,,ii #aafth ,,congress #b;d ,session ,s4 #cgic ,,in ,,the ,,senate ,,of ,,the ,,united ,,states ,may #ba1 #bjbj ,mr4 ,warner 7for himself1 ,mr4 ,sanders1 ,mr4 ,jones1 ,mr4 ,blumenthal1 ,ms4 ,klobuchar1 ,ms4 ,warren1 ,mrs4 ,feinstein1 ,mr4 ,reed1 and ,mr4 ,merkley7 introduced the following bill2 which was read twice and referred to the ,committee on ,finance ,a ,,bill ,to amend the ,,cares ,act to modify the employee retention tax credit to secure the paychecks and benefits of workers1 to provide a refundable credit against payroll taxes for the operating costs of employers1 to amend the ,internal ,revenue ,code of #aihf to provide a small business rebate1 and for other purposes4 #a4 ,short title1 etc 7a7 ,short title ,this ,act may be cited as the ,paycheck ,security ,act4 7b7 ,table of contents ,the table of contents of this ,act is as follows3 ,sec4 #a4 ,short title1 etc4 ,title ,i--,employer ,credits ,sec4 #aja4 ,paycheck security credit4 ,sec4 #ajb4 ,credit for employer operating expenses4 ,sec4 #ajc4 ,advance payments of credits4 ,sec4 #ajd4 ,administration4 ,sec4 #aje4 ,public disclosure4 ,sec4 #ajf4 ,employee notification4 ,title ,,ii--,small ,business ,rebate ,sec4 #bja4 ,small business rebate4 ,title ,,iii--,other ,provisions ,sec4 #cja4 ,additional appropriations for ,department of ,treasury4 ,sec4 #cjb4 ,,gao report4 ,i ,employer ,credits #aja4 ,paycheck security credit 7a7 ,amount of credit ,section #bcja7;a7 of the ,,cares ,act is amended-- 7#a7 by striking ,in the case of and inserting the following3 7#a7 ,allowance of credit ,in the case of 1 7#b7 by striking an amount equal to #ej percent and inserting an amount equal to the sum of-- 7,a7 #ajj percent 1 7#c7 by striking the period at the end and inserting 1 plus 7,b7 in the case of an eligible employer for which the average number of full-time employees 7within the meaning of section #dihj;,h of the ,internal ,revenue ,code of #aihf7 employed by such eligible employer during #bjai was not greater than #ajj1 #ej percent of all other wages with respect to each employee of such employer for the calendar quarter4 1 and 7#d7 by adding at the end the following new paragraph3 7#b7 ,phaseout ,in the case of an eligible employer for which the gross receipts for the calendar quarter exceed #hj percent of gross receipts for the same calendar quarter in the prior year1 the amount of credit allowed under paragraph 7#a7 7determined without regard to this paragraph7 shall be reduced 7but not below zero7 by an amount that bears the same ratio to such amount of credit as-- 7,a7 the excess of-- 7i7 #he percent1 over 7ii7 the percentage by which the taxpayer's gross receipts for the calendar quarter exceed the taxpayer's gross receipts for the same calendar quarter in the prior year1 bears to 7,b7 #e percent4 4 7b7 ,modification of limitation ,section #bcja7;b77#a7 of the ,,cares ,act is amended by striking for all calendar quarters shall not exceed #aj1jjj and inserting shall not exceed-- 7,a7 #bb1ejj for any calendar quarter1 or 7,b7 #ij1jjj for all calendar quarters4 4 7c7 ,definition of eligible employer ,section #bcja7;c77#b7 of the ,,cares ,act is amended to read as follows3 7#b7 ,eligible employer 7,a7 ,in general ,the term eligible employer means any employer-- 7i7 which was carrying on a trade or business during calendar year #bjbj1 7ii7 which meets the requirements of subparagraph 7,b71 7iii7 with respect to any calendar quarter1 for which the gross receipts 7within the meaning of section #ddh7;c7 of the ,internal ,revenue ,code of #aihf7 for the calendar quarter are less than #he percent of gross receipts for the same calendar quarter in the prior year4 7,b7 ,requirements ,an employer meets the requirements of this subparagraph if such employer-- 7i7 did not have gross receipts for the last taxable year ending in #bjai of more than #a1jjj1jjj1jjj1 and 7ii7 did not have on hand on ,march #a1 #bjbj1 cash and cash equivalents of more than an amount equal to #aej percent of the wages paid by the employer during calendar year #bjai4 7,c7 ,tax-exempt organizations ,in the case of an organization which is described in section #eja7;c7 of the ,internal ,revenue ,code of #aihf and exempt from tax under section #eja7;a7 of such ,code-- 7i7 subparagraph 7,a77i7 shall apply to all operations of such organization1 and 7ii7 any reference in this section to gross receipts shall be treated as a reference to gross receipts within the meaning of section #fjcc of such ,code4 7,d7 ,exceptions ,the term eligible employer shall not include-- 7i7 any employer that is a debtor in a case under chapter #g of title #aa1 ,united ,states ,code1 during the calendar quarter1 or 7ii7 any covered entity 7as defined in section #djai74 4 7d7 ,determination of qualified wages 7#a7 ,in general ,section #bcja7;c77#c7 of the ,,cares ,act is amended to read as follows3 7#c7 ,qualified wages 7,a7 ,in general ,the term qualified wages means wages paid