Sec. 201. Carbon reduced payroll tax
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Notwithstanding any other provision of law— with respect to any taxable year which begins after December 31, 2020, the rate of tax under section 1401(a) of the Internal Revenue Code of 1986 shall be 12.4 percent minus the reduced carbon rate, and with respect to remuneration received after December 31, 2020— the rate of tax under 3101(a) of such Code shall be 6.2 percent minus one-half of the reduced carbon rate (including for purposes of determining the applicable percentage under sections 3201(a) and 3211(a)(1) of such Code), and the rate of tax under subsection
(a)of section 3111 of such Code shall be 6.2 percent minus one-half of the reduced carbon rate (including for purposes of subsections
(e)and
(f)of such section and determining the applicable percentage under section 3221(a) of such Code). For purposes of applying section 1402(a)(12) of the Internal Revenue Code of 1986, the rate of tax imposed by subsection 1401(a) of such Code shall be determined without regard to the reduction in such rate under this section. In the case of the taxes imposed by section 1401 of such Code for any taxable year which begins in the payroll tax carbon period, the deduction under section 164(f) with respect to such taxes shall be equal to the sum of— one-half of the portion of such taxes attributable to the tax imposed by section 1401(a) (determined after the application of this section), plus one-half of the portion of such taxes attributable to the tax imposed by section 1401(b). For purposes of this section— The term reduced carbon rate means the number of percentage points determined by the Secretary to be— 1 percentage point in the case of any taxable year which begins during calendar year 2021, and in the case of any taxable year beginning in a calendar year beginning after calendar year 2021, the number of percentage points determined by the Secretary to be, for the calendar year the product of— 12.4, and 52.5 percent of amounts of estimated taxes received in the Treasury under subtitle L of the Internal Revenue Code of 1986 (relating to greenhouse gas emissions), divided by estimated taxes that would have been received in the Treasury with respect to a calendar year under sections 1401(a), 3101(a), 3111(a), and the applicable percentage of such taxes under 3201(a), 3211(a)(1), and 3221(a), were this section not in effect. For purposes of paragraph (1), the determination of amounts received in the Treasury shall be made on the basis of estimates by the Secretary of the Treasury (or the Secretary’s delegate), and proper adjustments shall be made in the amounts subsequently estimated to the extent prior estimates were in excess of or less than actual receipts. Not later than October 31 of each calendar year, the Secretary shall publish the reduced carbon rate determined under this subsection for the succeeding calendar year. 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 Federal 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. Not later than October 1 of each fiscal year beginning after fiscal year 2021 (January 1, 2021 in the case of fiscal year 2021), from amounts in the general fund of the Treasury not otherwise appropriated, the Commissioner of Social Security shall pay an amount, equal to 7.5 percent of amounts of taxes received in the Treasury under subtitle L of the Internal Revenue Code of 1986 (relating greenhouse gas emissions), to be distributed equally among each individual entitled to monthly insurance benefits under title II of the Social Security Act, or to an annuity under section 2 of the Railroad Retirement Act of 1974 for the first month of each year.
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- 45 USC 231n–1(a)
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