WORKING FAMILIES TAX RELIEF ACT OF 2004

PUBLIC LAW 108–311—OCT. 4, 2004

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118 STAT. 1166 PUBLIC LAW 108–311—OCT. 4, 2004

Public Law 108–311

108th Congress

An Act

To amend the Internal Revenue Code of 1986 to provide tax relief for working

families, and for other purposes.

Be it enacted by the Senate and House of Representatives of

the United States of America in Congress assembled,

SECTION 1. SHORT TITLE; AMENDMENT OF 1986 CODE; TABLE OF CON-

TENTS.

(a) S

HORT

ITLE

.—This Act may be cited as the ‘‘Working

Families Tax Relief Act of 2004’’.

(b) A

MENDMENT OF

1986 C

ODE

.—Except as otherwise expressly

provided, whenever in this Act an amendment or repeal is expressed

in terms of an amendment to, or repeal of, a section or other

provision, the reference shall be considered to be made to a section

or other provision of the Internal Revenue Code of 1986.

ABLE OF

ONTENTS

.—The table of contents for this Act

is as follows:

Sec. 1. Short title; amendment of 1986 Code; table of contents.

TITLE I—EXTENSION OF FAMILY TAX PROVISIONS

Sec. 101. Repeal of scheduled reductions in child tax credit, marriage penalty relief,

and 10-percent rate bracket.

Sec. 102. Acceleration of increase in refundability of the child tax credit.

Sec. 103. 1-year extension of minimum tax relief to individuals.

Sec. 104. Earned income includes combat pay.

Sec. 105. Application of EGTRRA sunset to this title.

TITLE II—UNIFORM DEFINITION OF CHILD

Sec. 201. Uniform definition of child, etc.

Sec. 202. Modifications of definition of head of household.

Sec. 203. Modifications of dependent care credit.

Sec. 204. Modifications of child tax credit.

Sec. 205. Modifications of earned income credit.

Sec. 206. Modifications of deduction for personal exemption for dependents.

Sec. 207. Technical and conforming amendments.

Sec. 208. Effective date.

TITLE III—EXTENSIONS OF CERTAIN EXPIRING PROVISIONS

Sec. 301. Research credit.

Sec. 302. Parity in the application of certain limits to mental health benefits.

Sec. 303. Work opportunity credit and welfare-to-work credit.

Sec. 304. Qualified zone academy bonds.

Sec. 305. Cover over of tax on distilled spirits.

Sec. 306. Deduction for corporate donations of scientific property and computer

technology.

Sec. 307. Deduction for certain expenses of school teachers.

Sec. 308. Expensing of environmental remediation costs.

Sec. 309. Certain New York Liberty Zone benefits.

Sec. 310. Tax incentives for investment in the District of Columbia.

Sec. 311. Disclosure of tax information to facilitate combined employment tax re-

porting.

26 USC 1 note.

Working

Families Tax

Relief Act of

2004.

Oct. 4, 2004

[H.R. 1308]

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118 STAT. 1167PUBLIC LAW 108–311—OCT. 4, 2004

Sec. 312. Allowance of nonrefundable personal credits against regular and min-

imum tax liability.

Sec. 313. Credit for electricity produced from certain renewable resources.

Sec. 314. Taxable income limit on percentage depletion for oil and natural gas pro-

duced from marginal properties.

Sec. 315. Indian employment tax credit.

Sec. 316. Accelerated depreciation for business property on Indian reservation.

Sec. 317. Disclosure of return information relating to student loans.

Sec. 318. Elimination of phaseout of credit for qualified electric vehicles for 2004

and 2005.

Sec. 319. Elimination of phaseout for deduction for clean-fuel vehicle property for

2004 and 2005.

Sec. 320. Disclosures relating to terrorist activities.

Sec. 321. Joint review of strategic plans and budget for the Internal Revenue Serv-

ice.

Sec. 322. Availability of medical savings accounts.

TITLE IV—TAX TECHNICAL CORRECTIONS

Sec. 401. Amendments related to Medicare Prescription Drug, Improvement, and

Modernization Act of 2003.

Sec. 402. Amendments related to Jobs and Growth Tax Relief Reconciliation Act of

2003.

Sec. 403. Amendments related to Job Creation and Worker Assistance Act of 2002.

Sec. 404. Amendments related to Economic Growth and Tax Relief Reconciliation

Act of 2001.

Sec. 405. Amendments related to Community Renewal Tax Relief Act of 2000.

Sec. 406. Amendments related to Taxpayer Relief Act of 1997.

Sec. 407. Amendments related to Small Business Job Protection Act of 1996.

Sec. 408. Clerical amendments.

TITLE I—EXTENSION OF FAMILY TAX

PROVISIONS

SEC. 101. REPEAL OF SCHEDULED REDUCTIONS IN CHILD TAX CREDIT,

MARRIAGE PENALTY RELIEF, AND 10-PERCENT RATE

BRACKET.

(a) C

HILD

REDIT

.—Subsection (a) of section 24 (relating

to child tax credit) is amended to read as follows:

‘‘(a) A

LLOWANCE OF

REDIT

.—There shall be allowed as a credit

against the tax imposed by this chapter for the taxable year with

respect to each qualifying child of the taxpayer an amount equal

to $1,000.’’.

(b) M

ARRIAGE

ENALTY

ELIEF IN

TANDARD

EDUCTION

.—

(1) I

N GENERAL

.—Paragraph (2) of section 63(c) (relating

to basic standard deduction) is amended to read as follows:

‘‘(2) B

ASIC STANDARD DEDUCTION

.—For purposes of para-

graph (1), the basic standard deduction is—

‘‘(A) 200 percent of the dollar amount in effect under

subparagraph (C) for the taxable year in the case of—

‘‘(i) a joint return, or

‘‘(ii) a surviving spouse (as defined in section 2(a)),

‘‘(B) $4,400 in the case of a head of household (as

defined in section 2(b)), or

‘‘(C) $3,000 in any other case.’’.

(2) C

ONFORMING AMENDMENTS

.—

(A) Section 63(c)(4) is amended by striking ‘‘(2)(D)’’

each place it occurs and inserting ‘‘(2)(C)’’.

(B) Section 63(c) is amended by striking paragraph

(7).

ARRIAGE

ENALTY

ELIEF IN

15-

PERCENT

NCOME

RACKET

.—Paragraph (8) of section 1(f) is amended to read as

follows:

26 USC 1.

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118 STAT. 1168 PUBLIC LAW 108–311—OCT. 4, 2004

‘‘(8) E

LIMINATION OF MARRIAGE PENALTY IN 15

PERCENT

BRACKET

.—With respect to taxable years beginning after

December 31, 2003, in prescribing the tables under paragraph

(1)—

‘‘(A) the maximum taxable income in the 15-percent

rate bracket in the table contained in subsection (a) (and

the minimum taxable income in the next higher taxable

income bracket in such table) shall be 200 percent of the

maximum taxable income in the 15-percent rate bracket

in the table contained in subsection (c) (after any other

adjustment under this subsection), and

‘‘(B) the comparable taxable income amounts in the

table contained in subsection (d) shall be

⁄

of the amounts

determined under subparagraph (A).’’.

(d) 10-P

ERCENT

ATE

RACKET

.—

(1) I

N GENERAL

.—Clause (i) of section 1(i)(1)(B) is amended

by striking ‘‘($12,000 in the case of taxable years beginning

after December 31, 2004, and before January 1, 2008)’’.

(2) I

NFLATION ADJUSTMENT

.—Subparagraph (C) of section

1(i)(1) is amended to read as follows:

‘‘(C) I

NFLATION ADJUSTMENT

.—In prescribing the tables

under subsection (f) which apply with respect to taxable

years beginning in calendar years after 2003—

‘‘(i) the cost-of-living adjustment shall be deter-

mined under subsection (f)(3) by substituting ‘2002’

for ‘1992’ in subparagraph (B) thereof, and

‘‘(ii) the adjustments under clause (i) shall not

apply to the amount referred to in subparagraph

(B)(iii).

If any amount after adjustment under the preceding sen-

tence is not a multiple of $50, such amount shall be rounded

to the next lowest multiple of $50.’’.

(e) E

FFECTIVE

ATE

.—The amendments made by this section

shall apply to taxable years beginning after December 31, 2003.

SEC. 102. ACCELERATION OF INCREASE IN REFUNDABILITY OF THE

CHILD TAX CREDIT.

(a) A

CCELERATION OF

EFUNDABILITY

.—Section 24(d)(1)(B)(i)

(relating to portion of credit refundable) is amended by striking

‘‘(10 percent in the case of taxable years beginning before January

1, 2005)’’.

(b) E

FFECTIVE

ATE

.—The amendment made by this section

shall apply to taxable years beginning after December 31, 2003.

SEC. 103. EXTENSION OF MINIMUM TAX RELIEF TO INDIVIDUALS.

(a) I

ENERAL

.—Subparagraphs (A) and (B) of section 55(d)(1)

of the Internal Revenue Code of 1986 (relating to exemption amount

for taxpayers other than corporations) are each amended by striking

‘‘2003 and 2004’’ and inserting ‘‘2003, 2004, and 2005’’.

(b) E

FFECTIVE

ATE

.—The amendments made by this section

shall apply to taxable years beginning after December 31, 2004.

SEC. 104. EARNED INCOME INCLUDES COMBAT PAY.

(a) C

HILD

REDIT

.—Section 24(d)(1) (relating to portion

of credit refundable) is amended by adding at the end the following

new sentence: ‘‘For purposes of subparagraph (B), any amount

excluded from gross income by reason of section 112 shall be treated

26 USC 55 note.

26 USC 24 note.

26 USC 1 note.

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118 STAT. 1169PUBLIC LAW 108–311—OCT. 4, 2004

as earned income which is taken into account in computing taxable

income for the taxable year.’’.

(b) E

ARNED

NCOME

REDIT

.—Subparagraph (B) of section

32(c)(2) (relating to earned income) is amended—

(1) by striking ‘‘and’’ at the end of clause (iv),

(2) by striking the period at the end of clause (v) and

inserting ‘‘, and’’, and

(3) by adding at the end the following:

‘‘(vi) in the case of any taxable year ending—

‘‘(I) after the date of the enactment of this

clause, and

‘‘(II) before January 1, 2006,

a taxpayer may elect to treat amounts excluded from

gross income by reason of section 112 as earned

income.’’.

FFECTIVE

ATE

.—

(1) C

HILD TAX CREDIT

.—The amendment made by sub-

section (a) shall apply to taxable years beginning after

December 31, 2003.

(2) E

ARNED INCOME CREDIT

.—The amendments made by

subsection (b) shall apply to taxable years ending after the

date of the enactment of this Act.

SEC. 105. APPLICATION OF EGTRRA SUNSET TO THIS TITLE.