with respect to any period during the calendar quarter in which an employee is not providing services4 ,such term shall not include any wages taken into account under section #gjja or section #gjjc of the ,families ,first ,coronavirus ,response ,act4 7,b7 ,limitation ,qualified wages paid or incurred by an eligible employer with respect to an employee for any period described in subparagraph 7,a7 may not exceed the greater of-- 7i7 #fjj per week1 or 7ii7 the amount such employee would have been paid 7including tips which would have been deemed to be paid by the employer under section #caba7q77 for working an equivalent duration during the #cj days immediately preceding such period4 4 7#b7 ,health plan expenses ,section #bcja7;c77#e7 of such ,act is amended to read as follows3 7#e7 ,wages 7,a7 ,in general ,the term wages means wages 7as defined in section #caba7;a7 of the ,internal ,revenue ,code of #aihf7 and compensation 7as defined in section #cbca7;e7 of such ,code74 7,b7 ,allowance for certain health plan expenses 7i7 ,in general ,such term shall include amounts paid or incurred by the eligible employer to provide and maintain a group health plan 7as defined in section #ejjj7;b77#a7 of the ,internal ,revenue ,code of #aihf71 but only to the extent that such amounts are excluded from the gross income of employees by reason of section #ajf7;a7 of such ,code4 7ii7 ,allocation rules ,for purposes of this section1 amounts treated as wages under clause 7i7 shall be treated as paid with respect to any employee 7and with respect to any period7 to the extent that such amounts are properly allocable to such employee 7and to such period7 in such manner as the ,secretary may prescribe4 ,except as otherwise provided by the ,secretary1 such allocation shall be treated as properly made if made on the basis of being pro rata among periods of coverage4 4 7e7 ,certain governmental employees eligible for credit 7#a7 ,in general ,section #bcja7;f7 of the ,,cares ,act is amended to read as follows3 7f7 ,certain governmental employers 7#a7 ,in general ,the credit under this section shall not be allowed to the ,federal ,government or any agency or instrumentality thereof4 7#b7 ,exception ,paragraph 7#a7 shall not apply to any organization described in section #eja7;c77#a7 of the ,internal ,revenue ,code of #aihf and exempt from tax under section #eja7;a7 of such ,code4 7#c7 ,special rules ,in the case of any ,state government1 ,indian tribal government1 or any agency1 instrumentality1 or political subdivision of the foregoing-- 7,a7 clauses 7i7 of subsection 7c77#b77;,a7 shall apply to all operations of such entity1 and 7,b7 clauses 7ii7 and 7iii7 of subsection 7c77#b77;,a7 shall not apply4 4 7#b7 ,coordination with application of certain definitions 7,a7 ,in general ,section #bcja7;c77#e77;,a7 of the ,,cares ,act1 as amended by the preceding provisions of this ,act1 is amended by adding at the end the following3 ,for purposes of the preceding sentence 7other than for purposes of subsection 7b77#b771 wages as defined in section #caba7;a7 of the ,internal ,revenue ,code of #aihf shall be determined without regard to paragraphs 7#a71 7#e71 7#f71 7#g71 7#h71 7#aj71 7#ac71 7#ah71 7#ai71 and 7#bb7 of section #cbab7;b7 of such ,code 7except with respect to services performed in a penal institution by an inmate thereof744 7,b7 ,conforming amendments ,sections #bcja7;c77#f7 of the ,,cares ,act is amended by striking ,any term and inserting ,except as otherwise provided in this section1 any term4 7f7 ,coordination with paycheck protection program 7#a7 ,amendment to paycheck protection program ,section #aajf7;a77#h7 of the ,cares ,act is amended by inserting 1 except that such costs shall not include qualified wages taken into account in determining the credit allowed under section #bcja of this ,act before the period at the end4 7#b7 ,amendments to employee retention tax credit 7,a7 ,in general ,section #bcja7;g7 of the ,,cares ,act is amended to read as follows3 7g7 ,election ,to not take certain wages into account 7#a7 ,in general ,this section shall not apply to qualified wages paid by an eligible employer with respect to which such employer makes an election 7at such time and in such manner as the ,secretary may prescribe7 to have this section not apply to such wages4 7#b7 ,coordination with paycheck protection program ,the ,secretary1 in consultation with the ,administrator of the ,small ,business ,administration1 shall issue guidance providing that payroll costs paid or incurred during the covered period shall not fail to be treated as qualified wages under this section by reason of an election under paragraph 7#a7 to the extent that a covered loan of the eligible employer is not forgiven by reason of a decision under section #aajf7;g74 ,terms used in the preceding sentence which are also used in section #aajf shall have the same meaning as when used in such section4 4 7,b7 ,conforming