ONLY WAGES ATTRIBUTABLE TO DOMESTIC PRODUCTION TAKEN INTO ACCOUNT IN DETERMINING DEDUCTION FOR DOMESTIC PRODUCTION.

SEC. 514. ONLY WAGES ATTRIBUTABLE TO DOMESTIC PRODUCTION TAKEN INTO ACCOUNT IN DETERMINING DEDUCTION FOR DOMESTIC PRODUCTION. (a) In General.—Paragraph (2) of section 199(b) (relating to W-2 wages) is amended to read as follows: “(2) W-2 wages.—For purposes of this section—“(A) In general.—The term ‘W-2 wages’ means, with respect to any person for any taxable year of such person, the sum of the amounts described in paragraphs (3) and (8) of section 6051(a) paid by such person with respect to employment of employees by such person during the calendar year ending during such taxable year. “(B) Limitation to wages attributable to domestic production.—Such term shall not include any amount which is not properly allocable to domestic production gross receipts for purposes of subsection (c)(1). “(C) Return requirement.—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 60th day after the due date (including extensions) for such return.”. (b) Simplification of Rules for Determining W-2 Wages of Partners and S Corporation Shareholders.—(1) In general.—Clause (iii) of section 199(d)(1)(A) is amended to read as follows: “(iii) each partner or shareholder shall be treated for purposes of subsection (b) as having W-2 wages for the taxable year in an amount equal to such person’s allocable share of the W-2 wages of the partnership or S corporation for the taxable year (as determined under regulations prescribed by the Secretary).”. (2) Conforming amendment.—Paragraph (2) of section 199(a) is amended by striking “and subsection (d)(1)”. 120 STAT. 367(c) Effective Date.—The amendments made by this section shall apply to taxable years beginning after the date of the enactment of this Act.