S 2373
110th CONGRESS
1st Session
S. 2373
To amend the Internal Revenue Code of 1986 to provide for residents
of Puerto Rico who participate in cafeteria plans under the Puerto Rican
tax laws an exclusion from employment taxes which is comparable to the
exclusion that applies to cafeteria plans under such Code.
IN THE SENATE OF THE UNITED STATES
November 15, 2007
Mr. SALAZAR (for himself and Mr. KERRY) introduced the following bill;
which was read twice and referred to the Committee on Finance
A BILL
To amend the Internal Revenue Code of 1986 to provide for residents
of Puerto Rico who participate in cafeteria plans under the Puerto Rican
tax laws an exclusion from employment taxes which is comparable to the
exclusion that applies to cafeteria plans under such Code.
Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled,
SECTION 1. EXCLUSION FROM EMPLOYMENT TAXES FOR RESIDENTS OF PUERTO
RICO FOR PAYMENTS MADE UNDER A CAFETERIA PLAN WHICH ARE EXCLUDABLE FROM
THE PUERTO RICAN INCOME TAX.
(a) Social Security Taxes-
(1) IN GENERAL- Paragraph (5) of section 3121(a) of the Internal Revenue
Code of 1986 (defining wages) is amended by striking `or' at the end
of subparagraph (H), by striking the semicolon at the end of subparagraph
(I) and inserting `, or', and by inserting after subparagraph (I)
the following new subparagraph:
`(J) under a plan established under section 1022(l) of the Puerto
Rico Internal Revenue Code of 1994 if such payment would not be
treated as wages without regard to such plan and it would be reasonable
to believe that (if such section 1022(l) applied for purposes of
this section) such section 1022(l) would not treat any wages as
constructively received;'.
(2) SOCIAL SECURITY ACT- Paragraph (4) of section 209(a) of the Social
Security Act (defining wages) is amended by adding at the end the
following: `or (L) under a plan established under section 1022(l)
of the Puerto Rico Internal Revenue Code of 1994 if such payment would
not be treated as wages without regard to such plan and it would be
reasonable to believe that (if such section 1022(l) applied for purposes
of this section) such section 1022(l) would not treat any wages as
constructively received;'.
(b) Unemployment Insurance- Paragraph (5) of section 3306(b) of such
Code (defining wages) is amended by striking `or' at the end of subparagraph
(G), by adding `or' at the end of subparagraph (H), and by inserting
after subparagraph (H) the following new subparagraph:
`(I) under a plan established under section 1022(l) of the Puerto
Rico Internal Revenue Code of 1994 if such payment would not be
treated as wages without regard to such plan and it would be reasonable
to believe that (if such section 1022(l) applied for purposes of
this section) such section 1022(l) would not treat any wages as
constructively received;'.
(c) Effective Date- The amendments made by this section shall apply
to remuneration paid after the date of the enactment of this Act.
END