amendment ,section #bcja of the ,,cares ,act is amended by striking subsection 7j74 7g7 ,denial of double benefit ,section #bcja7;h7 of the ,,cares ,act is amended-- 7#a7 by striking paragraphs 7#a7 and 7#b7 and inserting the following3 7#a7 ,denial of double benefit ,any wages taken into account in determining the credit allowed under this section shall not be taken into account as wages for purposes of sections #de;,a1 #de;,b1 #de,p1 #de,s1 #ea1 and #acif of the ,internal ,revenue ,code of #aihf4 1 and 7#b7 by redesignating paragraph 7#c7 as paragraph 7#b74 7h7 ,recapture and advancement of credit ,section #bcja of the ,,cares ,act is amended by redesignating subsections 7l7 and 7m7 as subsections 7o7 and 7p71 respectively1 and by inserting after subsection 7k7 the following3 7l7 ,recapture 7#a7 ,in general ,in any case in which an eligible employer which has been allowed a credit under this section for any calendar quarter takes any action described in paragraph 7#b7 during the #a-year period beginning on the day after the end of such calendar quarter1 the tax imposed by chapter #ba or #bb of the ,internal ,revenue ,code of #aihf 7whichever is applicable7 for the calendar quarter in which such action occurs shall be increased by the amount of the credit so allowed4 7#b7 ,actions described ,the following actions are described in this paragraph3 7,a7 ,returns of capital ,the eligible employer purchases its own stock or otherwise distributes capital 7including through a dividend74 7,b7 ,labor negotiations ,the eligible employer-- 7i7 abrogates a collective bargaining agreement1 or 7ii7 does not remain neutral in any union organizing effort4 7,c7 ,payroll ,the eligible employer pays any officer or employee a salary in an amount that is greater than #ej times the median salary of employees during the period lasting one year after the end of the calendar quarter in which credit is claimed4 7#c7 ,limitation ,the amount of tax imposed under paragraph 7#a7 with respect to any calendar quarter for all actions described in paragraph 7#b7 shall not exceed the amount allowed as a credit under this section with respect to such calendar quarter4 7m7 ,coordination with advance refunds of credit 7#a7 ,in general ,the amount of credit which would 7but for this subsection7 be allowed under this section shall be reduced 7but not below zero7 by the aggregate refunds and credits made or allowed to the taxpayer under section #ajc of the ,paycheck ,security ,act by reason of this section4 ,any failure to so reduce the credit shall be treated as arising out of a mathematical or clerical error and assessed according to section #fbac7;b77#a7 of the ,internal ,revenue ,code of #aihf4 7#b7 ,excess advance payments ,if the advance payments to a taxpayer under section #ajc of the ,paycheck ,security ,act by reason of this section for a calendar quarter exceed the credit allowed by this section 7determined without regard to paragraph 7#a771 the tax imposed by chapter #ba or #bb of the ,internal ,revenue ,code of #aihf 7whichever is applicable7 for the calendar quarter shall be increased by the amount of such excess4 4 7i7 ,regulations and guidance ,section #bcja7o7 of the ,,cares ,act1 as redesignated by subsection 7h71 is amended-- 7#a7 by striking paragraphs 7#a71 7#b71 and 7#c71 and inserting the following3 7#a7 to require employers allowed a credit under this section to report information relevant to actions described in subsection 7l77#b71 4 7#b7 by redesignating paragraphs 7#d7 and 7#e7 as paragraphs 7#b7 and 7#c71 respectively1 and 7#c7 in paragraph 7#c71 as so redesignated1 by striking subparagraphs 7,a77ii7 and 7,b7 of subsection 7c77#b7 and inserting subsections 7a77#b7 and 7c77#b77;,a77iv74 7j7 ,effective date ,the amendments made by this section shall apply to wages paid in calendar quarters beginning after the date of the enactment of this ,act4 #ajb4 ,credit for employer operating expenses 7a7 ,in general 7#a7 ,allowance of credit ,in the case of an eligible employer1 there shall be allowed as a credit against applicable employment taxes for each calendar quarter an amount equal to the lesser of-- 7,a7 #e percent of the qualifying gross receipts of the eligible employer1 or 7,b7 #ejj1jjj4 7#b7 ,phaseout ,in the case of an eligible employer for which the gross receipts for the calendar quarter exceed #hj percent of gross receipts for the same calendar quarter in the prior year1 the amount of determined under paragraph 7#a77;,a7 7determined without regard to this paragraph7 shall be reduced 7but not below zero7 by an amount that bears the same ratio to such amount as-- 7,a7 the excess of-- 7i7 #he percent1 over 7ii7 the percentage by which the taxpayer's gross receipts for the calendar quarter exceed the taxpayer's gross receipts for the same calendar quarter in the prior year1 bears to 7,b7 #e percent4 7b7 ,limitations and refundability 7#a7 ,credit limited to employment taxes ,the