1.
This Act may be cited as the
Military Reserve Mobilization Income
Security Act of 2005
.
2.
Refundable credit for activated military reservists
(a)
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:
36.
Wage differential for activated reservists
(a)
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)
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)
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)
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)
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)
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)
For purposes of this section—
(1)
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)
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)
(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)The amendments made by this section shall apply to taxable
years beginning after December 31, 2004.