Reduction in employer portion of payroll tax for certain employers increasing payroll

(a)

In general

In the case of any calendar quarter beginning in 2010 or 2011, the aggregate amount of employer payroll tax deposits of an employer shall be reduced by an amount equal to the applicable percentage of the payroll increase of such employer for such calendar quarter which is attributable to wages paid to a qualified individual. (b)

Definitions and special rules

For purposes of this section— (1)

Employer payroll tax deposits

The term employer payroll tax deposits means deposits an employer is required to make under section 6302 of the Internal Revenue Code of 1986 of taxes imposed on such employer under section 3111 of such Code with respect to individuals in his employ. (2)

Applicable percentage

The applicable percentage shall be— (A)in the case of any calendar quarter beginning in 2010, 15 percent, and (B)in the case of any calendar quarter beginning in 2011, 10 percent. (3)

Payroll increase

(A)

In general

The term payroll increase means, with respect to an employer for a calendar quarter, the excess (if any) of— (i)the aggregate amount of wages (as defined in section 3121(a) of such Code) paid by such employer to all employees for such calendar quarter, over (ii)aggregate amount of inflation adjusted wages paid by such employer to all employees for the same calendar quarter in the preceding calendar year. (B)

Wages

The term wages has the meaning given such term by section 3121(a) of such Code for purposes of section 3111(a). (C)

Inflation adjusted wages

The term inflation adjusted wages means an amount equal to— (i)wages with respect to an employee, multiplied by (ii)the cost-of-living adjustment determined under section 1(f)(3) for the calendar year for which the reduction in deposits under this section is being determined occurs, determined by substituting ‘calendar year 2009’ for ‘calendar year 1992’ in subparagraph (B) thereof. (4)

Qualified individual

The term qualified individual means any individual— (A)who begins employment with a qualified employer after February 3, 2010, and before January 1, 2012, (B)whose principal place of employment with such employer is certified by the employer as being within a county the unemployment rate of which is not less than 8.5 percent (as determined by reference to the most recent unemployment data announced by the Bureau of Labor Statistics of the Department of Labor for the month during which such individual begins employment), (C)who is not employed by the qualified employer to replace another employee of such employer unless such other employee separated from employment voluntarily or for cause, and (D)who is not an individual described in section 51(i)(1). (5)

Excess reductions treated as refundable

(A)

In general

The amount of employer payroll tax deposits of an employer for any quarter shall not be reduced below zero under subsection (a). (B)

Excess treated as payment of tax

(i)

In general

The amount by which the reduction for any calendar quarter under subsection (a) would (but for subparagraph (A)) have exceeded the aggregate employer payroll tax deposits of the employer for such quarter shall be treated as a payment of the tax imposed by subtitle A of such Code for the last taxable year ending before such calendar quarter ends. (ii)

Timing

Secretary shall, subject to the provisions of such Code, refund or credit any overpayment attributable to this section as rapidly as possible. (iii)

No interest

No interest shall be allowed on any overpayment attributable to this section. (6)

Denial of double benefit

The amount of any deduction allowable to the employer under chapter 1 of such Code for taxes paid under section 3111 of such Code with respect to employment during any calendar quarter shall be reduced by the amount by which the employer payroll tax deposits of such employer are reduced under subsection (a) for such quarter. (7)

Wages must be for trade or business

A rule similar to the rule of section 51(f) of such Code shall apply. (8)

Adjustments for certain acquisitions, etc

Under regulations prescribed by the Secretary— (A)

Acquisitions

If, after December 31, 2009, an employer acquires the major portion of a trade or business of another person (hereafter in this paragraph 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 quarter ending after such acquisition, the amount of wages or compensation deemed paid by the employer during periods before such acquisition shall be increased by so much of such wages or compensation 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)

Dispositions

If, after December 31, 2009— (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 paragraph (1) 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 quarter ending after such disposition, the amount of wages or compensation deemed paid by the employer during periods before such disposition shall be reduced by so much of such wages as is attributable to such trade or business or separate unit.

(9)

Employers not on quarterly system

The Secretary of the Treasury shall prescribe rules for the application of this section in the case of an eligible employer whose required income tax deposits are not made on a quarterly basis.

Bonus depreciation made permanent

(a)

In general

Paragraph (2) of section 168(k) of the Internal Revenue Code of 1986 is amended— (1)in subparagraph (A)— (A)by adding and at the end of clause (ii), (B)by striking , and before January 1, 2010 in clause (iii)(I), (C)by striking , and before January 1, 2010, and in clause (iii)(II) and inserting a period, and (D)by striking clause (iv), (2)in subparagraph (B), by striking clause (ii) and by redesignating clauses (iii) and (iv) as clauses (ii) and (iii), respectively, and (3)in subparagraph (E)(i), by striking , and before January 1, 2010. (b)

Conforming amendments

(1)Subclause (I) of section 168(k)(2)(B)(i) of such Code is amended by striking (iii), and (iv) and inserting and (iii). (2)Clause (i) of section 168(k)(2)(C) of such Code is amended by striking , (iii) and (iv) and inserting and (iii). (3)Subparagraph (B) of section 168(l)(5) of such Code is amended to read as follows:

(B)by substituting , and before January 1, 2013. for the period at the end of clause (i) thereof, and

(4)Subparagraph (D) of section 1400L(b)(2) of such Code is amended by striking clause (i) thereof shall be applied without regard to and before January 1, 2010, and. (5)Subparagraph (B) of section 1400N(d)(3) of such Code is amended to read as follows:

(B)by substituting , and before January 1, 2008. for the period at the end of clause (i) thereof, and

(6)The heading for subsection (k) of section 168 of such Code is amended by striking and before January 1, 2010. (c)

Effective date

The amendments made by this section shall apply to property placed in service after December 31, 2009.