S. 551, Recovery Startup Assistance Act
Summary
S. 551, the Recovery Startup Assistance Act, is a Senate bill introduced March 2 (legislative day, March 1), 2021 by Hassan, for herself and Braun, to amend the Internal Revenue Code of 1986 to expand the Employee Retention Tax Credit to include certain startup businesses. It was referred to the Committee on Finance. Section 2 amends section 2301 of the CARES Act and defines a recovery startup business as an employer that began carrying on a trade or business after February 15, 2020, had less than 50 full-time employees, did not have gross receipts in excess of $25,000 for specified earlier years, and elected to have the paragraph apply. Qualified wages for a quarter may not exceed $50,000.
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“S. 551, Recovery Startup Assistance Act.”
Original at www.govinfo.gov. Archived at Pandemic Darlings, https://pandemicdarlings.com/source-documents/bills-bills-117s551is-bills-117s551is/
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II
117TH CONGRESS
1ST SESSION
S. 551
To amend the Internal Revenue Code of 1986 to expand the Employee
Retention Tax Credit to include certain startup businesses.
IN THE SENATE OF THE UNITED STATES
MARCH 2 (legislative day, MARCH 1), 2021
Ms. HASSAN (for herself and Mr. BRAUN) introduced the following bill; which
was read twice and referred to the Committee on Finance
A BILL
To amend the Internal Revenue Code of 1986 to expand
the Employee Retention Tax Credit to include certain
startup businesses.
1 Be it enacted by the Senate and House of Representa-
2 tives of the United States of America in Congress assembled,
3 SECTION 1. SHORT TITLE.
4 This Act may be cited as the ‘‘Recovery Startup As-
5 sistance Act’’.
6 SEC. 2. EXPANSION OF EMPLOYEE RETENTION TAX CREDIT
7 TO INCLUDE CERTAIN STARTUP BUSINESSES.
8 (a) IN GENERAL.—Section 2301 of the CARES Act,
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9 as amended by sections 206 and 207 of the Taxpayer Cer-
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2
1 tainty and Disaster Tax Relief Act of 2020 (Public Law
2 116–260), is amended—
3 (1) in subsection (c)—
4 (A) in paragraph (2)(A)(ii)—
5 (i) in subclause (I), by striking ‘‘or’’
6 at the end,
7 (ii) in subclause (II), by striking the
8 period at the end and inserting ‘‘, or’’, and
9 (iii) by inserting after subclause (II)
10 the following:
11 ‘‘(III) the employer is a recovery
12 startup business (as defined in para-
13 graph (6)).’’,
14 (B) by redesignating paragraph (6) as
15 paragraph (7), and
16 (C) by inserting after paragraph (5) the
17 following:
18 ‘‘(6) RECOVERY STARTUP BUSINESS.—
19 ‘‘(A) IN GENERAL.—The term ‘recovery
20 startup business’ means any employer which—
21 ‘‘(i) began carrying on a trade or
22 business after February 15, 2020,
23 ‘‘(ii) had less than 50 full-time em-
24 ployees (as defined in section 4980H(c)(4)
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25 of the Internal Revenue Code of 1986, ex-
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3
1 cept that subparagraph (A) of such section
2 shall be applied by substituting ‘quarter’
3 for ‘month’) during the calendar quarter
4 for which the credit is determined under
5 subsection (a),
6 ‘‘(iii) did not have gross receipts (as
7 determined under the rules of section
8 448(c)(3) of such Code, without regard to
9 subparagraph (A) thereof) in excess of
10 $25,000 for any taxable year preceding the
11 5-taxable-year period ending with the tax-
12 able year preceding such quarter, and
13 ‘‘(iv) elected to have this paragraph
14 apply for such quarter.
15 ‘‘(B) PHASEOUT OF CREDIT.—In the case
16 of any recovery startup business, the amount of
17 the credit allowed under subsection (a) for any
18 calendar quarter (as determined without regard
19 to this subparagraph) shall be reduced (but not
20 below zero) by an amount equal to 1 percent of
21 the amount of such credit for each $40,000 (or
22 fraction thereof) by which the gross receipts (as
23 determined under the rules of section 448(c)(3)
24 of the Internal Revenue Code of 1986, without
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25 regard to subparagraph (A) thereof) of such
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4
1 business for the last taxable year ending before
2 such quarter exceeds $1,000,000.
3 ‘‘(C) EXTENSIONS AND MODIFICATIONS.—
4 ‘‘(i) LIMITATION ON NUMBER OF EM-
5 PLOYEES.—In the case of a recovery start-
6 up business, the amount of qualified wages
7 which may be taken into account under
8 subsection (a) by such employer for any
9 calendar quarter shall not exceed $50,000.
10 ‘‘(ii) LIMITATION ON NUMBER OF
11 QUARTERS.—
12 ‘‘(I) IN GENERAL.—Subject to
13 subclause (II), in the case of a recov-
14 ery startup business, the credit al-
15 lowed under subsection (a) shall only
16 apply to wages paid during any period
17 of 2 consecutive calendar quarters (as
18 elected by such business), as reduced
19 by the total number of calendar quar-
20 ters in which the recovery startup
21 business—
22 ‘‘(aa) claimed the credit
23 under this section, and
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1 ‘‘(bb) did not make an elec-
2 tion described in subparagraph
3 (A)(iv).
4 ‘‘(II) EXCLUSION.—The period
5 described in subclause (I) shall not in-
6 clude any calendar quarter which ends
7 before the later of—
8 ‘‘(aa) the date of enactment
9 of the Recovery Startup Assist-
10 ance Act, or
11 ‘‘(bb) the date on which
12 such business began operations.
13 ‘‘(iii) EXTENSION.—In the case of a
14 recovery startup business, subsection (m)
15 shall be applied by substituting ‘January
16 1, 2022’ for ‘July 1, 2021’.’’,
17 (2) in subsection (j)(2), by adding at the end
18 the following:
19 ‘‘(D) RECOVERY STARTUP BUSINESS.—
20 Without regard to subparagraphs (A) through
21 (C), under rules provided by the Secretary, a
22 recovery startup business may elect for any cal-
23 endar quarter to receive an advance payment of
24 the credit under subsection (a) (after applica-
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1 tion of subsection (c)(6)) for such quarter.’’,
2 and
3 (3) in subsection (l)—
4 (A) in paragraph (2), by striking ‘‘and’’ at
5 the end,
6 (B) in paragraph (3), by striking the pe-
7 riod at the end and inserting ‘‘, and’’, and
8 (C) by inserting after paragraph (3) the
9 following:
10 ‘‘(4) to prevent fraudulent and abusive claims
11 of the credit allowed under subsection (a) by recov-
12 ery startup businesses.’’.
13 (b) EFFECTIVE DATE.—The amendments made by
14 this section shall apply to calendar quarters beginning
15 after December 31, 2020.
Æ
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