Sec. 101. Temporary employee payroll tax cut for residents of United States possessions
899 words·~4 min read·
/bill/114/s/2381/is/section-101A research copy — for the controlling text, always check the official state or federal source. Not legal advice.
Notwithstanding any other provision of law, in the case of a qualified resident of a United States possession— there shall be allowed a credit against the tax imposed by section 1401(a) of the Internal Revenue Code of 1986 for any taxable year which begins in the payroll tax holiday period an amount equal to 3.1 percent of the lesser of— the self-employment income (as defined in section 1402(b) of such Code) derived from sources within a United States possession (as determined under section 937(b) of such Code) for the taxable year, or the net earnings from self-employment (as defined in section 1402(a) of such Code) for the taxable year, and with respect to remuneration received during the payroll tax holiday period for services performed as an employee within a United States possession (except amounts received for services performed as an employee of the United States or any agency thereof), the rate of tax under 3101(a) of such Code shall be 3.1 percent (including for purposes of determining the applicable percentage under sections 3201(a) and 3211(a)(1) of such Code).
In the case of an qualified resident of a United States possession to whom subsection (a)(2) applies, the first sentence of section 6413(c)(1) of the Internal Revenue Code of 1986 shall be applied by substituting for exceeds the tax with respect to the amount of such wages received in such year which is equal to such contribution and benefit base the following: exceeds the sum of— 3.1 percent of the lesser of— the wages received in such year to which section 101(a)(2) of the Puerto Rico Assistance Act of 2015 applies, or the contribution and benefit base, plus 6.2 percent of the lesser of— the wages received in such year to which such section does not apply, or the contribution and benefits base reduced (but not below zero) by the amount of wages taken into account under paragraph (1). .
An employer who receives an attestation from an employee, in such form and manner as directed by the Secretary of the Treasury (or the Secretary's delegate), that such employee is a qualified resident of a United States possession shall not be liable under section 3102 or 3202 of the Internal Revenue Code of 1986 for any failure to collect taxes in excess of the rate which applies under this section unless a reasonable person would determine that such attestation is not true and correct.
For purposes of subsection (a)(2), services performed as an employee outside of a United States possession shall not be taken into account if such services are de minimis. The term qualified resident means, with respect to any calendar year, any individual— who was present in a United States possession for at least 183 days during the preceding calendar year, and who, as of the first day of the calendar year, does not have a tax home (determined under the principles of section 911(d)(3) of the Internal Revenue Code of 1986 without regard to the second sentence thereof) outside of a United States possession and does not have a closer connection (determined under the principles of section 7701(b)(3)(B)(ii) of such Code) to the United States or a foreign country than to a United States possession.
For purposes of subparagraph (A), the determination of whether a person is present for any day shall be made under the principles of section 7701(b) of such Code. The term United States possession means Puerto Rico, American Samoa, Guam, the Northern Mariana Islands, and the Virgin Islands. The term payroll tax holiday period means the period beginning after December 31, 2015, and ending before January 1, 2021. In the case of the period beginning after December 31, 2019, and ending before January 1, 2021, this section shall be applied— by substituting 1.55 percent for 3.1 percent in subsection (a)(1), and by substituting 4.65 percent for 3.1 percent each place it appears in subsections (a)(2) and (b).
The Secretary of the Treasury shall notify employers of the payroll tax holiday period in any manner the Secretary deems appropriate. 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 application 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 amendments not been enacted.
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 application of subsection (a)(2). 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.
For purposes of applying any provision of law other than the provisions of the Internal Revenue Code of 1986, the rate of tax in effect under section 3101(a) of such Code shall be determined without regard to the reduction in such rate under this section.
Connectionstraces to 1
Traces to 1 document
U.S. Code
1 reference not yet in our index
- 45 USC 231n–1(a)
Citation graph
cites case law
Sec. 101
Temporary employee payroll tax cut for residents of United States possessions
Cite45 USC 231n–1(a)
Cites 2Cited by 0 across 0 sources