Rewarding American Workers Act of 2020

I 116TH CONGRESS 2D SESSION H. R. 7058 To provide a payroll tax credit for certain bonuses paid to employees who worked continuously during the COVID-19 pandemic. IN THE HOUSE OF REPRESENTATIVES MAY 28, 2020 Mr. REED (for himself, Mr. GOTTHEIMER, Mr. SCHWEIKERT, and Mr. CUELLAR) introduced the following bill; which was referred to the Com- mittee on Ways and Means A BILL To provide a payroll tax credit for certain bonuses paid to employees who worked continuously during the COVID-19 pandemic. 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 ‘‘Rewarding American 4 Workers Act of 2020’’. 5 VerDate Sep 11 2014 19:30 Jun 20, 2020 Jkt 099200 PO 00000 Frm 00001 Fmt 6652 Sfmt 6201 E:\BILLS\H7058.IH H7058 pamtmann on DSKBC07HB2PROD with BILLS 2 •HR 7058 IH SEC. 2. PAYROLL CREDIT FOR BONUSES PAID TO EMPLOY- 1 EES WHO WORKED CONTINUOUSLY DURING 2 THE COVID-19 PANDEMIC. 3 (a) IN GENERAL.—In the case of an employer, there 4 shall be allowed as a credit against applicable employment 5 taxes for the calendar quarter which includes the last day 6 of the covered period an amount equal to 100 percent of 7 the qualified bonuses paid to eligible employees of such 8 employer during such calendar quarter. 9 (b) QUALIFIED BONUS.—For the purposes of this 10 section— 11 (1) IN GENERAL.—The term ‘‘qualified bonus’’ 12 means, with respect to any eligible employee of any 13 employer, a supplemental wage (within the meaning 14 of the rules and regulations under section 3402) 15 equal to— 16 (A) in the case of an eligible employee 17 whose annualized covered period wages do not 18 exceed $55,000, an amount equal to the appli- 19 cable percentage of the wages (as defined in 20 section 3401) paid by such employer to such 21 employee during the covered period, and 22 (B) in the case of an eligible employee 23 whose annualized covered period wages exceed 24 $55,000 but do not exceed $99,000, $600. 25 VerDate Sep 11 2014 19:30 Jun 20, 2020 Jkt 099200 PO 00000 Frm 00002 Fmt 6652 Sfmt 6201 E:\BILLS\H7058.IH H7058 pamtmann on DSKBC07HB2PROD with BILLS 3 •HR 7058 IH (2) APPLICABLE PERCENTAGE.—The term ‘‘ap- 1 plicable percentage’’ means, with respect to any eli- 2 gible employee of any employer, 30 percent reduced 3 (but not below zero) by 0.1 percent for each $100 4 that the such employee’s annualized covered period 5 wages exceeds $30,000. 6 (3) ANNUALIZED COVERED PERIOD WAGES.— 7 The term ‘‘annualized covered period wages’’ means, 8 with respect to any eligible employee of any em- 9 ployer, the amount of wages (as defined in section 10 3401 and determined without regard to any quali- 11 fied bonuses) which would have been paid to such 12 employee by such employer during a 365-day period 13 if such employee were paid at the same rate during 14 all of such period as such employee was paid during 15 the covered period. 16 (c) ELIGIBLE EMPLOYEE.—For purposes of this sec- 17 tion, the term ‘‘eligible employee’’ means, with respect to 18 any employer, any employee if— 19 (1) such employee had taxes withheld by such 20 employer under section 3101 for the entirety of the 21 covered period, and 22 (2) such employee’s annualized covered period 23 wages do not exceed $99,000. 24 VerDate Sep 11 2014 19:30 Jun 20, 2020 Jkt 099200 PO 00000 Frm 00003 Fmt 6652 Sfmt 6201 E:\BILLS\H7058.IH H7058 pamtmann on DSKBC07HB2PROD with BILLS 4 •HR 7058 IH (d) COVERED PERIOD.—For purposes of this section, 1 the term ‘‘covered period’’ means the period beginning on 2 March 13, 2020, and ending on the earlier of July 31, 3 2020, or the end of the National Emergency Concerning 4 the Novel Coronavirus Disease (COVID-19) Outbreak. 5 (e) REFUNDABILITY.— 6 (1) CREDIT LIMITED TO EMPLOYMENT 7 TAXES.—The credit allowed by subsection (a) with 8 respect to any calendar quarter shall not exceed the 9 applicable employment taxes (reduced by any credits 10 allowed under subsections (e) and (f) of section 11 3111 of the Internal Revenue Code of 1986, sections 12 7001 and 7003 of the Families First Coronavirus 13 Response Act, and section 2301 of the CARES Act) 14 on the wages paid with respect to the employment 15 of all the employees of the eligible employer for such 16 calendar quarter. 17 (2) REFUNDABILITY OF EXCESS CREDIT.— 18 (A) IN GENERAL.—If the amount of the 19 credit under subsection (a) exceeds the limita- 20 tion of paragraph (1) for any calendar quarter, 21 such excess shall be treated as an overpayment 22 that shall be refunded under sections 6402(a) 23 and 6413(b) of the Internal Revenue Code of 24 1986. 25 VerDate Sep 11 2014 19:30 Jun 20, 2020 Jkt 099200 PO 00000 Frm 00004 Fmt 6652 Sfmt 6201 E:\BILLS\H7058.IH H7058 pamtmann on DSKBC07HB2PROD with BILLS 5 •HR 7058 IH (B) TREATMENT OF PAYMENTS.