EXTENSION AND MODIFICATION OF EMPLOYEE RETENTION AND REHIRING TAX CREDIT.

SEC. 207. EXTENSION AND MODIFICATION OF EMPLOYEE RETENTION AND REHIRING TAX CREDIT. (a) Extension.— (1) In general.—Section 2301(m) of the CARES Act is amended by striking “January 1, 2021” and inserting “July 1, 2021”. (2) Conforming amendment.—Section 2301(c)(2)(A)(i) of the CARES Act is amended by striking “during calendar year 2020” and inserting “during the calendar quarter for which the credit is determined under subsection (a)”. (b) Increase in Credit Percentage.—Section 2301(a) of the CARES Act is amended by striking “50 percent” and inserting “70 percent”. (c) Increase in Per Employee Limitation.—Section 2301(b)(1) of the CARES Act is amended by striking “for all calendar quarters shall not exceed $10,000” and inserting “for any calendar quarter shall not exceed $10,000”. (d) Modifications to Definition of Eligible Employer.— (1) Decrease in reduction in gross receipts necessary to qualify as eligible employer.— (A) In general.—Section 2301(c)(2)(A)(ii)(II) of the CARES Act is amended to read as follows: “(II) the gross receipts (within the meaning of section 448(c) of the Internal Revenue Code of 1986) of such employer for such calendar quarter are less than 80 percent of the gross receipts of such employer for the same calendar quarter in calendar year 2019.” . (B) Application to employers not in existence in 2019.—Section 2301(c)(2)(A) of the CARES Act, as amended by subparagraph (A), is amended by adding at the end the following new flush sentence:“With respect to any employer for any calendar quarter, if such employer was not in existence as of the beginning of the same calendar quarter in calendar year 2019, clause (ii)(II) shall be applied by substituting ‘2020’ for ‘2019’.”. (2) Election to determine gross receipts test based on prior quarter.— (A) In general.—Subparagraph (B) of section 2301(c)(2) of the CARES Act is amended to read as follows: “(B) Election to use alternative quarter.—At the election of the employer— “(i) subparagraph (A)(ii)(II) shall be applied— “(I) by substituting ‘for the immediately preceding calendar quarter’ for ‘for such calendar quarter’, and “(II) by substituting ‘the corresponding calendar quarter in calendar year 2019’ for ‘the same calendar quarter in calendar year 2019’, and “(ii) the last sentence of subparagraph (A) shall be applied by substituting ‘the corresponding calendar quarter in calendar year 2019’ for ‘the same calendar quarter in calendar year 2019’. An election under this subparagraph shall be made at such time and in such manner as the Secretary shall prescribe.” . (B) Conforming amendment.—Section 2301(l) of the CARES Act, as amended by section 206, is amended by inserting “and” at the end of paragraph (3), by striking paragraph (4), and by redesignating paragraph (5) as paragraph (4). (3) Application to certain governmental employers.— (A) In general.—Section 2301(f) of the CARES Act is amended— (i) by striking “This” and inserting the following: “(1) In general.—This” , and (ii) by adding at the end the following new paragraph: “(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. In the case of any entity described in subparagraph (B), such entity shall be treated as satisfying the requirements of subsection (c)(2)(A)(i).” . (B) Conforming amendment.—Section 2301(c)(5)(A) of the CARES Act, as amended by section 206(b)(2), is amended by adding at the end the following new sentence: “ForDetermination. purposes of the preceding sentence, in the case of any organization or entity described in subsection (f)(2), wages as defined in section 3121(a) of the Internal Revenue Code of 1986 shall be determined without regard to paragraphs (5), (6), (7), (10), and (13) of section 3121(b) of such Code (except with respect to services performed in a penal institution by an inmate thereof).”. (e) Modification of Determination of Qualified Wages.— (1) Modification of threshold for treatment as a large employer.—Section 2301(c)(3)(A) of the CARES Act is amended by striking “100” each place it appears in clauses (i) and (ii) and inserting “500”. (2) Elimination of limitation.—Section 2301(c)(3) of the CARES Act is amended— (A) by striking subparagraph (B), and (B) by striking “Such term” in the second sentence of subparagraph (A) and inserting the following: “(B) Exception.—The term ‘qualified wages”’ . (f) Denial of Double Benefit.—Section 2301(h) of the CARES Act is amended— (1) by striking paragraphs (1) and (2) and inserting the following: “(1) 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 41, 45A, 45P, 45S, 51, and 1396 of the Internal Revenue Code of 1986.” . (2) by redesignating paragraph (3) as paragraph (2). (g) Advance Payments.— (1) In general.—Section 2301 of the CARES Act, as amended by section 206(c)(2)(B)(i), is amended by inserting after subsection (i) the following new subsection: “(j) Advance Payments.