To provide a payroll tax credit for certain costs of providing employees with testing for COVID-19.

I 116TH CONGRESS 2D SESSION H. R. 7658 To provide a payroll tax credit for certain costs of providing employees with testing for COVID-19. IN THE HOUSE OF REPRESENTATIVES JULY 16, 2020 Mr. SCHWEIKERT introduced the following bill; which was referred to the Committee on Ways and Means A BILL To provide a payroll tax credit for certain costs of providing employees with testing for COVID-19. Be it enacted by the Senate and House of Representa- 1 tives of the United States of America in Congress assembled, 2 SECTION 1. EMPLOYEE TESTING TAX CREDIT. 3 (a) IN GENERAL.—In the case of an employer, there 4 shall be allowed as a credit against applicable employment 5 taxes for each calendar quarter an amount equal to 50 6 percent of the qualified employee testing expenses paid or 7 incurred by the employer during such calendar quarter. 8 (b) LIMITATIONS AND REFUNDABILITY.— 9 VerDate Sep 11 2014 21:46 Aug 09, 2020 Jkt 099200 PO 00000 Frm 00001 Fmt 6652 Sfmt 6201 E:\BILLS\H7658.IH H7658 pbinns on DSKJLVW7X2PROD with BILLS 2 •HR 7658 IH (1) OVERALL DOLLAR LIMITATION ON CRED- 1 IT.— 2 (A) IN GENERAL.—The amount of the 3 credit allowed under subsection (a) with respect 4 to any employer for any calendar quarter shall 5 not exceed the excess (if any) of— 6 (i) the applicable dollar limit with re- 7 spect to such employer for such calendar 8 quarter, over 9 (ii) the aggregate credits allowed 10 under subsection (a) with respect to such 11 employer for all preceding calendar quar- 12 ters. 13 (B) APPLICABLE DOLLAR LIMIT.—The 14 term ‘‘applicable dollar limit’’ means, with re- 15 spect to any employer for any calendar quarter, 16 the sum of— 17 (i) $500, multiplied so much of the 18 average number of full-time employees (as 19 determined for purposes of determining 20 whether an employer is an applicable large 21 employer for purposes of section 22 4980H(c)(2) of the Internal Revenue Code 23 of 1986, except that an individual shall not 24 be taken into account as employee for any 25 VerDate Sep 11 2014 21:46 Aug 09, 2020 Jkt 099200 PO 00000 Frm 00002 Fmt 6652 Sfmt 6201 E:\BILLS\H7658.IH H7658 pbinns on DSKJLVW7X2PROD with BILLS 3 •HR 7658 IH period during which substantially all of the 1 services provided by such individual as an 2 employee are provided outside the United 3 States) employed by such employer during 4 such calendar quarter as does not exceed 5 500, plus 6 (ii) $375, multiplied by so much of 7 such average number of full-time employ- 8 ees as exceeds 500 but does not exceed 9 1,000, plus 10 (iii) $250, multiplied by so much of 11 such average number of full-time employ- 12 ees as exceeds 1,000. 13 (2) CREDIT LIMITED TO EMPLOYMENT 14 TAXES.—The credit allowed by subsection (a) with 15 respect to any calendar quarter shall not exceed the 16 applicable employment taxes (reduced by any credits 17 allowed under subsections (e) and (f) of section 18 3111 of the Internal Revenue Code of 1986, sections 19 7001 and 7003 of the Families First Coronavirus 20 Response Act, and section 2301 of the CARES Act) 21 on the wages paid with respect to the employment 22 of all the employees of the eligible employer for such 23 calendar quarter. 24 (3) REFUNDABILITY OF EXCESS CREDIT.— 25 VerDate Sep 11 2014 21:46 Aug 09, 2020 Jkt 099200 PO 00000 Frm 00003 Fmt 6652 Sfmt 6201 E:\BILLS\H7658.IH H7658 pbinns on DSKJLVW7X2PROD with BILLS 4 •HR 7658 IH (A) IN GENERAL.—If the amount of the 1 credit under subsection (a) exceeds the limita- 2 tion of paragraph (2) for any calendar quarter, 3 such excess shall be treated as an overpayment 4 that shall be refunded under sections 6402(a) 5 and 6413(b) of the Internal Revenue Code of 6 1986. 7 (B) TREATMENT OF PAYMENTS.—For pur- 8 poses of section 1324 of title 31, United States 9 Code, any amounts due to the employer under 10 this paragraph shall be treated in the same 11 manner as a refund due from a credit provision 12 referred to in subsection (b)(2) of such section. 13 (c) QUALIFIED EMPLOYEE TESTING EXPENSES.— 14 For purposes of this section, the term ‘‘qualified employee 15 testing expenses’’ means amounts paid or incurred by the 16 employer for testing employees of the employer for 17 COVID-19 or SARS-CoV-2 (including on a periodic 18 basis). 19 (d) OTHER DEFINITIONS.—For purposes of this sec- 20 tion— 21 (1) APPLICABLE EMPLOYMENT TAXES.