credit allowed under subsection 7a7 with respect to any calendar quarter shall not exceed the applicable employment taxes 7reduced by any credits allowed under subsections 7e7 and 7f7 of section #caaa of the ,internal ,revenue ,code of #aihf1 sections #gjja and #gjjc of the ,families ,first ,coronavirus ,response ,act1 and section #bcja of the ,,cares ,act7 on the wages paid with respect to the employment of all the employees of the eligible employer for such calendar quarter4 7#b7 ,refundability of excess credit 7,a7 ,in general ,if the amount of the credit under subsection 7a7 7determined without regard to paragraph 7#a77 exceeds the limitation of paragraph 7#a7 for any calendar quarter1 such excess shall be treated as an overpayment that shall be refunded under sections #fdjb7;a7 and #fdac7;b7 of the ,internal ,revenue ,code of #aihf4 7,b7 ,treatment of payments ,for purposes of section #acbd of title #ca1 ,united ,states ,code1 any amounts due to the employer under this paragraph shall be treated in the same manner as a refund due from a credit provision referred to in subsection 7b77#b7 of such section4 7c7 ,definitions ,for purposes of this section-- 7#a7 ,applicable employment taxes ,the term applicable employment taxes means the following3 7,a7 ,the taxes imposed under section #caaa7;a7 of the ,internal ,revenue ,code of #aihf4 7,b7 ,so much of the taxes imposed under section #cbba7;a7 of such ,code as are attributable to the rate in effect under section #caaa7;a7 of such ,code4 7#b7 ,eligible employer ,the term eligible employer means an employer which-- 7,a7 is an eligible employer 7as defined in section #bcja7;c77#b7 of the ,,cares ,act1 determined without regard to subparagraph 7,a77ii7 thereof71 and 7,b7 with respect to any calendar quarter1 meets the gross receipts test of section #ddh7;c7 7determined by substituting #da1ejj1jjj for #be1jjj1jjj in paragraph 7#a7 thereof7 for the taxable year that includes the first day of the calendar quarter4 ,for purposes of subparagraph 7,b71 in the case of any taxpayer which is not a corporation or a partnership1 the gross receipts test of section #ddh7;c7 shall be applied in the same manner as if such taxpayer were a corporation or partnership4 7#c7 ,qualifying gross receipts ,the term qualifying gross receipts means the aggregate gross receipts of the eligible employer for the last taxable year ending before the date of the enactment of this ,act4 7#d7 ,gross receipts 7,a7 ,in general ,the term gross receipts has the meaning given such term under section #ddh7;c7 of the ,internal ,revenue ,code of #aihf4 7,b7 ,tax-exempt organizations ,in the case of an organization which is described in section #eja7;c7 of the ,internal ,revenue ,code of #aihf and exempt from tax under section #eja7;a7 of such ,code1 any reference in this section to gross receipts shall be treated as a reference to gross receipts within the meaning of section #fjcc of the ,internal ,revenue ,code of #aihf4 7#e7 ,secretary ,the term ,secretary means the ,secretary of the ,treasury or the ,secretary's delegate4 7d7 ,other rules ,for purposes of this section-- 7#a7 ,aggregation rule ,all persons treated as a single employer under subsection 7a7 or 7b7 of section #eb of the ,internal ,revenue ,code of #aihf1 or subsection 7m7 or 7o7 of section #dad of such ,code1 shall be treated as one employer4 7#b7 ,certain governmental employers ,this credit shall not apply to the ,government of the ,united ,states1 the government of any ,state or political subdivision thereof1 or any agency or instrumentality of any of the foregoing4 7#c7 ,election not to have section apply ,this section shall not apply with respect to any eligible employer for any calendar quarter if such employer elects 7at such time and in such manner as the ,secretary may prescribe7 not to have this section apply4 7#d7 ,third-party payors ,any credit allowed under this section shall be treated as a credit described in section #ceaa7;d77#b7 of such ,code4 7e7 ,transfers to ,federal ,old-,age and ,survivors ,insurance ,trust ,fund ,there are hereby appropriated to the ,federal ,old-,age and ,survivors ,insurance ,trust ,fund and the ,federal ,disability ,insurance ,trust ,fund established under section #bja of the ,social ,security ,act 7#db ,u4,s4,c4 #dja7 and the ,social ,security ,equivalent ,benefit ,account established under section #ae;,a7a7 of the ,railroad ,retirement ,act of #aigd 7#de ,u4,s4,c4 #ad #bcan-#a7;a77 amounts equal to the reduction in revenues to the ,treasury by reason of this section 7without regard to this subsection74 ,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 enacted4 7f7 ,treatment of deposits ,the ,secretary shall waive any penalty under section #ffef of the ,internal ,revenue ,code of #aihf for any failure to make a deposit of any applicable employment taxes if the ,secretary determines that such failure was due to the reasonable anticipation of the credit