—For pur- 1 poses of section 1324 of title 31, United States 2 Code, any amounts due to the employer under 3 this paragraph shall be treated in the same 4 manner as a refund due from a credit provision 5 referred to in subsection (b)(2) of such section. 6 (f) OTHER DEFINITIONS.—For purposes of this sec- 7 tion— 8 (1) APPLICABLE EMPLOYMENT TAXES.—The 9 term ‘‘applicable employment taxes’’ means the fol- 10 lowing: 11 (A) The taxes imposed under section 12 3111(a) of the Internal Revenue Code of 1986. 13 (B) So much of the taxes imposed under 14 section 3221(a) of such Code as are attrib- 15 utable to the rate in effect under section 16 3111(a) of such Code. 17 (2) SECRETARY.—The term ‘‘Secretary’’ means 18 the Secretary of the Treasury or the Secretary’s del- 19 egate. 20 (3) OTHER TERMS.—Except as otherwise pro- 21 vided in this section, any term used in this section 22 which is also used in chapter 21 or 22 of the Inter- 23 nal Revenue Code of 1986 shall have the same 24 meaning as when used in such chapter. 25 VerDate Sep 11 2014 19:30 Jun 20, 2020 Jkt 099200 PO 00000 Frm 00005 Fmt 6652 Sfmt 6201 E:\BILLS\H7058.IH H7058 pamtmann on DSKBC07HB2PROD with BILLS 6 •HR 7058 IH (g) AGGREGATION RULE.—All persons treated as a 1 single employer under subsection (a) or (b) of section 52 2 of the Internal Revenue Code of 1986, or subsection (m) 3 or (o) of section 414 of such Code, shall be treated as 4 one employer for purposes of this section. 5 (h) CERTAIN RULES TO APPLY.—For purposes of 6 this section, rules similar to the rules of sections 51(i)(1) 7 and 280C(a) of the Internal Revenue Code of 1986 shall 8 apply. 9 (i) ELECTION NOT TO HAVE SECTION APPLY.—This 10 section shall not apply with respect to any eligible em- 11 ployer for any calendar quarter if such employer elects (at 12 such time and in such manner as the Secretary may pre- 13 scribe) not to have this section apply. 14 (j) THIRD-PARTY PAYORS.—Any credit allowed 15 under this section shall be treated as a credit described 16 in section 3511(d)(2) of such Code. 17 (k) TRANSFERS TO FEDERAL OLD-AGE AND SUR- 18 VIVORS INSURANCE TRUST FUND.—There are hereby ap- 19 propriated to the Federal Old-Age and Survivors Insur- 20 ance Trust Fund and the Federal Disability Insurance 21 Trust Fund established under section 201 of the Social 22 Security Act (42 U.S.C. 401) and the Social Security 23 Equivalent Benefit Account established under section 24 15A(a) of the Railroad Retirement Act of 1974 (45 U.S.C. 25 VerDate Sep 11 2014 19:30 Jun 20, 2020 Jkt 099200 PO 00000 Frm 00006 Fmt 6652 Sfmt 6201 E:\BILLS\H7058.IH H7058 pamtmann on DSKBC07HB2PROD with BILLS 7 •HR 7058 IH 14 231n–1(a)) amounts equal to the reduction in revenues 1 to the Treasury by reason of this section (without regard 2 to this subsection). Amounts appropriated by the pre- 3 ceding sentence shall be transferred from the general fund 4 at such times and in such manner as to replicate to the 5 extent possible the transfers which would have occurred 6 to such Trust Fund or Account had this section not been 7 enacted. 8 (l) TREATMENT OF DEPOSITS.—The Secretary shall 9 waive any penalty under section 6656 of the Internal Rev- 10 enue Code of 1986 for any failure to make a deposit of 11 any applicable employment taxes if the Secretary deter- 12 mines that such failure was due to the reasonable anticipa- 13 tion of the credit allowed under this section. 14 (m) REGULATIONS AND GUIDANCE.—The Secretary 15 shall issue such forms, instructions, regulations, and guid- 16 ance as are necessary— 17 (1) to allow the advance payment of the credit 18 under subsection (a), subject to the limitations pro- 19 vided in this section, based on such information as 20 the Secretary shall require, 21 (2) to provide for the reconciliation of such ad- 22 vance payment with the amount advanced at the 23 time of filing the return of tax for the applicable cal- 24 endar quarter or taxable year, and 25 VerDate Sep 11 2014 19:30 Jun 20, 2020 Jkt 099200 PO 00000 Frm 00007 Fmt 6652 Sfmt 6201 E:\BILLS\H7058.IH H7058 pamtmann on DSKBC07HB2PROD with BILLS 8 •HR 7058 IH (3) with respect to the application of the credit 1 under subsection (a) to third-party payors (including 2 professional employer organizations, certified profes- 3 sional employer organizations, or agents under sec- 4 tion 3504 of the Internal Revenue Code of 1986), 5 including regulations or guidance allowing such 6 payors to submit documentation necessary to sub- 7 stantiate the eligible employer status of employers 8 that use such payors. 9 Æ VerDate Sep 11 2014 19:30 Jun 20, 2020 Jkt 099200 PO 00000 Frm 00008 Fmt 6652 Sfmt 6301 E:\BILLS\H7058.IH H7058 pamtmann on DSKBC07HB2PROD with BILLS