TEGL03-09.pdf

ETA Advisory File Text

Part III - Administrative Procedural and Miscellaneous Section 51 - Work Opportunity Tax Credit Notice 2009-28 PURPOSE Section 51 of the Internal Revenue Code the Code provides for a Work Opportunity Tax Credit WOTC for employers who hire individuals who are members of targeted groups. Section 1221 of the American Recovery and Reinvestment Tax Act of 2009 ARRTA enacted February 17 2009 Div. B Tit. I of Pub. L. No. 111-5 amended 51 to add two new targeted groups for purposes of the WOTC. New 51 d 14 provides that unemployed veterans and disconnected youth who begin work for an employer during 2009 or 2010 shall be treated as members of a targeted group for purposes of the WOTC. This notice provides sets forth the statutory definitions of unemployed veteran and disconnected youth and provides guidance on the definition of disconnected youth. It also provides transition relief for employers who hire unemployed veterans or disconnected youth after December 31 2008 and before July 17 2009. I. STATUTORY DEFINITION OF UNEMPLOYED VETERAN For purposes of 51 d 14 the term veteran means any individual who is certified by the designated local agency as defined in 51 d 12 as a State employment security agency established in accordance with the Act of June 6 1933 as amended 29 U.S.C. 49-49n as 1 having served on active duty other than active duty for training in the Armed Forces of the United States Armed Forces for a period of more than 180 days or 2 having been discharged or released from active duty in the Armed Forces for a service-connected disability. Section 51 d 14 B i provides that the term unemployed veteran means any veteran who is certified by the designated local agency as 1 having been discharged or released from active duty in the Armed Forces at any time during the 5-year period ending on the hiring date and 2 being in receipt of unemployment compensation under State or Federal law for not less than four weeks during the one-year period ending on the hiring date. 2 II. DISCONNECTED YOUTH A. Statutory Definition Section 51 d 14 B ii provides that the term disconnected youth means any individual who is certified by the designated local agency I as having attained age 16 but not age 25 on the hiring date II as not regularly attending any secondary technical or post-secondary school during the 6-month period preceding the hiring date III as not regularly employed during such 6-month period and IV as not readily employable by reason of lacking a sufficient number of basic skills. The Conference Agreement on ARRTA H.R. Rep. No. 111-16 at 554 states For purposes of the disconnected youths it is intended that a low level of formal education may satisfy the requirement that an individual is not readily employable by reason of lacking a sufficient number of skills. Further it is intended that the Internal Revenue Service when providing general guidance regarding the various new criteria shall take into account the administrability of the program by the State agencies. B. Not regularly attending any secondary technical or post-secondary school For purposes of 51 d 14 B ii II the term not regularly attending means that the individual states in writing that during the six months preceding his or her hiring date he or she has not attended a secondary technical or postsecondary school for more than an average of 10 hours per week not counting periods during which the school is closed for scheduled vacations. For purposes of 51 d 14 B ii the term secondary school means 1 A secondary school as defined in 20 U.S.C. 7801 38 or 2 a for-profit secondary school that otherwise meets the definition in 20 U.S.C. 7801 38 . A General Education Development GED program is not a secondary school for purposes of 51 d 14 B ii . For purposes of 51 d 14 B ii and 51 d 14 B ii IV the terms technical school and post-secondary school mean institutions of higher education as defined in 20 U.S.C. 1001 1002 a 1 b and c and 1059c b 3 . 3 C. Not regularly employed For purposes of section 51 d 14 B ii lll an individual was not regularly employed if during each consecutive three-month period within the six months preceding his or her hiring date the individual earned less than an amount equal to the gross amount he or she would have been paid at the minimum wage if he or she worked 30 hours every week during the three-month period. For purposes of the preceding sentence minimum wage is the higher of 1 the federal minimum wage as defined in 29 U.S.C. section 206 a 1 or 2 the generally applicable State minimum wage if any . D. Not readily employable by reason of lacking a sufficient number of basic skills For purposes of 51 d 14 B ii IV an individual is not readily employable by reason of lacking a