The House overwhelmingly passed legislation repealing the 3 percent withholding mandate on government contractors, along with a tax credit for hiring veterans.

Both measures have already been approved by the Senate, allowing them to go to President Obama’s desk for his signature (see Senate Passes Bill Providing Tax Credit for Hiring Veterans).

They had both been pieces of his American Jobs Act and he is expected to sign them into law.

The House in a show of unanimity voted to pass the bill by a margin of 422 to 0 on Wednesday. The 3 percent withholding rule would have required state, federal and local government agencies to withhold 3 percent of payments owed to their contractors throughout the country as a way to combat tax evasion by government contractors. The provision was introduced in the current bill by Rep. Wally Herger, R-Calif., and in an earlier version by Rep. Kevin Brady, R-Texas.

The American Institute of CPAs was one of a number of business groups that had lobbied to repeal the rule. The legislation also provided a tax incentive for businesses that hire veterans and specialized job training to help unemployed veterans find jobs.

In addition, the bill included a provision modifying the income definition used to determine eligibility for certain health programs, including Medicaid, in the health care reform law to more closely align the definition of income used for certain health programs with other federal means-tested programs. That provision was authored by Rep. Diane Black, R-Tenn. CCH has issued a new tax briefing describing the legislation.

"Congress demonstrated that when we work together, we can find bipartisan solutions to laws and regulations that stifle job creation,” said House Ways and Means Committee Chairman Dave Camp, R-Mich. “The permanent repeal of the 3 percent withholding law gives employers greater certainty that they will have resources to hire and invest in getting America back to work. This deficit reducing legislation also aligns the income definition for certain programs in the Democrats’ health care law with other federal means-tested programs to ensure that taxpayer dollars are targeted only to those low-income families in need of assistance. Finally, the Senate’s addition of the veterans-related provisions can increase opportunities for those who have served our nation and are seeking to join our workforce. I look forward to seeing the President sign this bipartisan bill into law.”

The AICPA applauded the passage of the legislation. “The AICPA has strongly supported H.R. 674 and efforts to repeal the 3 percent withholding requirement," said Edward Karl, vice president of taxation for the American Institute of CPAs in a statement. "With today’s vote, the bill can move to the White House. The AICPA urges President Obama to quickly sign H.R. 674 into law."

Senate Finance Committee Chairman Max Baucus, D-Mont., also hailed passage of the bill, which included the veterans hiring provisions that he and Sen. Chuck Grassley, R-Iowa, have championed since 2009.

“The unemployment rate among veterans is far too high, but this bill will help them find the jobs they deserve when their tours of duty end,” Baucus said in a statement. “This is the jobs investment our economy and veterans need. Veterans have the exact leadership skills and drive that translate directly to employment here at home. We need to continue working to simplify the process and make it easier for businesses to apply for this tax credit to help as many veterans as possible, and this bill lays the foundation we need to do just that.”

The veterans jobs bill the House passed includes a version of Baucus’s tax credit for businesses that hire veterans. The legislation will provide a $5,600 tax credit for hiring long-term unemployed veterans, $2,400 for hiring short-term unemployed veterans and credits of up to $9,600 for hiring unemployed veterans with service-related disabilities.

Baucus noted that his original VETs Jobs bill also included provisions to simplify the certification process to make it easier for businesses to get the tax credit. He said he would continue working to make it easier for businesses to get the credit.

President Obama praised passage of the bill. “I want to congratulate Republicans and Democrats in Congress for coming together to pass these tax credits that will encourage businesses to hire America’s veterans,” he said in a statement. “No veteran who fought for our country should have to fight for a job when they come home. That’s why I proposed these tax credits back in August, and I look forward to signing them into law. This is a good first step, but it is only a step. Congress needs to pass the rest of my American Jobs Act so that we can create jobs and put money in the pockets of the middle class.”

Democrats still hope to pass an extension of the payroll tax holiday, an extension of unemployment benefits for those whose benefits expire next month, and other provisions of Obama’s jobs bill. The provisions that came from Republican-backed legislation were long considered to be easier to pass through Congress.

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