Each amendment made by this title shall be subject to title

IX of the Economic Growth and Tax Relief Reconciliation Act of

2001 to the same extent and in the same manner as the provision

of such Act to which such amendment relates.

TITLE II—UNIFORM DEFINITION OF

CHILD

SEC. 201. UNIFORM DEFINITION OF CHILD, ETC.

Section 152 is amended to read as follows:

‘‘SEC. 152. DEPENDENT DEFINED.

‘‘(a) I

ENERAL

.—For purposes of this subtitle, the term

‘dependent’ means—

‘‘(1) a qualifying child, or

‘‘(2) a qualifying relative.

‘‘(b) E

XCEPTIONS

.—For purposes of this section—

‘‘(1) D

EPENDENTS INELIGIBLE

.—If an individual is a

dependent of a taxpayer for any taxable year of such taxpayer

beginning in a calendar year, such individual shall be treated

as having no dependents for any taxable year of such individual

beginning in such calendar year.

‘‘(2) M

ARRIED DEPENDENTS

.—An individual shall not be

treated as a dependent of a taxpayer under subsection (a)

if such individual has made a joint return with the individual’s

spouse under section 6013 for the taxable year beginning in

the calendar year in which the taxable year of the taxpayer

begins.

‘‘(3) C

ITIZENS OR NATIONALS OF OTHER COUNTRIES

.—

‘‘(A) I

N GENERAL

.—The term ‘dependent’ does not

include an individual who is not a citizen or national of

the United States unless such individual is a resident

26 USC 1 note.

26 USC 32 note.

26 USC 24 note.

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118 STAT. 1170 PUBLIC LAW 108–311—OCT. 4, 2004

of the United States or a country contiguous to the United

States.

‘‘(B) E

XCEPTION FOR ADOPTED CHILD

.—Subparagraph

(A) shall not exclude any child of a taxpayer (within the

meaning of subsection (f)(1)(B)) from the definition of

‘dependent’ if—

‘‘(i) for the taxable year of the taxpayer, the child

has the same principal place of abode as the taxpayer

and is a member of the taxpayer’s household, and

‘‘(ii) the taxpayer is a citizen or national of the

United States.

‘‘(c) Q

UALIFYING

HILD

.—For purposes of this section—

‘‘(1) I

N GENERAL

.—The term ‘qualifying child’ means, with

respect to any taxpayer for any taxable year, an individual—

‘‘(A) who bears a relationship to the taxpayer described

in paragraph (2),

‘‘(B) who has the same principal place of abode as

the taxpayer for more than one-half of such taxable year,

‘‘(C) who meets the age requirements of paragraph

(3), and

‘‘(D) who has not provided over one-half of such individ-

ual’s own support for the calendar year in which the taxable

year of the taxpayer begins.

‘‘(2) R

ELATIONSHIP

.—For purposes of paragraph (1)(A), an

individual bears a relationship to the taxpayer described in

this paragraph if such individual is—

‘‘(A) a child of the taxpayer or a descendant of such

a child, or

‘‘(B) a brother, sister, stepbrother, or stepsister of the

taxpayer or a descendant of any such relative.

‘‘(3) A

GE REQUIREMENTS

.—

‘‘(A) I

N GENERAL

.—For purposes of paragraph (1)(C),

an individual meets the requirements of this paragraph

if such individual—

‘‘(i) has not attained the age of 19 as of the close

of the calendar year in which the taxable year of the

taxpayer begins, or

‘‘(ii) is a student who has not attained the age

of 24 as of the close of such calendar year.

‘‘(B) S

PECIAL RULE FOR DISABLED

.—In the case of an

individual who is permanently and totally disabled (as

defined in section 22(e)(3)) at any time during such cal-

endar year, the requirements of subparagraph (A) shall

be treated as met with respect to such individual.

‘‘(4) S

PECIAL RULE RELATING TO 2 OR MORE CLAIMING QUALI

FYING CHILD

.—

‘‘(A) I

N GENERAL

.—Except as provided in subparagraph

(B), if (but for this paragraph) an individual may be and

is claimed as a qualifying child by 2 or more taxpayers

for a taxable year beginning in the same calendar year,

such individual shall be treated as the qualifying child

of the taxpayer who is—

‘‘(i) a parent of the individual, or

‘‘(ii) if clause (i) does not apply, the taxpayer with

the highest adjusted gross income for such taxable

year.

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118 STAT. 1171PUBLIC LAW 108–311—OCT. 4, 2004

‘‘(B) M

ORE THAN 1 PARENT CLAIMING QUALIFYING

CHILD

.—If the parents claiming any qualifying child do

not file a joint return together, such child shall be treated

as the qualifying child of—

‘‘(i) the parent with whom the child resided for

the longest period of time during the taxable year,

‘‘(ii) if the child resides with both parents for the

same amount of time during such taxable year, the

parent with the highest adjusted gross income.

‘‘(d) Q

UALIFYING

ELATIVE

.—For purposes of this section—

‘‘(1) I

N GENERAL

.—The term ‘qualifying relative’ means,

with respect to any taxpayer for any taxable year, an

individual—

‘‘(A) who bears a relationship to the taxpayer described

in paragraph (2),

‘‘(B) whose gross income for the calendar year in which

such taxable year begins is less than the exemption amount

(as defined in section 151(d)),

‘‘(C) with respect to whom the taxpayer provides over

one-half of the individual’s support for the calendar year

in which such taxable year begins, and

‘‘(D) who is not a qualifying child of such taxpayer

or of any other taxpayer for any taxable year beginning

in the calendar year in which such taxable year begins.

‘‘(2) R

ELATIONSHIP

.—For purposes of paragraph (1)(A), an

individual bears a relationship to the taxpayer described in

this paragraph if the individual is any of the following with

respect to the taxpayer:

‘‘(A) A child or a descendant of a child.

‘‘(B) A brother, sister, stepbrother, or stepsister.

‘‘(C) The father or mother, or an ancestor of either.

‘‘(D) A stepfather or stepmother.

‘‘(E) A son or daughter of a brother or sister of the

taxpayer.

‘‘(F) A brother or sister of the father or mother of

the taxpayer.

‘‘(G) A son-in-law, daughter-in-law, father-in-law,

mother-in-law, brother-in-law, or sister-in-law.

‘‘(H) An individual (other than an individual who at

any time during the taxable year was the spouse, deter-

mined without regard to section 7703, of the taxpayer)

who, for the taxable year of the taxpayer, has the same

principal place of abode as the taxpayer and is a member

of the taxpayer’s household.

‘‘(3) S

PECIAL RULE RELATING TO MULTIPLE SUPPORT AGREE

MENTS

.—For purposes of paragraph (1)(C), over one-half of

the support of an individual for a calendar year shall be treated

as received from the taxpayer if—

‘‘(A) no one person contributed over one-half of such

support,

‘‘(B) over one-half of such support was received from

2 or more persons each of whom, but for the fact that

any such person alone did not contribute over one-half

of such support, would have been entitled to claim such

individual as a dependent for a taxable year beginning

in such calendar year,

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118 STAT. 1172 PUBLIC LAW 108–311—OCT. 4, 2004

‘‘(C) the taxpayer contributed over 10 percent of such

support, and

‘‘(D) each person described in subparagraph (B) (other

than the taxpayer) who contributed over 10 percent of

such support files a written declaration (in such manner

and form as the Secretary may by regulations prescribe)

that such person will not claim such individual as a

dependent for any taxable year beginning in such calendar

year.

‘‘(4) S

PECIAL RULE RELATING TO INCOME OF HANDICAPPED

DEPENDENTS

.—

‘‘(A) I

N GENERAL

.—For purposes of paragraph (1)(B),

the gross income of an individual who is permanently and

totally disabled (as defined in section 22(e)(3)) at any time

during the taxable year shall not include income attrib-

utable to services performed by the individual at a shel-

tered workshop if—

‘‘(i) the availability of medical care at such work-

shop is the principal reason for the individual’s pres-

ence there, and

‘‘(ii) the income arises solely from activities at such

workshop which are incident to such medical care.

‘‘(B) S

HELTERED WORKSHOP DEFINED

.—For purposes of

subparagraph (A), the term ‘sheltered workshop’ means

a school—

‘‘(i) which provides special instruction or training

designed to alleviate the disability of the individual,

and

‘‘(ii) which is operated by an organization described

in section 501(c)(3) and exempt from tax under section

501(a), or by a State, a possession of the United States,

any political subdivision of any of the foregoing, the

United States, or the District of Columbia.

‘‘(5) S

PECIAL RULES FOR SUPPORT

.—For purposes of this

subsection—

‘‘(A) payments to a spouse which are includible in

the gross income of such spouse under section 71 or 682

shall not be treated as a payment by the payor spouse

for the support of any dependent, and

‘‘(B) in the case of the remarriage of a parent, support

of a child received from the parent’s spouse shall be treated

as received from the parent.

‘‘(e) S

PECIAL

ULE FOR

IVORCED

ARENTS

.—

‘‘(1) I

N GENERAL

.—Notwithstanding subsection (c)(1)(B),

(c)(4), or (d)(1)(C), if—

‘‘(A) a child receives over one-half of the child’s support

during the calendar year from the child’s parents—

‘‘(i) who are divorced or legally separated under

a decree of divorce or separate maintenance,

‘‘(ii) who are separated under a written separation

agreement, or

‘‘(iii) who live apart at all times during the last

6 months of the calendar year, and

‘‘(B) such child is in the custody of 1 or both of the

child’s parents for more than one-half of the calendar year,

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118 STAT. 1173PUBLIC LAW 108–311—OCT. 4, 2004

such child shall be treated as being the qualifying child or

qualifying relative of the noncustodial parent for a calendar

year if the requirements described in paragraph (2) are met.

‘‘(2) R

EQUIREMENTS

.—For purposes of paragraph (1), the

requirements described in this paragraph are met if—

‘‘(A) a decree of divorce or separate maintenance or

written separation agreement between the parents

applicable to the taxable year beginning in such calendar

year provides that—

‘‘(i) the noncustodial parent shall be entitled to

any deduction allowable under section 151 for such

child, or

‘‘(ii) the custodial parent will sign a written dec-

laration (in such manner and form as the Secretary

may prescribe) that such parent will not claim such

child as a dependent for such taxable year, or

‘‘(B) in the case of such an agreement executed before

January 1, 1985, the noncustodial parent provides at least

$600 for the support of such child during such calendar

year.

For purposes of subparagraph (B), amounts expended for the

support of a child or children shall be treated as received

from the noncustodial parent to the extent that such parent

provided amounts for such support.

‘‘(3) C

USTODIAL PARENT AND NONCUSTODIAL PARENT

.—For

purposes of this subsection—

‘‘(A) C

USTODIAL PARENT

.—The term ‘custodial parent’

means the parent with whom a child shared the same

principal place of abode for the greater portion of the

calendar year.