allowed under this section4 7g7 ,recapture 7#a7 ,in general ,in any case in which an eligible employer which has been allowed a credit under this section for any calendar quarter takes any action described in section #bcja7l77#b7 of the ,,cares ,act during the #a-year period beginning on the day after the end of such calendar quarter1 the tax imposed by chapter #ba or #bb of the ,internal ,revenue ,code of #aihf 7whichever is applicable7 for the calendar quarter in which such action occurs shall be increased by the amount of the credit so allowed4 7#b7 ,limitation ,the amount of tax imposed under paragraph 7#a7 with respect to any calendar quarter for all actions described in section #bcja7l77#b7 of the ,,cares ,act shall not exceed the amount allowed as a credit under this section with respect to such calendar quarter4 7h7 ,coordination with advance refunds of credit ,the amount of credit which would 7but for this subsection7 be allowed under this section shall be reduced 7but not below zero7 by the aggregate refunds and credits made or allowed to the taxpayer under section #ajc by reason of this section4 ,any failure to so reduce the credit shall be treated as arising out of a mathematical or clerical error and assessed according to section #fbac7;b77#a7 of the ,internal ,revenue ,code of #aihf4 7i7 ,credit treated as income ,for purposes of the ,internal ,revenue ,code of #aihf1 the amount allowed as a credit under this section for any calendar quarter shall be included in income of the employer for the taxable year that includes the last day of the calendar quarter4 7j7 ,regulations and guidance ,the ,secretary shall issue such forms1 instructions1 regulations1 and guidance as are necessary-- 7#a7 to require employers allowed a credit under this section to report information relevant to actions described in subsection 7g77#a71 7#b7 with respect to the application of the credit under subsection 7a7 to third party payors 7including professional employer organizations1 certified professional employer organizations1 or agents under section #cejd of the ,internal ,revenue ,code of #aihf71 including regulations or guidance allowing such payors to submit documentation necessary to substantiate the eligible employer status of employers that use such payors1 and 7#c7 for application of subsections 7a77#b7 in the case of any employer which was not carrying on a trade or business for all or part of the same calendar quarter in the prior year4 7k7 ,application ,this section shall only apply to calendar quarters beginning after the date of the enactment of this ,act and before ,january #a1 #bjbj4 #ajc4 ,advance payments of credits 7a7 ,in general ,the ,secretary of the ,treasury 7or the ,secretary's delegate7 shall establish a program under which an employer may elect to receive an advance payment of-- 7#a7 the credit allowable under section #bcja of the ,,cares ,act1 and 7#b7 the credit allowable under section #ajb4 ,the employer shall designate the amount of any advance payment made under this section which is made by reason of each credit described in the preceding sentence4 7b7 ,limitations 7#a7 ,limitation on amount of payment ,the aggregate amount of advance payments under this section with respect to any calendar quarter shall not exceed the deemed credit amount4 7#b7 ,limitation on number of advances ,an employer may not make an election under the program established under subsection 7a7 with respect to more than #b calendar quarters in any calendar year4 7c7 ,deemed credit amount ,for purposes of this section-- 7#a7 ,in general ,the term deemed credit amount means the sum of-- 7,a7 the average quarterly wages 7as defined in section #bcja of the ,,cares ,act7 paid by the taxpayer in calendar year #bjai1 plus 7,b7 #e percent of the qualifying gross receipts 7as defined in section #ajb7;c77#c77 of the taxpayer4 7#b7 ,special rule for seasonal employers ,in the case of any employer who employs seasonal workers 7as defined in section #de,r7d77#e77;,b7 of the ,internal ,revenue ,code of #aihf71 the employer may elect to use the wages 7as defined in section #bcja of the ,,cares ,act7 for the calendar quarter in #bjai which corresponds to the calendar quarter to which the election relates in lieu of the amount descried in paragraph 7#a77;,a74 #ajd4 ,administration 7a7 ,priority ,in carrying out the provisions of section #bcja of the ,,cares ,act and sections #c and #d1 the ,secretary of the ,treasury 7or the ,secretary's delegate7 shall prioritize businesses with #ajj or fewer employees4 7b7 ,audits ,in enforcing the requirements section #bcja of the ,,cares ,act and sections #c and #d1 the ,secretary of the ,treasury 7or the ,secretary's delegate7 shall prioritize employers with gross receipts for the last taxable year ending in #bjai of #a1jjj1jjj1jjj or more4 #aje4 ,public disclosure 7a7 ,quarterly reports ,not later than #fj days after the date of the enactment of this ,act1 and once every calendar quarter thereafter1 the ,treasury ,inspector ,general for ,tax ,administration shall make publicly available a report on the provisions of this ,act1 including-- 7#a7 ,a listing of each eligible employer that was allowed the credit under section #bcja of the ,,cares ,act and the number of employees taken into account in determining the amount of such credit4 7#b7 ,a listing of each eligible employer that was allowed the credit under section #ajb4 7#c7 ,the aggregate amount of advance payments provided to each eligible employer under section #ajc4 7#d7 ,the aggregate amount of credits recaptured from each eligible employer under each of the following provisions-- 7,a7 ,section #bcja7l7 of the ,,cares ,act and section #ajb7;g74 7,b7 ,section #bcja7m77#b7 of the ,,cares ,act4 7b7 ,conforming amendment ,section #fajc7l7 of the ,internal ,revenue ,code of #aihf is amended by adding at the end the following new paragraph3 7#bc7 ,disclosure of return information relating to paycheck security credits ,the ,treasury ,inspector ,general for ,tax ,administration shall disclose to the public taxpayer information required under section #aje of the ,paycheck ,security ,act4 4 #ajf4 ,employee notification 7a7 ,in general ,each employer shall post and keep posted on its website 7if any7 and in conspicuous places on the premises of the employer where notices to employees are customarily posted1 a notice1 to be prepared or approved by the ,secretary of ,labor1 of the credits allowed to employers under section #bcja of the ,,cares ,act and section #ajb4 7b7 ,model notice ,not later than #g days after the date of enactment of this ,act1 the ,secretary of ,labor shall make publicly available a model of notice that meets the requirements of subsection 7a74 ,,ii ,small ,business ,rebate #bja4 ,small business rebate 7a7 ,in general ,subchapter ,b of chapter #fe of subtitle ,f of the ,internal ,revenue ,code of #aihf is amended by inserting after section #fdbh the following new section3 #fdbi4 ,small business rebate 7a7 ,allowance of credit 7#a7 ,in general ,in the case of a qualifying taxpayer1 there shall be allowed as a credit against the tax imposed by subtitle ,a for the first taxable year beginning in #bjbj an amount equal to the lesser of-- 7,a7 #cj percent of qualified gross profits of such qualifying taxpayer for the applicable taxable year1 or 7,b7 #ge1jjj4 7#b7 ,phase-out for individuals ,in the case of a qualifying taxpayer that is a qualified individual1 the amount of the credit determined under paragraph 7#a7 7determined without regard to this paragraph7 shall be reduced 7but not below zero7 by the amount which bears the same ratio to such credit 7as so determined7 as-- 7,a7 the excess of-- 7i7 the taxpayer's adjusted gross income for the applicable taxable year1 over 7ii7 #ajj1jjj 7#bjj1jjj in the case of a joint return71 bears to 7,b7 #ej1jjj 7#ajj1jjj in the case of a joint return74 7#c7 ,reduction for qualified organizations 7,a7 ,in general ,in the case of a qualifying taxpayer that is a qualified organization1 the amount of the credit determined under paragraph 7#a7 7determined without regard to this paragraph7 shall be reduced by the total expenditures of the organization described in section #afb7;e77#a7 7other than expenditures described in section #fjcc7;e77#a77;,b77ii774 7,b7 ,exception ,this paragraph shall not apply to any organization described in section #eja7;c77#c74 7b7 ,qualifying taxpayer ,for purposes of this section-- 7#a7 ,in general ,the term qualifying taxpayer means any taxpayer that is a domestic ,c corporation1 a qualified organization1 or a qualified individual that meets the gross profits test under paragraph 7#d7 for the applicable taxable year4 7#b7 ,qualified organization ,the term qualified organization means any organization which is described in section #eja7;c7 and exempt from tax under section #eja7;a74 7#c7 ,qualified individual ,the term qualified individual means any individual who-- 7,a7 is a ,united ,states citizen or resident1 and 7,b7 materially participates 7within the meaning of section #dfi7;h77 in one or more trades or businesses 7other than any trade or business consisting of the performance of services by the taxpayer as an employee 7within the meaning of section #fb7;a77#a7774 7#d7 ,gross profits test 7,a7 ,in general ,a taxpayer meets the gross profits test under this section if the qualified gross profits of the taxpayer for the applicable taxable year are not more than #a1jjj1jjj4 7,b7 ,aggregation rules 7i7 ,in general ,all qualifying taxpayers that are domestic ,c corporations or qualified organizations and that are 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 person for purposes of subparagraph 7,a74 7ii7 ,qualifying individuals ,all trades or businesses in which a qualified individual materially participates 7within the meaning of section #dfi7;h77 shall be treated as a single trade