sufficient number of basic skills if the individual states in writing that he or she does not have a certificate of graduation from a secondary school or a GED Certificate. For purposes of 51 d 14 B ii IV an individual also is not readily employable by reason of lacking a sufficient number of basic skills if the individual states in writing that he or she has a certificate of graduation from a secondary school or a GED Certificate that was awarded no less than 6 months preceding his or her hiring date and has not held a job or been admitted to a technical school or post-secondary school since receiving the certificate. EFFECTIVE DATE New 51 d 14 is effective for individuals who begin work for the employer after December 31 2008 and before January 1 2011. TRANSITION RELIEF Section 51 d 13 provides that an individual shall not be treated as a member of a targeted group unless the employer obtains certification from a designated local agency on or before the day the individual begins work that the individual is a member of a targeted group or completes a pre-screening notice IRS Form 8850 on or before the day the individual is offered employment and submits such notice to the designated local agency to request certification not later than 28 days after the individual begins work. However under this notice any employer who hires an unemployed veteran or a disconnected youth as defined in 51 d 14 after December 31 2008 and before July 17 2009 will be considered to satisfy the deadline in 51 d 13 A ii II if the employer submits the pre-screening notice to the designated local agency to request certification not later than August 17 2009. 4 DRAFTING INFORMATION The principal author of this notice is Robin Ehrenberg of the Office of Division Counsel Associate Chief Counsel Tax Exempt and Government Entities . However other individuals participated in its development. For further information regarding this notice contact Ms. Ehrenberg at 202 622-6080 not a toll-free call . Part III - Administrative Procedural and Miscellaneous Section 51 - Work Opportunity Tax Credit Notice 2009-69 PURPOSE This Notice clarifies Notice 2009-28 2009-24 I.R.B. 1082 published on June 15 2009. As explained in Notice 2009-28 51 of the Internal Revenue Code the Code provides for a Work Opportunity Tax Credit WOTC for employers who hire individuals who are members of targeted groups. Section 1221 of the American Recovery and Reinvestment Tax Act of 2009 ARRTA enacted February 17 2009 Div. B Tit. I of Pub. L. No. 111-5 amended 51 to add two new targeted groups for purposes of the WOTC. New 51 d 14 provides that unemployed veterans and disconnected youth who begin work for an employer during 2009 or 2010 shall be treated as members of a targeted group for purposes of the WOTC. Notice 2009-28 sets forth the statutory definitions of unemployed veteran and disconnected youth and provides guidance on the definition of disconnected youth. With respect to disconnected youth Notice 2009-28 is being revised to clarify 51 d 14 B ii IV the definition of not readily employable by reason of lacking a sufficient number of basic skills. Section D of Notice 2009-28 is therefore revised to read as follows For purposes of 51 d 14 B ii IV an individual is not readily employable by reason of lacking a sufficient number of basic skills if the individual states in writing that he or she does not have a certificate of graduation from a secondary school or a GED Certificate. For purposes of 51 d 14 B ii IV an individual also is not readily employable by reason of lacking a sufficient number of basic skills if the individual states in writing that he or she has a certificate of graduation from a secondary school or a GED Certificate that was awarded no less than 6 months preceding his or her hiring date and has not held a job other than occasionally or been admitted to a technical school or post-secondary school since receiving the certificate. This clarifies that an individual who received a high school diploma or GED certificate at least six months prior to the hiring date and who otherwise satisfies the requirements for a disconnected youth will not fail to qualify as a disconnected youth merely because the individual has been employed at times since graduation as long as that employment was no more than occasional. TRANSITION RELIEF Section 51 d 13 provides that an individual shall not be treated as a member of a targeted group unless the employer obtains certification from a designated local agency on or before the day the individual begins work that the individual is a member of a targeted group or completes a pre-screening notice IRS Form 8850 on or before the day the individual is offered employment and submits such notice to the designated local