[Congressional Bills 111th Congress]
[From the U.S. Government Publishing Office]
[S. 278 Introduced in Senate (IS)]

111th CONGRESS
  1st Session
                                 S. 278

To amend the Internal Revenue Code of 1986 to provide for a tax credit 
             for qualified donations of employee services.


_______________________________________________________________________


                   IN THE SENATE OF THE UNITED STATES

                            January 16, 2009

   Mr. Hatch (for himself, Mr. Kennedy, Mr. Gregg, and Mr. Cochran) 
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 tax credit 
             for qualified donations of employee services.

    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 ``Incentive to Serve Tax Act''.

SEC. 2. TAX CREDIT FOR QUALIFIED DONATIONS OF EMPLOYEE SERVICES.

    (a) In General.--Subpart D of part IV of subchapter A of chapter 1 
of the Internal Revenue Code of 1986 is amended by adding at the end 
the following new section:

``SEC. 45R. QUALIFIED EMPLOYEE SERVICE DONATIONS.

    ``(a) In General.--For purposes of section 38, the qualified 
employee service donation credit under this section is an amount equal 
to 25 percent of the qualified wages paid or incurred by the taxpayer.
    ``(b) Qualified Wages.--For purposes of this section--
            ``(1) In general.--The term `qualified wages' means the 
        wages paid or incurred by an employer during the taxable year 
        to an eligible employee during periods in which the eligible 
        employee is performing qualified services.
            ``(2) Wages.--The term `wages' has the meaning given to 
        such term by subsection (b) of section 3306 (determined without 
        regard to the dollar limitation contained in such section).
            ``(3) Limitation on wages taken into account.--The amount 
        of qualified wages which may be taken into account with respect 
        to any individual shall not exceed $100,000 per year.
            ``(4) Coordination with other credits.--
                    ``(A) Work opportunity credit.--The term `qualified 
                wages' shall not include wages attributable to service 
                rendered during the 1-year period beginning with the 
                day the individual begins work for the employer if any 
                portion of such wages is taken into account in 
                determining the credit under section 51.
                    ``(B) Indian employment credit.--The term 
                `qualified wages' shall not include wages with respect 
                to any employee if a credit is allowed for wages paid 
                to such employee under section 45A.
    ``(c) Eligible Employee.--For purposes of this section, the term 
`eligible employee' means any employee of the employer who performs 
qualified services at the direction of the employer and with the 
employee's consent for a period of not less than 160 hours for which 
such employee was fully compensated during the taxable year of the 
employer.
    ``(d) Qualified Services.--For purposes of this section--
            ``(1) In general.--The term `qualified services' means--
                    ``(A) eligible direct services to recipients or 
                beneficiaries of charitable organizations and community 
                agencies,
                    ``(B) the recruitment and coordination of 
                activities of volunteers providing such eligible direct 
                services, or
                    ``(C) the building of the capacity of such 
                organizations and agencies to provide such eligible 
                direct services.
            ``(2) Eligible direct services.--The term `eligible direct 
        services' means direct services which advance 1 or more of the 
        following:
                    ``(A) Improving the quality of education in public 
                schools for economically disadvantaged students.
                    ``(B) Expanding and improving access to health 
                care.
                    ``(C) Improving and conserving energy and natural 
                resources.
                    ``(D) Improving economic opportunities for 
                economically disadvantaged individuals.
                    ``(E) Improving disaster preparedness and response.
    ``(e) Verification.--No amount shall be allowed as a credit under 
subsection (a) for qualified wages for qualified services with respect 
to which the taxpayer has not submitted such information or 
certification as the Secretary determines necessary to ensure the 
performance of such qualified services.
    ``(f) Special Rules.--For purposes of this section, rules similar 
to the rules of section 52 shall apply.''.
    (b) Credit Treated as Business Credit.--Section 38(b) of the 
Internal Revenue Code of 1986 (relating to current year business 
credit) is amended by striking ``plus'' at the end of paragraph (34), 
by striking the period at the end of paragraph (35) and inserting ``, 
plus'', and by adding at the end the following new paragraph:
            ``(36) the credit determined under section 45R(a).''.
    (c) Conforming Amendments.--
            (1) Section 196(c) of the Internal Revenue Code of 1986 is 
        amended by striking ``and'' at the end of paragraph (12), by 
        striking the period at the end of paragraph (13) and inserting 
        ``, and'', and by adding at the end the following new 
        paragraph:
            ``(14) the qualified employee service credit under section 
        45R(a).''.
            (2) Section 280C(a) of such Code is amended by inserting 
        ``45R(a),'' after ``45P(a),''.
    (d) Clerical Amendment.--The table of sections for subpart D of 
part IV of subchapter A of chapter 1 of the Internal Revenue Code of 
1986 is amended by adding at the end the following new item:

``Sec. 45R. Qualified employee service donations.''.
    (e) Effective Date.--The amendments made by this section shall 
apply to wages paid or incurred after the date of the enactment of this 
Act.

SEC. 3. EXCLUSION.

    Section 148 of the National and Community Service Act of 1990 (42 
U.S.C. 12604) is amended--
            (1) by redesignating subsection (g) as subsection (h); and
            (2) by inserting after subsection (f) the following:
    ``(g) Exclusion From Income.--The amount of an educational award 
provided to an individual under this section shall not be included in 
the gross income of the individual for purposes of the Internal Revenue 
Code of 1986.''.
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