Economic Modernization Act

Economic Modernization Act

This bill amends the Internal Revenue Code to allow additional tax credits and deductions to assist employees who work in declining or short-supply fields.

A "declining field" has experienced a decline in the level of average employment of at least 8% over the most recent 3-year period.

A "short-supply" field: (1) requires theoretical and practical application of a body of highly specialized knowledge and certain degrees or experience in the specialty; and (2) has an insufficient number of U.S. citizens or residents who are qualified, willing, and able to satisfy the demand for labor in the occupation or field of work.

For employers, the bill allows an economic transition tax credit for payroll taxes paid over a three-year period with respect to employees who previously worked in a declining field.

For individuals employed in short-supply fields, the bill:

• increases the limit for the exclusion from gross income for employer-provided educational assistance programs and expands the exclusion to include payments of education loans,
• increases the limit for the deduction for interest on education loans, and
• increases the limit for the deduction for qualified tuition and related expenses.

The bill also allows a deduction for companies that rehabilitate certain abandoned buildings. The deduction is equal to a portion of the income attributable to the rehabilitated building and may not exceed 50% of the wages paid by the company.