(a) General rule
For purposes of section 38, the differential wage payment credit for any taxable year is an amount equal to 20 percent of the sum of the eligible differential wage payments for each of the qualified employees of the taxpayer during such taxable year.
(b) Definitions
For purposes of this section—
(1) Eligible differential wage payments
The term "eligible differential wage payments" means, with respect to each qualified employee, so much of the differential wage payments (as defined in section 3401(h)(2)) paid to such employee for the taxable year as does not exceed $20,000.
(2) Qualified employee
The term "qualified employee" means a person who has been an employee of the taxpayer for the 91-day period immediately preceding the period for which any differential wage payment is made.
(3) Controlled groups
All persons treated as a single employer under subsection (b), (c), (m), or (o) of section 414 shall be treated as a single employer.
(c) Coordination with other credits
The amount of credit otherwise allowable under this chapter with respect to compensation paid to any employee shall be reduced by the credit determined under this section with respect to such employee.
(d) Disallowance for failure to comply with employment or reemployment rights of members of the reserve components of the Armed Forces of the United States
No credit shall be allowed under subsection (a) to a taxpayer for—
(1) any taxable year, beginning after the date of the enactment of this section, in which the taxpayer is under a final order, judgment, or other process issued or required by a district court of the United States under section 4323 of title 38 of the United States Code with respect to a violation of chapter 43 of such title, and
(2) the 2 succeeding taxable years.
(e) Certain rules to apply
For purposes of this section, rules similar to the rules of subsections (c), (d), and (e) of section 52 shall apply.
References in Text
The date of the enactment of this section, referred to in subsec. (d)(1), is the date of the enactment of Pub. L. 110–245, which was approved June 17, 2008.
Amendments
2015—Subsec. (a). Pub. L. 114–113, §122(b)(1), struck out ", in the case of an eligible small business employer" after "section 38".
Subsec. (b)(3). Pub. L. 114–113, §122(b)(2), amended par. (3) generally. Prior to amendment, par. (3) defined "eligible small business employer".
Subsec. (f). Pub. L. 114–113, §122(a), struck out subsec. (f). Text read as follows: "This section shall not apply to any payments made after December 31, 2014."
2014—Subsec. (f). Pub. L. 113–295 substituted "December 31, 2014" for "December 31, 2013".
2013—Subsec. (f). Pub. L. 112–240 substituted "December 31, 2013" for "December 31, 2011".
2010—Subsec. (f). Pub. L. 111–312 substituted "December 31, 2011" for "December 31, 2009".
Effective Date of 2015 Amendment
Pub. L. 114–113, div. Q, title I, §122(c), Dec. 18, 2015, 129 Stat. 3052, provided that:
"(1)
"(2)
Effective Date of 2014 Amendment
Pub. L. 113–295, div. A, title I, §118(b), Dec. 19, 2014, 128 Stat. 4015, provided that: "The amendment made by this section [amending this section] shall apply to payments made after December 31, 2013."
Effective Date of 2013 Amendment
Pub. L. 112–240, title III, §308(b), Jan. 2, 2013, 126 Stat. 2329, provided that: "The amendment made by this section [amending this section] shall apply to payments made after December 31, 2011."
Effective Date of 2010 Amendment
Pub. L. 111–312, title VII, §736(b), Dec. 17, 2010, 124 Stat. 3318, provided that: "The amendment made by this section [amending this section] shall apply to payments made after December 31, 2009."
Effective Date
Section applicable to amounts paid after June 17, 2008, see section 111(e) of Pub. L. 110–245, set out as an Effective Date of 2008 Amendment note under section 38 of this title.
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