[Congressional Bills 109th Congress]
[From the U.S. Government Publishing Office]
[S. 417 Introduced in Senate (IS)]







109th CONGRESS
  1st Session
                                 S. 417

To amend the Internal Revenue Code of 1986 to provide for a refundable 
      wage differential credit for activated military reservists.


_______________________________________________________________________


                   IN THE SENATE OF THE UNITED STATES

                           February 17, 2005

Mr. Dorgan (for himself and Mr. Shelby) introduced the following bill; 
     which was read twice and referred to the Committee on Finance

_______________________________________________________________________

                                 A BILL


 
To amend the Internal Revenue Code of 1986 to provide for a refundable 
      wage differential credit for activated military reservists.

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

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Military Reserve Mobilization Income 
Security Act of 2005''.

SEC. 2. REFUNDABLE CREDIT FOR ACTIVATED MILITARY RESERVISTS.

    (a) In General.--Subpart C of part IV of subchapter A of chapter 1 
of the Internal Revenue Code of 1986 is amended by redesignating 
section 36 as section 37 and by inserting after section 35 the 
following new section:

``SEC. 36. WAGE DIFFERENTIAL FOR ACTIVATED RESERVISTS.

    ``(a) In General.--In the case of a qualified reservist, there 
shall be allowed as a credit against the tax imposed by this subtitle 
an amount equal to the qualified active duty wage differential of such 
qualified reservist for the taxable year.
    ``(b) Qualified Active Duty Wage Differential.--For purposes of 
this section--
            ``(1) In general.--The term `qualified active duty wage 
        differential' means the daily wage differential of the 
        qualified active duty reservist multiplied by the number of 
        days such qualified reservist participates in qualified reserve 
        component duty during the taxable year, including time spent in 
        a travel status.
            ``(2) Daily wage differential.--The daily wage differential 
        is an amount equal to the lesser of--
                    ``(A) the excess of--
                            ``(i) the qualified reservist's average 
                        daily qualified compensation, over
                            ``(ii) the qualified reservist's average 
                        daily military pay while participating in 
                        qualified reserve component duty to the 
                        exclusion of the qualified reservist's normal 
                        employment duties, or
                    ``(B) $54.80.
            ``(3) Average daily qualified compensation.--
                    ``(A) In general.--The term `average daily 
                qualified compensation' means--
                            ``(i) the qualified compensation of the 
                        qualified reservist for the one-year period 
                        ending on the day before the date the qualified 
                        reservist begins qualified reserve component 
                        duty, divided by
                            ``(ii) 365.
                    ``(B) Qualified compensation.--The term `qualified 
                compensation' means--
                            ``(i) compensation which is normally 
                        contingent on the qualified reservist's 
                        presence for work and which would be includible 
                        in gross income, and
                            ``(ii) compensation which is not 
                        characterized by the qualified reservist's 
                        employer as vacation or holiday pay, or as sick 
                        leave or pay, or as any other form of pay for a 
                        nonspecific leave of absence.
            ``(4) Average daily military pay and allowances.--
                    ``(A) In general.--The term `average daily military 
                pay and allowances' means--
                            ``(i) the amount paid to the qualified 
                        reservist during the taxable year as military 
                        pay and allowances on account of the qualified 
                        reservist's participation in qualified reserve 
                        component duty, determined as of the date the 
                        qualified reservist begins qualified reserve 
                        component duty, divided by
                            ``(ii) the total number of days the 
                        qualified reservist participates in qualified 
                        reserve component duty during the taxable year, 
                        including time spent in travel status.
                    ``(B) Military pay and allowances.--The term 
                `military pay' means pay as that term is defined in 
                section 101(21) of title 37, United States Code, and 
                the term `allowances' means the allowances payable to a 
                member of the Armed Forces of the United States under 
                chapter 7 of that title.
            ``(5) Qualified reserve component duty.--The term 
        `qualified reserve component duty' means--
                    ``(A) active duty performed, as designated in the 
                reservist's military orders, in support of a 
                contingency operation as defined in section 101(a)(13) 
                of title 10, United States Code, or
                    ``(B) full-time National Guard duty (as defined in 
                section 101(19) of title 32, United States Code) which 
                is ordered pursuant to a request by the President, for 
                a period under 1 or more orders described in 
                subparagraph (A) or (B) of more than 90 consecutive 
                days.
    ``(c) Qualified Reservist.--For purposes of this section--
            ``(1) In general.--The term `qualified reservist' means an 
        individual who is engaged in normal employment and is a member 
        of--
                    ``(A) the National Guard (as defined by section 
                101(c)(1) of title 10, United States Code), or
                    ``(B) the Ready Reserve (as defined by section 
                10142 of title 10, United States Code).
            ``(2) Normal employment.--The term `normal employment 
        duties' includes self-employment.
    ``(d) Disallowance With Respect to Persons Ordered to Active Duty 
for Training.--No credit shall be allowed under subsection (a) to a 
qualified reservist who is called or ordered to active duty for any of 
the following types of duty:
            ``(1) Active duty for training under any provision of title 
        10, United States Code.
            ``(2) Training at encampments, maneuvers, outdoor target 
        practice, or other exercises under chapter 5 of title 32, 
        United States Code.
            ``(3) Full-time National Guard duty, as defined in section 
        101(d)(5) of title 10, United States Code.
    ``(e) Credit Included in Gross Income.--Gross income includes the 
amount of the credit allowed the taxpayer under this section.''.
    (b) Conforming Amendments.--
            (1) Paragraph (2) of section 1324(b) of title 31, United 
        States Code, is amended by inserting before the period ``, or 
        from section 36 of such Code''.
            (2) The table of sections for subpart C of part IV of 
        chapter 1 of the Internal Revenue Code of 1986 is amended by 
        striking the last item and inserting the following new items:

``Sec. 36. Wage differential for activated reservists.
``Sec. 37. Overpayments of tax.''.
    (c) Effective Date.--The amendments made by this section shall 
apply to taxable years beginning after December 31, 2004.
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