,i #aafth ,,congress #ast ,session ,h4 ,r4 #dibb ,,in ,,the ,,house ,,of ,,representatives ,october #cj1 #bjai,ms4 ,judy ,chu of ,california 7for herself and ,mr4 ,blumenauer7 introduced the following bill2 which was referred to the ,committee on ,ways and ,means ,a ,,bill ,to amend the ,internal ,revenue ,code of #aihf to provide a tax credit for angel investors in start-up businesses1 to provide a credit for wages paid by start-up businesses to their first employees1 and for other purposes4 #a4 ,short title ,this ,act may be cited as the ,providing ,real ,opportunities for ,growth to ,rising ,entrepreneurs for ,sustained ,success 7,,progress7 ,act4 #b4 ,angel ,investor ,tax ,credit 7a7 ,in general ,subpart ,d of part ,,iv of subchapter ,a of chapter #a of the ,internal ,revenue ,code of #aihf is amended by adding at the end the following new section3 #de,t4 ,angel ,investor ,tax ,credit 7a7 ,general ,rule ,for purposes of section #ch1 the angel investor credit determined under this section for any taxable year is an amount equal to the sum of the credit amounts determined for the taxable year for all qualified investments of the taxpayer4 7b7 ,credit amount ,for purposes of this section-- 7#a7 ,in general ,the term credit amount means1 with respect to any qualified investment in a qualifying business entity1 the lesser of-- 7,a7 #aj percent of the amount of the qualified investment determined under subsection 7c77#c7 for the taxable year1 or 7,b7 an amount equal to-- 7i7 #ej percent of such qualified investment1 reduced 7but not below zero7 by 7ii7 the amount of the credit determined under this section with respect to such qualified investment of the taxpayer for all preceding taxable years4 7#b7 ,overall dollar limitation 7,a7 ,in general ,the credit amount determined under paragraph 7#a7 with respect to any qualified investment of a taxpayer in a qualifying business entity for any taxable year shall not exceed the lesser of-- 7i7 #aj1jjj 7as increased for the taxable year by the cost-of-living adjustment under subsection 7e77#b771 or 7ii7 an amount equal to-- 7,i7 an amount equal to #e times the amount under clause 7i7 for the taxable year1 reduced 7but not below zero7 by 7,,ii7 the amount of the credit determined under this section with respect to such qualified investment of the taxpayer for all preceding taxable years4 7,b7 ,no credit amount by reason of cost-of-living adjustment after overall limit first reached ,no credit amount shall be determined under this section with respect to any qualified investment of a taxpayer in a qualifying business entity for any taxable year after the first taxable year for which the amount determined under subclause 7,,ii7 of subparagraph 7,a77ii7 equals or exceeds the amount determined under subclause 7,i7 of such subparagraph4 7#c7 ,reduction in credit amount where loan rate exceeds prime rate 7,a7 ,in general ,if-- 7i7 the rate of interest 7expressed as an annual percentage rate7 on a qualified investment which is a qualifying loan1 exceeds 7ii7 the bank prime rate as of the first day of the month in which the loan is entered into 7or such other time as the ,secretary may specify71 then each of the amounts determined under subparagraphs 7,a7 and 7,b77i7 of paragraph 7#a7 shall be reduced 7but not below zero7 by the amount which bears the same ratio to such amount as the number of full percentage points by which such rate of interest exceeds such bank prime rate bears to #be4 7,b7 ,special rules where qualifying loans treated as part of single investment ,if #a or more qualifying loans to which subparagraph 7,a7 applies are treated as part of a single qualified investment under subsection 7c77#a71 then1 for purposes of this subsection-- 7i7 the credit amount under paragraph 7#a7 for such single qualified investment shall be the sum of such credit amounts computed separately for each such qualifying loan and such credit amount computed for all other qualified investments treated as part of such single qualified investment1 and 7ii7 the limitation under paragraph 7#b7 shall be applied to such sum4 7,c7 ,rules relating to interest rates 7i7 ,annual percentage rate ,the ,secretary shall prescribe guidance or regulations for the calculation of the annual percentage rate of interest on a loan for purposes of subparagraph 7,a77i71 including rules which provide for-- 7,i7 the calculation