H.R. 3768 (107th): Worker Retraining Incentive Act of 2002

107th Congress, 2001–2002. Text as of Feb 14, 2002 (Introduced).

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HR 3768 IH

107th CONGRESS

2d Session

H. R. 3768

To amend the Internal Revenue Code of 1986 to provide tax credits for hiring workers retrained in Trade Adjustment and Assistance programs.

IN THE HOUSE OF REPRESENTATIVES

February 14, 2002

Mr. BALDACCI introduced the following bill; which was referred to the Committee on Ways and Means


A BILL

To amend the Internal Revenue Code of 1986 to provide tax credits for hiring workers retrained in Trade Adjustment and Assistance programs.

    Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

    This Act may be cited as the ‘Worker Retraining Incentive Act of 2002’.

SEC. 2. REFUNDABLE CREDIT FOR PORTION OF SOCIAL SECURITY TAXES BORNE BY EMPLOYEES WHO COMPLETE TRAINING PROGRAM UNDER TRADE ACT OF 1974.

    (a) GENERAL RULE- Subpart C of part IV of subchapter A of chapter 1 (relating to refundable credits) is amended by redesignating section 35 as section 36 and by inserting after section 34 the following new section:

‘SEC. 35. CREDIT FOR PORTION OF SOCIAL SECURITY TAXES BORNE BY EMPLOYEES WHO COMPLETE TRAINING PROGRAM UNDER TRADE ACT OF 1974.

    ‘(a) ALLOWANCE OF CREDIT- In the case of an eligible individual, there shall be allowed as a credit against the tax imposed by this subtitle for the taxable year an amount equal to the individual’s social security taxes attributable to service rendered during the 1-year period beginning with the day the individual begins work for the employer.

    ‘(b) LIMITATION- No credit shall be allowed under subsection (a) with respect to an individual for a taxable year if the sum of the wages (as defined in section 3121(a)) and compensation (as defined in section 3231(e)) of such individual for such 1-year period is $60,000 or greater.

    ‘(c) ELIGIBLE INDIVIDUAL-

      ‘(1) IN GENERAL- For purposes of this section, the term ‘eligible individual’ means an individual who--

        ‘(A) successfully completes a Trade Adjustment Assistance program under chapter 2 of title II of the Trade Act of 1974, and

        ‘(B) within 1 year after the completion of such program begins work with an employer in a position requiring skills which are taught in such program.

      ‘(2) EXCEPTION- For purposes of paragraph (1), an individual shall not be treated as an eligible individual if such individual is reemployed with the same employer (or successor thereto) in the same or similar position in which such individual last served before beginning such program.

      ‘(3) AGGREGATION RULE- All persons treated as a single employer under subsection (a) or (b) of section 52, or subsection (n) or (o) of section 414, shall be treated as a single employer for purposes of this subsection.

    ‘(d) SOCIAL SECURITY TAXES- For purposes of this section--

      ‘(1) IN GENERAL- The term ‘social security taxes’ means, with respect to any taxpayer for any taxable year--

        ‘(A) the amount of the taxes imposed by section 3101(a) on amounts received by the taxpayer during the calendar year in which the taxable year begins,

        ‘(B) the amount of the taxes determined using so much of the rate applicable under section 3201(a) as does not exceed the rate of tax in effect under section 3101(a) which is imposed by section 3201(a) on amounts received by the taxpayer during the calendar year in which the taxable year begins, and

        ‘(C) the amount of the taxes determined using so much of the rate applicable under section 3211(a)(1) as does not exceed the rate of tax in effect under section 3101(a) which is imposed by section 3211(a)(1) on amounts received by the taxpayer during the calendar year in which the taxable year begins.

      ‘(2) COORDINATION WITH SPECIAL REFUND OF SOCIAL SECURITY TAXES- The term ‘social security taxes’ shall not include any taxes to the extent the

taxpayer is entitled to a special refund of such taxes under section 6413(c).

      ‘(3) SPECIAL RULE- Any amounts paid pursuant to an agreement under section 3121(l) (relating to agreements entered into by American employers with respect to foreign affiliates) which are equivalent to the taxes referred to in paragraph (1)(A) shall be treated as taxes referred to in such paragraph.

    ‘(e) DENIAL OF CREDIT TO DEPENDENTS- No credit shall be allowed under this section to any individual with respect to whom a deduction under section 151 is allowable to another taxpayer for a taxable year beginning in the calendar year in which such individual’s taxable year begins.’.

