[Congressional Bills 109th Congress]
[From the U.S. Government Publishing Office]
[H.R. 5751 Introduced in House (IH)]
109th CONGRESS
2d Session
H. R. 5751
To amend the Internal Revenue Code of 1986 to allow employers a credit
against income tax equal to 50 percent of the compensation paid to
employees while they are performing active duty service as members of
the Ready Reserve or the National Guard and of the compensation paid to
temporary replacement employees.
_______________________________________________________________________
IN THE HOUSE OF REPRESENTATIVES
July 10, 2006
Mr. Poe 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 employers a credit
against income tax equal to 50 percent of the compensation paid to
employees while they are performing active duty service as members of
the Ready Reserve or the National Guard and of the compensation paid to
temporary replacement employees.
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 ``Reservist's Employer Support
Paycheck Enhancement Act of 2006''.
SEC. 2. EMPLOYER CREDIT FOR COMPENSATION PAID TO EMPLOYEES WHILE
SERVING ON ACTIVE DUTY AS MEMBERS OF READY RESERVE OR THE
NATIONAL GUARD.
(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 new section:
``SEC. 45N. EMPLOYER CREDIT FOR COMPENSATION PAID TO EMPLOYEES WHILE
SERVING ON ACTIVE DUTY AS MEMBERS OF READY RESERVE OR THE
NATIONAL GUARD AND FOR COMPENSATION PAID TO TEMPORARY
REPLACEMENT EMPLOYEES.
``(a) General Rule.--For purposes of section 38, in the case of an
employer, the employer Ready Reserve-National Guard active duty credit
determined under this section for the taxable year is an amount equal
to--
``(1) 50 percent of the compensation paid or incurred to
each Ready Reserve-National Guard employee of the taxpayer
while the employee is absent from employment while performing
qualified active duty, and
``(2) 50 percent of the compensation paid or incurred to
each qualified replacement employee of the taxpayer.
``(b) Limitation Applicable to Ready Reserve-National Guard
Employees.--
``(1) In general.--The amount of compensation taken into
account under subsection (a) for any period of qualified active
duty with respect to a Ready Reserve-National Guard employee
shall not exceed the active duty wage differential of such
employee for such period.
``(2) Active duty wage differential.--
``(A) In general.--For purposes of paragraph (1),
the active duty wage differential of a Ready Reserve-
National Guard employee for any period of qualified
active duty is the amount equal to the product of--
``(i) the daily wage differential of such
employee for such period, multiplied by
``(ii) the number of days that such
employee is on qualified active duty during
such period.
``(B) Daily wage differential.--For purposes of
subparagraph (A), the daily wage differential of a
Ready Reserve-National Guard employee for any period is
an amount equal to the excess of--
``(i) such employee's average daily
employer-provided compensation for such period,
over
``(ii) such employee's average daily
military pay for such period.
``(C) Average daily employer-provided
compensation.--
``(i) In general.--For purposes of
subparagraph (B), an employee's average daily
employer-provided compensation for any period
is the average daily compensation paid by the
employer to the employee for the 1-year period
ending on the day before the date that the
employee begins qualified active duty, adjusted
for cost-of-living and other increases
generally applicable to employees of the
employer for such period.
``(ii) Employer-provided compensation.--The
term `compensation' means any remuneration for
employment, whether in cash or in kind, which
is allowable as a deduction under section
162(a)(1).
``(D) Average daily military pay.--
``(i) In general.--For purposes of
subparagraph (B), a Ready Reserve-National
Guard employee's average daily military pay is
the average daily military pay and allowances
received by the employee on account of the
employees's performance of qualified active
duty during the period.
``(ii) Military pay and allowances.--For
purposes of clause (i)--
``(I) Military pay.--The term
`military pay' means pay (as defined in
section 101(21) of title 37, United
States Code).
``(II) Allowances.--The term
`allowances' means the allowances
payable to a member of the Armed Forces
of the United States under chapter 7 of
such title.
``(c) Limitation Applicable to Qualified Replacement Employees.--
``(1) In general.--The amount of compensation taken into
account under subsection (a) with respect to any qualified
replacement employee for any period shall not exceed the amount
equal to the product of--
``(A) the average daily employer-provided
compensation for such period of the Ready Reserve-
National Guard employee being replaced by such
replacement employee for such period, and
``(B) the number of days that the Ready Reserve-
National Guard employee is on qualified active duty
during such period.
``(d) Definitions.--For purposes of this section--
``(1) Ready reserve-national guard employee.--
``(A) In general.--The term `Ready Reserve-National
Guard employee' means any employee--
``(i) who is a member of the Ready Reserve
or of the National Guard, and
``(ii) who was an employee of the taxpayer
during the 1-year period ending on the day
before the date that the employee begins
qualified active duty.
``(B) National guard.--The term `National Guard'
has the meaning given such term by section 101(c)(1) of
title 10, United States Code.
``(C) Ready reserve.--The term `Ready Reserve' has
the meaning given such term by section 10142 of title
10, United States Code.
``(2) Qualified active duty.--The term `qualified active
duty' means--
``(A) active duty under an order or call for a
period in excess of 90 days or for an indefinite
period, other than the training duty specified in--
``(i) section 10147 of title 10, United
States Code (relating to training requirements
for the Ready Reserve), or
``(ii) section 502(a) of title 32, United
States Code (relating to required drills and
field exercises for the National Guard), in
connection with which an employee is entitled
to reemployment rights and other benefits or to
a leave of absence from employment under
chapter 43 of title 38, United States Code, and
``(B) hospitalization incident to such active duty.
``(3) Qualified replacement employee.--The term `qualified
replacement employee' means any employee who is hired by the
taxpayer to replace a Ready Reserve-National Guard employee
during a period of qualified active duty.''.
(b) Denial of Double Benefit.--Subsection (a) of section 280C of
such Code (relating to certain expenses for which credits are
allowable) is amended by inserting ``45N(a),'' after ``45A(a),''
(c) Credit To Be Part of General Business Credit.--Subsection (b)
of section 38 of such Code (relating to general business credit) is
amended by striking ``and'' at the end of paragraph (29), by striking
the period at the end of paragraph (30) and inserting ``, and'', and by
inserting after paragraph (30) the following new paragraph:
``(31) in the case of an employer, the employer Ready
Reserve-National Guard employee credit determined under section
45N(a).''.
(d) Conforming Amendment.--The table of sections for subpart D of
part IV of subchapter A of chapter 1 of such Code is amended by
inserting after the item relating to section 45M the following new
item:
``Sec. 45N. Employer credit for compensation paid to employees while
serving on active duty as members of Ready
Reserve or the National Guard and for
compensation paid to temporary replacement
employees.''.
(e) Effective Date.--The amendments made by this section shall
apply to periods of qualified active duty (as defined in section 45N(d)
of the Internal Revenue Code of 1986, as added by this section) in
taxable years beginning after December 31, 2005.
(f) Information on Military Pay and Allowances.--The Secretary
concerned (as defined in section 101 of title 10, United States Code)
shall provide to employers and the Secretary of the Treasury such
information as is necessary to determine the proper amount of credit
allowable to employers under such section 45N.
<all>