agency to request certification not later than 28 days after the individual begins work. Notice 2009-28 provides that any employer who hires an unemployed veteran or a disconnected youth as defined in 51 d 14 after December 31 2008 and before July 17 2009 will be considered to satisfy the deadline in 51 d 13 A ii II if the employer submits the pre-screening notice to the designated local agency to request certification not later than August 17 2009. This notice extends the transition relief in Notice 2009-28. Specifically under this notice any employer who hires an unemployed veteran or disconnected youth as defined in 51 d 14 after December 31 2008 and before September 17 2009 will be considered to satisfy the deadline in 51 d 13 A ii II if the employer submits the pre-screening notice to the designated local agency to request certification not later than October 17 2009. EFFECT ON OTHER DOCUMENTS Notice 2009-28 2009-24 I.R.B. 1082 is clarified. DRAFTING INFORMATION The principal author of this notice is Robin Ehrenberg of the Office of Division Counsel Associate Chief Counsel Tax Exempt and Government Entities . However other individuals participated in its development. For further information regarding this notice contact Ms. Ehrenberg at 202 622-6080 not a toll-free call . 1 ETA Form 9061 August 2009 Individual Characteristics Form ICF U.S. Department of Labor Work Opportunity Tax Credit Employment and Training Administration OMB No. 1205-0371 Expiration Date November 30 2011 1. Control No. For Agency use only APPLICANT INFORMATION See instructions on reverse 2. Date Received For Agency Use only EMPLOYER INFORMATION 3. Employer Name 4. Employer Address and Telephone 5. Employer Federal ID Number EIN APPLICANT INFORMATION 6. Applicant Name Last First MI 7. Social Security Number 8. Have you worked for this employer before Yes No If YES enter last date of employment APPLICANT CHARACTERISTICS FOR WOTC TARGET GROUP CERTIFICATION 9. Employment Start Date 10. Starting Wage 11. Position 12. Are you at least age 16 but under age 40 Yes No If YES enter your date of birth 13. Are you a Veteran of the U.S. Armed Forces Yes No If NO go to Box 14. If YES are you a member of a family that received Supplemental Nutritional Assistance Program SNAP Food Stamps benefits for at least a 3-month period during the 15-month period ending on your hire date Yes No If YES enter name of primary recipient and city and state where benefits were received . OR are you a veteran entitled to compensation for a service-connected disability Yes No If YES were you discharged or released from active duty within the year before you were hired Yes No OR were you unemployed for a combined period of at least 6 months during the year before you were hired Yes No 14. Are you a member of a family that received SNAP Food Stamps benefits for the 6-month period before you were hired Yes No OR received SNAP benefits for at least a 3-month period within the last 5 months But you are no longer receiving them Yes No If YES to either question enter name of primary recipient and city and state where benefits were received . 2 ETA Form 9061 August 2009 15. Were you referred to an employer by a Vocational Rehabilitation Agency approved by a state Yes No OR by an Employment Network under the Ticket to Work Program Yes No OR by the Department of Veterans Affairs Yes No 16. Are you a member of a family that received Temporary Assistance to Needy Families TANF for at least the last 18 months before you were hired Yes No OR are you a member of a family that received TANF benefits for any 18 months beginning after August 5 1997 and the earliest 18-month period beginning after August 5 1997 ended within 2 years before you were hired Yes No OR did your family stop being eligible for TANF assistance within 2 years before you were hired because a Federal or state law limited the maximum time those payments could be made Yes No If NO are you a member of a family that received TANF assistance for any 9 months during the 18-month period before you were hired Yes No If YES to any question enter name of primary recipient and the city and state where benefits were received . 