of the annual percentage rate in cases where there is a variable rate of interest1 7,,ii7 the recalculation of the annual percentage rate where the terms of the loan are modified after the loan is entered into1 and 7,,iii7 the proper taking into account of lump sum payments1 orientation and application fees1 closing fees1 invoice discounting fees1 and any other loan fees4 7ii7 ,bank prime rate ,for purposes of subparagraph 7,a77ii71 the term bank prime rate means the average predominant prime rate quoted by commercial banks to large businesses1 as determined by the ,board of ,governors of the ,federal ,reserve ,system4 7#d7 ,special rules for pass-thru entities ,for purposes of this subsection1 if a qualified investment in a qualifying business entity is made by a partnership1 trust1 ,s corporation1 or other pass-thru entity1 the limitations under this subsection with respect to the qualified investment shall apply at the partnership or other entity level and not at the partner or similar level4 7c7 ,qualified investment ,for purposes of this section-- 7#a7 ,in general ,the term qualified investment means1 with respect to any qualifying business entity1 either of the following of the taxpayer3 7,a7 ,the direct or indirect acquisition of stock1 or a capital interest1 in the entity at its original issue solely in exchange for cash4 7,b7 ,a qualifying loan made to the entity4 ,if a taxpayer has or had more than #a qualified investment in any qualifying business entity for the taxable year or any prior taxable year1 all such investments shall be treated as a single qualified investment for purposes of applying this section4 7#b7 ,exception for investments made by qualified active investors and related persons ,such term shall not include any acquisition or loan made by a taxpayer who1 immediately before the acquisition or loan1 is a qualified active investor in the qualifying business entity or is related to any qualified active investor4 7#c7 ,amount of qualified investment ,the amount of a taxpayer's qualified investment with respect to any qualifying business entity for any taxable year shall be the monthly average for months ending within the taxable year of-- 7,a7 the taxpayer's aggregate unadjusted bases in all stock or interests described in paragraph 7#a77;,a7 as of the close of each such month1 and 7,b7 the aggregate outstanding principal amount of all qualified loans described in paragraph 7#a77;,b7 as of the close of each such month4 7#d7 ,special rules for transfers of qualifying loans 7,a7 ,in general ,if a taxpayer sells1 exchanges1 or otherwise transfers all or any portion of a qualifying loan which is a qualified investment in a qualifying business entity1 such investment shall be treated as a qualified investment in the hands of the transferee 7and not of the transferor7 for periods after the transfer4 ,this paragraph shall also apply to any subsequent transfer of such interest4 7,b7 ,coordination of limits ,in applying subsection 7b7 to any qualifying loan treated as a qualified investment of a transferee under this paragraph-- 7i7 all credits determined under this section for any periods before the transfer with respect to the qualified investment of any prior holder of such investment shall be taken into account under paragraphs 7#a77;,b77ii7 and 7#b77;,a77ii77,,ii7 of such subsection in the same manner as if such credits were determined for the transferee for prior taxable years1 and 7ii7 if only a portion of the qualified investment was transferred1 the amount taken into account under such paragraphs by reason of clause 7i7 shall be ratably reduced to reflect only the portion so transferred4 7d7 ,qualifying business entity ,for purposes of this section-- 7#a7 ,definition 7,a7 ,in general ,the term qualifying business entity means1 with respect to any qualified investment1 any entity which is engaged in the active conduct of #a or more trades or businesses and with respect to which-- 7i7 the qualified active investor ownership requirements of paragraph 7#b7 are met immediately before and after the qualified investment1 7ii7 the wage requirements of paragraph 7#c7 are met1 and 7iii7 the certification requirements of paragraph 7#d7 are met4 7,b7 ,entities under common control ,for purposes of this section1 all qualifying business entities treated as a single employer under subsection 7a7 or 7b7 of section #eb