SAFE Kids and Jobs Act

I 116TH CONGRESS 2D SESSION H. R. 7837 To provide a payroll tax credit for certain employee dependent care expenses paid by employers. IN THE HOUSE OF REPRESENTATIVES JULY 29, 2020 Mr. LAMB (for himself, Ms. SA´NCHEZ, and Mr. FITZPATRICK) introduced the following bill; which was referred to the Committee on Ways and Means A BILL To provide a payroll tax credit for certain employee dependent care 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 ‘‘Supporting American 4 Families, Employers, Kids and Jobs Act’’ or as the 5 ‘‘SAFE Kids and Jobs Act’’. 6 VerDate Sep 11 2014 00:24 Aug 20, 2020 Jkt 099200 PO 00000 Frm 00001 Fmt 6652 Sfmt 6201 E:\BILLS\H7837.IH H7837 SSpencer on DSK126QN23PROD with BILLS 2 •HR 7837 IH SEC. 2. PAYROLL CREDIT FOR CERTAIN EMPLOYEE DE- 1 PENDENT CARE EXPENSES PAID BY EMPLOY- 2 ERS. 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 30 6 percent of the qualified employee dependent care expenses 7 paid by such employer with respect to such calendar quar- 8 ter. 9 (b) LIMITATIONS AND REFUNDABILITY.— 10 (1) DOLLAR LIMITATION PER EMPLOYEE.—The 11 qualified employee dependent care expenses which 12 may be taken into account under subsection (a) with 13 respect to any employee for any calendar quarter 14 shall not exceed $2,500. 15 (2) CREDIT LIMITED TO CERTAIN EMPLOYMENT 16 TAXES.—The credit allowed by subsection (a) with 17 respect to any calendar quarter shall not exceed the 18 applicable employment taxes for such calendar quar- 19 ter (reduced by any credits allowed under sub- 20 sections (e) and (f) of section 3111 of such Code, 21 sections 7001 and 7003 of the Families First 22 Coronavirus Response Act, section 2301 of the 23 CARES Act, and section 4 of this Act, for such 24 quarter) on the wages paid with respect to the em- 25 VerDate Sep 11 2014 00:24 Aug 20, 2020 Jkt 099200 PO 00000 Frm 00002 Fmt 6652 Sfmt 6201 E:\BILLS\H7837.IH H7837 SSpencer on DSK126QN23PROD with BILLS 3 •HR 7837 IH ployment of all the employees of the employer for 1 such calendar quarter. 2 (3) REFUNDABILITY OF EXCESS CREDIT.— 3 (A) IN GENERAL.—If the amount of the 4 credit under subsection (a) exceeds the limita- 5 tion of paragraph (2) for any calendar quarter, 6 such excess shall be treated as an overpayment 7 that shall be refunded under sections 6402(a) 8 and 6413(b) of the Internal Revenue Code of 9 1986. 10 (B) TREATMENT OF PAYMENTS.—For pur- 11 poses of section 1324 of title 31, United States 12 Code, any amounts due to an employer under 13 this paragraph shall be treated in the same 14 manner as a refund due from a credit provision 15 referred to in subsection (b)(2) of such section. 16 (4) COORDINATION WITH GOVERNMENT 17 GRANTS.—The qualified employee dependent care 18 expenses taken into account under this section by 19 any employer shall be reduced by any amounts pro- 20 vided by any Federal, State, or local government for 21 purposes of making or reimbursing such expenses. 22 (c) QUALIFIED EMPLOYEE DEPENDENT CARE EX- 23 PENSES.—For purposes of this section— 24 VerDate Sep 11 2014 00:24 Aug 20, 2020 Jkt 099200 PO 00000 Frm 00003 Fmt 6652 Sfmt 6201 E:\BILLS\H7837.IH H7837 SSpencer on DSK126QN23PROD with BILLS 4 •HR 7837 IH (1) IN GENERAL.—The term ‘‘qualified em- 1 ployee dependent care expenses’’ means any amount 2 paid to or for the benefit of an employee in the em- 3 ployment of the employer if— 4 (A) such amount is dependent care assist- 5 ance (as defined in section 129(e)(1) of the In- 6 ternal Revenue Code of 1986); and 7 (B) the employer elects (at such time and 8 in such manner as the Secretary may provide) 9 to treat such amount as a qualified employee 10 dependent care expense. 11 (2) EXCLUSION OF AMOUNTS PAID THROUGH 12 SALARY REDUCTION ARRANGEMENTS.—Such term 13 shall not include any amount paid at the election of 14 the employee under a salary reduction arrangement. 15 (d) SPECIAL RULES; OTHER DEFINITIONS.— 16 (1) APPLICATION OF CERTAIN NON-DISCRIMINA- 17 TION RULES.—No credit shall be allowed under this 18 section to any employer for any calendar quarter if 19 qualified employee dependent care expenses are pro- 20 vided by such employer to employees for such cal- 21 endar quarter in a manner which discriminates in 22 favor of highly compensated individuals (within the 23 meaning of section 125) as to eligibility for, or the 24 amount of, such benefit expenses. 25 VerDate Sep 11 2014 00:24 Aug 20, 2020 Jkt 099200 PO 00000 Frm 00004 Fmt 6652 Sfmt 6201 E:\BILLS\H7837.IH H7837 SSpencer on DSK126QN23PROD with BILLS 5 •HR 7837 IH (2) DENIAL OF DOUBLE BENEFIT.—For pur- 1 poses of chapter 1 of such Code, no deduction or 2 credit (other than the credit allowed under this sec- 3 tion) shall be allowed for so much of qualified em- 4 ployee dependent care expenses as is equal to the 5 credit allowed under 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) APPLICABLE EMPLOYMENT TAXES.