‘‘(B) N

ONCUSTODIAL PARENT

.—The term ‘noncustodial

parent’ means the parent who is not the custodial parent.

‘‘(4) E

XCEPTION FOR MULTIPLE

SUPPORT AGREEMENTS

.—This

subsection shall not apply in any case where over one-half

of the support of the child is treated as having been received

from a taxpayer under the provision of subsection (d)(3).

‘‘(f) O

THER

EFINITIONS AND

ULES

.—For purposes of this

section—

‘‘(1) C

HILD DEFINED

.—

‘‘(A) I

N GENERAL

.—The term ‘child’ means an individual

who is—

‘‘(i) a son, daughter, stepson, or stepdaughter of

the taxpayer, or

‘‘(ii) an eligible foster child of the taxpayer.

‘‘(B) A

DOPTED CHILD

.—In determining whether any of

the relationships specified in subparagraph (A)(i) or para-

graph (4) exists, a legally adopted individual of the tax-

payer, or an individual who is lawfully placed with the

taxpayer for legal adoption by the taxpayer, shall be treated

as a child of such individual by blood.

‘‘(C) E

LIGIBLE FOSTER CHILD

.—For purposes of subpara-

graph (A)(ii), the term ‘eligible foster child’ means an indi-

vidual who is placed with the taxpayer by an authorized

placement agency or by judgment, decree, or other order

of any court of competent jurisdiction.

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118 STAT. 1174 PUBLIC LAW 108–311—OCT. 4, 2004

‘‘(2) S

TUDENT DEFINED

.—The term ‘student’ means an indi-

vidual who during each of 5 calendar months during the cal-

endar year in which the taxable year of the taxpayer begins—

‘‘(A) is a full-time student at an educational organiza-

tion described in section 170(b)(1)(A)(ii), or

‘‘(B) is pursuing a full-time course of institutional on-

farm training under the supervision of an accredited agent

of an educational organization described in section

170(b)(1)(A)(ii) or of a State or political subdivision of a

State.

‘‘(3) D

ETERMINATION OF HOUSEHOLD STATUS

.—An individual

shall not be treated as a member of the taxpayer’s household

if at any time during the taxable year of the taxpayer the

relationship between such individual and the taxpayer is in

violation of local law.

‘‘(4) B

ROTHER AND SISTER

.—The terms ‘brother’ and ‘sister’

include a brother or sister by the half blood.

‘‘(5) S

PECIAL SUPPORT TEST IN CASE OF STUDENTS

.—For

purposes of subsections (c)(1)(D) and (d)(1)(C), in the case of

an individual who is—

‘‘(A) a child of the taxpayer, and

‘‘(B) a student,

amounts received as scholarships for study at an educational

organization described in section 170(b)(1)(A)(ii) shall not be

taken into account.

‘‘(6) T

REATMENT OF MISSING CHILDREN

.—

‘‘(A) I

N GENERAL

.—Solely for the purposes referred to

in subparagraph (B), a child of the taxpayer—

‘‘(i) who is presumed by law enforcement authori-

ties to have been kidnapped by someone who is not

a member of the family of such child or the taxpayer,

and

‘‘(ii) who had, for the taxable year in which the

kidnapping occurred, the same principal place of abode

as the taxpayer for more than one-half of the portion

of such year before the date of the kidnapping,

shall be treated as meeting the requirement of subsection

(c)(1)(B) with respect to a taxpayer for all taxable years

ending during the period that the child is kidnapped.

‘‘(B) P

URPOSES

.—Subparagraph (A) shall apply solely

for purposes of determining—

‘‘(i) the deduction under section 151(c),

‘‘(ii) the credit under section 24 (relating to child

tax credit),

‘‘(iii) whether an individual is a surviving spouse

or a head of a household (as such terms are defined

in section 2), and

‘‘(iv) the earned income credit under section 32.

‘‘(C) C

OMPARABLE TREATMENT OF CERTAIN QUALIFYING

RELATIVES

.—For purposes of this section, a child of the

taxpayer—

‘‘(i) who is presumed by law enforcement authori-

ties to have been kidnapped by someone who is not

a member of the family of such child or the taxpayer,

and

Applicability.

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118 STAT. 1175PUBLIC LAW 108–311—OCT. 4, 2004

‘‘(ii) who was (without regard to this paragraph)

a qualifying relative of the taxpayer for the portion

of the taxable year before the date of the kidnapping,

shall be treated as a qualifying relative of the taxpayer

for all taxable years ending during the period that the

child is kidnapped.

‘‘(D) T

ERMINATION OF TREATMENT

.—Subparagraphs (A)

and (C) shall cease to apply as of the first taxable year

of the taxpayer beginning after the calendar year in which

there is a determination that the child is dead (or, if

earlier, in which the child would have attained age 18).

‘‘(7) C

ROSS REFERENCES

.—

‘‘For provision treating child as dependent of both parents for pur-

poses of certain provisions, see sections 105(b), 132(h)(2)(B), and

213(d)(5).’’.

SEC. 202. MODIFICATIONS OF DEFINITION OF HEAD OF HOUSEHOLD.

(a) H

EAD OF

OUSEHOLD

.—Clause (i) of section 2(b)(1)(A) is

amended to read as follows:

‘‘(i) a qualifying child of the individual (as defined

in section 152(c), determined without regard to section

152(e)), but not if such child—

‘‘(I) is married at the close of the taxpayer’s

taxable year, and

‘‘(II) is not a dependent of such individual

by reason of section 152(b)(2) or 152(b)(3), or both,

or’’.

(b) C

ONFORMING

MENDMENTS

.—

(1) Section 2(b)(2) is amended by striking subparagraph

(A) and by redesignating subparagraphs (B), (C), and (D) as

subparagraphs (A), (B), and (C), respectively.

(2) Clauses (i) and (ii) of section 2(b)(3)(B) are amended

to read as follows:

‘‘(i) subparagraph (H) of section 152(d)(2), or

‘‘(ii) paragraph (3) of section 152(d).’’.

SEC. 203. MODIFICATIONS OF DEPENDENT CARE CREDIT.

(a) I

ENERAL

.—Section 21(a)(1) is amended by striking ‘‘In

the case of an individual who maintains a household which includes

as a member one or more qualifying individuals (as defined in

subsection (b)(1))’’ and inserting ‘‘In the case of an individual for

which there are 1 or more qualifying individuals (as defined in

subsection (b)(1)) with respect to such individual’’.

(b) Q

UALIFYING

NDIVIDUAL

.—Paragraph (1) of section 21(b)

is amended to read as follows:

‘‘(1) Q

UALIFYING INDIVIDUAL

.—The term ‘qualifying indi-

vidual’ means—

‘‘(A) a dependent of the taxpayer (as defined in section

152(a)(1)) who has not attained age 13,

‘‘(B) a dependent of the taxpayer who is physically

or mentally incapable of caring for himself or herself and

who has the same principal place of abode as the taxpayer

for more than one-half of such taxable year, or

‘‘(C) the spouse of the taxpayer, if the spouse is phys-

ically or mentally incapable of caring for himself or herself

and who has the same principal place of abode as the

taxpayer for more than one-half of such taxable year.’’.

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118 STAT. 1176 PUBLIC LAW 108–311—OCT. 4, 2004

ONFORMING

MENDMENT

.—Paragraph (1) of section 21(e)

is amended to read as follows:

‘‘(1) P

LACE OF ABODE

.—An individual shall not be treated

as having the same principal place of abode of the taxpayer

if at any time during the taxable year of the taxpayer the

relationship between the individual and the taxpayer is in

violation of local law.’’.

SEC. 204. MODIFICATIONS OF CHILD TAX CREDIT.

(a) I

ENERAL

.—Paragraph (1) of section 24(c) is amended

to read as follows:

‘‘(1) I

N GENERAL

.—The term ‘qualifying child’ means a

qualifying child of the taxpayer (as defined in section 152(c))

who has not attained age 17.’’.

(b) C

ONFORMING

MENDMENT

.—Section 24(c)(2) is amended by

striking ‘‘the first sentence of section 152(b)(3)’’ and inserting

‘‘subparagraph (A) of section 152(b)(3)’’.

SEC. 205. MODIFICATIONS OF EARNED INCOME CREDIT.

(a) Q

UALIFYING

HILD

.—Paragraph (3) of section 32(c) is

amended to read as follows:

‘‘(3) Q

UALIFYING CHILD

.—

‘‘(A) I

N GENERAL

.—The term ‘qualifying child’ means

a qualifying child of the taxpayer (as defined in section

152(c), determined without regard to paragraph (1)(D)

thereof and section 152(e)).

‘‘(B) M

ARRIED INDIVIDUAL

.—The term ‘qualifying child’

shall not include an individual who is married as of the

close of the taxpayer’s taxable year unless the taxpayer

is entitled to a deduction under section 151 for such taxable

year with respect to such individual (or would be so entitled

but for section 152(e)).

‘‘(C) P

LACE OF ABODE

.—For purposes of subparagraph

(A), the requirements of section 152(c)(1)(B) shall be met

only if the principal place of abode is in the United States.

‘‘(D) I

DENTIFICATION REQUIREMENTS

.—

‘‘(i) I

N GENERAL

.—A qualifying child shall not be

taken into account under subsection (b) unless the

taxpayer includes the name, age, and TIN of the quali-

fying child on the return of tax for the taxable year.

‘‘(ii) O

THER METHODS

.—The Secretary may pre-

scribe other methods for providing the information

described in clause (i).’’.

(b) C

ONFORMING

MENDMENTS

.—

(1) Section 32(c)(1) is amended by striking subparagraph

as subparagraphs (C), (D), (E), and (F), respectively.

(2) Section 32(c)(4) is amended by striking ‘‘(3)(E)’’ and

inserting ‘‘(3)(C)’’.

(3) Section 32(m) is amended by striking ‘‘subsections

(c)(1)(F)’’ and inserting ‘‘subsections (c)(1)(E)’’.

SEC. 206. MODIFICATIONS OF DEDUCTION FOR PERSONAL EXEMPTION

FOR DEPENDENTS.

Subsection (c) of section 151 is amended to read as follows:

‘‘(c) A

DDITIONAL

XEMPTION FOR

EPENDENTS

.—An exemption

of the exemption amount for each individual who is a dependent

(as defined in section 152) of the taxpayer for the taxable year.’’.

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118 STAT. 1177PUBLIC LAW 108–311—OCT. 4, 2004

SEC. 207. TECHNICAL AND CONFORMING AMENDMENTS.

(1) Section 2(a)(1)(B)(i) is amended by inserting ‘‘, deter-

mined without regard to subsections (b)(1), (b)(2), and (d)(1)(B)

thereof’’ after ‘‘section 152’’.

