1.This Act may be cited as the
Rural Jobs Tax Credit Act of
2010
.
2.Refundable credit
for increasing employment
(a)Subpart C of part IV
of subchapter A of chapter 1 of the Internal Revenue Code of 1986 (relating to
refundable credits) is amended by inserting after section 36A the following new
section:
36B.Credit for
increasing employment
(a)In the case of an
eligible employer, there shall be allowed as a credit against the tax imposed
by this subtitle—
(1)for any taxable
year beginning in 2010, an amount equal to 15 percent of the excess (if any)
of—
(A)the aggregate
wages paid during 2010, over
(B)the inflation-adjusted wages paid during
2009, and
(2)for any taxable year beginning in 2011, an
amount equal to 10 percent of the excess (if any) of—
(A)the aggregate
wages paid during 2011, over
(B)the inflation-adjusted wages paid during
2010.
(b)For purposes of this section, the term eligible
employer
means any employer which conducts an active trade or business
in an area other than—
(1)a city or town
with a population of more than 50,000 inhabitants (based on the most recent
available census data), or
(2)any urbanized area
contiguous and adjacent to such a city or town.
(c)Quarterly
advance payments of credit
(1)The Secretary shall
pay (without interest) to each employer for each calendar quarter an amount
equal to the credit percentage of the excess (if any) of—
(A)the aggregate
wages paid by the employer during such quarter, over
(B)the
inflation-adjusted wages paid by the employer during the comparable quarter of
the preceding calendar year.
(2)For purposes of
paragraph (1), the credit percentage is—
(A)15 percent in the
case of the calendar quarters of 2010, and
(B)10 percent in the
case of the calendar quarters of 2011.
(3)
(A)If there is a payment
under paragraph (1) for 1 or more calendar quarters ending with or within a
taxable year, then the tax imposed by this chapter for such taxable year shall
be increased by the aggregate amount of such payments.
(B)Any
increase in tax under subparagraph (A) shall not be treated as tax imposed by
this chapter for purposes of determining the amount of any credit (other than
the credit under subsection (a)) allowable under this part.
(4)No claim shall be
allowed under this subsection with respect to any calendar quarter unless filed
on or before the earlier of—
(A)the last day of the succeeding quarter,
or
(B)the time
prescribed by law for filing the return of tax imposed by this chapter for the
taxable year in which or with which such quarter ends.
(5)Notwithstanding
paragraph (1), if the Secretary has not paid pursuant to a claim filed under
this subsection within 45 days of the date of the filing of such claim (20 days
in the case of an electronic claim), the claim shall be paid with interest from
such date determined by using the overpayment rate and method under section
6621.
(d)Total wages must
increaseThe amount of credit allowed under this section for any
taxable year shall not exceed the amount which would be so allowed for such
year if—
(1)the aggregate
amounts taken into account as wages were determined without any dollar
limitation, and
(2)103 percent of the
amount of wages otherwise required to be taken into account under subsection
(a)(1)(B) or subsection (a)(2)(B), as the case may be, were taken into
account.
(e)Inflation-Adjusted
wages; wagesFor purposes of
this section—
(1)
(A)The term inflation-adjusted wages means, for
any period—
(i)the aggregate
wages paid by the employer during such period, increased by
(ii)an amount equal
to the inflation percentage of such wages.
(B)The inflation percentage is—
(i)3
percent for purposes of determining inflation-adjusted wages for periods during
2009, and
(ii)5 percent for purposes of determining
inflation-adjusted wages for periods during 2010.
(2)
(A)Except as provided in subparagraph (B), the term
wages means, with respect to any calendar year, so much of wages
(as defined in section 3121(a)) as does not exceed the median household income
in the United States for the preceding calendar year.
(B)In the case of
remuneration subject to the tax imposed by 3201(a), the term wages
means, with respect to any calendar year, so much of compensation (as defined
in section 3231(e)) as does not exceed the median household income in the
United States for the preceding calendar year.
(f)
(1)Adjustments for
certain acquisitions, etc
(A)If, after December 31, 2008, an employer
acquires the major portion of a trade or business of another person
(hereinafter in this subparagraph referred to as the
predecessor
) or the major portion of a separate unit of a trade
or business of a predecessor, then, for purposes of applying this section for
any calendar year ending after such acquisition, the amount of wages deemed
paid by the employer during periods before such acquisition shall be increased
by so much of such wages paid by the predecessor with respect to the acquired
trade or business as is attributable to the portion of such trade or business
acquired by the employer.
(B)If,
after December 31, 2008—
(i)an
employer disposes of the major portion of any trade or business of the employer
or the major portion of a separate unit of a trade or business of the employer
in a transaction to which subparagraph (A) applies, and
(ii)the employer
furnishes the acquiring person such information as is necessary for the
application of subparagraph (A),
then,
for purposes of applying this section for any calendar year ending after such
disposition, the amount of wages deemed paid by the employer during periods
before such disposition shall be decreased by so much of such wages as is
attributable to such trade or business or separate unit.(2)Change in status
from self-employed to employeeIf—
(A)during 2009 or
2010 an individual has net earnings from self-employment (as defined in section
1402(a)) which are attributable a trade or business, and
(B)for any portion of
the succeeding calendar year such individual is an employee of such trade or
business,
then, for
purposes of determining the credit allowable for a taxable year beginning in
such succeeding calendar year, the employer’s aggregate wages for 2009 or 2010,
as the case may be, shall be increased by an amount equal to so much of the net
earnings referred to in subparagraph (A) as does not exceed the median
household income in the United States for 2009 or 2010, as the case may
be.(3)Certain other
rules to applyRules similar
to the following rules shall apply for purposes of this section:
(A)Section 51(f)
(relating to remuneration must be for trade or business employment).
(B)Section 51(k)
(relating to treatment of successor employers; treatment of employees
performing services for other persons).
(C)Section 52
(relating to special rules).
(4)If the employer has more than 1 taxable year beginning in
2010 or 2011, the credit under this section shall be determined for the
employer’s last taxable year beginning in 2010 or 2011, as the case may
be.
(g)Tax-Exempt
employers treated as taxpayersSolely for purposes of this
section and section 6402, employers exempt from tax under section 501(a) shall
be treated as
taxpayers.
.
(b)Subsection (a) of section 280C of such Code is amended by
inserting 36B(a),
before 45A(a)
.
(c)
(1)Section 1324(b)(2) of title 31, United
States Code, is amended by inserting 36B,
after
36A,
.
(2)The table of
sections for subpart C of part IV of subchapter A of chapter 1 of such Code is
amended by inserting after the item relating to section 36A the following new
item:
Sec. 36B. Credit for increasing
employment.
.
(d)The amendments made by
this section shall apply to taxable years beginning after December 31,
2009.
(e)Notice of
availability of creditThe Secretary of the Treasury shall work
with the State Employment Security Agencies to inform businesses of the
availability of section 36B of the Internal Revenue Code of 1986 (as added by
this Act).