or subsection 7m7 or 7o7 of section #dad shall be treated as a single qualifying business entity4 7#b7 ,qualified active investor ownership requirements ,the requirements of this paragraph are met with respect to any entity if qualified active investors own directly or indirectly-- 7,a7 in the case of a corporation1 more than #ej percent 7by vote and value7 of the stock in the corporation1 and 7,b7 in the case of any other entity1 more than #ej percent of the capital or profits interests in the entity4 7#c7 ,wage requirements 7,a7 ,in general ,the requirements of this paragraph are met with respect to any entity if the entity1 during the taxable year of the entity preceding the taxable year in which the qualified investment is made-- 7i7 employed at least #a full-time employee1 or employees constituting a full-time equivalent employee1 in #a or more trades or businesses actively conducted by the entity1 and 7ii7 paid ,w-#b wages to such employee or employees with respect to such employment4 7,b7 ,certain wages not taken into account ,w-#b wages shall not be taken into account under subparagraph 7,a7 if paid by an entity to an employee1 and such employee shall not be taken into account under subparagraph 7,a77i71 during any period the employee is-- 7i7 a qualified active investor1 or 7ii7 an employee other than a qualified active investor who is a #e-percent owner 7as defined in section #daf7;i77#a77;,b77i77 of the entity4 7,c7 ,w-#b wages ,the term ,w-#b wages means1 with respect to any entity1 the amounts described in paragraphs 7#c7 and 7#h7 of section #fjea7;a7 paid by the entity with respect to employment of employees by the entity4 ,such term shall not include any amount which is not properly included in a return filed with the ,social ,security ,administration on or before the #fjth day after the due date 7including extensions7 for such return4 7,d7 ,full-time employees and equivalents ,for purposes of this paragraph-- 7i7 the term full-time employee has the meaning given to such term by section #dihj;,h7c77#d71 and 7ii7 the determination of the number of employees constituting a full-time equivalent shall be made in the same manner as under section #dihj;,h7c77#b77;,e74 7#d7 ,certification requirements 7,a7 ,in general ,the requirements of this paragraph are met with respect to any entity if the entity certifies1 in such form and manner and at such time as the ,secretary may prescribe1 that1 at the time of the qualified investment1 the entity-- 7i7 is engaged in the active conduct of #a or more trades or businesses1 and 7ii7 meets the requirements of paragraphs 7#b7 and 7#c7 to be treated as a qualifying business entity4 7,b7 ,certification provided to investors and ,secretary ,an entity shall-- 7i7 provide the certification under subparagraph 7,a7 to the person making the qualified investment at the time such investment is made1 and 7ii7 include such certification1 and the names1 addresses1 and taxpayer identification numbers of the entity's qualified active investors and the persons making the qualified investment1 with its return of tax for the taxable year which includes the date of the qualified investment4 7,c7 ,certification included with return claiming credit ,no credit shall be determined under subsection 7a7 with respect to any taxpayer making a qualified investment in a qualifying business entity unless the taxpayer includes the certification under subparagraph 7,a7 with respect to the investment with its return of tax for any taxable year for which such credit is being claimed4 7,d7 ,timely filed return required ,the requirements of subparagraph 7,b77ii7 or 7,c7 shall be treated as met only if the return described in such subparagraph is filed on or before its due date 7including extensions74 7#e7 ,qualified active investor 7,a7 ,in general ,the term qualified active investor means1 with respect to any entity1 an individual who-- 7i7 is a citizen or resident of the ,united ,states1 7ii7 materially participates 7within the meaning of section #dfi7;h77 in #a or more trades or businesses actively conducted by the entity1 7iii7 holds stock1 or a capital or profits interest1 in the entity1 and 7iv7 meets the income requirements of subparagraph 7,b74 7,b7 ,income requirements ,the requirements of this subparagraph are met with respect to an individual if the average annual taxable income of the individual for