- 2 -$5 million in 2011 and $6 million in 2012, the credit to which the employer would be entitledwould eliminate the employer’s portion of social security taxes on the $1 million of increasedwages. The credit would be available on up to $50 million of an employer’s increased wages.Generally, the credit is available to all employers, whether private businesses or tax-exemptorganizations, but would not be available to Federal, State and local government employers(other than State colleges and universities) or with respect to household workers. Transfers fromgeneral revenues are provided to protect the social security trust fund.
Subtitle B – Other Relief for Businesses
Section 111 – Extension of Temporary 100 Percent Bonus Depreciation for Certain BusinessAssets
Under current law, businesses generally are allowed to immediately deduct 100 percentof the cost of qualified property placed in service in 2011 and 50 percent of the cost of suchproperty placed in service in 2012. To encourage additional capital investment, this sectionextends the ability of businesses to deduct 100 percent of the cost of qualified property throughthe end of 2012.Section 112 – Surety Bonds. Subsection (a) temporarily increases the size of contract suretybond that the Small Business Administration (SBA) can guarantee from $2,000,000 to$5,000,000. This will make it easier for small businesses to take advantage of contractingopportunities generated by the American Jobs Act’s proposed infrastructure investments.Subsection (b) amends the section of the Small Business Investment Act that limits liability forsurety bond guarantees in situations when the guarantee was obtained by fraud or materialmisrepresentation, the surety has breached a material item of the guarantee agreement, or thesurety has violated SBA’s surety bond regulations, in order to make that section consistent withthe higher surety bond guarantee limit. Subsection (c) provides that the increased surety loansize will sunset at the end of fiscal year 2012. Subsection (d) provides $3,000,000 in mandatoryfunding to the Surety Bond Guarantees Revolving Fund to cover the estimated cost of thissection.Section 113 – Delay in Application of Withholding on Government Contractors. This sectionwould delay the effective date of the requirement that governmental entities withhold at a 3percent rate from payments to persons providing certain property or services. Under thissection, this withholding requirement would apply to payments made after December 31, 2013.
Title II – Putting Workers Back on the Job While Rebuilding and Modernizing AmericaSubtitle A – Veterans Hiring Preferences
Section 201 – Returning Heroes and Wounded Warriors Work Opportunity Tax Credits. Undercurrent law, employers that hire veterans who have been unemployed for at least 6 months andhave a service-connected disability are eligible for a maximum tax credit of $4,800. This sectionincreases the amount of that credit to $9,600. This section also creates two new hiring credits forveterans. The first is a credit of $2,400 for employers that hire veterans who have beenunemployed for at least 4 weeks. The second is credit of $5,600 for veterans who have beenunemployed for at least 6 months. Under this section, these credits are also available to tax-