(2) Section 21(e)(5) is amended—

(A) by striking ‘‘paragraph (2) or (4) of’’ in subpara-

graph (A), and

(B) by striking ‘‘within the meaning of section 152(e)(1)’’

and inserting ‘‘as defined in section 152(e)(3)(A)’’.

(3) Section 21(e)(6)(B) is amended by striking ‘‘section

151(c)(3)’’ and inserting ‘‘section 152(f)(1)’’.

(4) Section 25B(c)(2)(B) is amended by striking ‘‘151(c)(4)’’

and inserting ‘‘152(f)(2)’’.

(5)(A) Subparagraphs (A) and (B) of section 51(i)(1) are

each amended by striking ‘‘paragraphs (1) through (8) of section

152(a)’’ both places it appears and inserting ‘‘subparagraphs

(A) through (G) of section 152(d)(2)’’.

(B) Section 51(i)(1)(C) is amended by striking ‘‘152(a)(9)’’

and inserting ‘‘152(d)(2)(H)’’.

(6) Section 72(t)(2)(D)(i)(III) is amended by inserting ‘‘,

determined without regard to subsections (b)(1), (b)(2), and

(d)(1)(B) thereof’’ after ‘‘section 152’’.

(7) Section 72(t)(7)(A)(iii) is amended by striking ‘‘151(c)(3)’’

and inserting ‘‘152(f)(1)’’.

(8) Section 42(i)(3)(D)(ii)(I) is amended by inserting ‘‘, deter-

mined without regard to subsections (b)(1), (b)(2), and (d)(1)(B)

thereof’’ after ‘‘section 152’’.

(9) Subsections (b) and (c)(1) of section 105 are amended

by inserting ‘‘, determined without regard to subsections (b)(1),

(b)(2), and (d)(1)(B) thereof’’ after ‘‘section 152’’.

(10) Section 120(d)(4) is amended by inserting ‘‘(determined

without regard to subsections (b)(1), (b)(2), and (d)(1)(B)

thereof)’’ after ‘‘section 152’’.

(11) Section 125(e)(1)(D) is amended by inserting ‘‘, deter-

mined without regard to subsections (b)(1), (b)(2), and (d)(1)(B)

thereof’’ after ‘‘section 152’’.

(12) Section 129(c)(2) is amended by striking ‘‘151(c)(3)’’

and inserting ‘‘152(f)(1)’’.

(13) The first sentence of section 132(h)(2)(B) is amended

by striking ‘‘151(c)(3)’’ and inserting ‘‘152(f)(1)’’.

(14) Section 153 is amended by striking paragraph (1)

and by redesignating paragraphs (2), (3), and (4) as paragraphs

(1), (2), and (3), respectively.

(15) Section 170(g)(1) is amended by inserting ‘‘(determined

without regard to subsections (b)(1), (b)(2), and (d)(1)(B)

thereof)’’ after ‘‘section 152’’.

(16) Section 170(g)(3) is amended by striking ‘‘paragraphs

(1) through (8) of section 152(a)’’ and inserting ‘‘subparagraphs

(A) through (G) of section 152(d)(2)’’.

(17) Section 213(a) is amended by inserting ‘‘, determined

without regard to subsections (b)(1), (b)(2), and (d)(1)(B) thereof’’

after ‘‘section 152’’.

(18) The second sentence of section 213(d)(11) is amended

by striking ‘‘paragraphs (1) through (8) of section 152(a)’’ and

inserting ‘‘subparagraphs (A) through (G) of section 152(d)(2)’’.

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118 STAT. 1178 PUBLIC LAW 108–311—OCT. 4, 2004

(19) Section 220(d)(2)(A) is amended by inserting ‘‘, deter-

mined without regard to subsections (b)(1), (b)(2), and (d)(1)(B)

thereof’’ after ‘‘section 152’’.

(20) Section 221(d)(4) is amended by inserting ‘‘(determined

without regard to subsections (b)(1), (b)(2), and (d)(1)(B)

thereof)’’ after ‘‘section 152’’.

(21) Section 529(e)(2)(B) is amended by striking ‘‘para-

graphs (1) through (8) of section 152(a)’’ and inserting ‘‘subpara-

graphs (A) through (G) of section 152(d)(2)’’.

(22) Section 2032A(c)(7)(D) is amended by striking ‘‘section

151(c)(4)’’ and inserting ‘‘section 152(f)(2)’’.

(23) Section 2057(d)(2)(B) is amended by inserting ‘‘, deter-

mined without regard to subsections (b)(1), (b)(2), and (d)(1)(B)

thereof’’ after ‘‘section 152’’.

(24) Section 7701(a)(17) is amended by striking ‘‘152(b)(4),

682,’’ and inserting ‘‘682’’.

(25) Section 7702B(f)(2)(C)(iii) is amended by striking

‘‘paragraphs (1) through (8) of section 152(a)’’ and inserting

‘‘subparagraphs (A) through (G) of section 152(d)(2)’’.

(26) Section 7703(b)(1) is amended—

(A) by striking ‘‘151(c)(3)’’ and inserting ‘‘152(f)(1)’’,

and

(B) by striking ‘‘paragraph (2) or (4) of’’.

SEC. 208. EFFECTIVE DATE.

The amendments made by this title shall apply to taxable

years beginning after December 31, 2004.

TITLE III—EXTENSIONS OF CERTAIN

EXPIRING PROVISIONS

SEC. 301. RESEARCH CREDIT.

(a) E

XTENSION

.—

(1) I

N GENERAL

.—Section 41(h)(1)(B) (relating to termi-

nation) is amended by striking ‘‘June 30, 2004’’ and inserting

‘‘December 31, 2005’’.

(2) C

ONFORMING AMENDMENT

.—Section 45C(b)(1)(D) is

amended by striking ‘‘June 30, 2004’’ and inserting ‘‘December

31, 2005’’.

(b) E

FFECTIVE

ATE

.—The amendments made by this section

shall apply to amounts paid or incurred after June 30, 2004.

SEC. 302. PARITY IN THE APPLICATION OF CERTAIN LIMITS TO

MENTAL HEALTH BENEFITS.

(a) I

ENERAL

.—Section 9812(f) is amended—

(1) by striking ‘‘and’’ at the end of paragraph (1), and

(2) by striking paragraph (2) and inserting the following

new paragraphs:

‘‘(2) on or after January 1, 2004, and before the date

of the enactment of the Working Families Tax Relief Act of

2004, and

‘‘(3) after December 31, 2005.’’.

(b) ERISA.—Section 712(f) of the Employee Retirement Income

Security Act of 1974 (29 U.S.C. 1185a(f)) is amended by striking

‘‘on or after December 31, 2004’’ and inserting ‘‘after December

31, 2005’’.

26 USC 41 note.

26 USC 2 note.

26 USC 7702.

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118 STAT. 1179PUBLIC LAW 108–311—OCT. 4, 2004

(42 U.S.C. 300gg-5(f)) is amended by striking ‘‘on or after December

31, 2004’’ and inserting ‘‘after December 31, 2005’’.

(d) E

FFECTIVE

ATES

.—The amendments made by this section

shall take effect on the date of the enactment of this Act.

SEC. 303. WORK OPPORTUNITY CREDIT AND WELFARE-TO-WORK

CREDIT.

(a) E

XTENSION OF

REDIT

.—

(1) I

N GENERAL

.—Section 51(c)(4) is amended by striking

‘‘December 31, 2003’’ and inserting ‘‘December 31, 2005’’.

(2) L

ONG

TERM FAMILY ASSISTANCE RECIPIENTS

.—Section

51A(f) is amended by striking ‘‘December 31, 2003’’ and

inserting ‘‘December 31, 2005’’.

(b) E

FFECTIVE

ATE

.—The amendments made by this section

shall apply to individuals who begin work for the employer after

December 31, 2003.

SEC. 304. QUALIFIED ZONE ACADEMY BONDS.

(a) I

ENERAL

.—Paragraph (1) of section 1397E(e) is amended

by striking ‘‘and 2003’’ and inserting ‘‘2003, 2004, and 2005’’.

(b) E

FFECTIVE

ATE

.—The amendment made by this section

shall apply to obligations issued after December 31, 2003.

SEC. 305. COVER OVER OF TAX ON DISTILLED SPIRITS.

(a) I

ENERAL

.—Paragraph (1) of section 7652(f) is amended

by striking ‘‘January 1, 2004’’ and inserting ‘‘January 1, 2006’’.

(b) E

FFECTIVE

ATE

.—The amendment made by this section

shall apply to articles brought into the United States after December

31, 2003.

SEC. 306. DEDUCTION FOR CORPORATE DONATIONS OF SCIENTIFIC

PROPERTY AND COMPUTER TECHNOLOGY.

(a) I

ENERAL

.—Section 170(e)(6)(G) is amended by striking

‘‘2003’’ and inserting ‘‘2005’’.

(b) E

FFECTIVE

ATE

.—The amendment made by this section

shall apply to contributions made in taxable years beginning after

December 31, 2003.

SEC. 307. DEDUCTION FOR CERTAIN EXPENSES OF SCHOOL TEACHERS.

(a) I

ENERAL

.—Subparagraph (D) of section 62(a)(2) is

amended by striking ‘‘or 2003’’ and inserting ‘‘, 2003, 2004, or

2005’’.

(b) E

FFECTIVE

ATE

.—The amendment made by subsection (a)

shall apply to expenses paid or incurred in taxable years beginning

after December 31, 2003.

SEC. 308. EXPENSING OF ENVIRONMENTAL REMEDIATION COSTS.

(a) E

XTENSION OF

ERMINATION

ATE

.—Subsection (h) of sec-

tion 198 is amended by striking ‘‘December 31, 2003’’ and inserting

‘‘December 31, 2005’’.

(b) E

FFECTIVE

ATE

.—The amendment made by subsection (a)

shall apply to expenditures paid or incurred after December 31,

2003.

SEC. 309. CERTAIN NEW YORK LIBERTY ZONE BENEFITS.

(a) E

XTENSION OF

-E

XEMPT

OND

INANCING

.—Subpara-

graph (D) of section 1400L(d)(2) is amended by striking ‘‘2005’’

and inserting ‘‘2010’’.

26 USC 198 note.

26 USC 62 note.

26 USC 170 note.

26 USC 7652

note.

26 USC 1397E

note.

26 USC 1397.

26 USC 51 note.

26 USC 9812

note.

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118 STAT. 1180 PUBLIC LAW 108–311—OCT. 4, 2004

(b) E

XTENSION OF

DVANCE

EFUNDINGS

.—Section 1400L(e)(1)

is amended by striking ‘‘2005’’ and inserting ‘‘2006’’.