17. Were you convicted of a felony or released from prison after a felony conviction during the year before you were hired Yes No If YES enter date of conviction and date of release . Was this a Federal or a State conviction Check one 18. Do you live and plan to continue living in an Empowerment Zone or Renewal Community Yes No OR in a Rural Renewal County RRC Yes No If YES enter name of the RRC 19. Did you receive Supplemental Security Income SSI benefits for any month ending within 60 days before you were hired Yes No 20. Are you an unemployed veteran who served on active duty other than active duty for training in the Armed Forces of the United States for a period of more than 180 days Yes No OR were you discharged or released from active duty in the Armed Forces for a service-connected disability Yes No If YES where you discharged or released from active duty in the Armed Forces at any time during the 5-year period ending on the hiring date Yes No If YES did you receive unemployment compensation for not less than four weeks during the one-year period ending on your hiring date Yes No 21. Are you at least age 16 but under age 25 Yes No If YES did you not regularly attend any secondary technical or post-secondary school during the 6-month period before your hiring date Yes No If YES were you not regularly employed during that 6-month period Yes No If YES were you not employable because you lacked basic skills Yes No 22. Sources used to document eligibility Employers Consultants List all documentation provided or forthcoming. SWAs List all documentation used in determining target group eligibility and enter your initials and date when determination was made. I certify that this information is true and correct to the best of my knowledge. I understand that the information above may be subject to verification. 23 a . Signature See instructions in Box 23b for who signs this signature block 23. b Indicate with a 9 who signed the form Employer Consultant SWA Participating Agency Applicant or Parent Guardian if applicant is a minor 24. Date 3 ETA Form 9061 August 2009 INSTRUCTIONS FOR COMPLETING THE INDIVIDUAL CHARACTERISTICS FORM ICF ETA 9061. This form is used together with IRS Form 8850 to help state workforce agencies SWAs determine eligibility for the Work Opportunity Tax Credit WOTC Program. The form may be completed on behalf of the applicant by 1 the employer or employer representative the SWA a participating agency or by 2 the applicant directly if a minor the parent or guardian must sign the form and signed by the individual completing the form. This form is required to be used without modification by all employers or their representatives seeking WOTC certification. Boxes 1 and 2. SWA. For agency use only. Boxes 3-5. Employer Information. Enter the name address including ZIP code telephone number and employer Federal ID number EIN of the employer requesting the certification for the WOTC. Do not enter information pertaining to the employer s representative if any. Boxes 6-11. Applicant Information. Enter the applicant s name and social security number as they appear on the applicant s social security card. In Box 8 indicate whether the applicant previously worked for the employer and If Yes enter the last date or approximate last date of employment. This information will help the 48-hour reviewer early in the verification process to eliminate requests for former employees and to issue denials to these type of requests or certifications in the case of qualifying rehires during valid breaks in employment see pages III-12 and III-13 Nov. 2002 Third Ed. ETA Handbook 408 during the first year of employment. Boxes 12-21. Applicant Characteristics. Read questions carefully answer each question and provide additional information where requested. Box 22 Sources to Document Eligibility. The applicant or employer is requested to provide documentary evidence to substantiate the YES answers on page 1. List or describe the documentary evidence that is attached to the ICF or that will be provided to the SWA. Indicate in parentheses next to each document listed whether it is attached A or forthcoming F . Some examples of acceptable documentary evidence are provided below. Employers A letter from the agency that administers a relevant program may be furnished specifically addressing the question to which the applicant answered YES. For example if an applicant answers YES to either question in Box 14 and enters the name of the primary recipient and the city and state in which the benefits were received the applicant could provide a letter from the appropriate Food Stamp agency stating to whom Food Stamp benefits were paid the months for which they were paid and the names of the individuals included on the grant for each month. SWAs will use this box to document the sources used when verifying target group eligibility followed by their initials and the date the determination was completed. Examples of Documentary Evidence and Collateral Contacts. Employers Consultants You may check with your SWA to find out what other sources you can use to prove target group eligibility. You are encouraged to provide copies of documentation or names of collateral contacts for each question for which you answered YES. QUESTION 12 3 Birth Certificate Driver s License School I.D. Card 1 Work Permit 1 Federal State