or business for purposes of subparagraph 7,a74 7c7 ,qualified gross profits ,for purposes of this section-- 7#a7 ,in general ,except as otherwise provided in this subsection1 the term qualified gross profits means the excess of-- 7,a7 the gross receipts of the taxpayer as reported on the return of tax for the applicable taxable year1 reduced by 7,b7 returns and allowances and cost of goods sold as reported on the return of tax for the applicable taxable year4 7#b7 ,application to qualified organizations ,in the case of a qualified organization-- 7,a7 paragraph 7#a7 shall be applied-- 7i7 by treating the reference to gross receipts as a reference to gross receipts within the meaning of section #fjcc1 and 7ii7 without regard to subparagraph 7,b7 thereof1 and 7,b7 in the case of an organization which1 for all applicable taxable years1 is exempt from filing a return pursuant to section #fjcc7;a7 or which is not required to include in such return the information necessary to determine the amount qualified gross receipts1 such organization may submit to the ,secretary 7in such form and manner as is deemed appropriate by the ,secretary7 any information required for purposes of determining the amount of such gross receipts4 ,for purposes of section #fajd1 any information submitted by an organization under subparagraph 7,b7 shall be deemed to be information required to be furnished by such organization pursuant to section #fjcc4 7#c7 ,application to qualified individuals 7,a7 ,in general ,in the case of a qualified individual-- 7i7 gross receipts1 returns and allowances1 and cost of goods sold taken into account under paragraph 7#a7 shall only include gross receipts from trades or businesses described in subsection 7b77#c7 in which the qualified individual materially participated1 and 7ii7 wages received from any such trade or business by the qualified individual shall not be taken into account under paragraph 7#a77;,a74 7,b7 ,treatment of amounts from partnerships and ,s corporations ,in the case of any qualified individual who materially participates 7within the meaning of section #dfi7;h77 in a trade or business of a partnership or ,s corporation in which such individual is a partner or shareholder1 the amount determined under paragraph 7#a7 with respect to such trade or business shall be determined using-- 7i7 in the case of a partnership1 the partner's distributive share of non-separately stated income1 as reported on the return of tax for the applicable taxable year1 and 7ii7 in the case of an ,s corporation1 the shareholder's pro rata share of non-separately stated income1 as reported on the return of tax for the applicable taxable year4 7,c7 ,treatment of amounts from farming businesses ,in the case of a qualified individual who materially participates 7within the meaning of section #dfi7;h77 in a farming business 7as defined in section #bfc;,a7e77#d771 the amount of determined under paragraph 7#a7 shall be the gross income derived from such business1 as reported on the return of tax for the applicable taxable year4 7d7 ,applicable taxable year ,for purposes of this section1 the term applicable taxable year means-- 7#a7 the first taxable year beginning in #bjai1 or 7#b7 in any case in which the qualifying taxpayer did not file a tax return for the taxable year described in paragraph 7#a71 the first taxable year beginning in #bjah4 7e7 ,treatment of credit 7#a7 ,in general ,the credit allowed by subsection 7a7 shall be treated as allowed by subpart ,c of part ,,iv of subchapter ,a of chapter #a4 7#b7 ,credit included in gross income 7,a7 ,in general ,except as provided in subparagraph 7,b71 for purposes of subtitle ,a1 the amount of any credit allowed under this section shall be included in gross income4 7,b7 ,amounts not taken into account for purposes of premium tax credit 7i7 ,in general ,for purposes of determining modified adjusted gross income under section #cf;,b7d77#b77;,b71 adjusted gross income shall not include any amount treated as income by reason of subparagraph 7,a74 7ii7 ,exception ,paragraph 7#a7 shall not apply to the extent such reduction results in an amount of household income 7as defined in section #cf;,b7d77#b77;,a77 of a taxpayer that is less than #ajj percent of the poverty line 7as defined in section #cf;,b7d77#c77 for a family of the size involved 7as determined under the rules of section #cf;,b7d77#a774 7f7 ,coordination with advance refunds and credit for employer operating expenses 7#a7 ,coordination with advance refunds of credit ,the amount of credit which would 7but for this subsection7 be allowable under this section shall be reduced 7but not below zero7 by the aggregate refunds and credits made or allowed to the taxpayer under subsection 7g74 ,any failure to so reduce the credit shall be treated as arising out of a mathematical or clerical error and assessed according to section #fbac7;b77#a74 7#b7 ,coordination with credit for