the #c taxable years of the individual immediately preceding the taxable year in which the qualified investment is made does not exceed the applicable amount4 7,c7 ,applicable amount ,for purposes of this paragraph1 the term applicable amount means1 with respect to any taxable year in which a qualified investment is made-- 7i7 in the case of an individual not described in clause 7ii71 #ajj1jjj 7as increased for the taxable year by the cost-of-living adjustment under subsection 7e77#b771 and 7ii7 in the case of an individual who is a married individual filing a joint return or who is a head of household 7as defined in section #b7;b77 for the taxable year1 an amount equal to #b times the amount in effect under clause 7i7 for the taxable year4 7,d7 ,rules for determining average taxable income ,for purposes of this paragraph-- 7i7 a married individual filing a separate return of tax for any taxable year shall include the taxable income of their spouse in computing the individual's average taxable income for any period unless the ,secretary determines that the spouse's information is not available to the individual1 and 7ii7 the ,secretary shall prescribe rules for the determination of average taxable income in cases where the individual had different filing statuses for the #c taxable years described in subparagraph 7,b74 7e7 ,definitions and special rules ,for purposes of this section-- 7#a7 ,related persons ,a person shall be treated as related to another person if the person bears a relationship to such other person described in section #bfg7;b71 except that section #bfg7;b7 shall be applied by substituting #e percent for #ej percent each place it appears4 7#b7 ,cost-of-,living adjustments ,in the case of any taxable year beginning after #bjbj1 the #aj1jjj amount under subsection 7b77#b77;,a77i7 and the #ajj1jjj amount under subsection 7d77#e77;,c77i7 shall each be increased by an amount equal to-- 7,a7 such dollar amount1 multiplied by 7,b7 the cost-of-living adjustment under section #a7;f77#c7 for the calendar year in which the taxable year begins1 determined by substituting #bjai for #bjaf in subparagraph 7,a77ii7 thereof4 ,if any increase in such #aj1jjj amount is not a multiple of #ajj1 such increase shall be rounded to the next lowest multiple of #ajj and if any increase in such #ajj1jjj amount is not a multiple of #a1jjj1 such increase shall be rounded to the next lowest multiple of #a1jjj4 7#c7 ,rules relating to entities 7,a7 ,sole proprietorships ,if a taxpayer carries on #a or more trades or businesses as sole proprietorships1 all such trades or businesses shall be treated as a single entity for purposes of applying this section4 7,b7 ,application to disregarded entities ,in the case of any entity with a single owner which is disregarded as an entity separate from its owner for purposes of this title1 this section shall be applied in the same manner as if such entity were a corporation4 7f7 ,regulations ,the ,secretary shall prescribe such regulations or other guidance as may be necessary to carry out the provisions of this section4 4 7b7 ,credit ,to be part of general business credit ,section #ch7;b7 of such ,code is amended by striking plus at the end of paragraph 7#ca71 by striking the period at the end of paragraph 7#cb7 and inserting 1 plus1 and by adding at the end the following new paragraph3 7#cc7 the angel investor credit determined under section #de,t7a74 4 7c7 ,credit allowed against alternative minimum tax ,section #ch7;c77#d77;,b7 of such ,code is amended by redesignating clauses 7x71 7xi71 and 7xii7 as clauses 7xi71 7xii71 and 7xiii71 respectively1 and by inserting after clause 7ix7 the following new clause3 7x7 the credit determined under section #de,t1 4 7d7 ,clerical amendment ,the table of sections for subpart ,d of part ,,iv of subchapter ,a of chapter #a of such ,code is amended by adding at the end the following new item3 ,sec4 #de,t4 ,angel investor tax credit4 4 7e7 ,effective date ,the amendments made by this section shall apply to qualified investments made in taxable years beginning after ,december #ca1 #bjai4 #c4 ,first employee business wage credit 7a7 ,allowance of credit 7#a7 ,in general ,subpart ,d of part ,,iv of subchapter ,a of chapter #a of the ,internal ,revenue ,code of #aihf1 as amended by section #b1 is amended by adding at the end the following new section3 #de,u4 ,first