8), (10), (13), 25 VerDate Sep 11 2014 18:45 May 21, 2020 Jkt 099200 PO 00000 Frm 00006 Fmt 6652 Sfmt 6201 E:\BILLS\H6787.IH H6787 pamtmann on DSKBC07HB2PROD with BILLS 7 •HR 6787 IH (18), (19), and (22) thereof (except with re- 1 spect to services performed in a penal institu- 2 tion by an inmate thereof) and section 3 3231(e)(1) shall be applied without regard to 4 the sentence that begins ‘‘Such term does not 5 include remuneration’’. 6 (f) CERTAIN GOVERNMENTAL EMPLOYERS.— 7 (1) IN GENERAL.—The credit under this section 8 shall not be allowed to the Federal Government or 9 any agency or instrumentality thereof. 10 (2) EXCEPTION.—Paragraph (1) shall not 11 apply to any organization described in section 12 501(c)(1) of the Internal Revenue Code of 1986 and 13 exempt from tax under section 501(a) of such Code. 14 (g) TREATMENT OF DEPOSITS.—The Secretary shall 15 waive any penalty under section 6656 of such Code for 16 any failure to make a deposit of applicable employment 17 taxes if the Secretary determines that such failure was due 18 to the anticipation of the credit allowed under this section. 19 (h) REGULATIONS.—The Secretary shall prescribe 20 such regulations or other guidance as may be necessary 21 to carry out the purposes of this section, including regula- 22 tions or other guidance— 23 (1) to allow the advance payment of the credit 24 determined under subsection (a), subject to the limi- 25 VerDate Sep 11 2014 18:45 May 21, 2020 Jkt 099200 PO 00000 Frm 00007 Fmt 6652 Sfmt 6201 E:\BILLS\H6787.IH H6787 pamtmann on DSKBC07HB2PROD with BILLS 8 •HR 6787 IH tations provided in this section, based on such infor- 1 mation as the Secretary shall require, 2 (2) to provide for the reconciliation of such ad- 3 vance payment with the amount of the credit at the 4 time of filing the return of tax for the applicable 5 quarter or taxable year, 6 (3) for recapturing the benefit of credits deter- 7 mined under this section in cases where there is a 8 subsequent adjustment to the credit determined 9 under subsection (a), and 10 (4) with respect to the application of the credit 11 to third party payors (including professional em- 12 ployer organizations, certified professional employer 13 organizations, or agents under section 3504 of such 14 Code), including to allow such payors to submit doc- 15 umentation necessary to substantiate eligibility for, 16 and the amount of, the credit allowed under this sec- 17 tion. 18 (i) APPLICATION OF SECTION.—This section shall 19 apply only to qualified pandemic-related employee benefit 20 expenses paid after March 12, 2020, and before January 21 1, 2021. 22 (j) TRANSFERS TO CERTAIN TRUST FUNDS.—There 23 are hereby appropriated to the Federal Old-Age and Sur- 24 vivors Insurance Trust Fund and the Federal Disability 25 VerDate Sep 11 2014 18:45 May 21, 2020 Jkt 099200 PO 00000 Frm 00008 Fmt 6652 Sfmt 6201 E:\BILLS\H6787.IH H6787 pamtmann on DSKBC07HB2PROD with BILLS 9 •HR 6787 IH Insurance Trust Fund established under section 201 of 1 the Social Security Act (42 U.S.C. 401) and the Social 2 Security Equivalent Benefit Account established under 3 section 15A(a) of the Railroad Retirement Act of 1974 4 (45 U.S.C. 231n–1(a)) amounts equal to the reduction in 5 revenues to the Treasury by reason of this section (without 6 regard to this subsection). Amounts appropriated by the 7 preceding sentence shall be transferred from the general 8 fund at such times and in such manner as to replicate 9 to the extent possible the transfers which would have oc- 10 curred to such Trust Fund or Account had this section 11 not been enacted. 12 Æ VerDate Sep 11 2014 18:45 May 21, 2020 Jkt 099200 PO 00000 Frm 00009 Fmt 6652 Sfmt 6301 E:\BILLS\H6787.IH H6787 pamtmann on DSKBC07HB2PROD with BILLS