Sec. 251. Payroll credit for certain employers affected by COVID–19
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In the case of an eligible employer, there shall be allowed as a credit against the tax imposed by section 3111(a) or 3221(a) of the Internal Revenue Code of 1986 for each calendar quarter an amount equal to 80 percent of the qualified wages allocable to the inoperable trade or business with respect to each employee of such employer for such calendar quarter. The amount of qualified wages with respect to any employee which may be taken into account under subsection
(a)by the eligible employer for all calendar quarters shall not exceed $10,000. The credit allowed by subsection
(a)with respect to any calendar quarter shall not exceed the tax imposed by section 3111(a) or 3221(a) of the Internal Revenue Code of 1986 for such calendar quarter (reduced by any credits allowed under subsections
(e)and
(f)of section 3111 and sections 7001 and 7003 of the Families First Coronavirus Response Act) on the wages paid with respect to the employment of all the employees of the eligible employer. If the amount of the credit under subsection
(a)exceeds the limitation of paragraph
(2)for any calendar quarter, such excess shall be treated as an overpayment that shall be refunded under sections 6402(a) and 6413(b) of such Code. For purposes of section 1324 of title 31, United States Code, any amounts due to the employer under this paragraph shall be treated in the same manner as a refund due from a credit provision referred to in subsection (b)(2) of such section. For purposes of this section— The term eligible employer means an employer— which conducted an active trade or business on January 31, 2020, with respect to which such trade or business is an inoperable trade or business after January 31, 2020 during any calendar quarter, and which had either— no more than 1,500 full-time equivalent employees (as defined in section 45R(d)(2) of the Internal Revenue Code of 1986) for calendar year 2019, or no more than $41.5 million in gross receipts in calendar year 2019. The term inoperable trade or business means any trade or business of an eligible employer for which gross receipts for the calendar quarter are less than 80 percent of gross receipts for the same calendar quarter for the prior year. The term qualified wages means wages (as defined in section 3121(a) of such Code) or compensation (as defined in section 3231(e) of such Code) paid or incurred by an eligible employer with respect to an employee on any day after January 31, 2020 and before December 31, 2020 that falls during the designated period, except that such term shall not include any wages taken into account under section 7001 or section 7003 of the Families First Coronavirus Response Act. The term designated period means the period— beginning in the calendar quarter in which the trade or business became an inoperable trade or business, and ending in the calendar quarter for which the gross receipts of the trade or business of the eligible employer are greater than 90 percent of gross receipts for the same calendar quarter for the prior year. Such term shall include wages paid or incurred without regard to whether the employee performs no services, performs services at a different place of employment, or performs services during the period in which the eligible employer is an inoperable trade or business. All persons treated as a single employer under subsection
(a)or
(b)of section 52 of such Code, or subsection
(m)or
(o)of section 414 of such Code, shall be treated as one eligible employer for purposes of this section. For purposes of chapter 1 of such Code, the gross income of the employer for the taxable year which includes the last day of any calendar quarter with respect to which a credit is allowed under this section shall be increased by the amount of such credit. Any credit allowed under this section shall be treated as a credit described in section 3511(d)(2) of such Code. This section shall not apply with respect to any eligible employer for any calendar quarter if such employer elects (at such time and in such manner as the Secretary of the Treasury (or the Secretary’s delegate) may prescribe) not to have this section apply. An employee shall not be treated as an employee for purposes of this section for any period with respect to any employer if such employer is allowed a credit under section 51 of such Code with respect to such employee for such period. The Secretary of the Treasury (or the Secretary’s delegate) shall prescribe such regulations or other guidance as may be necessary to carry out the purposes of this section, including— regulations or other guidance providing for waiver of penalties for failure to deposit amounts in anticipation of the allowance of the credit allowed under this section, regulations or other guidance regarding the form and manner for recapturing credits under this section, regulations or other guidance to prevent the avoidance of the purposes of this section, regulations or other guidance describing proper calculation of gross receipts for purposes of subsection
(c)for eligible employers that did not operate a trade or business in prior calendar quarters, and regulations or other guidance regarding the application of the credit under subsection
(a)to third party payors (including professional employer organizations, certified professional employer organizations, or agents under section 3504 of such Code), including regulations or other guidance allowing such payors to submit documentation necessary to substantiate the eligible employer status of employers that use such payors. There are hereby appropriated to the Federal Old-Age and Survivors Insurance Trust Fund and the Federal Disability Insurance Trust Fund established under section 201 of the Social Security Act ( 42 U.S.C. 401 ) and the Social Security Equivalent Benefit Account established under section 15A(a) of the Railroad Retirement Act of 1974 ( 45 U.S.C. 14 231n–1(a)) amounts equal to the reduction in revenues to the Treasury by reason of this section (without regard to this subsection). 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 or Account had this section not been enacted.
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- 45 USC 14
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