1. Short title
This Act may be cited as the “Veterans Back to Work Act of 2019”.
Veterans Back to Work Act of 2019
A BILL
To amend the Internal Revenue Code of 1986 to make permanent the work opportunity tax credit for veterans and to allow an exemption from an employer’s employment taxes in an amount equivalent to the value of such credit in the case of veterans.
2. Extension and improvement of work opportunity tax credit for veterans
Credit made permanent for veterans— Section 51(c)(4) of the Internal Revenue Code of 1986 is amended by inserting “(other than a qualified veteran)” after “an individual”.
Election To Claim Credit as Exemption From Employment Taxes—
In general— Section 3111 of the Internal Revenue Code of 1986 is amended by adding at the end the following new subsection:
“(g) Special exemption for certain veterans
“(1) In general—Subsection (a) shall not apply to first-year wages paid after the date of the enactment of this subsection by a qualified employer with respect to employment of any specified veteran for services performed—
“(A) in a trade or business of such qualified employer, or
“(B) in the case of a qualified employer exempt from tax under section 501(a), in furtherance of the activities related to the purpose or function constituting the basis of the employer’s exemption under section 501.
“(2) Limitation—With respect to any specified veteran employed by a qualified employer, the amount of wages to which paragraph (1) applies shall not exceed—
“(A) $125,490 in the case of an individual who is a qualified veteran by reason of section 51(d)(3)(A)(ii)(II),
“(B) $73,203 in the case of an individual who is a qualified veteran by reason of section 51(d)(3)(A)(iv),
“(C) $62,745 in the case of an individual who is a qualified veteran by reason of section 51(d)(3)(A)(ii)(I), and
“(D) $31,373 in the case of any other qualified veteran.
“(3) Qualified employer—For purposes of this subsection—
“(A) In general—The term qualified employer means any employer other than the United States, any State, or any political subdivision thereof, or any instrumentality of the foregoing.
“(B) Treatment of employees of post-secondary educational institutions—Notwithstanding subparagraph (A), the term qualified employer includes any employer which is a public institution of higher education (as defined in section 101(b) of the Higher Education Act of 1965).
“(4) Specified veteran—For purposes of this subsection—
“(A) In general—The term specified veteran means any individual who—
“(i) begins employment with a qualified employer after the date of the enactment of this subsection,
“(ii) certifies by signed affidavit, under penalties of perjury, that such individual is a qualified veteran and whether such individual is a qualified veteran described in subparagraph (A), (B), or (C) of paragraph (2),
“(iii) 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
“(iv) is not an individual described in section 51(i)(1) (applied by substituting “qualified employer” for “taxpayer” each place it appears).
“(B) Qualified veteran—The term “qualified veteran” has the meaning given such term by section 51(d)(3), but applied without regard to whether such individual has been certified by the designated local agency.
“(5) First-year wages—For purposes of this subsection, the term “first-year wages” means, with respect to any individual, wages for services rendered during the 1-year period beginning with the day the individual begins work for the employer.
“(6) Coordination with credit for employment of qualified veterans by qualified tax-exempt organizations—This subsection shall not apply with respect to the first-year wages of any individual if such wages are taken into account in determining the credit allowed under subsection (e).
“(7) Election—A qualified employer may elect to have this subsection not apply with respect to the first-year wages of any individual. Such election shall be made in such manner as the Secretary may require.”
Coordination with work opportunity credit— Section 51(c) of such Code is amended by adding at the end the following new paragraph:
“(6) Coordination with payroll tax exemption for qualified veterans—The credit determined under this section with respect to any qualified veteran for any taxable year shall be reduced by an amount equal to 7.65 percent of the qualified first-year wages paid or incurred by the taxpayer to such veteran during such taxable year to which section 3111(g) or 3221(d) applied.”
Coordination with credit for employment of qualified veterans by qualified tax-exempt organizations— Section 3111(e) of such Code is amended by adding at the end the following new paragraph:
“(6) Election
“(A) In general—A qualified tax-exempt organization may elect to determine the credit allowed under this section without regard to the qualified first-year wages of any individual.
“(B) Coordination with exemption for first-year wages of specified veterans—For exemption for first-year wages of specified veterans to which this subsection does not apply, see subsection (f).”
Transfers to Federal Old-Age and Survivors Insurance Trust Fund— There are hereby appropriated to the Federal Old-Age and Survivors Trust Fund and the Federal Disability Insurance Trust Fund established under section 201 of the Social Security Act (42 U.S.C. 401) amounts equal to the reduction in revenues to the Treasury by reason of the amendments made by paragraph (1). 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 had such amendments not been enacted.
Application to Railroad Retirement Taxes—
In general— Section 3221 of the Internal Revenue Code of 1986 is amended by redesignating subsection (d) as subsection (e) and by inserting after subsection (c) the following new subsection:
“(d) Special exemption for certain veterans
“(1) In general—In the case of first-year compensation paid by a qualified employer after the date of the enactment of this subsection with respect to having a specified veteran in the employer’s employ for services rendered to such qualified employer, the applicable percentage under subsection (a) shall be equal to the rate of tax in effect under section 3111(b) for the calendar year.
“(2) Limitation—With respect to any specified veteran employed by a qualified employer, the amount of compensation to which paragraph (1) applies shall not exceed—
“(A) $125,490 in the case of an individual who is a qualified veteran by reason of section 51(d)(3)(A)(ii)(II),
“(B) $73,203 in the case of an individual who is a qualified veteran by reason of section 51(d)(3)(A)(iv),
“(C) $62,745 in the case of an individual who is a qualified veteran by reason of section 51(d)(3)(A)(ii)(I), and
“(D) $31,373 in the case of any other qualified veteran.
“(3) Qualified employer—The term ‘qualified employer’ means any employer other than the United States, any State, or any political subdivision thereof, or any instrumentality of the foregoing.
“(4) Specified veteran—For purposes of this subsection—
“(A) In general—The term specified veteran means any individual who—
“(i) begins employment with a qualified employer after the date of the enactment of this subsection,
“(ii) certifies by signed affidavit, under penalties of perjury, that such individual is a qualified veteran and whether such individual is a qualified veteran described in subparagraph (A), (B), or (C) of paragraph (2),
“(iii) 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
“(iv) is not an individual described in section 51(i)(1) (applied by substituting “qualified employer” for “taxpayer” each place it appears).
“(B) Qualified veteran—The term “qualified veteran” has the meaning given such term by section 51(d)(3), but applied without regard to whether such individual has been certified by the designated local agency.
“(5) First-year compensation—For purposes of this subsection, the term “first-year compensation” means, with respect to any individual, compensation for services rendered during the 1-year period beginning with the day the individual begins work for the employer.
“(6) Election—A qualified employer may elect to have this subsection not apply. Such election shall be made in such manner as the Secretary may require.”
Transfers to social security equivalent benefit account— There are hereby appropriated to 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 the amendments made by subparagraph (A). 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 Account had such amendments not been enacted.
Effective Dates—
In general— The amendments made by subsection (a) shall apply to individuals who begin work for the employer after December 31, 2019.
Exemption from employment taxes— The amendments made by subsection (b) shall apply to amounts paid after the date of the enactment of this Act.