EMPLOYEE RETENTION CREDIT FOR EMPLOYERS AFFECTED BY QUALIFIED DISASTERS.

SEC. 303. EMPLOYEE RETENTION CREDIT FOR EMPLOYERS AFFECTED BY QUALIFIED DISASTERS. (a) In General.—For purposes of section 38 of the Internal Revenue Code of 1986, in the case of an eligible employer, the 2020 qualified disaster employee retention credit shall be treated as a credit listed at the end of subsection (b) of such section. For purposes of this subsection, the 2020 qualified disaster employee retention credit for any taxable year is an amount equal to 40 percent of the qualified wages with respect to each eligible employee of such employer for such taxable year. The amount of qualified wages with respect to any employee which may be taken into account under this subsection by the employer for any taxable year shall not exceed $6,000 (reduced by the amount of qualified wages with respect to such employee taken into account for any prior taxable year). (b) Definitions.—For purposes of this section— (1) Eligible employer.—The term “eligible employer” means any employer— (A) which conducted an active trade or business in a qualified disaster zone at any time during the incident period of the qualified disaster with respect to such qualified disaster zone, and (B) with respect to whom the trade or business described in subparagraph (A) is inoperable at any time during the period beginning on the first day of the incident period of such qualified disaster and ending on the date of the enactment of this Act, as a result of damage sustained by reason of such qualified disaster. (2) Eligible employee.—The term “eligible employee” means with respect to an eligible employer an employee whose principal place of employment with such eligible employer (determined immediately before the qualified disaster referred to in paragraph (1)) was in the qualified disaster zone referred to in such paragraph. (3) Qualified wages.—The term “qualified wages” means wages (as defined in section 51(c)(1) of the Internal Revenue Code of 1986, but without regard to section 3306(b)(2)(B) of such Code) paid or incurred by an eligible employer with respect to an eligible employee at any time on or after the date on which the trade or business described in paragraph (1) first became inoperable at the principal place of employment of the employee (determined immediately before the qualified disaster referred to in such paragraph) and before the earlier of— (A) the date on which such trade or business has resumed significant operations at such principal place of employment, or (B) the date which is 150 days after the last day of the incident period of the qualified disaster referred to in paragraph (1). Such term shall include wages paid without regard to whether the employee performs no services, performs services at a different place of employment than such principal place of employment, or performs services at such principal place of employment before significant operations have resumed. Such term shall not include any wages taken into account under section 2301 of the CARES Act. (c) Special Rules.— (1) Denial of double benefit.—Any wages taken into account in determining any credit allowed under this section shall not be taken into account as wages for purposes of sections 41, 45A, 45P, 45S, 51, and 1396 of the Internal Revenue Code of 1986. (2) Certain other rules to apply.—For purposes of this section, rules similar to the rules of sections 51(i)(1), 52, and 280C(a) of the Internal Revenue Code of 1986 shall apply. (d) Payroll Tax Credit for Certain Tax-exempt Organizations.— (1) In general.—In the case of any qualified tax-exempt organization, there shall be allowed as a credit against the tax imposed by section 3111(a) of the Internal Revenue Code of 1986 on wages paid with respect to employment of all employees of the organization during the calendar quarter an amount equal to 40 percent of the qualified wages paid to eligible employees of such organization during such calendar quarter. (2) Application of aggregate dollar limitation per employee.—The amount of qualified wages with respect to any employee which may be taken into account under this subsection by the employer for any calendar quarter shall not exceed $6,000 (reduced by the amount of qualified wages with respect to which credit was allowed under this subsection for any prior calendar quarter with respect to such employee). (3) Overall limitation.— (A) In general.—The aggregate amount allowed as a credit under this subsection for all eligible employees of any employer for any calendar quarter shall not exceed the amount of the tax imposed by section 3111(a) of the Internal Revenue Code of 1986 on wages paid with respect to employment of all employees of such employer during such calendar quarter (reduced by any credits allowed under subsections (e) and (f) of section 3111 of such Code for such quarter). (B) Carryforward.—If the amount of the credit under paragraph (1) exceeds the limitation of subparagraph (A) for any calendar quarter, such excess shall be carried to the succeeding calendar quarter and allowed as a credit under paragraph (1) for such quarter. (C) Coordination with other payroll tax credits.— (i) [26 U.S.C. 3111 note] Section 7001(b)(3) of the Families First Coronavirus Response Act is amended by inserting “, and section 303(d) of the Taxpayer Certainty and Disaster Tax Relief Act of 2020,” after “subsections (e) and (f) of section 3111 of such Code”. (ii) Section 7003(b)(2) of the Families First Coronavirus Response Act is amended by striking “and section 7001 of this Act,” and inserting “section 7001 of this Act, and section 303(d) of the Taxpayer Certainty and Disaster Tax Relief Act of 2020,”. (iii) Section 2301(b)(2) of the CARES Act is amended by striking “and sections 7001 and 7003 of the Families First Coronavirus Response Act” and inserting “, sections 7001 and 7003 of the Families First Coronavirus Response Act, and section 303(d) of the Taxpayer Certainty and Disaster Tax Relief Act of 2020”. (4) Definitions.