LARIFICATION OF

ONDS

LIGIBLE FOR

DVANCE

EFUNDING

.—Section 1400L(e)(2)(B) (relating to bonds described)

is amended by striking ‘‘, or’’ and inserting ‘‘or the Municipal

Assistance Corporation, or’’.

(d) E

FFECTIVE DATE

.—The amendment made by subsection (c)

shall take effect as if included in the amendments made by section

301 of the Job Creation and Worker Assistance Act of 2002.

SEC. 310. TAX INCENTIVES FOR INVESTMENT IN THE DISTRICT OF

COLUMBIA.

(a) D

ESIGNATION OF

ONE

.—Subsection (f) of section 1400 is

amended by striking ‘‘December 31, 2003’’ both places it appears

and inserting ‘‘December 31, 2005’’.

(b) T

-E

XEMPT

CONOMIC

EVELOPMENT

ONDS

.—Subsection

(b) of section 1400A is amended by striking ‘‘December 31, 2003’’

and inserting ‘‘December 31, 2005’’.

ERO

ERCENT

APITAL

AINS

ATE

.—

(1) I

N GENERAL

.—Subsection (b) of section 1400B is

amended by striking ‘‘January 1, 2004’’ each place it appears

and inserting ‘‘January 1, 2006’’.

(2) C

ONFORMING AMENDMENTS

.—

(A) Section 1400B(e)(2) is amended—

(i) by striking ‘‘December 31, 2008’’ and inserting

‘‘December 31, 2010’’, and

(ii) by striking ‘‘

2008

’’ in the heading and inserting

‘‘

2010

’’.

(B) Section 1400B(g)(2) is amended by striking

‘‘December 31, 2008’’ and inserting ‘‘December 31, 2010’’.

31, 2008’’ and inserting ‘‘December 31, 2010’’.

(d) F

IRST

-T

IME

OMEBUYER

REDIT

.—Subsection (i) of section

1400C is amended by striking ‘‘January 1, 2004’’ and inserting

‘‘January 1, 2006’’.

(e) E

FFECTIVE

ATES

.—

(1) I

N GENERAL

.—Except as provided in paragraph (2), the

amendments made by this section shall take effect on January

1, 2004.

(2) T

EXEMPT ECONOMIC DEVELOPMENT BONDS

.—The

amendment made by subsection (b) shall apply to obligations

issued after the date of the enactment of this Act.

SEC. 311. DISCLOSURE OF TAX INFORMATION TO FACILITATE COM-

BINED EMPLOYMENT TAX REPORTING.

(a) I

ENERAL

.—Paragraph (5) of section 6103(d) (relating

to disclosure to State tax officials and State and local law enforce-

ment agencies) is amended to read as follows:

‘‘(5) D

ISCLOSURE FOR COMBINED EMPLOYMENT TAX

REPORTING

.—

‘‘(A) I

N GENERAL

.—The Secretary may disclose taxpayer

identity information and signatures to any agency, body,

or commission of any State for the purpose of carrying

out with such agency, body, or commission a combined

Federal and State employment tax reporting program

approved by the Secretary. Subsections (a)(2) and (p)(4)

and sections 7213 and 7213A shall not apply with respect

26 USC 1400

note.

26 USC 1400L

note.

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118 STAT. 1181PUBLIC LAW 108–311—OCT. 4, 2004

to disclosures or inspections made pursuant to this para-

graph.

‘‘(B) T

ERMINATION

.—The Secretary may not make any

disclosure under this paragraph after December 31, 2005.’’.

(b) E

FFECTIVE

ATE

.—The amendment made by this section

shall take effect on the date of the enactment of this Act.

SEC. 312. ALLOWANCE OF NONREFUNDABLE PERSONAL CREDITS

AGAINST REGULAR AND MINIMUM TAX LIABILITY.

(a) I

ENERAL

.—Paragraph (2) of section 26(a) is amended—

(1) by striking ‘‘

RULE FOR 2000

2001

2002

AND 2003

.—’’

and inserting ‘‘

RULE FOR TAXABLE YEARS 2000 THROUGH 2005

.—

’’, and

(2) by striking ‘‘or 2003’’ and inserting ‘‘2003, 2004, or

2005’’.

(b) C

ONFORMING

ROVISIONS

.—

(1) Section 904(h) is amended by striking ‘‘or 2003’’ and

inserting ‘‘2003, 2004, or 2005’’.

(2) The amendments made by sections 201(b), 202(f), and

618(b) of the Economic Growth and Tax Relief Reconciliation

Act of 2001 shall not apply to taxable years beginning during

2004 or 2005.

FFECTIVE

ATE

.—The amendments made by this section

shall apply to taxable years beginning after December 31, 2003.

SEC. 313. CREDIT FOR ELECTRICITY PRODUCED FROM CERTAIN

RENEWABLE RESOURCES.

(a) I

ENERAL

.—Subparagraphs (A), (B), and (C) of section

45(c)(3) are each amended by striking ‘‘January 1, 2004’’ and

inserting ‘‘January 1, 2006’’.

(b) E

FFECTIVE

ATE

.—The amendments made by subsection

(a) shall apply to facilities placed in service after December 31,

2003.

SEC. 314. TAXABLE INCOME LIMIT ON PERCENTAGE DEPLETION FOR

OIL AND NATURAL GAS PRODUCED FROM MARGINAL

PROPERTIES.

(a) I

ENERAL

.—Subparagraph (H) of section 613A(c)(6) is

amended by striking ‘‘January 1, 2004’’ and inserting ‘‘January

1, 2006’’.

(b) E

FFECTIVE

ATE

.—The amendment made by subsection (a)

shall apply to taxable years beginning after December 31, 2003.

SEC. 315. INDIAN EMPLOYMENT TAX CREDIT.

Section 45A(f) (relating to termination) is amended by striking

‘‘December 31, 2004’’ and inserting ‘‘December 31, 2005’’.

SEC. 316. ACCELERATED DEPRECIATION FOR BUSINESS PROPERTY

ON INDIAN RESERVATION.

Section 168(j)(8) (relating to termination) is amended by

striking ‘‘December 31, 2004’’ and inserting ‘‘December 31, 2005’’.

SEC. 317. DISCLOSURE OF RETURN INFORMATION RELATING TO STU-

DENT LOANS.

Section 6103(l)(13)(D) (relating to termination) is amended by

striking ‘‘December 31, 2004’’ and inserting ‘‘December 31, 2005’’.

26 USC 613A

note.

26 USC 45 note.

26 USC 26 note.

26 USC 23 note.

26 USC 6103

note.

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118 STAT. 1182 PUBLIC LAW 108–311—OCT. 4, 2004

SEC. 318. ELIMINATION OF PHASEOUT OF CREDIT FOR QUALIFIED

ELECTRIC VEHICLES FOR 2004 AND 2005.

(a) I

ENERAL

.—Paragraph (2) of section 30(b) is amended

to read as follows:

‘‘(2) P

HASEOUT

.—In the case of any qualified electric vehicle

placed in service after December 31, 2005, the credit otherwise

allowable under subsection (a) (determined after the application

of paragraph (1)) shall be reduced by 75 percent.’’.

(b) E

FFECTIVE

ATE

.—The amendments made by this section

shall apply to property placed in service after December 31, 2003.

SEC. 319. ELIMINATION OF PHASEOUT FOR DEDUCTION FOR CLEAN-

FUEL VEHICLE PROPERTY FOR 2004 AND 2005.

(a) I

ENERAL

.—Subparagraph (B) of section 179A(b)(1) is

amended to read as follows:

‘‘(B) P

HASEOUT

.—In the case of any qualified clean-

fuel vehicle property placed in service after December 31,

2005, the limit otherwise allowable under subparagraph

(A) shall be reduced by 75 percent.’’.

(b) E

FFECTIVE

ATE

.—The amendment made by subsection (a)

shall apply to property placed in service after December 31, 2003.

SEC. 320. DISCLOSURES RELATING TO TERRORIST ACTIVITIES.

(a) I

ENERAL

.—Clause (iv) of section 6103(i)(3)(C) and

subparagraph (E) of section 6103(i)(7) are both amended by striking

‘‘December 31, 2003’’ and inserting ‘‘December 31, 2005’’.

(b) D

ISCLOSURE OF TAXPAYER IDENTITY TO LAW ENFORCEMENT

AGENCIES INVESTIGATING TERRORISM

.—Subparagraph (A) of section

6103(i)(7) is amended by adding at the end the following new

clause:

‘‘(v) T

AXPAYER IDENTITY

.—For purposes of this

subparagraph, a taxpayer’s identity shall not be treated

as taxpayer return information.’’.

FFECTIVE

ATES

.—

(1) I

N GENERAL

.—The amendments made by subsection

(a) shall apply to disclosures on or after the date of the enact-

ment of this Act.

(2) S

UBSECTION

(b).—The amendment made by subsection

(b) shall take effect as if included in section 201 of the Victims

of Terrorism Tax Relief Act of 2001.

SEC. 321. JOINT REVIEW OF STRATEGIC PLANS AND BUDGET FOR

THE INTERNAL REVENUE SERVICE.

(a) I

ENERAL

.—Paragraph (2) of section 8021(f) (relating

to joint reviews) is amended by striking ‘‘2004’’ and inserting ‘‘2005’’.

(b) R

EPORT

.—Subparagraph (C) of section 8022(3) (regarding

reports) is amended—

(1) by striking ‘‘2004’’ and inserting ‘‘2005’’, and

(2) by striking ‘‘with respect to—’’ and all that follows

and inserting ‘‘with respect to the matters addressed in the

joint review referred to in section 8021(f)(2).’’.

IME FOR

OINT

EVIEW

.—The joint review required by

section 8021(f)(2) of the Internal Revenue Code of 1986 to be made

before June 1, 2004, shall be treated as timely if made before

June 1, 2005.

Deadline.

26 USC 8021

note.

26 USC 6103

note.

26 USC 179A

note.

26 USC 30 note.

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118 STAT. 1183PUBLIC LAW 108–311—OCT. 4, 2004

SEC. 322. AVAILABILITY OF MEDICAL SAVINGS ACCOUNTS.

(a) I

ENERAL

.—Paragraphs (2) and (3)(B) of section 220(i)

(defining cut-off year) are each amended by striking ‘‘2003’’ each

place it appears in the text and headings and inserting ‘‘2005’’.

(b) C

ONFORMING

MENDMENTS

.—

(1) Paragraph (2) of section 220(j) is amended—

(A) in the text by striking ‘‘or 2002’’ each place it

appears and inserting ‘‘2002, or 2004’’, and

(B) in the heading by striking ‘‘

OR 2002

’’ and inserting

‘‘

2002

OR 2004

’’.

(2) Subparagraph (A) of section 220(j)(4) is amended by

striking ‘‘and 2002’’ and inserting ‘‘2002, and 2004’’.

