Long-term unemployed workers work opportunity tax credits

(a)

In general

Paragraph (3) of section 51(b) of the Internal Revenue Code of 1986 is amended by inserting $10,000 per year in the case of any individual who is a qualified long term unemployed individual by reason of subsection (d)(11), and before $12,000 per year. (b)

Long-Term unemployed individuals

(1)

In general

Paragraph (1) of section 51(d) of the Internal Revenue Code of 1986 is amended by striking or at the end of subparagraph (H), by striking the period at the end of subparagraph (I) and inserting , or, and by adding at the end the following new subparagraph:

(J)a qualified long-term unemployed individual.

(2)

Definition

Subsection (d) of section 51 of such Code is amended by redesignating paragraphs (11) through (14) as paragraphs (12) through (15), respectively, and by inserting after paragraph (10) the following new paragraph:

(11)

Qualified long-term unemployed individual

(A)

In general

The term qualified long-term unemployed individual means any individual who was not a student for at least 6 months during the 1-year period ending on the hiring date and is certified by the designated local agency as having aggregate periods of unemployment during the 1-year period ending on the hiring date which equal or exceed 6 months. (B)

Student

For purposes of this paragraph, a student is an individual enrolled at least half-time in a program that leads to a degree, certificate, or other recognized educational credential for at least 6 months whether or not consecutive during the 1-year period ending on the hiring date.

(c)

Simplified certification

Section 51(d) of the Internal Revenue Code of 1986, as amended by subsection (b)(2), is amended by adding at the end the following new paragraph:

(16)

Simplified certification for qualified long-term unemployed individuals

(A)

In general

Any individual under paragraph (11) will be treated as certified by the designated local agency as having aggregate periods of unemployment described in such paragraph if the individual is certified by the designated local agency as being in receipt of unemployment compensation under State or Federal law for not less than 6 months during the 1-year period ending on the hiring date. (B)

Regulatory authority

The Secretary in the Secretary's discretion may provide alternative methods for certification under paragraph (11).

(d)

Credit made available to tax-Exempt employers in certain circumstances

Section 52(c) of the Internal Revenue Code of 1986 is amended— (1)by striking No credit and inserting:

(1)

In general

Except as provided in paragraph (2), no

, and

(2)by adding at the end the following new paragraph:

(2)

Exception

(A)

In general

In the case of any tax-exempt employer, there shall be treated as a credit allowable under subpart C (and not allowable under subpart D) the lesser of— (i)the amount of the work opportunity credit determined under this subpart with respect to such employer that is related to the hiring of qualified long-term unemployed individuals described in section 51(d)(11), or (ii)the amount of the payroll taxes of the employer during the calendar year in which the taxable year begins. (B)

Credit amount

In the case of any tax-exempt employer, the work opportunity credit under subparagraph (A) shall be determined by substituting 26 percent for 40 percent in subsections (a) and (i)(3)(A) of section 51 and by substituting 16.25 percent for 25 percent in section 51(i)(3)(A). (C)

Tax-exempt employer

For purposes of this paragraph, the term tax-exempt employer means an employer which is— (i)an organization described in section 501(c) and exempt from taxation under section 501(a), or (ii)a public higher education institution (as defined in section 101 of the Higher Education Act of 1965). (D)

Payroll taxes

For purposes of this paragraph, the term payroll taxes means— (i)amounts required to be withheld from the employees of the tax-exempt employer under section 3402(a), (ii)amounts required to be withheld from such employees under section 3101, and (iii)amounts of the taxes imposed on the tax-exempt employer under section 3111.

(e)

Treatment of Possessions

(1)

Payments to possessions

(A)

Mirror code possessions

The Secretary of the Treasury shall pay to each possession of the United States with a mirror code tax system amounts equal to the loss to that possession by reason of the application of the amendments made by this section (other than this subsection). Such amounts shall be determined by the Secretary of the Treasury based on information provided by the government of the respective possession of the United States. (B)

Other possessions

The Secretary of the Treasury shall pay to each possession of the United States, which does not have a mirror code tax system, amounts estimated by the Secretary of the Treasury as being equal to the aggregate credits that would have been provided by the possession by reason of the application of the amendments made by this section (other than this subsection) if a mirror code tax system had been in effect in such possession. The preceding sentence shall not apply with respect to any possession of the United States unless such possession has a plan, which has been approved by the Secretary of the Treasury, under which such possession will promptly distribute such payments. (2)

Coordination with credit allowed against united states income taxes

No increase in the credit determined under section 38(b) of the Internal Revenue Code of 1986 that is attributable to the credit provided by the amendments made by this section (other than this subsection) shall be taken into account with respect to any person— (A)to whom a credit is allowed against taxes imposed by the possession of the United States by reason of the amendments made by this section for such taxable year, or (B)who is eligible for a payment under a plan described in paragraph (1)(B) with respect to such taxable year. (3)

Definitions and special rules

(A)

Possession of the united states

For purposes of this subsection, the term possession of the United States includes American Samoa, the Commonwealth of the Northern Mariana Islands, the Commonwealth of Puerto Rico, Guam, and the United States Virgin Islands. (B)

Mirror code tax system

For purposes of this subsection, the term mirror code tax system means, with respect to any possession of the United States, the income tax system of such possession if the income tax liability of the residents of such possession under such system is determined by reference to the income tax laws of the United States as if such possession were the United States. (C)

Treatment of payments

For purposes of section 1324(b)(2) of title 31, United States Code, rules similar to the rules of section 1001(b)(3)(C) of the American Recovery and Reinvestment Tax Act of 2009 shall apply. (f)

Effective date

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