— (A) Qualified tax-exempt organization.—For purposes of this subsection, the term “qualified tax-exempt organization” means an organization described in section 501(c) of the Internal Revenue Code of 1986 and exempt from taxation under section 501(a) of such Code if such organization would be an eligible employer if the activities of such organization were an active trade or business. (B) Application of certain terms with respect to qualified tax-exempt organizations.—For purposes of this subsection, the terms “eligible employee” and “qualified wages” shall be applied with respect to any qualified tax-exempt organization— (i) by treating the activities of such organization as an active trade or business, and (ii) by substituting “wages (within the meaning of subsection (d)(4)(C))” for “wages (as defined in section 51(c)(1) of the Internal Revenue Code of 1986, but without regard to section 3306(b)(2)(B) of such Code)” in subsection (b)(3). (C) Other terms.—Except as otherwise provided in this subsection, any term used in this subsection which is also used in chapter 21 or 22 of the Internal Revenue Code of 1986 shall have the same meaning as when used in such chapter. (5) Transfers to certain trust funds.—There are hereby appropriated to the Federal Old-Age and Survivors Insurance Trust Fund and the Federal Disability Insurance Trust Fund established under section 201 of the Social Security Act (42 U.S.C. 401) and 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 this subsection (without regard to this paragraph). 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 subsection not been enacted. (6) Treatment of deposits.—The Secretary shall waive any penalty under section 6656 of such Code for any failure to make a deposit of applicable employment taxes if the Secretary determines that such failure was due to the anticipation of the credit allowed under this subsection. (7) Third party payors.—Any credit allowed under this subsection shall be treated as a credit described in section 3511(d)(2) of such Code. (8) Coordination with subsection (a) credit.—Any wages taken into account in determining the credit allowed under this subsection shall not be take into account as wages for purposes of subsection (a). (9) Regulations and guidance.—The Secretary shall issue such forms, instructions, regulations, and guidance as are necessary— (A) to allow the advance payment of the credit under paragraph (1), subject to the limitations provided in this subsection, based on such information as the Secretary shall require, (B) regulations or other guidance to provide for the reconciliation of such advance payment with the amount of the credit under this subsection at the time of filing the return of tax for the applicable quarter or taxable year, (C) with respect to the application of the credit under paragraph (1) to third party payors (including professional employer organizations, certified professional employer organizations, or agents under section 3504 of the Internal Revenue Code of 1986), including regulations or guidance allowing such payors to submit documentation necessary to substantiate the eligible employer status of employers that use such payors, and (D) for recapturing the benefit of credits determined under this subsection in cases where there is a subsequent adjustment to the credit determined under paragraph (1). (e) Election to Not Take Certain Wages Into Account.— (1) In general.—This section shall not apply to qualified wages paid by an eligible employer with respect to which such employer makes an election (at such time and in such manner as the Secretary may prescribe) to have this section not apply to such wages. (2) Coordination with paycheck protection program.—The Secretary, in consultation with the Administrator of the Small Business Administration, 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 (1) to the extent that a covered loan of the eligible employer is not forgiven by reason of a decision under section 7A(g) of the Small Business Act. Terms used in the preceding sentence which are also used in section 7A(g) of such Act shall have the same meaning as when used in such section. (f) Certain Governmental Employers.— (1) In general.—The credits under this section shall not apply to the Government of the United States, the government of any State or political subdivision thereof, or any agency or instrumentality of any of the foregoing. (2) Exception.—Paragraph (1) shall not apply to— (A) any organization described in section 501(c)(1) of the Internal Revenue Code of 1986 and exempt from tax under section 501(a) of such Code, or (B) any entity described in paragraph (1) if — (i) such entity is a college or university, or (ii) the principal purpose or function of such entity is providing medical or hospital care. An entity described in subparagraph (B) shall be treated for purposes of this section in the same manner as an organization described in section 501(c) of the Internal Revenue Code of 1986 and exempt from tax under section 501(a) of such Code. (g) Amendment to Paycheck Protection Program.—Section 7A(a)(12) of the Small Business Act (as redesignated, transferred, and amended by the Economic Aid to Hard-Hit Small Businesses, Nonprofits, and Venues Act and as amended by section 206(c) of this division) is amended by adding at the end the following: “Such payroll costs shall not include qualified wages taken into account in determining the credit allowed under subsection (a) or (d) of section 303 of the Taxpayer Certainty and Disaster Tax Relief Act of 2020.”.