(3) Subparagraph (C) of section 220(j)(2) is amended to

read as follows:

‘‘(C) N

O LIMITATION FOR 2000 OR 2003

.—The numerical

limitation shall not apply for 2000 or 2003.’’.

FFECTIVE

ATE

.—The amendments made by this section

shall take effect on January 1, 2004.

(d) T

IME FOR

ILING

EPORTS

, E

.—

(1) The report required by section 220(j)(4) of the Internal

Revenue Code of 1986 to be made on August 1, 2004, shall

be treated as timely if made before the close of the 90-day

period beginning on the date of the enactment of this Act.

(2) The determination and publication required by section

220(j)(5) of such Code with respect to calendar year 2004 shall

be treated as timely if made before the close of the 120-day

period beginning on the date of the enactment of this Act.

If the determination under the preceding sentence is that 2004

is a cut-off year under section 220(i) of such Code, the cut-

off date under such section 220(i) shall be the last day of

such 120-day period.

TITLE IV—TAX TECHNICAL

CORRECTIONS

SEC. 401. AMENDMENTS RELATED TO MEDICARE PRESCRIPTION

DRUG, IMPROVEMENT, AND MODERNIZATION ACT OF

2003.

(a) A

MENDMENTS

ELATED TO

ECTION

1201

OF THE

.—

(1) Paragraph (2) of section 26(b) is amended by striking

‘‘and’’ at the end of subparagraph (Q), by striking the period

at the end of subparagraph (R) and inserting ‘‘, and’’, and

by adding at the end the following new subparagraph:

‘‘(S) section 223(f)(4) (relating to additional tax on

health savings account distributions not used for qualified

medical expenses).

(2) Paragraph (3) of section 35(g) is amended to read as

follows:

‘‘(3) M

EDICAL AND HEALTH SAVINGS ACCOUNTS

.—Amounts

distributed from an Archer MSA (as defined in section 220(d))

or from a health savings account (as defined in section 223(d))

shall not be taken into account under subsection (a).’’.

(b) E

FFECTIVE

ATE

.—The amendments made by subsection

(a) shall take effect as if included in section 1201 of the Medicare

Prescription Drug, Improvement, and Modernization Act of 2003.

26 USC 26 note.

26 USC 26.

Deadlines.

26 USC 220 note.

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118 STAT. 1184 PUBLIC LAW 108–311—OCT. 4, 2004

SEC. 402. AMENDMENTS RELATED TO JOBS AND GROWTH TAX RELIEF

RECONCILIATION ACT OF 2003.

(a) A

MENDMENTS

ELATED TO

ECTION

302

OF THE

.—

(1) Clause (i) of section 1(h)(1)(D) is amended by inserting

‘‘(determined without regard to paragraph (11))’’ after ‘‘net cap-

ital gain’’.

(2) Subclause (I) of section 1(h)(11)(B)(iii) is amended—

(A) by striking ‘‘section 246(c)(1)’’ and inserting ‘‘section

246(c)’’,

(B) by striking ‘‘120-day period’’ and inserting ‘‘121-

day period’’, and

period’’.

(3) Clause (ii) of section 1(h)(11)(D) is amended by striking

‘‘an individual’’ and inserting ‘‘a taxpayer to whom this section

applies’’.

(4) Paragraph (4) of section 691(c) is amended by striking

‘‘of any gain’’.

(5)(A) Subparagraph (B) of section 854(b)(1) is amended—

(i) by striking clauses (iii) and (iv), and

(ii) by amending clause (i) to read as follows:

‘‘(i) I

N GENERAL

.—In any case in which—

‘‘(I) a dividend is received from a regulated

investment company (other than a dividend to

which subsection (a) applies),

‘‘(II) such investment company meets the

requirements of section 852(a) for the taxable year

during which it paid such dividend, and

‘‘(III) the qualified dividend income of such

investment company for such taxable year is less

than 95 percent of its gross income,

then, in computing qualified dividend income, there

shall be taken into account only that portion of such

dividend designated by the regulated investment com-

pany.’’.

(B) Subparagraph (C) of section 854(b)(1) is amended to

read as follows:

‘‘(C) L

IMITATIONS

.—

‘‘(i) S

UBPARAGRAPH (A)

.—The aggregate amount

which may be designated as dividends under subpara-

graph (A) shall not exceed the aggregate dividends

received by the company for the taxable year.

‘‘(ii) S

UBPARAGRAPH (B)

.—The aggregate amount

which may be designated as qualified dividend income

under subparagraph (B) shall not exceed the sum of—

‘‘(I) the qualified dividend income of the com-

pany for the taxable year, and

‘‘(II) the amount of any earnings and profits

which were distributed by the company for such

taxable year and accumulated in a taxable year

with respect to which this part did not apply.’’.

‘‘as a dividend for purposes of the maximum rate under section

1(h)(11) and’’ and inserting ‘‘as qualified dividend income for

purposes of section 1(h)(11) and as dividends for purposes of’’.

(D) Paragraph (5) of section 854(b) is amended to read

as follows:

26 USC 1.

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118 STAT. 1185PUBLIC LAW 108–311—OCT. 4, 2004

‘‘(5) Q

UALIFIED DIVIDEND INCOME

.—For purposes of this

subsection, the term ‘qualified dividend income’ has the

meaning given such term by section 1(h)(11)(B).’’.

(E) Paragraph (2) of section 857(c) is amended to read

as follows:

‘‘(2) S

ECTION

(1)(h)(11).—

‘‘(A) I

N GENERAL

.—In any case in which—

‘‘(i) a dividend is received from a real estate invest-

ment trust (other than a capital gain dividend), and

‘‘(ii) such trust meets the requirements of section

856(a) for the taxable year during which it paid such

dividend,

then, in computing qualified dividend income, there shall

be taken into account only that portion of such dividend

designated by the real estate investment trust.

‘‘(B) L

IMITATION

.—The aggregate amount which may

be designated as qualified dividend income under subpara-

graph (A) shall not exceed the sum of—

‘‘(i) the qualified dividend income of the trust for

the taxable year,

‘‘(ii) the excess of—

‘‘(I) the sum of the real estate investment trust

taxable income computed under section 857(b)(2)

for the preceding taxable year and the income

subject to tax by reason of the application of the

regulations under section 337(d) for such preceding

taxable year, over

‘‘(II) the sum of the taxes imposed on the

trust for such preceding taxable year under section

857(b)(1) and by reason of the application of such

regulations, and

‘‘(iii) the amount of any earnings and profits which

were distributed by the trust for such taxable year

and accumulated in a taxable year with respect to

which this part did not apply.

‘‘(C) N

OTICE TO SHAREHOLDERS

.—The amount of any

distribution by a real estate investment trust which may

be taken into account as qualified dividend income shall

not exceed the amount so designated by the trust in a

written notice to its shareholders mailed not later than

60 days after the close of its taxable year.

‘‘(D) Q

UALIFIED DIVIDEND INCOME

.—For purposes of

this paragraph, the term ‘qualified dividend income’ has

the meaning given such term by section 1(h)(11)(B).’’.

(F) With respect to any taxable year of a regulated invest-

ment company or real estate investment trust ending on or

before November 30, 2003, the period for providing notice of

the qualified dividend amount to shareholders under sections

854(b)(2) and 857(c)(2)(C) of the Internal Revenue Code of 1986,

as amended by this section, shall not expire before the date

on which the statement under section 6042(c) of such Code

is required to be furnished with respect to the last calendar

year beginning in such taxable year.

(6) Paragraph (2) of section 302(f) of the Jobs and Growth

Tax Relief Reconciliation Act of 2003 is amended to read as

follows:

26 USC 1 note.

26 USC 854 note.

Deadline.

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118 STAT. 1186 PUBLIC LAW 108–311—OCT. 4, 2004

‘‘(2) P

ASS

THRU ENTITIES

.—In the case of a pass-thru entity

described in subparagraph (A), (B), (C), (D), (E), or (F) of

section 1(h)(10) of the Internal Revenue Code of 1986, as

amended by this Act, the amendments made by this section

shall apply to taxable years ending after December 31, 2002;

except that dividends received by such an entity on or before

such date shall not be treated as qualified dividend income

(as defined in section 1(h)(11)(B) of such Code, as added by

this Act).’’.

(b) E

FFECTIVE

ATE

.—The amendments made by subsection

(a) shall take effect as if included in section 302 of the Jobs and

Growth Tax Relief Reconciliation Act of 2003.

SEC. 403. AMENDMENTS RELATED TO JOB CREATION AND WORKER

ASSISTANCE ACT OF 2002.

(a) A

MENDMENTS

ELATED TO

ECTION

101

OF THE

.—

(1) Clause (i) of section 168(k)(2)(B) is amended to read

as follows:

‘‘(i) I

N GENERAL

.—The term ‘qualified property’

includes any property if such property—

‘‘(I) meets the requirements of clauses (i), (ii),

and (iii) of subparagraph (A),

‘‘(II) has a recovery period of at least 10 years

or is transportation property,

‘‘(III) is subject to section 263A, and

‘‘(IV) meets the requirements of clause (ii) or

(iii) of section 263A(f)(1)(B) (determined as if such

clauses also apply to property which has a long

useful life (within the meaning of section

263A(f))).’’.

(2)(A) Subparagraph (D) of section 168(k)(2) is amended

by adding at the end the following new clauses:

‘‘(iii) S

YNDICATION

.—For purposes of subparagraph

(A)(ii), if—

‘‘(I) property is originally placed in service

after September 10, 2001, by the lessor of such

property,

‘‘(II) such property is sold by such lessor or

any subsequent purchaser within 3 months after

the date such property was originally placed in

service, and

‘‘(III) the user of such property after the last

sale during such 3-month period remains the same

as when such property was originally placed in

service,

such property shall be treated as originally placed

in service not earlier than the date of such last sale.

‘‘(iv) L

IMITATIONS RELATED TO USERS AND RELATED

PARTIES

.—The term ‘qualified property’ shall not

include any property if—

‘‘(I) the user of such property (as of the date

on which such property is originally placed in

service) or a person which is related (within the

meaning of section 267(b) or 707(b)) to such user

or to the taxpayer had a written binding contract

in effect for the acquisition of such property at

any time on or before September 10, 2001, or

26 USC 168.

26 USC 1 note.

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118 STAT. 1187PUBLIC LAW 108–311—OCT. 4, 2004

‘‘(II) in the case of property manufactured,

constructed, or produced for such user’s or person’s

own use, the manufacture, construction, or produc-

tion of such property began at any time on or

before September 10, 2001.’’.

(B) Clause (ii) of section 168(k)(2)(D) is amended by

inserting ‘‘clause (iii) and’’ before ‘‘subparagraph (A)(ii)’’.

