H.R. 1959: To amend the Internal Revenue Code of 1986 to protect small businesses from unemployment insurance premium increases by reason of unrepaid State advances.

This bill proposes changes to the Internal Revenue Code, specifically aimed at protecting small businesses from increases in unemployment insurance premiums due to unpaid state advances. Here are the main components of the bill:

Protection for Small Businesses

The bill amends Section 3302 of the Internal Revenue Code to introduce a new provision that ensures certain small businesses are shielded from premium increases. The key points include:

• Unemployment Insurance Premiums: Normally, small businesses may see their unemployment insurance premiums rise if the state has taken advances for unemployment benefits that have not been repaid. This bill seeks to prevent that increase for qualifying small businesses.
• Definition of Small Business: A "specified small business" is defined as one that employs fewer than 500 individuals as of the end of the third quarter of the previous calendar year.
• No Impact on Credits: The increase in unemployment insurance premiums due to unpaid advances will not apply to these specified small businesses, effectively protecting them from higher costs related to their unemployment insurance obligations.

Effective Date

The changes made by this bill will take effect for taxable years beginning after it is enacted. This means that once the bill is signed into law, small businesses will benefit from the protections starting in the next applicable tax year.

Summary

Overall, this bill aims to offer financial relief to small businesses by ensuring that they are not penalized with higher unemployment insurance premiums as a consequence of unrepaid state advances. It is focused on businesses that meet the small business criteria of employing fewer than 500 employees.

Relevant Companies