— “(1) In general.—Except as provided in paragraph (2), no advance payment of the credit under subsection (a) shall be allowed. “(2) Advance payments to small employers.— “(A) In general.—Under rules provided by the Secretary, an eligible employer for which the average number of full-time employees (within the meaning of section 4980H of the Internal Revenue Code of 1986) employed by such eligible employer during 2019 was not greater than 500 may elect for any calendar quarter to receive an advance payment of the credit under subsection (a) for such quarter in an amount not to exceed 70 percent of the average quarterly wages paid by the employer in calendar year 2019. “(B) Special rule for seasonal employers.—In the case of any employer who employs seasonal workers (as defined in section 45R(d)(5)(B) of the Internal Revenue Code of 1986), the employer may elect to substitute ‘the wages for the calendar quarter in 2019 which corresponds to the calendar quarter to which the election relates’ for ‘the average quarterly wages paid by the employer in calendar year 2019’. “(C) Special rule for employers not in existence in 2019.—In the case of any employer that was not in existence in 2019, subparagraphs (A) and (B) shall each be applied by substituting ‘2020’ for ‘2019’ each place it appears. “(3) Reconciliation of credit with advance payments.— “(A) In general.—The amount of credit which would (but for this subsection) be allowed under this section shall be reduced (but not below zero) by the aggregate payment allowed to the taxpayer under paragraph (2). Any failure to so reduce the credit shall be treated as arising out of a mathematical or clerical error and assessed according to section 6213(b)(1) of the Internal Revenue Code of 1986. “(B) Excess advance payments.—If the advance payments to a taxpayer under paragraph (2) for a calendar quarter exceed the credit allowed by this section (determined without regard to subparagraph (A)), the tax imposed by chapter 21 or 22 of the Internal Revenue Code of 1986 (whichever is applicable) for the calendar quarter shall be increased by the amount of such excess.” . (2) Conforming amendments.—Section 2301(l) of the CARES Act, as amended by section 206 and subsection (d)(2)(B), is amended— (A) by inserting “as provided in subsection (j)(2)” after “subsection (a)” in paragraph (1), (B) by striking paragraph (2), and (C) by redesignating paragraphs (3) and (4) as paragraphs (2) and (3), respectively. (h) Third-party Payors.—Section 2301(l) of the CARES Act, as amended by section 206 and subsections (d)(2)(B) and (g)(2), is amended by adding at the end the following flush sentence:“Any forms, instructions, regulations, or guidance described in paragraph (2) shall require the customer to be responsible for the accounting of the credit and for any liability for improperly claimed credits and shall require the certified professional employer organization or other third party payor to accurately report such tax credits based on the information provided by the customer.”. (i) Public Awareness Campaign.—Section 2301 of the CARES Act is amended by adding at the end the following new subsection: “(n) Public Awareness Campaign.— “(1) In general.—The Secretary shall conduct a public awareness campaign, in coordination with the Administrator of the Small Business Administration, to provide information regarding the availability of the credit allowed under this section. “(2) Outreach.—Under the campaign conducted under paragraph (1), the Secretary shall— “(A) provide to all employers which reported not more than 500 employees on the most recently filed return of applicable employment taxes a notice about the credit allowed under this section and the requirements for eligibility to claim the credit, and “(B) not later than 30 days after the date of the enactment of this subsection, provide to all employers educational materials relating to the credit allowed under this section, including specific materials for businesses with not more than 500 employees.” . (j) Coordination With Certain Payroll Protection Program Loans.—Section 2301(g)(2) of the CARES Act, as added by section 206(c)(2)(A), is amended by striking “section 7A(g) of the Small Business Act” and all that follows and inserting “section 7A(g) of the Small Business Act or the application of section 7(a)(37)(J) of the Small Business Act. Terms used in the preceding sentence which are also used in section 7A(g) or 7(a)(37)(J) of the Small Business Act shall, when applied in connection with either such section, have the same meaning as when used in such section, respectively.”. (k) [26 U.S.C. 3111 note] Effective Date.—The amendments made by this section shall apply to calendar quarters beginning after December 31, 2020.