[Congressional Bills 116th Congress]
[From the U.S. Government Publishing Office]
[H.R. 7837 Introduced in House (IH)]

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116th CONGRESS
  2d Session
                                H. R. 7837

  To provide a payroll tax credit for certain employee dependent care 
                      expenses paid by employers.


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

                             July 29, 2020

Mr. Lamb (for himself, Ms. Sanchez, and Mr. Fitzpatrick) introduced the 
 following bill; which was referred to the Committee on Ways and Means

_______________________________________________________________________

                                 A BILL


 
  To provide a payroll tax credit for certain employee dependent care 
                      expenses paid by employers.

    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 ``Supporting American Families, 
Employers, Kids and Jobs Act'' or as the ``SAFE Kids and Jobs Act''.

SEC. 2. PAYROLL CREDIT FOR CERTAIN EMPLOYEE DEPENDENT CARE EXPENSES 
              PAID BY EMPLOYERS.

    (a) In General.--In the case of an employer, there shall be allowed 
as a credit against applicable employment taxes for each calendar 
quarter an amount equal to 30 percent of the qualified employee 
dependent care expenses paid by such employer with respect to such 
calendar quarter.
    (b) Limitations and Refundability.--
            (1) Dollar limitation per employee.--The qualified employee 
        dependent care expenses which may be taken into account under 
        subsection (a) with respect to any employee for any calendar 
        quarter shall not exceed $2,500.
            (2) Credit limited to certain employment taxes.--The credit 
        allowed by subsection (a) with respect to any calendar quarter 
        shall not exceed the applicable employment taxes for such 
        calendar quarter (reduced by any credits allowed under 
        subsections (e) and (f) of section 3111 of such Code, sections 
        7001 and 7003 of the Families First Coronavirus Response Act, 
        section 2301 of the CARES Act, and section 4 of this Act, for 
        such quarter) on the wages paid with respect to the employment 
        of all the employees of the employer for such calendar quarter.
            (3) Refundability of excess credit.--
                    (A) In general.--If the amount of the credit under 
                subsection (a) exceeds the limitation of paragraph (2) 
                for any calendar quarter, such excess shall be treated 
                as an overpayment that shall be refunded under sections 
                6402(a) and 6413(b) of the Internal Revenue Code of 
                1986.
                    (B) Treatment of payments.--For purposes of section 
                1324 of title 31, United States Code, any amounts due 
                to an employer under this paragraph shall be treated in 
                the same manner as a refund due from a credit provision 
                referred to in subsection (b)(2) of such section.
            (4) Coordination with government grants.--The qualified 
        employee dependent care expenses taken into account under this 
        section by any employer shall be reduced by any amounts 
        provided by any Federal, State, or local government for 
        purposes of making or reimbursing such expenses.
    (c) Qualified Employee Dependent Care Expenses.--For purposes of 
this section--
            (1) In general.--The term ``qualified employee dependent 
        care expenses'' means any amount paid to or for the benefit of 
        an employee in the employment of the employer if--
                    (A) such amount is dependent care assistance (as 
                defined in section 129(e)(1) of the Internal Revenue 
                Code of 1986); and
                    (B) the employer elects (at such time and in such 
                manner as the Secretary may provide) to treat such 
                amount as a qualified employee dependent care expense.
            (2) Exclusion of amounts paid through salary reduction 
        arrangements.--Such term shall not include any amount paid at 
        the election of the employee under a salary reduction 
        arrangement.
    (d) Special Rules; Other Definitions.--
            (1) Application of certain non-discrimination rules.--No 
        credit shall be allowed under this section to any employer for 
        any calendar quarter if qualified employee dependent care 
        expenses are provided by such employer to employees for such 
        calendar quarter in a manner which discriminates in favor of 
        highly compensated individuals (within the meaning of section 
        125) as to eligibility for, or the amount of, such benefit 
        expenses.
            (2) Denial of double benefit.--For purposes of chapter 1 of 
        such Code, no deduction or credit (other than the credit 