—For 10 purposes of this section, the term ‘‘applicable em- 11 ployment taxes’’ means the following: 12 (A) The taxes imposed under section 13 3111(a) of the Internal Revenue Code of 1986. 14 (B) So much of the taxes imposed under 15 section 3221(a) of such Code as are attrib- 16 utable to the rate in effect under section 17 3111(a) of such Code. 18 (5) SECRETARY.—For purposes of this section, 19 the term ‘‘Secretary’’ means the Secretary of the 20 Treasury or the Secretary’s delegate. 21 (6) CERTAIN TERMS.— 22 (A) IN GENERAL.—Any term used in this 23 section which is also used in chapter 21 or 22 24 of such Code shall have the same meaning as 25 VerDate Sep 11 2014 00:24 Aug 20, 2020 Jkt 099200 PO 00000 Frm 00005 Fmt 6652 Sfmt 6201 E:\BILLS\H7837.IH H7837 SSpencer on DSK126QN23PROD with BILLS 6 •HR 7837 IH when used in such chapter (as the case may 1 be). 2 (B) CERTAIN PROVISIONS NOT TAKEN 3 INTO ACCOUNT EXCEPT FOR PURPOSES OF LIM- 4 ITING CREDIT TO EMPLOYMENT TAXES.—For 5 purposes of subparagraph (A) (other than with 6 respect to subsection (b)(2)), section 3121(b) of 7 such Code shall be applied without regard to 8 paragraphs (1), (5), (6), (7), (8), (10), (13), 9 (18), (19), and (22) thereof (except with re- 10 spect to services performed in a penal institu- 11 tion by an inmate thereof) and section 12 3231(e)(1) shall be applied without regard to 13 the sentence that begins ‘‘Such term does not 14 include remuneration’’. 15 (e) CERTAIN GOVERNMENTAL EMPLOYERS.— 16 (1) IN GENERAL.—The credit under this section 17 shall not be allowed to the Federal Government or 18 any agency or instrumentality thereof. 19 (2) EXCEPTION.—Paragraph (1) shall not 20 apply to any organization described in section 21 501(c)(1) of the Internal Revenue Code of 1986 and 22 exempt from tax under section 501(a) of such Code. 23 (f) TREATMENT OF DEPOSITS.—The Secretary shall 24 waive any penalty under section 6656 of such Code for 25 VerDate Sep 11 2014 00:24 Aug 20, 2020 Jkt 099200 PO 00000 Frm 00006 Fmt 6652 Sfmt 6201 E:\BILLS\H7837.IH H7837 SSpencer on DSK126QN23PROD with BILLS 7 •HR 7837 IH any failure to make a deposit of applicable employment 1 taxes if the Secretary determines that such failure was due 2 to the anticipation of the credit allowed under this section. 3 (g) REGULATIONS.—The Secretary shall prescribe 4 such regulations or other guidance as may be necessary 5 to carry out the purposes of this section, including regula- 6 tions or other guidance— 7 (1) to allow the advance payment of the credit 8 determined under subsection (a), subject to the limi- 9 tations provided in this section, based on such infor- 10 mation as the Secretary shall require; 11 (2) to provide for the reconciliation of such ad- 12 vance payment with the amount of the credit at the 13 time of filing the return of tax for the applicable 14 quarter or taxable year; 15 (3) for recapturing the benefit of credits deter- 16 mined under this section in cases where there is a 17 subsequent adjustment to the credit determined 18 under subsection (a); and 19 (4) with respect to the application of the credit 20 to third-party payors (including professional em- 21 ployer organizations, certified professional employer 22 organizations, or agents under section 3504 of such 23 Code), including to allow such payors to submit doc- 24 umentation necessary to substantiate eligibility for, 25 VerDate Sep 11 2014 00:24 Aug 20, 2020 Jkt 099200 PO 00000 Frm 00007 Fmt 6652 Sfmt 6201 E:\BILLS\H7837.IH H7837 SSpencer on DSK126QN23PROD with BILLS 8 •HR 7837 IH and the amount of, the credit allowed under this sec- 1 tion. 2 (h) APPLICATION OF SECTION.—This section shall 3 apply only to qualified employee dependent care expenses 4 paid after the date of the enactment of this Act and before 5 January 1, 2021. 6 (i) TRANSFERS TO CERTAIN TRUST FUNDS.—There 7 are hereby appropriated to the Federal Old-Age and Sur- 8 vivors Insurance Trust Fund and the Federal Disability 9 Insurance Trust Fund established under section 201 of 10 the Social Security Act (42 U.S.C. 401) and the Social 11 Security Equivalent Benefit Account established under 12 section 15A(a) of the Railroad Retirement Act of 1974 13 (45 U.S.C. 231n–1(a)) amounts equal to the reduction in 14 revenues to the Treasury by reason of this section (without 15 regard to this subsection). Amounts appropriated by the 16 preceding sentence shall be transferred from the general 17 fund at such times and in such manner as to replicate 18 to the extent possible the transfers which would have oc- 19 curred to such Trust Fund or Account had this section 20 not been enacted. 21 Æ VerDate Sep 11 2014 00:24 Aug 20, 2020 Jkt 099200 PO 00000 Frm 00008 Fmt 6652 Sfmt 6301 E:\BILLS\H7837.IH H7837 SSpencer on DSK126QN23PROD with BILLS