Local Gov t I.D. 1 Copy of Hospital Record of Birth QUESTION 13 DD-214 or Discharge Papers Reserve Unit Contacts FL 21-802 Issued ONLY by DVA certifies a Veteran with a service connected disability UI claims records for unemployed status QUESTIONS 14 16 TANF SNAP Food Stamp Benefit History Signed Statement from Authorized Individual with Specific Description of the Months Benefits Were Received Case Number Identifier QUESTION 15 Vocational Rehabilitation Agency Contact Veterans Administration Signed Statement from Authorized Individual With Specific Description of Months Benefits Received For SWAs To determine Ticket Holder TH eligibility Fax page 1 of Form 8850 to MAXIMUS to 703-683-1051 to verify if applicant 1 is a TH and 2 has an Individual Work Plan from an Employment Network. QUESTION 17 Parole Officer s Name or Statement Correction Institution Records Court Records Extracts QUESTION 18 Driver s License Work Permit Utility Bills W-4 Lease Papers or Landlord s Statement School 1 or Library Card 2 Voter Registration Card SNAP Food Stamp Award Letter Selective Service Registration Card Social Security Letter To determine if a Designated Community Resident lives in a RRC visit the site www.usps.com . Click on Find Zip Code Enter Submit Address Zip Code Click on Mailing Industry Information Download and Print the Information then compare the county of the address to the list in the June 2007 Instructions to IRS 8850. QUESTION 19 SSI Record or Authorization SSI Contact Evidence of SSI Benefits Notes . 1. Where a Federal State Local Gov t. School I.D. Card or Work Permit does not contain age or birth date another valid document must be obtained to verify an individual s age. 2. Where a Library Card does not contain the holder s address another document issued in the jurisdiction where the EZ RC or RR County is located must be obtained showing the holder s address. 3. ESPL No. 05-98 dated 3 18 98 officially rescinded the authority to use Form I-9 as proof of age and residence. Therefore the I-9 is no longer a valid piece of documentary evidence. 4 ETA Form 9061 August 2009 QUESTION 20 DD-214 FL 21-802 Issued ONLY by DVA certifies a Veteran with a service connected disability Discharge Papers UI claims records for unemployed status QUESTION 21 To determine age Birth Certificate Driver s License Work Permit Copy of Hospital Record of Birth School I.D. Card School Records Federal State Local Government I.D. To determine youth has not regularly attended any secondary technical or post secondary school Self-Attestation Signed letter from parent guardian if minor To determine unemployed status during the 6-month period before hiring date UI Wage Records To determine unemployable status due to lack of basic skills Self-Attestation that he she has a high school HS or GED Certificate that was awarded no less than 6 months preceding his or her hiring date and has not held a job other than occasionally or been admitted to a technical school or post-secondary school since receiving the certificate. Box 23. Signature. The person who completes the form signs the signature block. Options a Employer or Authorized Representative b SWA staff c Participating Agency staff or d Applicant If applicant is a minor the parent or guardian must sign . Box 24 Date. Enter the month day and year when the form was completed. Persons are not required to respond to this collection of information unless it displays a currently valid OMB Control Number. Respondent s obligation to reply to these questions is required to obtain and retain benefits per public law 104-188. Public reporting burden for this collection of information is estimated to average 20 minutes per response including the time for reading instructions searching existing data sources gathering and maintaining the data needed and completing and reviewing. the information. Send comments regarding this burden estimate or any other aspect of this collection of information including suggestions for reducing burden to the U.S. Department of Labor Employment and Training Administration Division of Adult Services Room S-4209 Washington D.C. 20210 Paperwork Reduction Project Control No. 1205-0371 . ...... Cut along dotted line and keep in your files TO THE JOB APPLICANT OR EMPLOYEE THE INFORMATION AND THE SUPPORTING DOCUMENTATION YOU HAVE PROVIDED IN COMPLETING THIS FORM OR IN SOME CASES OTHER INFORMATION THAT COULD VERIFY THE RESPONSES YOU HAVE GIVEN TO THE ITEMS QUESTIONS IN THIS FORM WILL BE DISCLOSED BY YOUR EMPLOYER TO THE STATE WORKFORCE AGENCY SWA . ENTER THE SWA s NAME BELOW IN ORDER TO QUALIFY FOR A FEDERAL EMPLOYER TAX CREDIT PROVISION OF THIS INFORMATION IS VOLUNTARY. HOWEVER THE INFORMATION IS REQUIRED FOR YOUR EMPLOYER TO RECEIVE THE FEDERAL TAX CREDIT. IF THE INFORMATION YOU PROVIDE IS ABOUT A MEMBER OF YOUR FAMILY YOU SHOULD PROVIDE HIM or HER A COPY OF THIS NOTICE. Attachment C. 123 STAT. 306 PUBLIC LAW 111 5 FEB. 17 2009 DIVISION B TAX UNEMPLOYMENT HEALTH STATE FISCAL RELIEF AND OTHER PROVISIONS TITLE I TAX PROVISIONS American Recovery and Reinvestment Tax Act of 2009 Section 1221 26 USC 1 et seq. 26 USC 1 note. SEC. 1000. SHORT TITLE ETC. a SHORT TITLE. This title may be cited as the American Recovery and Reinvestment Tax Act of 2009 . b REFERENCE. Except as otherwise expressly provided whenever in this title an amendment or repeal is expressed in terms of an amendment to or repeal of a section or other provision the reference shall be considered to be made to a section or other provision of the Internal Revenue Code of 1986. c TABLE OF CONTENTS. The table of contents for this title is as follows TITLE I TAX PROVISIONS Sec. 1000. Short title etc. Subtitle A Tax Relief for Individuals and Families PART I GENERAL TAX RELIEF Sec. 1001. Making work pay credit. Sec. 1002. Temporary increase in earned income tax credit. Sec. 1003. Temporary increase of refundable portion of child credit. Sec. 1004. American opportunity tax credit. Sec. 1005. Computer technology and equipment allowed as a qualified higher education expense for section 529 accounts in 2009 and 2010. Sec. 1006. Extension of and increase in first-time homebuyer credit waiver of requirement to repay. Sec. 1007. Suspension of tax on portion of unemployment compensation. Attachment C. Sec. 1008. Additional deduction for State sales tax and excise tax on the purchase of certain motor vehicles. PART II ALTERNATIVE MINIMUM TAX RELIEF Sec. 1011. Extension of alternative minimum tax relief for nonrefundable personal credits. Sec. 1012. Extension of increased alternative minimum tax exemption amount. Subtitle B Energy Incentives PART I RENEWABLE ENERGY INCENTIVES Sec. 1101. Extension of credit for electricity produced from certain renewable resources. Sec. 1102. Election of investment credit in lieu of production credit. Sec. 1103. Repeal of certain limitations on credit for renewable energy property. Sec. 1104. Coordination with renewable energy grants. PART II INCREASED ALLOCATIONS OF NEW CLEAN RENEWABLE ENERGY BONDS AND QUALIFIED ENERGY CONSERVATION BONDS Sec. 1111. Increased limitation on issuance of new clean renewable energy bonds. Sec. 1112. Increased limitation on issuance of qualified energy conservation bonds. PART III ENERGY CONSERVATION INCENTIVES Sec. 1121. Extension and modification of credit for nonbusiness energy property. Sec. 1122. Modification of credit for residential energy efficient property. Sec. 1123. Temporary increase in credit for alternative fuel vehicle refueling property. PART IV MODIFICATION OF CREDIT FOR CARBON DIOXIDE SEQUESTRATION Sec. 1131. Application of monitoring requirements to carbon dioxide used as a tertiary injectant. Attachment C. n POQ96SHH1PUBLIC LAW 111 5 FEB. 17 2009 123 STAT. 307 PART V PLUG-IN ELECTRIC DRIVE MOTOR VEHICLES Sec. 1141. Credit for new qualified plug-in electric drive motor vehicles. Sec. 1142. Credit for certain plug-in electric vehicles. Sec. 1143. Conversion kits. Sec. 1144. Treatment of alternative motor vehicle credit as a personal credit allowed against AMT. PART VI PARITY FOR TRANSPORTATION FRINGE BENEFITS Sec. 1151. Increased exclusion amount for commuter transit benefits and transit passes. Subtitle C Tax Incentives for Business PART I TEMPORARY INVESTMENT INCENTIVES Sec. 1201. Special allowance for certain property acquired during 2009. Sec. 1202. Temporary increase in limitations on expensing of certain depreciable business assets. PART II SMALL BUSINESS PROVISIONS Sec. 1211. 5-year carryback of operating losses of small businesses. Sec. 1212. Decreased required estimated tax payments in 2009 for certain small businesses. PART III INCENTIVES FOR NEW JOBS Sec. 1221. Incentives to hire unemployed veterans and disconnected youth. PART IV RULES RELATING TO DEBT INSTRUMENTS Sec. 1231. Deferral and ratable inclusion of income arising from business indebtedness discharged by the reacquisition of a debt instrument. Sec. 1232. Modifications of rules for original issue discount on certain high yield obligations. PART V QUALIFIED SMALL BUSINESS STOCK Sec. 1241. Special rules applicable to qualified small business stock for 2009 and 2010. Attachment C. PART VI S CORPORATIONS Sec. 1251. Temporary reduction in recognition period for built-in gains tax. PART VII RULES RELATING TO OWNERSHIP CHANGES Sec. 1261. Clarification of regulations related to limitations on certain built-in losses following an ownership change. Sec. 1262. Treatment of certain ownership changes for purposes of limitations on net operating loss carryforwards and certain