employer operating expenses ,the amount of the credit allowed under this section 7determined without regard to this subsection7 shall be reduced 7but not below zero7 by the amount of any credit allowed under section #ajb of the ,paycheck ,security ,act during the taxable year4 7#c7 ,special rule for recapture of advanced refunds and credits 7,a7 ,in general ,in the case of any qualifying taxpayer who received a refund or credit by reason of subsection 7g7 and who was allowed a credit under section #ajb of the ,paycheck ,security ,act for any quarter ending on or before the last day of the taxpayer's first taxable year beginning in #bjbj1 the tax imposed by chapter #a on the taxpayer to whom such refund or credit was made or allowed shall be increased for the taxable year by the lessor of-- 7i7 the refund or credit made or allowed to such taxpayer by reason of subsection 7g71 or 7ii7 the amount of the credit allowed under section #ajb of the ,paycheck ,security ,act4 7,b7 ,application to partnerships and ,s corporations ,for purposes of applying subparagraph 7,a71 in the case of any partnership or ,s corporation which was allowed a credit under section #ajb of the ,paycheck ,security ,act1 each partner of such partnership shall be treated as having been allowed a credit under such section equal to such partner's distributive share of such credit and each shareholder of such ,s corporation shall be treated as having been allowed a credit equal to such shareholder's pro rata share of such credit4 7,c7 ,return requirement ,if the tax imposed by chapter #a for the taxable year is increased under this paragraph1 the taxpayer shall1 notwithstanding section #fjab1 be required to file a return with respect to the taxes imposed under subtitle ,a4 7g7 ,advance refunds and credits 7#a7 ,in general ,any person which was a qualifying taxpayer for such person's last taxable year ending before ,january #a1 #bjbj1 shall be treated as having made a payment against the tax imposed by chapter #a for such taxable year in an amount equal to the advance refund amount for such taxable year1 regardless of whether such tax would have been imposed on such person4 7#b7 ,advance refund amount ,for purposes of paragraph 7#a71 the advance refund amount is the amount that would have been allowed as a credit under this section for such taxable year if this section 7other than subsection 7f7 and this subsection7 had applied to such taxable year4 7#c7 ,timing of payments ,the ,secretary shall1 subject to the provisions of this title1 refund or credit any overpayment attributable to this section as rapidly as possible4 ,no refund or credit shall be made or allowed under this subsection after ,december #ca1 #bjbj4 7#d7 ,no interest ,no interest shall be allowed on any overpayment attributable to this section4 7h7 ,regulations and guidance ,the ,secretary shall issue such forms1 instructions1 regulations1 and guidance as are necessary1 including guidance with respect to the application of subsection 7f77#c77;,b7 to partners and partnerships with differing taxable years4 4 7b7 ,conforming amendments 7#a7 ,section #fbaa7;b77#d77;,a7 of the ,internal ,revenue ,code of #aihf is amended by striking and #fdbh and inserting #fdbh1 and #fdbi4 7#b7 ,paragraph 7#b7 of section #acbd7;b7 of title #ca1 ,united ,states ,code1 is amended by inserting 8#fdbi10 after 8#fdbh104 7#c7 ,the table of sections for subchapter ,b of chapter #fe of subtitle ,f of the ,internal ,revenue ,code of #aihf is amended by inserting after the item relating to section #fdbh the following3 ,sec4 #fdbi4 ,small business rebate4 4 ,,iii ,other ,provisions #cja4 ,additional appropriations for ,department of ,treasury 7a7 ,internal ,revenue ,service ,there is authorized to be appropriated1 and there is appropriated1 to the ,internal ,revenue ,service #a1jjj1jjj1jjj1 to remain available until expended1 to carry out the provisions of1 and amendments made by1 this ,act4 7b7 ,treasury inspector general for tax administration ,there is authorized to be appropriated1 and there is appropriated1 to the ,treasury ,inspector ,general for ,tax ,administration #be1jjj1jjj1 to remain available until expended1 to carry out investigations1 audits and other oversight activities with respect to the credits allowed under section #bcja of the ,,cares ,act1 and sections #ajb and #bja of this ,act1 and the provisions of section #ajc and #aje of this ,act1 as authorized under the ,inspector ,general ,act of #aigh 7#e ,u4,s4,c4 ,app474 #cjb4 ,,gao report ,not later than #e months after the date of enactment of this ,act1 the ,comptroller ,general of the ,united ,states shall issue a report evaluating the effectiveness of the operative provisions of and amendments made by this ,act4 ,such report shall include recommendations on extending the applicability of such amendments and provisions and how to transition workers after the expiration of such provisions and amendments4