(b) A

MENDMENTS

ELATED TO

ECTION

102

OF THE

.—

(1) Subparagraph (H) of section 172(b)(1) is amended by

striking ‘‘a taxpayer which has’’.

(2) In the case of a net operating loss for a taxable year

ending during 2001 or 2002—

(A) an application under section 6411(a) of the Internal

Revenue Code of 1986 with respect to such loss shall not

fail to be treated as timely filed if filed before November

1, 2002,

(B) any election made under section 172(b)(3) of such

Code may (notwithstanding such section) be revoked before

November 1, 2002, and

Code shall (notwithstanding such section) be treated as

timely made if made before November 1, 2002.

(3) Section 102(c)(2) of the Job Creation and Worker Assist-

ance Act of 2002 (Public Law 107–147) is amended by striking

‘‘before January 1, 2003’’ and inserting ‘‘after December 31,

1990’’.

(4)(A) Subclause (I) of section 56(d)(1)(A)(i) is amended

by striking ‘‘attributable to carryovers’’.

(B) Subclause (I) of section 56(d)(1)(A)(ii) is amended—

(i) by striking ‘‘for taxable years’’ and inserting ‘‘from

taxable years’’, and

(ii) by striking ‘‘carryforwards’’ and inserting

‘‘carryovers’’.

MENDMENTS

ELATED TO

ECTION

301

OF THE

.—

(1) Subparagraph (D) of section 1400L(a)(2) is amended—

(A) by striking ‘‘subchapter B’’ and inserting ‘‘sub-

chapter A’’, and

(B) in clause (ii), by striking ‘‘subparagraph (B)’’ and

inserting ‘‘this paragraph’’.

(2) Subparagraph (D) of section 1400L(b)(2) is amended

by inserting ‘‘, and clause (iv) thereof shall be applied by

substituting ‘qualified New York Liberty Zone property’ for

‘qualified property’ ’’ before the period at the end.

(3) Subsection (c) of section 1400L is amended by adding

at the end the following new paragraph:

‘‘(5) E

LECTION OUT

.—For purposes of this subsection, rules

similar to the rules of section 168(k)(2)(C)(iii) shall apply.’’.

(4) Paragraph (2) of section 1400L(f) is amended by

inserting before the period ‘‘, determined without regard to

subparagraph (C)(i) thereof’’.

(d) A

MENDMENT

ELATED TO

ECTION

405

OF THE

.—The

last sentence of section 4006(a)(3)(E)(iii)(IV) of the Employee Retire-

ment Income Security Act of 1974 (29 U.S.C. 1306(a)(3)(E)(iii)(IV))

is amended—

(1) by inserting ‘‘or this subparagraph’’ after ‘‘this clause’’

both places it appears, and

Applicability.

26 USC 1400L.

26 USC 56 note.

26 USC 172 note.

26 USC 172.

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118 STAT. 1188 PUBLIC LAW 108–311—OCT. 4, 2004

(2) by inserting ‘‘(other than sections 4005, 4010, 4011,

and 4043)’’ after ‘‘subsections’’.

(e) A

MENDMENT

ELATED TO

ECTION

411

OF THE

.—

Subparagraph (B) of section 411(c)(2) of the Job Creation and

Worker Assistance Act of 2002 is amended by striking ‘‘Paragraph

(2)’’ and inserting ‘‘Paragraph (1)’’.

(f) E

FFECTIVE

ATE

.—The amendments made by this section

shall take effect as if included in the provisions of the Job Creation

and Worker Assistance Act of 2002 to which they relate.

SEC. 404. AMENDMENTS RELATED TO ECONOMIC GROWTH AND TAX

RELIEF RECONCILIATION ACT OF 2001.

(a) A

MENDMENT

ELATED TO

ECTION

401

OF THE

.—Clause

(i) of section 530(d)(2)(C) is amended by striking ‘‘higher’’ after

‘‘qualified’’.

(b) A

MENDMENTS

ELATED TO

ECTION

611

OF THE

.—

(1) Paragraph (3) of section 45A(c) is amended by inserting

‘‘, except that the base period taken into account for purposes

of such adjustment shall be the calendar quarter beginning

October 1, 1993’’ before the period at the end.

(2) Subparagraph (A) of section 415(d)(4) is amended by

adding at the end the following new sentence: ‘‘This subpara-

graph shall also apply for purposes of any provision of this

title that provides for adjustments in accordance with the

method contained in this subsection, except to the extent pro-

vided in such provision.’’.

MENDMENT

ELATED TO

ECTION

614

OF THE

.—Clause

(ii) of section 4972(c)(6)(A) is amended to read as follows:

‘‘(ii) the amount of contributions described in sec-

tion 401(m)(4)(A), or’’.

(d) A

MENDMENT

ELATED TO

ECTION

637

OF THE

.—Clause

(i) of section 408(p)(6)(A) is amended by adding at the end the

following new sentence: ‘‘For purposes of the preceding sentence,

amounts described in section 6051(a)(3) shall be determined without

regard to section 3401(a)(3).’’.

(e) A

MENDMENT

ELATED TO

ECTION

641

OF THE

.—

Subparagraph (B) of section 403(a)(4) is amended to read as follows:

‘‘(B) C

ERTAIN RULES MADE APPLICABLE

.—The rules of

paragraphs (2) through (7) and (9) of section 402(c) and

section 402(f) shall apply for purposes of subparagraph

(A).’’.

(f) E

FFECTIVE

ATE

.—The amendments made by this section

shall take effect as if included in the provisions of the Economic

Growth and Tax Relief Reconciliation Act of 2001 to which they

relate.

SEC. 405. AMENDMENTS RELATED TO COMMUNITY RENEWAL TAX

RELIEF ACT OF 2000.

(a) A

MENDMENTS

ELATED TO

ECTION

401

OF THE

.—

(1) Subsection (c) of section 1234B is amended by adding

at the end the following new sentence: ‘‘The Secretary may

prescribe regulations regarding the status of contracts the

values of which are determined directly or indirectly by ref-

erence to any index which becomes (or ceases to be) a narrow-

based security index (as defined for purposes of section

1256(g)(6)).’’.

(2) Paragraph (6) of section 1256(g) is amended by adding

at the end the following new sentence: ‘‘The Secretary may

26 USC 1256.

26 USC 1234B.

26 USC 45A note.

26 USC 403.

26 USC 408.

26 USC 4972.

26 USC 415.

26 USC 45A.

26 USC 530.

26 USC 56 note.

26 USC 137.

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118 STAT. 1189PUBLIC LAW 108–311—OCT. 4, 2004

prescribe regulations regarding the status of options the values

of which are determined directly or indirectly by reference

to any index which becomes (or ceases to be) a narrow-based

security index (as so defined).’’.

(b) E

FFECTIVE

ATE

.—The amendments made by subsection

(a) shall take effect as if included in section 401 of the Community

Renewal Tax Relief Act of 2000.

SEC. 406. AMENDMENTS RELATED TO TAXPAYER RELIEF ACT OF 1997.

(a) A

MENDMENT

ELATED TO

ECTION

211

OF THE

.—

Subparagraph (B) of section 529(c)(5) is amended to read as follows:

‘‘(B) T

REATMENT OF DESIGNATION OF NEW BENE

FICIARY

.—The taxes imposed by chapters 12 and 13 shall

apply to a transfer by reason of a change in the designated

beneficiary under the program (or a rollover to the account

of a new beneficiary) unless the new beneficiary is—

‘‘(i) assigned to the same generation as (or a higher

generation than) the old beneficiary (determined in

accordance with section 2651), and

‘‘(ii) a member of the family of the old beneficiary.’’.

(b) A

MENDMENT

ELATED TO

ECTION

213

OF THE

.—Clause

(iii) of section 530(d)(4)(B) is amended by striking ‘‘account holder’’

and inserting ‘‘designated beneficiary’’.

MENDMENT

ELATED TO

ECTION

226

OF THE

.—Section

1397E is amended by adding at the end the following new sub-

section:

‘‘(i) S C

ORPORATIONS

.—In the case of a qualified zone academy

bond held by an S corporation which is an eligible taxpayer—

‘‘(1) each shareholder shall take into account such share-

holder’s pro rata share of the credit, and

‘‘(2) no basis adjustments to the stock of the corporation

shall be made under section 1367 on account of this section.’’.

(d) A

MENDMENT

ELATED TO

ECTION

311

OF THE

.—

Subparagraph (B) of section 55(b)(3) is amended by striking ‘‘the

amount on which a tax is determined under’’ and inserting ‘‘an

amount equal to the excess described in’’.

(e) A

MENDMENTS

ELATED TO

ECTION

1001

OF THE

.—

(1) Paragraph (2) of section 1259(c) is amended by striking

‘‘The term ‘constructive sale’ shall not include any contract’’

and inserting ‘‘A taxpayer shall not be treated as having made

a constructive sale solely because the taxpayer enters into

a contract’’.

(2) Subparagraphs (A) and (B)(i) of section 1259(c)(3) are

each amended by striking ‘‘be treated as a constructive sale’’

and inserting ‘‘cause a constructive sale’’.

(3) Clause (i) of section 1259(c)(3)(A) is amended by striking

‘‘before the end of’’ and inserting ‘‘on or before’’.

(4) Clause (ii) of section 1259(c)(3)(B) is amended by

striking ‘‘substantially similar’’.

(5) Subclause (I) of section 1259(c)(3)(B)(ii) is amended

to read as follows:

‘‘(I) which would (but for this subparagraph)

cause the requirement of subparagraph (A)(iii) not

to be met with respect to the transaction described

in clause (i) of this subparagraph,’’.

(6) Subclause (II) of such section is amended by inserting

‘‘on or’’ before ‘‘before the 30th day’’.

26 USC 1259.

26 USC 55.

26 USC 1397E.

26 USC 530.

Applicability.

26 USC 529.

26 USC 1234B

note.

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118 STAT. 1190 PUBLIC LAW 108–311—OCT. 4, 2004

(7) The heading for subparagraph (B) of section 1259(c)(3)

is amended by striking ‘‘

POSITIONS WHICH ARE REESTABLISHED

’’

and inserting ‘‘

CERTAIN CLOSED TRANSACTIONS WHERE RISK OF

LOSS ON APPRECIATED FINANCIAL POSITION DIMINISHED

’’.

(f) A

MENDMENTS

ELATED TO

ECTION

1015

OF THE

.—

(1) Section 246(c)(1)(A) is amended by striking ‘‘90-day

period’’ and inserting ‘‘91-day period’’.

(2) Section 246(c)(2)(B) is amended—

(A) by striking ‘‘180-day period’’ and inserting ‘‘181-

day period’’, and

(B) by striking ‘‘90-day period’’ and inserting ‘‘91-day

period’’.

