Supporting Section 206 of H.R. 647, the Able Actby Representative Peter J. Roskam
Posted on 2014-12-11
in the house of representatives
Thursday, December 11, 2014
Mr. ROSKAM. Mr. Speaker, I was pleased to advocate for and support
the recently passed H.R. 647, the ABLE Act, for the important benefits
it offers to the disabled, and because of the additional clarity and
equity it will provide for employers dealing with the IRS.
Section 206 addresses an issue under current law and the interpretation of the IRS for employers that use the services of professional employer organizations (PEOs). For example, any PEO that qualifies as a statutory employer under the Internal Revenue Code is eligible to claim the Tip Tax Credit, instead of the restaurant for which the wait staff who directly perform the services and therefore earned the qualification for it.
Under this system, some PEOs claim the credit themselves as the statutory employer, others administer the credit for the restaurants which they serve, and some restaurants claim the credit directly--only to be challenged in IRS audits.
This provision of the ABLE Act provides important tax clarity for small businesses working with PEOs. I am pleased to have been able to help secure the passage of this legislation in the House of Representatives, and I urge its prompt consideration in the Senate.