I 112th CONGRESS 1st Session H. R. 3681 IN THE HOUSE OF REPRESENTATIVES December 15, 2011 Mr. Webster introduced the following bill; which was referred to the Committee on Ways and Means A BILL To amend the Internal Revenue Code of 1986 to allow a credit to pass-thru entities for hiring individuals who are unemployed and receive unemployment benefits.

1.

Short title

This Act may be cited as the One New Employee Act of 2011.

2.

Business credit for pass-thru entities hiring the unemployed

(a)

In general

Subpart F of part IV of subchapter A of chapter 1 of the Internal Revenue Code of 1986 is amended by inserting after section 51 the following new section:

51A.

Pass-thru entities hiring the unemployed

(a)

Determination of amount

In the case of an eligible entity, for purposes of section 38, the amount of the hiring the unemployed credit determined under this section for the taxable year shall be the aggregate of the applicable amounts for a qualified individual during the taxable year. (b)

Limitation

The maximum amount allowed as a credit under subsection (a) to an eligible entity for a taxable year shall not exceed $5,000. (c)

Applicable amount

For purposes of this section— (1)

In general

The applicable amount shall be $1,250 for any quarter in the taxable year for which a qualified individual is an employee of the eligible entity, beginning with the first quarter of the taxable year after the quarter in which such individual is hired. (2)

Number of employees

The applicable amount for any quarter shall be zero if the number of employees who received wages in such quarter does not exceed the number of employees who received wages in the quarter ending before the date the qualified individual was hired. (3)

Number of qualified individuals

Not more than one qualified individual may be taken into account in a taxable year under subsection (a). (d)

Qualified individual

For purposes of this section— (1)

In general

The term qualified individual means an individual who— (A)on the day the individual is hired by the employer, was in receipt of unemployment compensation under State or Federal law for not less than 1 week during the 1-year period ending on such day, and (B)while employed does not receive any unemployment compensation under State or Federal law for any period after such day. (2)

Continuous employment in succeeding taxable years

The term qualified individual includes any individual with respect to whom a credit was allowed under subsection (a) in a preceding taxable year and who has been employed by the employer since such day of hiring without a break in service. (e)

Eligible entity

For purposes of this section, the term eligible entity means any entity engaged in a trade or business as— (1)an S corporation, partnership, trust, or estate, (2)an organization to which part I of subchapter T applies, or (3)a trade or business conducted by an individual as a sole proprietor. (f)

Coordination with other credits and deductions

The credit allowed under this section is in addition to any credit or deduction allowable under this chapter with respect to a qualified individual. (g)

Termination

Subsection (a) shall not apply to any taxable year beginning after December 31, 2016.

. (b)

Credit allowed as part of general business credit

Section 38(b) of such Code (defining current year business credit) is amended by striking plus at the end of paragraph (35), by striking the period at the end of paragraph (36) and inserting , plus, and by adding at the end the following new paragraph: (37)the hiring the unemployed credit determined under section 51A.. (c)

Clerical amendment

The table of sections for subpart F of part IV of subchapter A of chapter 1 of such Code is amended by inserting after the item relating to section 51 the following new item: Sec. 51A. Pass-thru entities hiring the unemployed.. (d)

Effective date

The amendments made by this section shall apply to individuals who begin work for the employer in taxable years ending after the date of the enactment of this Act.