employee business wage credit 7a7 ,general ,rule ,for purposes of section #ch1 in the case of a qualifying business entity1 the first employee business wage credit determined under this section for any taxable year is an amount equal to #be percent of the qualified wages of the entity for the taxable year4 7b7 ,dollar limitations 7#a7 ,in general ,the amount of the credit determined under subsection 7a7 with respect to any qualifying business entity for any taxable year shall not exceed the lesser of-- 7,a7 #aj1jjj 7as increased for the taxable year by the cost-of-living adjustment under subsection 7f771 or 7,b7 the excess 7if any7 of-- 7i7 an amount equal to #d times the amount under subparagraph 7,a7 for the taxable year1 over 7ii7 the amount of the credit determined under this section with respect to such entity for all preceding taxable years4 7#b7 ,no credit by reason of cost-of-living adjustment after overall limit first reached ,no credit shall be determined under this section with respect to any qualifying business entity for any taxable year after the first taxable year for which the amount determined under clause 7ii7 of paragraph 7#a77;,b7 equals or exceeds the amount determined under clause 7i7 of such paragraph4 7#c7 ,pass-thru entities ,if a qualifying business entity is a partnership1 trust1 ,s corporation1 or other pass-thru entity1 the limitations under this subsection shall apply at the partnership or other entity level and not at the partner or similar level4 7c7 ,qualified wages ,for purposes of this section-- 7#a7 ,in general ,the term qualified wages means1 with respect to any qualifying business entity1 the amount of ,w-#b wages paid or incurred during any eligible taxable year to employees for services performed in connection with the active conduct of a trade or business by the entity4 7#b7 ,exception for qualified active investors and #e-percent owner-employees ,w-#b wages shall not be taken into account under paragraph 7#a7 if paid by an entity to an employee1 and such employee shall not be taken into account under paragraph 7#c77;,a71 during any period the employee is-- 7,a7 a qualified active investor1 or 7,b7 an employee other than a qualified active investor who is a #e-percent owner 7as defined in section #daf7;i77#a77;,b77i77 of the entity4 7#c7 ,eligible taxable year 7,a7 ,in general ,the term eligible taxable year means any taxable year of a qualifying business entity-- 7i7 which occurs during the period-- 7,i7 beginning with the first taxable year of the entity in which the entity employed at least #a full-time employee 7or employees constituting a full-time equivalent employee7 in #a or more trades or businesses actively conducted by the entity during the taxable year and paid ,w-#b wages to such employee or employees with respect to such employment1 and 7,,ii7 ending with the last taxable year for which a credit may be determined for the entity under this section by reason of the limitation under subsection 7b77#b71 and 7ii7 in the case of a taxable year other than the first taxable year described in clause 7i77,i71 with respect to which the entity meets the employment and wage requirements of such clause4 ,such term shall not include any taxable year during such a period if the first taxable year described in clause 7i77,i7 of the entity 7or any predecessor7 begins before ,january #a1 #bjbj4 7,b7 ,w-#b wages2 full-time employees ,for purposes of this subsection1 ,w-#b wages1 full-time employees1 and full-time employee equivalents shall be determined in the same manner as under section #de,t4 7d7 ,qualifying business entity ,for purposes of this section-- 7#a7 ,qualifying business entity defined 7,a7 ,in general ,the term qualifying business entity means1 with respect to any taxable year for which a credit under this section is being determined1 any entity-- 7i7 which is engaged in the active conduct of #a or more trades or businesses1 7ii7 with respect to which the qualified active investor ownership requirements of paragraph 7#b7 of section #de,t7d7 are met as of the close of such taxable year 7rather than immediately before and after the qualified investment71 and 7iii7 with respect to which the certification requirements of paragraph 7#b7 are met4 7,b7 ,entities under common control ,for purposes of this section-- 7i7 ,in general ,all qualifying business entities treated as a single