Productivity Incentive Act of 1985

Productivity Incentive Act of 1985 - Amends the Internal Revenue Code to allow an income tax credit for payments made by a taxpayer to an employee under a productivity incentive plan. Sets the amount of such credit at: (1) ten percent of amounts paid in the first year of such plan; (2) five percent of amounts paid in the second year; and (3) three percent of amounts paid in the third year.

Defines "productivity incentive plan" as a written plan which provides bonuses to employees due to profits or cost savings resulting from increases in productivity.