[Congressional Bills 105th Congress]
[From the U.S. Government Publishing Office]
[H.R. 508 Introduced in House (IH)]







105th CONGRESS
  1st Session
                                H. R. 508

    To amend the Internal Revenue Code of 1986 to make the FICA tax 
      inapplicable to overtime hours of small business employees.


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

                            February 4, 1997

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

_______________________________________________________________________

                                 A BILL


 
    To amend the Internal Revenue Code of 1986 to make the FICA tax 
      inapplicable to overtime hours of small business employees.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. INAPPLICABILITY OF FICA TAX TO OVERTIME HOURS OF SMALL 
              BUSINESS EMPLOYEES.

    (a) In General.--Subsection (a) of section 3121 of the Internal 
Revenue Code of 1986 (defining wages) is amended by striking ``or'' at 
the end of paragraph (20), by striking the period at the end of 
paragraph (21) and inserting ``; or'', and by inserting after paragraph 
(21) the following new paragraph:
            ``(22) remuneration with respect to employment paid to an 
        individual by a small employer on an hourly basis for hours 
        worked by such individual for such small employer for any week, 
        to the extent that such hours exceed 40 such hours for such 
        week.''
    (b) Small Employer.--Subsection (a) of section 3121 of such Code is 
amended by adding at the end the following:
``For purposes of paragraph (22), the term `small employer' means an 
employer that employed not more than 20 full-time employees during the 
preceding taxable year. Persons treated as a single employer for 
purposes of subsection (a) or (b) of section 52 shall be treated as a 
single employer for purposes of the preceding sentence.''
    (c) Effective Date.--The amendments made by this section shall 
apply to remuneration paid after December 31, 1997, with respect to 
hours worked after such date.
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