—The 22 term ‘‘applicable employment taxes’’ means the fol- 23 lowing: 24 VerDate Sep 11 2014 21:46 Aug 09, 2020 Jkt 099200 PO 00000 Frm 00004 Fmt 6652 Sfmt 6201 E:\BILLS\H7658.IH H7658 pbinns on DSKJLVW7X2PROD with BILLS 5 •HR 7658 IH (A) The taxes imposed under section 1 3111(a) of the Internal Revenue Code of 1986. 2 (B) So much of the taxes imposed under 3 section 3221(a) of such Code as are attrib- 4 utable to the rate in effect under section 5 3111(a) of such Code. 6 (2) SECRETARY.—The term ‘‘Secretary’’ means 7 the Secretary of the Treasury or the Secretary’s del- 8 egate. 9 (3) OTHER TERMS.—Any term used in this sec- 10 tion (other than subsection (b)(1)(B)) which is also 11 used in chapter 21 or 22 of the Internal Revenue 12 Code of 1986 shall have the same meaning as when 13 used in such chapter. 14 (e) CERTAIN GOVERNMENTAL EMPLOYERS.—This 15 credit shall not apply to the Government of the United 16 States, the government of any State or political subdivi- 17 sion thereof, or any agency or instrumentality of any of 18 the foregoing. 19 (f) SPECIAL RULES.— 20 (1) AGGREGATION RULE.—All persons treated 21 as a single employer under subsection (a) or (b) of 22 section 52 of the Internal Revenue Code of 1986, or 23 subsection (m) or (o) of section 414 of such Code, 24 VerDate Sep 11 2014 21:46 Aug 09, 2020 Jkt 099200 PO 00000 Frm 00005 Fmt 6652 Sfmt 6201 E:\BILLS\H7658.IH H7658 pbinns on DSKJLVW7X2PROD with BILLS 6 •HR 7658 IH shall be treated as one employer for purposes of this 1 section. 2 (2) DENIAL OF DOUBLE BENEFIT.—Rules simi- 3 lar to the rules of section 280C(a) of the Internal 4 Revenue Code of 1986 shall apply for purposes of 5 this section. 6 (3) THIRD-PARTY PAYORS.—Any credit allowed 7 under this section shall be treated as a credit de- 8 scribed in section 3511(d)(2) of such Code. 9 (4) ELECTION NOT TO HAVE SECTION APPLY.— 10 This section shall not apply with respect to any eligi- 11 ble employer for any calendar quarter if such em- 12 ployer elects (at such time and in such manner as 13 the Secretary may prescribe) not to have this section 14 apply. 15 (g) TRANSFERS TO CERTAIN TRUST FUNDS.—There 16 are hereby appropriated to the Federal Old-Age and Sur- 17 vivors Insurance Trust Fund and the Federal Disability 18 Insurance Trust Fund established under section 201 of 19 the Social Security Act (42 U.S.C. 401) and the Social 20 Security Equivalent Benefit Account established under 21 section 15A(a) of the Railroad Retirement Act of 1974 22 (45 U.S.C. 14 231n–1(a)) amounts equal to the reduction 23 in revenues to the Treasury by reason of this section 24 (without regard to this subsection). Amounts appropriated 25 VerDate Sep 11 2014 21:46 Aug 09, 2020 Jkt 099200 PO 00000 Frm 00006 Fmt 6652 Sfmt 6201 E:\BILLS\H7658.IH H7658 pbinns on DSKJLVW7X2PROD with BILLS 7 •HR 7658 IH by the preceding sentence shall be transferred from the 1 general fund at such times and in such manner as to rep- 2 licate to the extent possible the transfers which would have 3 occurred to such Trust Fund or Account had this section 4 not been enacted. 5 (h) TREATMENT OF DEPOSITS.—The Secretary shall 6 waive any penalty under section 6656 of the Internal Rev- 7 enue Code of 1986 for any failure to make a deposit of 8 any applicable employment taxes if the Secretary deter- 9 mines that such failure was due to the reasonable anticipa- 10 tion of the credit allowed under this section. 11 (i) REGULATIONS AND GUIDANCE.—The Secretary 12 shall prescribe such regulations and other guidance as 13 may be necessary or appropriate to carry out the purposes 14 of this section, including— 15 (1) with respect to the application of the credit 16 under subsection (a) to third-party payors (including 17 professional employer organizations, certified profes- 18 sional employer organizations, or agents under sec- 19 tion 3504 of the Internal Revenue Code of 1986), 20 regulations or other guidance allowing such payors 21 to submit documentation necessary to substantiate 22 the amount of the credit allowed under subsection 23 (a), and 24 VerDate Sep 11 2014 21:46 Aug 09, 2020 Jkt 099200 PO 00000 Frm 00007 Fmt 6652 Sfmt 6201 E:\BILLS\H7658.IH H7658 pbinns on DSKJLVW7X2PROD with BILLS 8 •HR 7658 IH (2) regulations or other guidance to prevent 1 abusive transactions. 2 (j) APPLICATION.—This section shall only apply to 3 amounts paid or incurred after March 12, 2020, and be- 4 fore January 1, 2021. 5 Æ VerDate Sep 11 2014 21:46 Aug 09, 2020 Jkt 099200 PO 00000 Frm 00008 Fmt 6652 Sfmt 6301 E:\BILLS\H7658.IH H7658 pbinns on DSKJLVW7X2PROD with BILLS