built-in losses. Subtitle D Manufacturing Recovery Provisions Sec. 1301. Temporary expansion of availability of industrial development bonds to facilities manufacturing intangible property. Sec. 1302. Credit for investment in advanced energy facilities. Subtitle E Economic Recovery Tools Sec. 1401. Recovery zone bonds. Sec. 1402. Tribal economic development bonds. Sec. 1403. Increase in new markets tax credit. Sec. 1404. Coordination of low-income housing credit and low-income housing grants. Subtitle F Infrastructure Financing Tools PART I IMPROVED MARKETABILITY FOR TAX-EXEMPT BONDS Sec. 1501. De minimis safe harbor exception for tax-exempt interest expense of financial institutions. Sec. 1502. Modification of small issuer exception to tax-exempt interest expense allocation rules for financial institutions. Sec. 1503. Temporary modification of alternative minimum tax limitations on taxexempt bonds. Sec. 1504. Modification to high speed intercity rail facility bonds. PART II DELAY IN APPLICATION OF WITHHOLDING TAX ON GOVERNMENT CONTRACTORS Sec. 1511. Delay in application of withholding tax on government contractors. ate Nov Attachment C. PUBLIC LAW 111 5---FEB. 17 2009 123 STAT. 337 A certification under subclause II shall be in such form and manner and filed at such time as the Secretary may by regulations prescribe. iii INCOME FROM A SMALL BUSINESS. For purposes of clause ii income from a small business means with respect to any individual income from a trade or business the average number of employees of which was less than 500 employees for the calendar year ending with or within the preceding taxable year of the individual. iv SEPARATE RETURNS. In the case of a married individual within the meaning of section 7703 who files a separate return for the taxable year for which the amount of the installment is being determined clause ii I shall be applied by substituting 250 000 for 500 000 . v ESTATES AND TRUSTS. In the case of an estate or trust adjusted gross income shall be determined as provided in section 67 e . . PART III INCENTIVES FOR NEW JOBS SEC. 1221. INCENTIVES TO HIRE UNEMPLOYED VETERANS AND DISCONNECTED YOUTH. a IN GENERAL. Subsection d of section 51 is amended by adding at the end the following new paragraph 14 CREDIT ALLOWED FOR UNEMPLOYED VETERANS AND DISCONNECTED YOUTH HIRED IN 2009 OR 2010. A IN GENERAL. Any unemployed veteran or disconnected youth who begins work for the employer during 2009 or 2010 shall be treated as a member of a targeted group for purposes of this subpart. B DEFINITIONS. For purposes of this paragraph i UNEMPLOYED VETERAN. The term unemployed veteran means any veteran as defined in paragraph 3 B determined without regard to clause ii thereof who is certified by the designated local agency as I having been discharged or released from active duty in the Armed Forces at any time during the 5-year period ending on the hiring date and II being in receipt of unemployment compensation under State or Federal law for not less Attachment C. 123 STAT. 338 PUBLIC LAW 111 5 FEB. 17 2009 than 4 weeks during the 1-year period ending on the hiring date. ii DISCONNECTED YOUTH. The term disconnected youth means any individual who is certified by the designated local agency I as having attained age 16 but not age 25 on the hiring date II as not regularly attending any secondary technical or post-secondary school during the 6- month period preceding the hiring date III as not regularly employed during such 6-month period and IV as not readily employable by reason of lacking a sufficient number of basic skills. . 26 USC 51. b EFFECTIVE DATE. The amendments made by this section shall apply to individuals who begin work for the employer after December 31 2008. PART IV RULES RELATING TO DEBT INSTRUMENTS SEC. 1231. DEFERRAL AND RATABLE INCLUSION OF INCOME ARISING FROM BUSINESS INDEBTEDNESS DISCHARGED BY THE REACQUISITION OF A DEBT INSTRUMENT. a IN GENERAL. Section 108 relating to income from discharge of indebtedness is amended by adding at the end the following new subsection i DEFERRAL AND RATABLE INCLUSION OF INCOME ARISING FROM BUSINESS INDEBTEDNESS DISCHARGED BY THE REACQUISITION OF A DEBT INSTRUMENT. 1 IN GENERAL. At the election of the taxpayer income from the discharge of indebtedness in connection with the reacquisition after December 31 2008 and before January 1 2011 of an applicable debt instrument shall be includible in gross income ratably over the 5-taxable-year period beginning with A in the case of a reacquisition occurring in 2009 the fifth taxable year following the taxable year in which the reacquisition occurs and B in the case of a reacquisition occurring in 2010 the fourth taxable year following the taxable year in which Attachment C. the reacquisition occurs.