HR 5250 — Veterans Back to Work Act of 2019

Summary

Veterans Back to Work Act of 2019 This bill amends the Internal Revenue Code to (1) make permanent the work opportunity tax credit for hiring qualified veterans (veterans receiving compensation for a service-connected disability and other federal assistance); and (2) allow employers who hire qualified veterans to elect to claim the tax credit as an exemption from employment and railroad retirement taxes for such veterans' first-year wages, subject to specified limitations. The bill appropriates amounts to the Social Security trust funds and the Social Security Equivalent Benefit Account to cover any revenue loss to such funds resulting from this bill.

Bill Text

• Introduced Introduced in House Current html November 21, 2019

Compared against current U.S. Code AI-generated reading aid — verify against the official bill.

This bill makes changes to the Internal Revenue Code to permanently extend the work opportunity tax credit for veterans and introduces a special exemption from employment taxes for certain veterans.

• Section 51(c)(4)

  (other than a qualified veteran)

  The work opportunity tax credit for veterans is made permanent by specifying that it applies to individuals other than qualified veterans.

• Section 3111

  Special Exemption for Certain Veterans. (1) In general.--Subsection (a) shall not apply to first-year wages paid after the date of the enactment of this subsection by a qualified employer with respect to employment 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.

  Employers may be exempt from employment taxes for wages paid to specified veterans.

• Section 3111

  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.

  There are specific wage limits set for the exception from employment taxes for various qualified veterans.

• Section 3111

  For purposes of this subsection, the term 'first-year wages' means, with respect to any individual, wages for services rendered during the 1-year period beginning with the day the individual begins work for the employer.

  The definition of 'first-year wages' is established for the exemptions applicable to specified veterans.

• Section 51(c)

  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(g) or 3221(d) applied.

  The bill specifies that the work opportunity tax credit for veterans will be reduced by the amount of the new payroll tax exemption.

• Section 3111(e)

  (6) Election.-- (A) In general.--A qualified tax-exempt organization may elect to determine the credit allowed under this section without regard to the qualified first-year wages of any individual.

  A qualified tax-exempt organization can choose to not factor in the wages of specific individuals when determining their credit.

• Section 3221

  Special Exemption for Certain Veterans.-- (1) In general.--In the case of first-year compensation paid by a qualified employer after the date of the enactment of this subsection 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.

  An additional exemption is provided for railroad employers regarding specified veterans.

• Section 3221

  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.

  Similar limits apply to railroad employers for specified veterans as per the self-employment tax exemptions.

Action History

1. November 21, 2019

   Introduced in House

2. November 21, 2019

   Introduced in House

3. November 21, 2019

   Referred to the House Committee on Ways and Means.

4. December 11, 2019

   Sponsor introductory remarks on measure. (CR H10028)

Sponsors

• Ron Wright · Primary

Subjects