Number: 111- 43
Date: June 3, 2010
House Passes H.R. 4213, the
“American Jobs and Closing Tax Loopholes Act of 2010”
On May 28, 2010, the House passed H.R. 4213, the “American Jobs and Closing Tax Loopholes Act of 2010,” by a vote of 245-171.
The bill includes the following provisions of interest to SSA.
Ensuring Collection of Employment Taxes Earned by Certain Service Professionals (Section 413)
• Would ensure collection of Social Security employment taxes earned by certain service professionals in situations where: (1) an S corporation is engaged in a professional service business that is principally based on the reputation and skill of three or fewer individuals; or, (2) an S corporation is a partner in a professional service business.
• Would also clarify that individuals who are engaged in professional service businesses are unable to avoid Social Security employment taxes by routing their earnings through a limited liability corporation or a limited partnership.
• Would be effective for taxable years beginning after December 31, 2010.
Settlement Payments to American Indians (Section 607)
• Would ratify a class-action lawsuit settlement ( Elouise Cobell et al. v. Ken Salazar et al.) that determined the United States had mismanaged American Indian assets for generations. Under the terms of the settlement, Indian landowners who had monies held in these mismanaged trust accounts would be eligible for settlement payments.
• Would exclude these settlement payments from consideration as income (in the month received) or as a resource (for a period of one year beginning with the month of receipt) for SSI purposes.
• Would be effective upon enactment.