        allowed under this section) shall be allowed for so much of 
        qualified employee dependent care expenses as is equal to the 
        credit allowed under this section.
            (3) Third-party payors.--Any credit allowed under this 
        section shall be treated as a credit described in section 
        3511(d)(2) of such Code.
            (4) Applicable employment taxes.--For purposes of this 
        section, the term ``applicable employment taxes'' means the 
        following:
                    (A) The taxes imposed under section 3111(a) of the 
                Internal Revenue Code of 1986.
                    (B) So much of the taxes imposed under section 
                3221(a) of such Code as are attributable to the rate in 
                effect under section 3111(a) of such Code.
            (5) Secretary.--For purposes of this section, the term 
        ``Secretary'' means the Secretary of the Treasury or the 
        Secretary's delegate.
            (6) Certain terms.--
                    (A) In general.--Any term used in this section 
                which is also used in chapter 21 or 22 of such Code 
                shall have the same meaning as when used in such 
                chapter (as the case may be).
                    (B) Certain provisions not taken into account 
                except for purposes of limiting credit to employment 
                taxes.--For purposes of subparagraph (A) (other than 
                with respect to subsection (b)(2)), section 3121(b) of 
                such Code shall be applied without regard to paragraphs 
                (1), (5), (6), (7), (8), (10), (13), (18), (19), and 
                (22) thereof (except with respect to services performed 
                in a penal institution by an inmate thereof) and 
                section 3231(e)(1) shall be applied without regard to 
                the sentence that begins ``Such term does not include 
                remuneration''.
    (e) Certain Governmental Employers.--
            (1) In general.--The credit under this section shall not be 
        allowed to the Federal Government or any agency or 
        instrumentality thereof.
            (2) Exception.--Paragraph (1) shall not apply to any 
        organization described in section 501(c)(1) of the Internal 
        Revenue Code of 1986 and exempt from tax under section 501(a) 
        of such Code.
    (f) Treatment of Deposits.--The Secretary shall waive any penalty 
under section 6656 of such Code for any failure to make a deposit of 
applicable employment taxes if the Secretary determines that such 
failure was due to the anticipation of the credit allowed under this 
section.
    (g) Regulations.--The Secretary shall prescribe such regulations or 
other guidance as may be necessary to carry out the purposes of this 
section, including regulations or other guidance--
            (1) to allow the advance payment of the credit determined 
        under subsection (a), subject to the limitations provided in 
        this section, based on such information as the Secretary shall 
        require;
            (2) to provide for the reconciliation of such advance 
        payment with the amount of the credit at the time of filing the 
        return of tax for the applicable quarter or taxable year;
            (3) for recapturing the benefit of credits determined under 
        this section in cases where there is a subsequent adjustment to 
        the credit determined under subsection (a); and
            (4) with respect to the application of the credit to third-
        party payors (including professional employer organizations, 
        certified professional employer organizations, or agents under 
        section 3504 of such Code), including to allow such payors to 
        submit documentation necessary to substantiate eligibility for, 
        and the amount of, the credit allowed under this section.
    (h) Application of Section.--This section shall apply only to 
qualified employee dependent care expenses paid after the date of the 
enactment of this Act and before January 1, 2021.
    (i) Transfers to Certain Trust Funds.--There are hereby 
appropriated to the Federal Old-Age and Survivors Insurance Trust Fund 
and the Federal Disability Insurance Trust Fund established under 
section 201 of the Social Security Act (42 U.S.C. 401) and the Social 
Security Equivalent Benefit Account established under section 15A(a) of 
the Railroad Retirement Act of 1974 (45 U.S.C. 231n-1(a)) amounts equal 
to the reduction in revenues to the Treasury by reason of this section 
(without regard to this subsection). Amounts appropriated by the 
preceding sentence shall be transferred from the general fund at such 
times and in such manner as to replicate to the extent possible the 
transfers which would have occurred to such Trust Fund or Account had 
this section not been enacted.
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