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House Bill 6221
116th Congress(2019-2020)
Paid Sick Leave Credit Act of 2020
Introduced
Introduced
Introduced in House on Mar 12, 2020
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Introduced in House 
Mar 12, 2020
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Introduced in House(Mar 12, 2020)
Mar 12, 2020
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H. R. 6221 (Introduced-in-House)


116th CONGRESS
2d Session
H. R. 6221


To allow a tax credit for employers under the Internal Revenue Code of 1986 for certain mandated paid sick leave.

IN THE HOUSE OF REPRESENTATIVES

March 12, 2020

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

A BILL

To allow a tax credit for employers under the Internal Revenue Code of 1986 for certain mandated paid sick leave.

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 “Paid Sick Leave Credit Act of 2020”.

SEC. 2. Payroll credit for required paid sick leave.

(a) In general.—In the case of a employer who elects (at such time and in such manner as the Secretary may provide) the application of this section there shall be allowed as a credit against the tax imposed by section 3111(a) of the Internal Revenue Code of 1986 for the first calendar quarter beginning after such election an amount equal to the excess (if any) of—

(1) 90 percent of the qualified sick leave wages paid by an employer by reason of the requirements of section 2 of the Emergency Paid Sick Leave Act; over

(2) the aggregate credits allowed under this section with respect to all prior calendar quarters.

(b) Limitations.—

(1) WAGES TAKEN INTO ACCOUNT.—The amount of qualified sick leave wages which may be taken into account under subsection (a) for the taxable year with respect to any individual shall not exceed—

(A) for any day (or portion thereof) the individual is on sick leave during the taxable year, $511; and

(B) in the aggregate for any four consecutive calendar quarters, $7,156.

(2) CREDIT LIMITED TO CERTAIN EMPLOYMENT TAXES.—The credit allowed by subsection (a) with respect to any calendar quarter shall not exceed the tax imposed under section 3111(a) for such calendar quarter on the wages paid with respect to the employment of all individuals in the employ of the employer.

(3) CARRYOVER OF UNUSED CREDIT.—If the amount of the credit under subsection (a) exceeds the limitation of paragraph (2) for any calendar quarter, such excess shall be carried to the succeeding calendar quarter and allowed as a credit under subsection (a) for such quarter.

(c) Qualified sick leave wages.—For purposes of this section—

(1) IN GENERAL.—The term “qualified sick leave wages” means wages (as defined in section 51(c)(1) of the Internal Revenue Code of 1986, but without regard to section 3306(b)(2)(B) of such Code) paid or incurred by an employer to an employee with respect to employment for a period during which such employee is on sick leave with the employer.

(2) ONLY ADDITIONAL PAID SICK TIME TAKEN INTO ACCOUNT.—In the case of any employer with a sick leave plan in effect on March 12, 2020, only wages in excess of the wages the employer would have otherwise paid such employee (but for section 2 of the Emergency Paid Sick Leave Act) under such plan shall be taken into account.

(3) SICK LEAVE WAGES MUST MEET REQUIREMENTS OF ACT.—Wages shall not be taken into account under this section unless such wages meet the requirements of, and are required by, section 2 of the Emergency Paid Sick Leave Act.

(d) Special rules.—

(1) CERTAIN RULES TO APPLY.—For purposes of this section, rules similar to the rules of sections 51(i)(1) and 52 of the Internal Revenue Code of 1986 shall apply.

(2) RELATED EMPLOYERS.—For purposes of this section, all persons treated as a single employer under subsection (b), (c), (m), or (o) of section 414 of such Code shall be treated as 1 employer.

(3) DENIAL OF DOUBLE BENEFIT.—No deduction shall be allowed under such Code for the portion of wages paid or incurred for the taxable year which is equal to the sum of the credits determined under this section for calendar quarters ending in such taxable year. Rules similar to the rules under the second sentence of section 280C(a) of such Code shall apply for purposes of the preceding sentence.

(e) 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 subsection (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 Trust Fund had such paragraphs not been enacted.

(f) Regulations.—The Secretary shall prescribe such regulations as may be necessary to carry out the purposes of this subsection, including—

(1) regulations to prevent the avoidance of the purposes of the limitations and aggregation rules under this subsection through the use of successor companies or other means,

(2) regulations to minimize compliance and record-keeping burdens under this subsection, and

(3) regulations for recapturing the benefit of credits determined under this section in cases where there is a subsequent adjustment to the credit determined under subsection (a).

(g) Termination.—This section shall not apply to any wages paid more than 2 years after the date of the effective date of the Emergency Paid Sick Leave Act.