Temporary work opportunity credit for small businesses

(a)

In general

Section 51 of the Internal Revenue Code of 1986 is amended by adding at the end the following new subsection:

(l)

Small business credit for hiring certain unemployed individuals during 2014 and 2015

(1)

In general

In the case of an eligible unemployed individual who begins work for an eligible small business during 2014 or 2015, the taxpayer may elect to treat such individual as a member of a targeted group for purposes of this subpart, subject to the modifications in paragraph (4) and in lieu of treating such individual as a member of any other targeted group.(2)

Eligible small business

For purposes of this subsection, the term eligible small business means any person if—(A)either—(i)the gross receipts of such person for the preceding taxable year did not exceed $20,000,000, or(ii)in the case of a person to which subparagraph (A) does not apply, such person employed not more than 100 full-time employees during the preceding taxable year, and(B)such person elects the application of this section for the taxable year.

For purposes of subparagraph (A)(ii), an employee shall be considered full-time if such employee is employed at least 30 hours per week for 35 or more calendar weeks in the taxable year.

(3)

Eligible unemployed individual

For purposes of this section, the term eligible unemployed individual means any individual—(A)who is certified by the designated local agency as being eligible to receive unemployment compensation under State or Federal law during the 1-year period ending on the hiring date, or(B)whose employment with the employer was terminated before January 1, 2014.(4)

Employee must be full-time

No wages shall be taken into account with respect to any individual for any taxable year unless such individual is employed by the employer an average of at least 30 hours per week in the taxable year (in the case of the taxable year during which the individual begins work, beginning with the day the individual begins work).(5)

Modifications

For purposes of this subsection, the modifications described in this paragraph are as follows:(A)

Percentage of wages

Subsection (a) shall be applied—(i)in the case of wages paid or incurred by the employer during 2014, by substituting 7.5 percent for 40 percent, and(ii)in the case of wages paid or incurred by the employer during 2015, by substituting 5 percent for 40 percent.(B)

Qualified wages during 2014 and 2015 taken into account

Subsection (b)(2) shall be applied by substituting during 2014 and 2015 for during the 1-year period beginning with the day the individual begins work for the employer.(C)

$75,000 wage limitation

Subsection (b)(3) shall be applied by substituting $75,000 for $6,000.(D)

Double credit in counties with high unemployment

(i)

In general

In the case of an employer located in a county which is a high unemployment county for the month during which the employee begins work for the employer, clauses (i) and (ii) of subparagraph (A) shall be applied by substituting 15 percent and 10 percent for 7.5 percent and 5 percent, respectively.(ii)

High unemployment county

For purposes of this subparagraph, the term high unemployment county means, with respect to any month, a county for which the rate of unemployment exceeds the national rate of unemployment (as determined by the Bureau of Labor Statistics of the Department of Labor).(E)

Credit to apply for all 2014 and 2015

This subsection shall be applied without regard to subsection (c)(4).(F)

Certain rehires eligible

Subsection (i)(2) shall not apply to an individual whose employment with the employer was terminated before January 1, 2014.

(b)

Effective date

The amendments made by this section shall apply to employees hired after December 31, 2013.