Page:United States Statutes at Large Volume 104 Part 2.djvu/816

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104 STAT. 1388-408 PUBLIC LAW 101-508—NOV. 5, 1990 after 1989, the dollar amount contained in paragraph (1) shall be increased by an amount equal to— "(i) such dollar amount, multiplied by "(ii) the cost-of-living adjustment determined under section 1(f)(3) for the calendar year in which the taxable year begins, by substituting 'calendar year 1988' for 'calendar year 1989' in subparagraph (B) thereof. " (B) ADJUSTMENT TO THRESHOLD AMOUNTS FOR YEARS AFTER 1991. — In the case of any taxable year beginning in a calendar year after 1991, each dollar amount contained in paragraph (3)(C) shall be increased by an amount equal to— "(i) such dollar amount, multiplied by "(ii) the cost-of-living adjustment determined under section 1(f)(3) for the calendar year in which the taxable year begins, by substituting 'calendar year 1990' for 'calendar year 1989' in subparagraph (B) thereof." (b) CONFORMING AMENDMENT. —Paragraph (6) of section 1(f) is amended— (1) by striking "section 151(d)(3)" in subparagraph (A) and inserting "section 151(d)(4)", and (2) by striking "section 151(d)(3)" in subparagraph (B) and inserting "section 151(d)(4)(A)". 26 USC 1 note. (c) EFFECTIVE DATE. —The amendments made by this section shall apply to taxable years beginning after December 31, 1990. PART II—MODIFICATIONS OF EARNED INCOME CREDIT SEC. mil. MODIFICATIONS OF EARNED INCOME TAX CREDIT. (a) IN GENERAL.— So much of section 32 (relating to earned income credit) as precedes subsection (d) thereof is amended to read as follows: "SEC. 32. EARNED INCOME. "(a) ALLOWANCE OF CREDIT.—In the case of an eligible individual, there shall be allowed as a credit against the tax imposed by this subtitle for the taxable year an amount equal to the sum of— "(1) the basic earned income credit, and "(2) the health insurance credit. "(b) COMPUTATION OF CREDIT.— For purposes of this section— " (1) BASIC EARNED INCOME CREDIT.— "(A) IN GENERAL.—The term 'basic earned income credit' means an amount equal to the credit percentage of so much of the taxpayer's earned income for the taxable year as does not exceed $5,714. "(B) LIMITATION. —The amount of the basic earned income credit allowable to a taxpayer for any taxable year shall not exceed the excess (if any) of— "(i) the credit percentage of $5,714, over "(ii) the phaseout percentage of so much of the adjusted gross income (or, if greater the earned income) of the taxpayer for the taxable year as exceeds $9,000. "(C) PERCENTAGES. —For purposes of this paragraph— "(i) IN GENERAL. —Except as provided in clause (ii), the percentages shall be determined as follows: