HouseH.R. 10446119th Congress
Incentivizing Small Business Employee Retention Act of 2026
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[Congressional Bills 119th Congress]
[From the U.S. Government Publishing Office]
[H.R. 10446 Introduced in House (IH)]
<DOC>
119th CONGRESS
2d Session
H. R. 10446
To amend the Internal Revenue Code of 1986 to enhance the deduction for
expenditures to remove architectural and transportation barriers to
certain individuals and to extend and enhance the work opportunity
credit, and for other purposes.
_______________________________________________________________________
IN THE HOUSE OF REPRESENTATIVES
September 16, 2026
Mr. Latimer (for himself and Mr. Cisneros) introduced the following
bill; which was referred to the Committee on Ways and Means
_______________________________________________________________________
A BILL
To amend the Internal Revenue Code of 1986 to enhance the deduction for
expenditures to remove architectural and transportation barriers to
certain individuals and to extend and enhance the work opportunity
credit, and for other purposes.
Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ``Incentivizing Small Business
Employee Retention Act of 2026''.
SEC. 2. ENHANCEMENT OF DEDUCTION FOR EXPENDITURES TO REMOVE
ARCHITECTURAL AND TRANSPORTATION BARRIERS TO CERTAIN
INDIVIDUALS.
(a) Inclusion of Improvements in Accessibility to Internet and
Telecommunications Operations.--Section 190(b)(1) of the Internal
Revenue Code of 1986 is amended by adding at the end the following new
sentence: ``Such term shall include an expenditure for the purpose of
improving accessibility for individuals with disabilities and older
adults to any internet or telecommunications services provided within
any facility or public transportation vehicle owned or leased by the
taxpayer for use in connection with their trade or business.''.
(b) Increase in Deduction Limitation Amount.--Section 190(c) of
such Code is amended by striking ``$15,000'' and inserting ``$30,000''.
(c) Conforming Amendments.--
(1) Section 190(b)(1) of such Code, as amended by
subsection (a), is amended by striking ``handicapped and
elderly individuals'' and inserting ``individuals with
disabilities and older adults''.
(2) Section 190(b)(3) of such Code is amended--
(A) by striking ``handicapped individual'' and
inserting ``individual with a disability'', and
(B) by striking ``Handicapped individual'' in the
heading thereof and inserting ``Individual with a
disability''.
(3)(A) The heading for section 190 of such Code is amended
by striking ``the handicapped and elderly'' and inserting
``individuals with disabilities and older adults''.
(B) The item relating to section 190 in the table of
sections for part VI of subchapter B of chapter 1 of such Code
is amended by striking ``the handicapped and elderly'' and
inserting ``individuals with disabilities and older adults''.
(4) Section 67(d)(1) of such Code is amended by striking
``a handicapped individual'' and inserting ``an individual with
a disability''.
(5) Section 263(a)(1)(E) of such Code is amended by
striking ``the handicapped and elderly'' and inserting
``individuals with disabilities and older adults''.
(d) Effective Date.--The amendments made by this section shall
apply to taxable years beginning after December 31, 2026.
(e) Rule of Construction.--Except as provided in subsection (a),
nothing in this section, or the amendments made by this section, shall
be construed to modify or expand any definition used in section 190 of
the Internal Revenue Code of 1986.
SEC. 3. EXTENSION AND ENHANCEMENT OF WORK OPPORTUNITY CREDIT.
(a) Extension of Credit.--Section 51(c)(4) of the Internal Revenue
Code of 1986 is amended by striking ``December 31, 2025'' and inserting
``September 30, 2030''.
(b) Increased Credit for Qualified Small Businesses.--
(1) In general.--Section 51 of such Code is amended--
(A) by redesignating subsections (f) through (k) as
subsections (g) through (l), respectively, and
(B) by inserting after subsection (e) the following
new subsection:
``(f) Increased Credit for Qualified Small Businesses.--
``(1) In general.--In the case of a qualified small
business, the amount of the work opportunity credit determined
under this section for the taxable year shall include--
``(A) 50 percent of the qualified second-year wages
for such year,
``(B) 75 percent of the qualified third-year wages
for such year,
``(C) 90 percent of the qualified fourth-year wages
for such year, and
``(D) 100 percent of the qualified fifth-year wages
for such year.
``(2) Limitation on wages per year taken into account.--
``(A) In general.--The amount of the qualified
second-year wages, qualified third-year wages,
qualified fourth-year wages, or qualified fifth-year
wages which may be taken into account with respect to
any individual shall not exceed the applicable amount
for the taxable year.
``(B) Applicable amount.--For purposes of
subparagraph (A), the term `applicable amount' means--
``(i) in the case of any individual who is
a qualified veteran by reason of subsection
(d)(3)(A)(ii)(II), the dollar amount in effect
for the taxable year under subsection
(b)(3)(B)(i),
``(ii) in the case of any individual who is
a qualified veteran by reason of subsection
(d)(3)(A)(iv), the dollar amount in effect for
the taxable year under subsection
(b)(3)(B)(ii),
``(iii) in the case of any individual who
is a qualified veteran by reason of subsection
(d)(3)(A)(ii)(I), the dollar amount in effect
for the taxable year under subsection
(b)(3)(B)(iii),
``(iv) in the case of any individual who is
a long-term family assistance recipient, the
dollar amount in effect for the taxable year
under subsection (e)(1)(B), and
``(v) in the case of any individual not
described in clause (i), (ii), (iii), or (iv),
the dollar amount in effect for the taxable
year under subsection (b)(3)(B)(iv).
``(3) Individuals not meeting minimum employment periods.--
``(A) Reduction of increased credit for individuals
performing fewer than 400 hours of service.--In the
case of an individual who has performed at least 120
hours, but less than 400 hours, of service for the
qualified small business during the taxable year,
paragraph (1) shall be applied--
``(i) by substituting `30 percent' for `50
percent' in subparagraph (A) thereof,
``(ii) by substituting `40 percent' for `75
percent' in subparagraph (B) thereof,
``(iii) by substituting `45 percent' for
`90 percent' in subparagraph (C) thereof, and
``(iv) by substituting `50 percent' for
`100 percent' in subparagraph (D) thereof.
``(B) Denial of increased credit for individuals
performing fewer than 120 hours of service.--No wages
shall be taken into account under paragraph (1) with
respect to any individual unless such individual has
performed at least 120 hours of service for the
qualified small business during the taxable year.
``(4) Special rules for agricultural and railway labor.--In
the case of a long-term family assistance recipient to whom
subparagraph (A) or (B) of subsection (i)(1) applies, rules
similar to the rules of such subparagraphs shall apply except
that--
``(A) such subparagraph (A) shall be applied by
substituting `the dollar amount in effect for the
taxable year under subsection (e)(1)(B)' for `the
dollar amount in effect for the taxable year under
subsection (b)(3)(B)(iv)', and
``(B) such subparagraph (B) shall be applied by
substituting `\1/12\ of the dollar amount in effect for
the taxable year under subsection (e)(1)(B)' for `\1/
12\ of the dollar amount in effect for the taxable year
under subsection (b)(3)(B)(iv)'.
``(5) Definitions.--For purposes of this subsection--
``(A) Qualified small business.--The term
`qualified small business' means any person which is a
small business concern (as defined in section 3 of the
Small Business Act).
``(B) Qualified second-year wages.--The term
`qualified second-year wages' means qualified wages--
``(i) which are paid to an individual with
respect to whom the qualified small business
claimed credit under this section for the
qualified first-year wages of such individual,
and
``(ii) which are attributable to service
rendered during the 1-year period beginning on
the day after the last day of the 1-year period
with respect to such individual determined
under subsection (b)(2).