employer under subsection 7a7 or 7b7 of section #eb or subsection 7m7 or 7o7 of section #dad shall be treated as a single qualifying business entity4 7ii7 ,allocation of credit ,except as provided in regulations1 the credit under this section shall be allocated among the entities comprising the single entity described in clause 7i7 in proportion to the qualified wages of each such entity taken into account under subsection 7a74 7#b7 ,certification requirements 7,a7 ,in general ,the requirements of this paragraph are met with respect to any entity for any taxable year described in paragraph 7#a7 if the entity certifies1 in such form and manner and at such time as the ,secretary may prescribe1 that the entity meets the requirements described in clauses 7i7 and 7ii7 of paragraph 7#a77;,a74 7,b7 ,certification provided to ,secretary ,an entity shall include the certification under subparagraph 7,a71 and the names1 addresses1 and taxpayer identification numbers of the entity's qualified active investors 7and employees who are #e-percent owners described in subsection 7c77#b77;,b771 with its return of tax for the taxable year to which the certification relates4 ,the requirement of this subparagraph is met only if such return is filed before its due date 7including extensions74 7#c7 ,qualified active investor ,for purposes of this section 7including applying the requirements of paragraph 7#b7 of section #de,t7d7 for purposes of paragraph 7#a77;,a77ii771 the term qualified active investor has the same meaning given such term by section #de,t7d77#e71 except that such section shall be applied separately for each taxable year described in paragraph 7#a7 7rather than the taxable year of the qualified investment74 7e7 ,election ,to apply credit against payroll taxes 7#a7 ,in general ,at the election of a qualifying business entity1 section #caaa7;g7 shall apply to the payroll tax credit portion of the credit otherwise determined under subsection 7a7 for the taxable year and such portion shall not be treated 7other than for purposes of section #bhj;,c7 as a credit determined under subsection 7a74 7#b7 ,payroll tax credit portion ,for purposes of this subsection1 the payroll tax credit portion of the credit determined under subsection 7a7 with respect to any qualifying business entity for any taxable year is the least of-- 7,a7 the amount specified in the election made under this subsection1 7,b7 the credit determined under subsection 7a7 for the taxable year 7determined before the application of this subsection71 or 7,c7 in the case of a qualifying business entity other than a partnership1 estate1 ,s corporation or other pass-thru entity1 the amount of the business credit carryforward under section #ci carried from the taxable year 7determined before the application of this subsection to the taxable year74 7#c7 ,election 7,a7 ,in general ,any election under this subsection for any taxable year-- 7i7 shall specify the amount of the credit to which such election applies1 7ii7 shall be made on or before the due date 7including extensions7 of the return for the taxable year1 and 7iii7 may be revoked only with the consent of the ,secretary4 7,b7 ,special rule for pass-thru entities ,in the case of a partnership1 estate1 ,s corporation1 or other pass-thru entity1 the election made under this subsection shall be made at the entity level4 7f7 ,cost-of-,living adjustments ,in the case of any taxable year beginning after #bjbj1 the #aj1jjj amount under subsection 7b77#a77;,a7 shall be increased by an amount equal to-- 7#a7 such dollar amount1 multiplied by 7#b7 the cost-of-living adjustment under section #a7;f77#c7 for the calendar year in which the taxable year begins1 determined by substituting #bjai for #bjaf in subparagraph 7,a77ii7 thereof4 ,if any increase in such amount is not a multiple of #ajj1 such increase shall be rounded to the next lowest multiple of #ajj4 7g7 ,other rules ,for purposes of this section-- 7#a7 ,rules relating to entities ,rules similar to the rules of section #de,t7e77#c7 shall apply4 7#b7 ,election not to have credit apply 7,a7 ,in general ,a taxpayer may elect not to have this section apply for any taxable year4 7,b7 ,other rules ,rules similar to the rules of paragraphs 7#b7 and 7#c7 of section #ea7;j7 shall apply for purposes of this paragraph4 7#c7 ,certain other rules made applicable ,rules similar to the rules