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H.R. 5845 (112th): Veterans Back to Work Act of 2012

The text of the bill below is as of May 18, 2012 (Introduced).


I

112th CONGRESS

2d Session

H. R. 5845

IN THE HOUSE OF REPRESENTATIVES

May 18, 2012

(for himself, Mr. Carnahan, and Ms. Buerkle) 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 extend the work opportunity tax credit for veterans and to allow an exemption from an employer’s employment taxes in an amount equivalent to the value of such credit.

1.

Short title

This Act may be cited as the Veterans Back to Work Act of 2012.

2.

Extension and improvement of work opportunity tax credit for veterans

(a)

Extension of credit for veterans

Clause (i) of section 51(c)(4)(B) of the Internal Revenue Code of 1986 is amended by striking December 31, 2012 and inserting December 31, 2013.

(b)

Election To claim credit as exemption from employment taxes

(1)

In general

Section 3111 of the Internal Revenue Code of 1986 is amended by adding at the end the following new subsection:

(e)

Special exemption for certain veterans

(1)

In general

Subsection (a) shall not apply to wages paid by a qualified employer with respect to employment during the period beginning on the day after the date of the enactment of this subsection and ending on December 31, 2013, of any specified veteran for services performed—

(A)

in a trade or business of such qualified employer, or

(B)

in the case of a qualified employer exempt from tax under section 501(a), in furtherance of the activities related to the purpose or function constituting the basis of the employer’s exemption under section 501.

(2)

Limitation

With respect to any specified veteran employed by a qualified employer, the amount of wages to which paragraph (1) applies shall not exceed—

(A)

$125,490 in the case of an individual who is a qualified veteran by reason of section 51(d)(3)(A)(ii)(II),

(B)

$73,203 in the case of an individual who is a qualified veteran by reason of section 51(d)(3)(A)(iv),

(C)

$62,745 in the case of an individual who is a qualified veteran by reason of section 51(d)(3)(A)(ii)(I), and

(D)

$31,373 in the case of any other qualified veteran.

(3)

Qualified employer

For purposes of this subsection—

(A)

In general

The term qualified employer means any employer other than the United States, any State, or any political subdivision thereof, or any instrumentality of the foregoing.

(B)

Treatment of employees of post-secondary educational institutions

Notwithstanding subparagraph (A), the term qualified employer includes any employer which is a public institution of higher education (as defined in section 101(b) of the Higher Education Act of 1965).

(4)

Specified veteran

For purposes of this subsection—

(A)

In general

The term specified veteran means any individual who—

(i)

begins employment with a qualified employer after the date of the enactment of this subsection, and before January 1, 2014,

(ii)

certifies by signed affidavit, under penalties of perjury, that such individual is a qualified veteran and whether such individual is a qualified veteran described in subparagraph (A), (B), or (C) of paragraph (2),

(iii)

is not employed by the qualified employer to replace another employee of such employer unless such other employee separated from employment voluntarily or for cause, and

(iv)

is not an individual described in section 51(i)(1) (applied by substituting qualified employer for taxpayer each place it appears).

(B)

Qualified veteran

The term qualified veteran has the meaning given such term by section 51(d)(3), but applied without regard to whether such individual has been certified by the designated local agency.

(5)

Election

A qualified employer may elect to have this subsection not apply. Such election shall be made in such manner as the Secretary may require.

.

(2)

Coordination with work opportunity credit

Section 51(c) of such Code is amended by adding at the end the following new paragraph:

(6)

Coordination with payroll tax exemption for qualified veterans

The credit determined under this section with respect to any qualified veteran for any taxable year shall be reduced by an amount equal to 7.65 percent of the qualified first-year wages paid or incurred by the taxpayer to such veteran during such taxable year to which section 3111(e) applied.

.

(3)

Transfers to Federal Old-Age and Survivors Insurance Trust Fund

There are hereby appropriated to the Federal Old-Age and Survivors Trust Fund and the Federal Disability Insurance Trust Fund established under section 201 of the Social Security Act (42 U.S.C. 401) amounts equal to the reduction in revenues to the Treasury by reason of the amendments made by paragraph (1). Amounts appropriated by the preceding sentence shall be transferred from the general fund at such times and in such manner as to replicate to the extent possible the transfers which would have occurred to such Trust Fund had such amendments not been enacted.

(4)

Application to Railroad Retirement Taxes

(A)

In general

Section 3221 of the Internal Revenue Code of 1986 is amended by redesignating subsection (d) as subsection (e) and by inserting after subsection (c) the following new subsection:

(d)

Special exemption for certain veterans

(1)

In general

In the case of compensation paid by a qualified employer during the period beginning on the day after the date of the enactment of this subsection and ending on December 31, 2013, with respect to having a specified veteran in the employer’s employ for services rendered to such qualified employer, the applicable percentage under subsection (a) shall be equal to the rate of tax in effect under section 3111(b) for the calendar year.

(2)

Limitation

With respect to any specified veteran employed by a qualified employer, the amount of compensation to which paragraph (1) applies shall not exceed—

(A)

$125,490 in the case of an individual who is a qualified veteran by reason of section 51(d)(3)(A)(ii)(II),

(B)

$73,203 in the case of an individual who is a qualified veteran by reason of section 51(d)(3)(A)(iv),

(C)

$62,745 in the case of an individual who is a qualified veteran by reason of section 51(d)(3)(A)(ii)(I), and

(D)

$31,373 in the case of any other qualified veteran.

(3)

Qualified employer

The term ‘qualified employer’ means any employer other than the United States, any State, or any political subdivision thereof, or any instrumentality of the foregoing.

(4)

Specified veteran

For purposes of this subsection—

(A)

In general

The term specified veteran means any individual who—

(i)

begins employment with a qualified employer after the date of the enactment of this subsection, and before January 1, 2014,

(ii)

certifies by signed affidavit, under penalties of perjury, that such individual is a qualified veteran and whether such individual is a qualified veteran described in subparagraph (A), (B), or (C) of paragraph (2),

(iii)

is not employed by the qualified employer to replace another employee of such employer unless such other employee separated from employment voluntarily or for cause, and

(iv)

is not an individual described in section 51(i)(1) (applied by substituting qualified employer for taxpayer each place it appears).

(B)

Qualified veteran

The term qualified veteran has the meaning given such term by section 51(d)(3), but applied without regard to whether such individual has been certified by the designated local agency.

(5)

Election

A qualified employer may elect to have this subsection not apply. Such election shall be made in such manner as the Secretary may require.

.

(B)

Transfers to social security equivalent benefit account

There are hereby appropriated to the Social Security Equivalent Benefit Account established under section 15A(a) of the Railroad Retirement Act of 1974 (45 U.S.C. 231n–1(a)) amounts equal to the reduction in revenues to the Treasury by reason of the amendments made by subparagraph (A). Amounts appropriated by the preceding sentence shall be transferred from the general fund at such times and in such manner as to replicate to the extent possible the transfers which would have occurred to such Account had such amendments not been enacted.

(c)

Effective Date

The amendments made by this section shall apply to amounts paid after the date of the enactment of this Act.