Section 1 Short title
This Act may be cited as the “Reserve Employers Comprehensive Relief and Uniform Incentives on Taxes Act of 2024” or as the “RECRUIT Act of 2024”.
Reserve Employers Comprehensive Relief and Uniform Incentives on Taxes Act of 2024
A BILL
To amend the Internal Revenue Code of 1986 to allow for a credit against tax for employers of reservists.
Sec. 2 Reservist employment credit
Allowance of credit— 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:
“45BB. Reservist employment credit
“(a) Establishment of credit—For purposes of section 38, in the case of an eligible employer, the reservist employment credit for any taxable year is an amount equal to 40 percent of the wages paid or incurred to qualified reservists by such employer during such taxable year.
“(b) Limitation
“(1) In general—The reservist employment credit determined under subsection (a), with respect to any qualified reservist for any taxable year, shall not exceed the reservist credit amount.
“(2) Reservist credit amount—For purposes of this section, the term reservist credit amount means, with respect to a qualified reservist for a taxable year, an amount equal to the sum of—
“(A) $1,000, plus
“(B) in the case of a qualified reservist—
“(i) with 30 or more days, and fewer than 90 days, of service in the uniformed services during such year, $3,000,
“(ii) with 90 or more days, and fewer than 180 days, of service in the uniformed services during such year, $5,000, and
“(iii) with 180 or more days of service in the uniformed services during such year, $10,000.
“(3) Days of service—For purposes of paragraph (2), any day of service—
“(A) shall not be taken into account if such day constitutes inactive-duty training, or active duty or full-time National Guard duty for a period of 30 days or less, and
“(B) shall only be taken into account with respect to a qualified reservist employed by an eligible employer to the extent such days are during a period of employment of such reservist by such employer.
“(4) Qualified reservist—The term qualified reservist means, with respect to a taxable year, an individual who is, at any time during such taxable year, a member of the National Guard or a reserve component of the Armed Forces, as named in section 10101 of title 10, United States Code, in active status.
“(5) Reserve component—The term reserve component means any of the reserve components of the Armed Forces named in section 10101 of title 10, United States Code.
“(6) National Guard—The term National Guard has the meaning given such term in section 101(3) of title 32, United States Code.
“(7) Service in the uniformed services—The term service in the uniformed services means active duty or full-time National Guard duty for a period of more than 30 days, but does not include active Guard and Reserve duty.
“(8) Active status—The term “active status” has the meaning given such term in section 101 of title 10, United States Code.
“(9) Inactive-duty training—The term “inactive-duty training” has the meaning given such term in section 101 of title 10, United States Code.
“(c) Eligible employer—For purposes of this section, the term “eligible employer” means any employer which—
“(1) has an average of less than 500 employees employed on business days during the taxable year,
“(2) meets the gross receipts test of section 448(c) for the taxable year, and
“(3) is not a tax shelter prohibited from using the cash receipts and disbursements method of accounting under section 448(a)(3).
“(d) Aggregation rule—All persons treated as a single employer under subsection (b), (c), (m), or (o) of section 414 shall be treated as 1 employer for purposes of this section.
“(e) Election To have credit not apply
“(1) In general—A taxpayer may elect to have this section not apply for any taxable year.
“(2) Other rules—Rules similar to the rules of paragraphs (2) and (3) of section 51(j) shall apply for purposes of this subsection.”
Credit part of general business credit— Section 38(b) of the Internal Revenue Code of 1986 is amended by striking “plus” at the end of paragraph (40), by striking the period at the end of paragraph (41) and inserting “, plus”, and by adding at the end the following new paragraph:
“(42) in the case of an eligible employer (as defined in section 45BB(c)), the reservist employment credit determined under section 45BB(a).”
Credit allowed against AMT— Subparagraph (B) of section 38(c)(4) of the Internal Revenue Code of 1986 is amended by redesignating clauses (x) through (xii) as clauses (xi) through (xiii), respectively, and by inserting after clause (ix) the following new clause:
“(x) the credit determined under section 45BB,”
Conforming amendments—
Denial of double benefit— Section 280C(a) of the Internal Revenue Code of 1986 is amended by inserting “45BB(a),” after “45S(a),”.
Election To have credit not apply— Section 6501(m) of the Internal Revenue Code of 1986 is amended by inserting “45BB(d),” after “45H(g),”.
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:
Treatment of possessions—
Payments to possessions—
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 amendments made by this section. 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.
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 the amount estimated by the Secretary of the Treasury as being equal to the loss to that possession that would have occurred by reason of the amendments made by this section 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 establishes to the satisfaction of the Secretary that the possession has implemented (or, at the discretion of the Secretary, will implement) an income tax benefit which is substantially equivalent to the income tax credit in effect after the amendments made by this section.
Coordination with credit allowed against united states income taxes— The credit allowed under section 45BB of the Internal Revenue Code of 1986 (as added by this section) to any eligible employer with respect to any qualified reservist shall be reduced by the amount of any credit (or other tax benefit described in paragraph (1)(B)) against income taxes imposed by a possession of the United States allowed to such employer with respect to such reservist by reason of this section for the taxable year.
Definitions and special rules—
Possession of the United States— For purposes of this subsection, the term “possession of the United States” shall include such possessions as are specified in section 937(a)(1) of the Internal Revenue Code of 1986.
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.
Treatment of payments— For purposes of section 1324(b)(2) of title 31, United States Code, the payments under this subsection shall be treated in the same manner as a refund due from credit provisions described in such section.
Effective date— The amendments made by this section shall apply to wages paid in taxable years beginning after December 31, 2023.