Bill Summary
This legislation, known as the Reserve Component Employer Incentive, Compensation, and Relief Act of 2019, aims to amend the Internal Revenue Code of 1986 to provide a tax credit for employers of reservists. The credit would be equal to the sum of the reservist credit amounts for each qualified reservist employed by the employer during the taxable year. The reservist credit amount would be determined based on the number of days of service in the uniformed services, with a maximum credit of $10,000 for those with 180 or more days of service. The credit would be part of the general business credit and could also be applied towards the alternative minimum tax. Employers would have the option to elect not to claim the credit. The effective date for this legislation would be for wages paid in taxable years beginning after December 31, 2019.
Possible Impacts
1. The "Reserve Component Employer Incentive, Compensation, and Relief Act of 2019" could potentially encourage more employers to hire reservists, as they would receive a tax credit for doing so. This could positively impact reservists who may have had difficulty finding employment due to their military obligations.
2. Employers who hire qualified reservists for longer periods of time, such as 180 days, would receive a higher tax credit of $10,000, incentivizing them to keep reservists employed for longer periods. This could benefit reservists who may have previously been only able to find short-term employment due to their military commitments.
3. The amendment also allows for reservists to elect not to apply for the tax credit if they so choose. This could benefit reservists who may not want their employer to receive a tax credit for hiring them, as it could potentially create tension or resentment between them and their co-workers.
[Congressional Bills 116th Congress]
[From the U.S. Government Publishing Office]
[H.R. 801 Introduced in House (IH)]
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116th CONGRESS
1st Session
H. R. 801
To amend the Internal Revenue Code of 1986 to allow for a credit
against tax for employers of reservists.
_______________________________________________________________________
IN THE HOUSE OF REPRESENTATIVES
January 25, 2019
Mr. Ryan (for himself and Mr. Palazzo) 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 allow for a credit
against tax for employers of reservists.
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 ``Reserve Component Employer
Incentive, Compensation, and Relief Act of 2019''.
SEC. 2. RESERVIST EMPLOYMENT CREDIT.
(a) Allowance of Credit.--Subpart D of part IV of subchapter A of
chapter 1 of the Internal Revenue Code of 1986 is amended by adding at
the end the following new section:
``SEC. 45T. RESERVIST EMPLOYMENT CREDIT.
``(a) Establishment of Credit.--For purposes of section 38, in the
case of an eligible employer, the reservist employment credit for a
taxable year is an amount equal to the sum of the reservist credit
amount for each qualified reservist employed by such employer at any
time during such taxable year.
``(b) Reservist Credit Amount.--For purposes of this section--
``(1) In general.--The term `reservist credit amount'
means, with respect to a qualified reservist for a taxable
year, an amount equal to the sum of--
``(A) $1,000, plus
``(B) in the case of a qualified reservist--
``(i) with 30 or more days, and fewer than
90 days, of service in the uniformed services
during such year, $3,000,
``(ii) with 90 or more days, and fewer than
180 days, of service in the uniformed services
during such year, $5,000, and
``(iii) with 180 or more days of service in
the uniformed services during such year,
$10,000.
``(2) Days of service.--For purposes of paragraph (1), days
of service shall only be taken into account with respect to a
qualified reservist employed by an eligible employer to the
extent such days are during a period of employment of such
reservist by such employer.
``(3) Qualified reservist.--The term `qualified reservist'
means, with respect to a taxable year, an individual who is, at
any time during such taxable year, a member of the National
Guard or a reserve component of the Armed Forces, as named in
section 10101 of title 10, United States Code (except for a
member of the Individual Ready Reserve).
``(4) Other definitions.--The terms `reserve component',
`active service', `full-time National Guard duty', `active
Guard and Reserve duty', and `inactive-duty training' have the
meanings given such terms in section 101 of title 10, United
States Code. The term `National Guard' has the meaning given
such term in section 101(3) of title 32, United States Code.
The term `service in the uniformed services' has the meaning
given such term in section 4303 of title 38, United States
Code.
``(c) Election To Have Credit Not Apply.--
``(1) In general.--A taxpayer may elect to have this
section not apply for any taxable year.
``(2) Other rules.--Rules similar to the rules of
paragraphs (2) and (3) of section 51(j) shall apply for
purposes of this subsection.''.
(b) Credit Part of General Business Credit.--Section 38(b) of the
Internal Revenue Code of 1986 is amended by striking ``plus'' at the
end of paragraph (31), by striking the period at the end of paragraph
(32) and inserting ``, plus'', and by adding at the end the following
new paragraph:
``(33) in the case of an eligible employer (as defined in
section 45T(c)), the reservist employment credit determined
under section 45T(a).''.
(c) Credit Allowed Against AMT.--Subparagraph (B) of section
38(c)(4) of the Internal Revenue Code of 1986 is amended by
redesignating clauses (x) through (xii) as clauses (xi) through (xiii),
respectively, and by inserting after clause (ix) the following new
clause:
``(x) the credit determined under section
45T,''.
(d) Conforming Amendments.--
(1) Denial of double benefit.--Section 280C(a) of the
Internal Revenue Code of 1986 is amended by inserting
``45T(a),'' after ``45S(a),''.
(2) Election to have credit not apply.--Section 6501(m) of
the Internal Revenue Code of 1986 is amended by inserting
``45T(d),'' after ``45S(h),''.
(3) Clerical amendment.--The table of sections for subpart
D of part IV of subchapter A of chapter 1 of the Internal
Revenue Code of 1986 is amended by adding at the end the
following new item:
``Sec. 45T. Reservist employment credit.''.
(e) Effective Date.--The amendments made by this section shall
apply to wages paid in taxable years beginning after December 31, 2019.
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