By Edward Cardenas
SOUTHFIELD (CBS Detroit) – U.S. Senators Gary Peters, D-MI, and Joni Ernst, R-IA, introduced bipartisan legislation Tuesday in the Senate that would give a tax credit for small businesses that provide differential pay to military reservists and National Guard members called to serve on active duty.
The “Military Reserve Small Business Jobs Act of 2015” would provide a tax credit for 20 percent of the differential salary payment for small businesses with fewer than 50 employees. If passed, the bill would extend the tax credit for small businesses for five years.
According to Peters, if an employee’s pay at their small business employer is $3,000 per month, but they make $2,000 while called up, their employer would receive a $200 credit for paying them the $1,000 difference.
“These are citizen soldiers. These are folks who are in their career, have families … but they are willing to step aside from that to serve their country,” said Peters. “The least we can do is to make sure they don’t have to worry about their financial security when they are called up.”
There are approximately 824,000 reservists and National Guard members in America, and 15,438 of them serve in units in Michigan. Since Sept. 11, over 905,000 members of the guard and reserve were activated support wars in Iraq and Afghanistan.
The credit was originally enacted in 2008 as part of the bipartisan Heroes Earnings Assistance and Relief Tax Act (HEART Act), but expired in 2014.
Peters sated that credit cost taxpayers between $1-$2 million.
“NGAUS applauds the effort to make our members and their small business employers financially whole during deployments. The subject tax credit effectively does that dollar for dollar for both member and employer with a necessary benefit inuring to the families of our deployed,” said Colonel Peter J. Duffy, U.S. Army (Retired), Director of Legislative Programs for the National Guard Association of the United States, in a release. “Our employers remain perhaps the most vital part of the community support network for our members and their families.”
Both sponsors have military experience. Peters is a former Lt. Commander in the Navy Reserve and Ernst continues to serve as a Lt. Colonel in the Iowa Army National Guard.