(g) A

MENDMENTS

ELATED TO

ECTION

1053

OF THE

.—

(1) Section 901(k)(1)(A)(i) is amended by striking ‘‘30-day

period’’ and inserting ‘‘31-day period’’.

(2) Section 901(k)(3)(B) is amended—

(A) by striking ‘‘90-day period’’ and inserting ‘‘91-day

period’’, and

(B) by striking ‘‘30-day period’’ and inserting ‘‘31-day

period’’.

(h) E

FFECTIVE

ATE

.—The amendments made by this section

shall take effect as if included in the provisions of the Taxpayer

Relief Act of 1997 to which they relate.

SEC. 407. AMENDMENTS RELATED TO SMALL BUSINESS JOB PROTEC-

TION ACT OF 1996.

(a) A

MENDMENT

ELATED TO

ECTION

1307

OF THE

.—

Subsection (b) of section 1377 (relating to post-termination transi-

tion period) is amended by adding at the end the following new

paragraph:

‘‘(3) S

PECIAL RULES FOR AUDIT RELATED POST

TERMINATION

TRANSITION PERIODS

.—

‘‘(A) N

O APPLICATION TO CARRYOVERS

.—Paragraph

(1)(B) shall not apply for purposes of section 1366(d)(3).

‘‘(B) L

IMITATION ON APPLICATION TO DISTRIBUTIONS

.—

Paragraph (1)(B) shall apply to a distribution described

in section 1371(e) only to the extent that the amount of

such distribution does not exceed the aggregate increase

(if any) in the accumulated adjustments account (within

the meaning of section 1368(e)) by reason of the adjust-

ments referred to in such paragraph.’’.

(b) A

MENDMENTS

ELATED TO

ECTION

1432

OF THE

.—

Paragraph (26) of section 401(a) is amended by striking subpara-

graph (C) and by redesignating subparagraphs (D) through (I) as

subparagraphs (C) through (H), respectively.

FFECTIVE

ATE

.—The amendments made by this section

shall take effect as if included in the provisions of the Small

Business Job Protection Act of 1996 to which they relate.

SEC. 408. CLERICAL AMENDMENTS.

(a) I

NTERNAL

EVENUE

ODE OF

1986.—

(1) Subclause (II) of section 1(g)(7)(B)(ii) is amended by

striking ‘‘10 percent.’’ and inserting ‘‘10 percent’’.

(2) Clause (ii) of section 1(h)(6)(A) is amended—

(A) in subclause (I), by striking ‘‘(5)(B)’’ and inserting

‘‘(4)(B)’’, and

(B) in subclause (II), by striking ‘‘(5)(A)’’ and inserting

‘‘(4)(A)’’.

26 USC 1.

26 USC 401 note.

26 USC 401.

26 USC 1377.

26 USC 55 note.

26 USC 901.

26 USC 246.

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118 STAT. 1191PUBLIC LAW 108–311—OCT. 4, 2004

(3) Subclause (I) of section 42(d)(2)(D)(iii) is amended by

striking ‘‘section 179(b)(7)’’ and inserting ‘‘section 179(d)(7)’’.

(4) Subsection (f) of section 72 is amended by striking

‘‘Economic Growth and Tax Relief Reconciliation Act of 2001’’

and inserting ‘‘Economic Growth and Tax Relief Reconciliation

Act of 2001)’’.

(5)(A) Section 138 and paragraph (2) of section 26(b) are

each amended by striking ‘‘Medicare+Choice MSA’’ each place

it appears in the text and inserting ‘‘Medicare Advantage MSA’’.

(B) The heading for section 138 is amended to read as

follows:

‘‘SEC. 138. MEDICARE ADVANTAGE MSA.’’.

by striking ‘‘M

EDICARE

HOICE

MSA’’ and inserting ‘‘M

EDICARE

DVANTAGE

MSA’’.

(D) The heading for paragraph (2) of section 138(c) is

amended by striking ‘‘

MEDICARE

CHOICE MSA

’’ and inserting

‘‘

MEDICARE ADVANTAGE MSA

’’.

(E) Clause (i) of section 138(c)(2)(C) is amended by striking

‘‘Medicare+Choice MSAs’’ and inserting ‘‘Medicare Advantage

MSAs’’.

(F) Subsection (f) of section 138 is amended by striking

‘‘Medicare+Choice MSA’s’’ and inserting ‘‘Medicare Advantage

MSAs’’.

(G) The item relating to section 138 in the table of sections

for part III of subchapter B of chapter 1 is amended to read

as follows:

‘‘Sec. 138. Medicare Advantage MSA.’’.

(6) Clause (ii) of section 168(k)(2)(D) is amended—

(A) by inserting ‘‘is’’ after ‘‘if property’’, and

(B) by striking ‘‘is’’ in subclause (I).

(7) Each of the following provisions is amended by inserting

‘‘Robert T. Stafford’’ before ‘‘Disaster Relief and Emergency

Assistance Act’’:

(A) Section 165(i)(1).

(B) Section 165(k).

(D) Section 5064(b)(3).

(E) Section 5708(a).

(8) The heading for subparagraph (F) of section 168(k)(2)

is amended by striking ‘‘

MINIUMUM

’’ and inserting ‘‘

MINIMUM

’’.

(9) Paragraph (1) of section 246A(b) is amended by striking

‘‘section 243(c)(4)’’ and inserting ‘‘section 243(d)(4)’’.

(10) Clause (ii) of section 263(g)(2)(B) is amended by

striking ‘‘1278’’ and inserting ‘‘1276’’.

(11) Clause (ii) of section 403(b)(7)(A) is amended by

striking ‘‘section 3121(a)(1)(D)’’ and inserting ‘‘section

3121(a)(5)(D)’’.

(12) Paragraph (1) of section 408(a) is amended by striking

‘‘457(e)(16)’’ and inserting ‘‘457(e)(16),’’.

(13) Paragraph (2) of section 408(n) is amended by striking

‘‘section 101(6)’’ and inserting ‘‘paragraph (6) or (7) of section

101’’.

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118 STAT. 1192 PUBLIC LAW 108–311—OCT. 4, 2004

(14) The table contained in section 411(a)(12)(B) is amended

by striking the last line and inserting the following:

‘‘6 or more ................................................................................... 100.’’.

(15) Paragraph (7) of section 414(q) is amended by striking

‘‘section’’ and inserting ‘‘subsection’’.

(16) Subparagraph (A) of section 416(i)(1) is amended in

the matter following clause (iii) by striking ‘‘in the case of

plan years’’ and inserting ‘‘In the case of plan years’’.

(17) Subparagraph (C) of section 415(c)(7) is amended by

striking ‘‘subparagraph (D)’’ and inserting ‘‘subparagraph (B)’’.

(18) The item relating to section 1234B in the table of

sections for part IV of subchapter P of chapter 1 is amended

to read as follows:

‘‘Sec. 1234B. Gains or losses from securities futures contracts.’’.

(19) Subsection (h) of section 1296 is amended by striking

‘‘paragraphs (2) and (3) of section 851(b)’’ and inserting ‘‘section

851(b)(2)’’.

(20) The table of sections for part II of subchapter A of

chapter 11 is amended by inserting after the item relating

to section 2010 the following new item:

‘‘Sec. 2011. Credit for State death taxes.’’.

(21) The table of sections for subchapter A of chapter

13 is amended by inserting after the item relating to section

2603 the following new item:

‘‘Sec. 2604. Credit for certain State taxes.’’.

(22) Subsection (c) of section 4973 is amended by striking

‘‘subsection (a)(2)’’ and inserting ‘‘subsection (a)(3)’’.

(23) Paragraph (2) of section 4978(a) is amended by striking

‘‘60 percent’’ and inserting ‘‘(60 percent’’.

(24) Paragraph (4) of section 6103(p) is amended by striking

‘‘subsection (l)(16) or (17)’’ each place it appears and inserting

‘‘subsection (l)(16) or (18)’’.

(b) O

THER

AWS

.—

(1) Subsection (c) of section 156 of the Community Renewal

Tax Relief Act of 2000 (114 Stat. 2763A–623) is amended in

the first sentence by inserting ‘‘than’’ after ‘‘not later’’.

(2) Paragraph (6) of section 1(a) of Public Law 107–22

shall be applied by substituting ‘‘part VIII’’ for ‘‘part VII’’ in

such paragraph.

(3) Subparagraph (A) of section 1(b)(3) of Public Law 107–

22 shall be applied by substituting ‘‘

EDUCATIONAL

’’ for ‘‘

EDU

CATION

’’ in the matter preceding subparagraph (A) in such

section.

(4) Paragraph (1) of section 204(e) of the Railroad Retire-

ment and Survivors’ Improvement Act of 2001 shall be applied

by substituting ‘‘Section 24(d)(2)(A)(iii)’’ for ‘‘Section

24(d)(3)(A)(iii)’’ in such paragraph.

(5) Paragraph (2) of section 412(b) of the Economic Growth

and Tax Relief Reconciliation Act of 2001 shall be applied

by substituting ‘‘Section 221(f)(1)’’ for ‘‘Section 221(g)(1)’’ in

such paragraph.

(6) Subsection (b) of section 531 of the Economic Growth

and Tax Relief Reconciliation Act of 2001 shall be applied

by substituting ‘‘section’’ for ‘‘subsection’’ in such subsection.

26 USC 2011

note.

26 USC 221.

26 USC 24.

26 USC 72.

26 USC 1400E

note.

Applicability.

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118 STAT. 1193PUBLIC LAW 108–311—OCT. 4, 2004

LEGISLATIVE HISTORY—H.R. 1308:

HOUSE REPORTS: No. 108–696 (Comm. of Conference).

CONGRESSIONAL RECORD:

Vol. 149 (2003): Mar. 19, considered and passed House.

June 5, considered and passed Senate, amended.

June 12, House concurred in Senate amendments with an

amendment pursuant to H. Res. 270.

Vol. 150 (2004): Sept. 23, House and Senate agreed to conference report.

WEEKLY COMPILATION OF PRESIDENTIAL DOCUMENTS, Vol. 40 (2004):

Oct. 4, Presidential remarks.

(7) Paragraph (3) of section 619(c) of the Economic Growth

and Tax Relief Reconciliation Act of 2001 shall be applied

by substituting ‘‘after the item relating to section 45D’’ for

‘‘at the end’’ in such paragraph.

(8) The table contained in section 203(a)(4)(B) of the

Employee Retirement Income Security Act of 1974 (29 U.S.C.

1053(a)(4)(B)) is amended by striking the last line and inserting

the following:

‘‘6 or more ................................................................................... 100.’’.

(9) Paragraph (3) of section 652(b) of the Economic Growth

and Tax Relief Reconciliation Act of 2001 shall be applied

by inserting ‘‘each place it appears’’ before ‘‘in the next to

last sentence’’ in such paragraph.

Approved October 4, 2004.

26 USC 4972.

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