``(C) Qualified third-year wages.--The term
`qualified third-year wages' means qualified wages--
``(i) which are paid to an individual with
respect to whom the qualified small business
claimed credit under this section for the
qualified first-year wages and qualified
second-year wages of such individual, and
``(ii) which are attributable to service
rendered during the 1-year period beginning on
the day after the last day of the 1-year period
with respect to such individual determined
under subparagraph (B).
``(D) Qualified fourth-year wages.--The term
`qualified fourth-year wages' means qualified wages--
``(i) which are paid to an individual with
respect to whom the qualified small business
claimed credit under this section for the
qualified first-year wages, qualified second-
year wages, and qualified third-year wages of
such individual, and
``(ii) which are attributable to service
rendered during the 1-year period beginning on
the day after the last day of the 1-year period
with respect to such individual determined
under subparagraph (C).
``(E) Qualified fifth-year wages.--The term
`qualified fifth-year wages' means qualified wages--
``(i) which are paid to an individual with
respect to whom the qualified small business
claimed credit under this section for the
qualified first-year wages, qualified second-
year wages, qualified third-year wages, and
qualified fourth-year wages of such individual,
and
``(ii) which are attributable to service
rendered during the 1-year period beginning on
the day after the last day of the 1-year period
with respect to such individual determined
under subparagraph (D).
``(6) Regulations.--The Secretary shall prescribe such
regulations or other guidance as may be necessary to carry out
the purposes of this subsection, including regulations or other
guidance providing for requirements for recordkeeping or
information reporting for purposes of administering this
subsection.''.
(2) Conforming amendments.--
(A) Section 51 of such Code, as amended by the
preceding provisions of this section, is amended--
(i) in subsection (c)(1), by striking
``subsection (h)(2)'' and inserting
``subsection (i)(2)'',
(ii) in subsection (e)--
(I) in paragraph (1), in the matter
preceding subparagraph (A), by striking
``With'' and inserting ``Subject to
subsection (f), with'', and
(II) in paragraph (3), by striking
``subsection (h)(1)'' and inserting
``subsection (i)(1)'', and
(iii) in subsection (g)(2), by striking
``subsection (h)(1)'' and inserting
``subsection (i)(1)''.
(B) Section 45A of such Code is amended--
(i) in subsection (b)(1)(B), by adding at
the end the following new sentence: ``If any
portion of wages are taken into account under
subsection (f)(1) of section 51, the preceding
sentence shall be applied by substituting `5-
year period' for `1-year period'.'',
(ii) in subsection (c)(5)(A), by striking
``section 51(i)(1)'' and inserting ``section
51(j)(1)'', and
(iii) in subsection (e)(3), by striking
``section 51(k)'' and inserting ``section
51(l)''.
(C) Section 45S(h)(2) of such Code is amended by
striking ``section 51(j)'' and inserting ``section
51(k)''.
(D) Section 1396(d)(2)(A) of such Code is amended
by striking ``section 51(i)(1)'' and inserting
``section 51(j)(1)''.
(E) Section 1397(c) of such Code is amended by
striking ``section 51(k)'' and inserting ``section
51(l)''.
(F) Section 3111(e)(3)(B) of such Code is amended
by striking ``subsection (i)(3)(A)'' and inserting
``subsection (j)(3)(A)''.
(c) Inflation Adjustment.--
(1) In general.--Section 51 of such Code, as amended by the
preceding provisions of this section, is amended by adding at
the end the following new subsection:
``(m) Inflation Adjustment.--
``(1) In general.--In the case of any taxable year
beginning after 2027, each of the dollar amounts in subsection
(b)(3)(B) and the $10,000 amount in subsection (e)(1)(B) shall
be increased by an amount equal to--
``(A) such dollar amount, multiplied by
``(B) the cost-of-living adjustment determined
under section 1(f)(3) for the calendar year in which
the taxable year begins, determined by substituting
`calendar year 2026' for `calendar year 2016' in
subparagraph (A)(ii) thereof.