of subsections 7c71 7d71 and 7e7 of section #eb shall apply4 7h7 ,regulations ,the ,secretary shall prescribe such regulations or other guidance as may be necessary to carrying out the provisions of this section1 including regulations-- 7#a7 preventing the avoidance of the limitations under this section in cases in which there is a successor or new qualified business entity with respect to the same trade or business for which a predecessor qualified business entity already claimed the credit under this section1 7#b7 to minimize compliance and recordkeeping burdens under the provisions of this section1 and 7#c7 for recapturing the benefit of credits determined under section #caaa7;g7 in cases where there is a recapture or a subsequent adjustment to the payroll tax credit portion of the credit determined under subsection 7a71 including requiring amended income tax returns in the cases where there is such an adjustment4 4 7#b7 ,credit to be part of general business credit ,section #ch7;b7 of such ,code1 as amended by section #b1 is amended by striking plus at the end of paragraph 7#cb71 by striking the period at the end of paragraph 7#cc7 and inserting 1 plus1 and by adding at the end the following new paragraph3 7#cd7 the first employee business wage credit determined under section #de,u7a74 4 7#c7 ,credit allowed against alternative minimum tax ,section #ch7;c77#d77;,b7 of such ,code1 as amended by section #b1 is amended by redesignating clauses 7xi71 7xii71 and 7xiii7 as clauses 7xii71 7xiii71 and 7xiv71 respectively1 and by inserting after clause 7x7 the following new clause3 7xi7 the credit determined under section #de,u1 4 7#d7 ,clerical amendment ,the table of sections for subpart ,d of part ,,iv of subchapter ,a of chapter #a of such ,code1 as amended by section #b1 is amended by adding at the end the following new item3 ,sec4 #de,u4 ,first employee business wage credit4 4 7b7 ,payroll tax credit ,section #caaa of the ,internal ,revenue ,code of #aihf is amended by adding at the end the following new subsection3 7g7 ,credit for first employee business wage expenses 7#a7 ,in general ,in the case of a taxpayer who has made an election under section #de,u7e7 for a taxable year1 there shall be allowed as a credit against the tax imposed by subsection 7a7 for the first calendar quarter which begins after the date on which the taxpayer files the return for the taxable year an amount equal to the payroll tax credit portion determined under section #de,u7e77#b74 7#b7 ,limitation ,the credit allowed by paragraph 7#a7 shall not exceed the tax imposed by subsection 7a7 for any calendar quarter on the wages paid with respect to the employment of all individuals in the employ of the employer4 7#c7 ,carryover of unused credit ,if the amount of the credit under paragraph 7#a7 exceeds the limitation of paragraph 7#b7 for any calendar quarter1 such excess shall be carried to the succeeding calendar quarter and allowed as a credit under paragraph 7#a7 for such quarter4 7#d7 ,deduction allowed for credited amounts ,notwithstanding section #bhj;,c7a71 the credit allowed under paragraph 7#a7 shall not be taken into account for purposes of determining the amount of any deduction allowed under chapter #a for taxes imposed under subsection 7a74 4 7c7 ,coordination with deductions and other credits 7#a7 ,deductions ,section #bhj;,c7a7 of the ,internal ,revenue ,code of #aihf is amended by inserting #de,u7a71 after #de,s7a714 7#b7 ,other credits 7,a7 ,section #da7;b77#b77;,d7 of such ,code is amended by adding at the end the following3 7iv7 ,exclusion for wages to which first employee wage credit applies ,the term wages shall not include any amount taken into account in determining the credit under section #de,u4 4 7,b7 ,section #de;,a7b77#a7 of such ,code is amended by adding at the end the following3 7,c7 ,coordination with first employee wage credit ,the term qualified wages shall not include wages if any portion of such wages is taken into account in determining the credit under section #de,u4 4 7,c7 ,section #acif7;c77#c7 of such ,code is amended-- 7i7 by striking section #ea each place it appears and inserting section #de,u or #ea1 and 7ii7 by inserting and first employee wage after opportunity in the heading thereof4 7d7 ,effective date ,the amendments made by this section shall apply to taxable years beginning after ,december #ca1 #bjai4