    (b) TECHNICAL AMENDMENTS-

      (1) Paragraph (2) of section 1324(b) of title 31, United States Code, is amended by inserting ‘or from section 35 of such Code’ before the period at the end.

      (2) The table of sections for subpart C of part IV of subchapter A of chapter 1 is amended by striking the item relating to section 35 and inserting the following:

‘Sec. 35. Credit for portion of social security taxes borne by employees who complete training program under Trade Act of 1974.

‘Sec. 36. Overpayments of tax.’.

    (c) EFFECTIVE DATE- The amendments made by this section shall apply to taxable years beginning after December 31, 2002.

SEC. 3. CREDIT FOR PORTION OF EMPLOYER SOCIAL SECURITY TAXES PAID WITH RESPECT TO EMPLOYEES HIRED AFTER COMPLETING TRAINING PROGRAMS UNDER TRADE ACT OF 1974.

    (a) IN GENERAL- Subpart D of part IV of subchapter A of chapter 1 of the Internal Revenue Code of 1986 (relating to business related credits) is amended by adding at the end the following:

‘SEC. 45G. CREDIT FOR PORTION OF EMPLOYER SOCIAL SECURITY TAXES PAID WITH RESPECT TO EMPLOYEES HIRED AFTER COMPLETING TRAINING PROGRAMS UNDER TRADE ACT OF 1974.

    ‘(a) GENERAL RULE- For purposes of section 38, the employer trade adjustment assistance hiring credit determined under this section for the taxable year is an amount equal to the aggregate of the qualified social security taxes paid or incurred which are attributable to service of an eligible employee rendered during the 1-year period beginning on the day the employee begins work for the employer.

    ‘(b) LIMITATION- No credit shall be allowed under subsection (a) with respect to an employee for a taxable year if the sum of the wages (as defined in section 3121(a)) and compensation (as defined in section 3231(e)) of such employee for such 1-year period is $60,000 or greater.

    ‘(c) QUALIFIED SOCIAL SECURITY TAX-

      ‘(1) IN GENERAL- For purposes of this section, the term ‘qualified social security tax’ means, with respect to any eligible employee for any taxable year--

        ‘(A) the amount of the taxes imposed by section 3111(a) on amounts paid with respect to such employee by the taxpayer during the calendar year in which the taxable year begins, and

        ‘(B) the amount of the taxes determined using so much of the rate applicable under section 3221(a) as does not exceed the rate of tax in effect under section 3111(a) which is imposed by section 3221(a) on amounts paid with respect to such employee by the taxpayer during the calendar year in which the taxable year begins.

      ‘(2) COORDINATION WITH SPECIAL REFUND OF SOCIAL SECURITY TAXES- The term ‘social security taxes’ shall not include any taxes to the extent the taxpayer is entitled to a special refund of such taxes under section 6413(c).

      ‘(3) SPECIAL RULE- Any amounts paid pursuant to an agreement under section 3121(l) (relating to agreements entered into by American employers with respect to foreign affiliates) which are equivalent to the taxes referred to in paragraph (1)(A) shall be treated as taxes referred to in such paragraph.

    ‘(d) ELIGIBLE EMPLOYEE- For purposes of this section, the term ‘eligible employee’ means an individual who is an eligible individual (as defined in section 35(c)).

    ‘(e) DENIAL OF DOUBLE BENEFIT- No deduction or other credit shall be allowed under this chapter for any amount taken into account in determining the credit under this section.

    ‘(f) ELECTION NOT TO CLAIM CREDIT- This section shall not apply to a taxpayer for any taxable year if such taxpayer elects to have this section not apply for such taxable year.’.

    (b) CONFORMING AMENDMENTS-

      (1) Section 38(b) of such Code is amended by striking ‘plus’ at the end of paragraph (14), by striking the period at the end of paragraph (15) and inserting ‘, plus’, and by adding at the end the following:

      ‘(16) the trade adjustment assistance hiring credit determined under section 45G.’.

      (2) The table of sections for subpart D of part IV of subchapter A of chapter 1 of such Code is amended by adding at the end the following:

‘Sec. 45G. Credit for portion of employer social security taxes paid with respect to employees hired after completing training programs under Trade Act of 1974.’.

    (c) EFFECTIVE DATE- The amendments made by this section shall apply to taxable years beginning after December 31, 2002.