``(2) Rounding.--Any increase determined under paragraph
(1) shall be rounded to the nearest multiple of $100.''.
(2) Conforming amendments.--
(A) Limitation on wages per year taken into
account.--Section 51(b)(3) of such Code is amended to
read as follows:
``(3) Limitation on wages per year taken into account.--
``(A) In general.--The amount of the qualified
first-year wages which may be taken into account with
respect to any individual shall not exceed the
applicable amount for the taxable year.
``(B) Applicable amount.--For purposes of
subparagraph (A), the term `applicable amount' means--
``(i) $24,000 in the case of any individual
who is a qualified veteran by reason of
subsection (d)(3)(A)(ii)(II),
``(ii) $14,000 in the case of any
individual who is a qualified veteran by reason
of subsection (d)(3)(A)(iv),
``(iii) $12,000 in the case of any
individual who is a qualified veteran by reason
of subsection (d)(3)(A)(ii)(I), and
``(iv) $6,000 in the case of any individual
not described in clause (i), (ii), or (iii).''.
(B) Qualified summer youth employees.--Section
51(d)(7)(B)(ii) of such Code is amended to read as
follows:
``(ii) the amount of the qualified first-
year wages which may be taken into account with
respect to such employee shall not exceed 50
percent of the dollar amount in effect for the
taxable year under subsection (b)(3)(B)(iv).''.
(C) Special rules for agricultural labor and
railway labor.--
(i) In general.--Section 51(i)(1) of such
Code, as redesignated by subsection (b), is
amended--
(I) in subparagraph (A), by
striking ``$6,000'' and inserting ``the
dollar amount in effect for the taxable
year under subsection (b)(3)(B)(iv)'',
and
(II) in subparagraph (B), by
striking ``$500'' and inserting ``\1/
12\ of the dollar amount in effect for
the taxable year under subsection
(b)(3)(B)(iv)''.
(ii) Related conforming amendments.--
Section 51(e)(3) of such Code is amended by
striking subparagraphs (A) and (B) and
inserting the following new subparagraphs:
``(A) such subparagraph (A) shall be applied by
substituting `the dollar amount in effect for the
taxable year under subsection (e)(1)(B)' for `the
dollar amount in effect for the taxable year under
subsection (b)(3)(B)(iv)', and
``(B) such subparagraph (B) shall be applied by
substituting `\1/12\ of the dollar amount in effect for
the taxable year under subsection (e)(1)(B)' for `\1/
12\ of the dollar amount in effect for the taxable year
under subsection (b)(3)(B)(iv)'.''.
(d) Effective Dates.--
(1) Extension.--The amendment made by subsection (a) shall
apply to individuals who begin work for the employer after
December 31, 2025.
(2) Enhancement; inflation adjustment.--The amendments made
by subsections (b) and (c) shall apply to individuals who begin
work for the employer after December 31, 2026.
SEC. 4. REPORTS.
(a) In General.--The Secretary of the Treasury (or the Secretary's
delegate) shall, in consultation with the Administrator of the Small
Business Administration, submit to the appropriate congressional
committees a report for each of taxable years 2027 through 2030 on--
(1) the number of small businesses that claim the increased
work opportunity credit for qualified small businesses under
section 51(f) of the Internal Revenue Code of 1986,
(2) the employee retention rates and wage growth of such
businesses,
(3) the fiscal effect of the increased work opportunity
credit for qualified small businesses under section 51(f) of
such Code, and
(4) opportunities to improve outreach to small businesses
regarding the availability of the work opportunity credit under
section 51 of such Code, including the increased credit for
qualified small businesses under subsection (f) of such
section.
(b) Appropriate Congressional Committees.--For purposes of this
section, the term ``appropriate congressional committees'' means--
(1) the Committee on Ways and Means of the House of
Representatives,
(2) the Committee on Small Business of the House of
Representatives,
(3) the Committee on Finance of the Senate, and
(4) the Committee on Small Business and Entrepreneurship of
the Senate.
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