Indian employment credit

For purposes of section 38, the amount of the Indian employment credit determined under this section with respect to any employer for any taxable year is an amount equal to 20 percent of the excess (if any) of— the sum of— For purposes of this section— The term “qualified wages” means any wages paid or incurred by an employer for services performed by an employee while such employee is a qualified employee. The term “qualified wages” shall not include wages attributable to service rendered during the 1-year period beginning with the day the individual begins work for the employer if any portion of such wages is taken into account in determining the credit under section 51. If any portion of wages are taken into account under subsection (e)(1)(A) of section 51, the preceding sentence shall be applied by substituting “2-year period” for “1-year period”. The term “qualified employee health insurance costs” means any amount paid or incurred by an employer for health insurance to the extent such amount is attributable to coverage provided to any employee while such employee is a qualified employee. No amount paid or incurred for health insurance pursuant to a salary reduction arrangement shall be taken into account under subparagraph (A). The aggregate amount of qualified wages and qualified employee health insurance costs taken into account with respect to any employee for any taxable year (and for the base period under subsection (a)(2)) shall not exceed $20,000. For purposes of this section— Except as otherwise provided in this subsection, the term “qualified employee” means, with respect to any period, any employee of an employer if— An employee shall not be treated as a qualified employee for any taxable year of the employer if the total amount of the wages paid or incurred by such employer to such employee during such taxable year (whether or not for services within an Indian reservation) exceeds the amount determined at an annual rate of $30,000. The Secretary shall adjust the $30,000 amount under paragraph (2) for years beginning after 1994 at the same time and in the same manner as under section 415(d), except that the base period taken into account for purposes of such adjustment shall be the calendar quarter beginning October 1, 1993. An employee shall be treated as a qualified employee for any taxable year of the employer only if more than 50 percent of the wages paid or incurred by the employer to such employee during such taxable year are for services performed in a trade or business of the employer. Any determination as to whether the preceding sentence applies with respect to any employee for any taxable year shall be made without regard to subsection (e)(2). The term “qualified employee” shall not include— The term “Indian tribe” means any Indian tribe, band, nation, pueblo, or other organized group or community, including any Alaska Native village, or regional or village corporation, as defined in, or established pursuant to, the Alaska Native Claims Settlement Act (43 U.S.C. 1601 et seq.) which is recognized as eligible for the special programs and services provided by the United States to Indians because of their status as Indians. The term “Indian reservation” has the meaning given such term by section 168(j)(6). If the employment of any employee is terminated by the taxpayer before the day 1 year after the day on which such employee began work for the employer— In the case of any termination of employment to which paragraph (1) applies, the carrybacks and carryovers under section 39 shall be properly adjusted. Paragraph (1) shall not apply to— For purposes of paragraph (1), the employment relationship between the taxpayer and an employee shall not be treated as terminated— Any increase in tax under paragraph (1) shall not be treated as a tax imposed by this chapter for purposes of— For purposes of this section— The term “wages” has the same meaning given to such term in section 51. Rules similar to the rules of section 51(k) and subsections (c), (d), and (e) of section 52 shall apply. Any reference in this section to a provision not contained in this title shall be treated for purposes of this section as a reference to such provision as in effect on the date of the enactment of this paragraph. For any taxable year having less than 12 months, the amount determined under subsection (a)(2) shall be multiplied by a fraction, the numerator of which is the number of days in the taxable year and the denominator of which is 365. This section shall not apply to taxable years beginning after December 31, 2021.