78TH CONG., 2D SESS.- CH. 63-FEB . 25, 1944 amended by striking out "294 (a) (3), (4), and (5)" and inserting in lieu thereof "294 (d)". (c) TAXABLE YEARS TO WHICH APPICABLE. - -T he amendments made by this section shall be applicable with respect to taxable years beginning after December 31, 1942. SEC. 119. BACK PAY ATTRIBUTABLE TO PRIOR YEARS. (a) IN GENERAL. --Section 107 (relating to compensation for certain services rendered) is amended by inserting at the end thereof the fol- lowing new subsection: "(d) BACK PAY.- "(1) IN GENERAL.-If the amount of the back pay received or accrued by an individual during the taxable year exceeds 15 per centum of the gross income of the individual for such year, the part of the tax attributable to the inclusion of such back pay in gross income for the taxable year shall not be greater than the aggregate of the increases in the taxes which would have resulted from the inclusion of the respective portions of such back pay in gross income for the taxable years to which such portions are respec- tively attributable, as determined under regulations prescribed by the Commissioner with the approval of the Secretary. "(2) DEFINrION OF BACK PAY.-For the purposes of this sub- section, 'back pay' means (A) remuneration, including wages, salaries, retirement pay, and other similar compensation, which is received or accrued during the taxable year by an employee for services performed prior to the taxable year for his employer and which would have been paid prior to the taxable year except for the intervention of one of the following events: (i) bankruptcy or receivership of the employer; (ii) dispute as to the liability of the employer to pay such remuneration, which is determined after the commencement of court proceedings; (iii) if the employer is the United States, a State, a Territory, or any political subdivision thereof, or the District of Columbia, or any agency or instru- mentality of any of the foregoing, lack of funds appropriated to pay such remuneration; or (iv) any other event determined to be similar in nature under regulations prescribed by the Commis- sioner with the approval of the Secretary; and (B) wages or salaries which are received or accrued during the taxable year by an employee for services performed prior to the taxable year for his employer and which constitute retroactive wage or salary increases ordered, recommended, or approved by any Federal or State agency, and made retroactive to any period prior to the taxable year; and (C) payments which are received or accrued during the taxable year as the result of an alleged violation by an employer of any State or Federal law relating to lalor standards or practices, and which are determined under regulations pre- scribed by the Commissioner with the approval of the Secretary to be attributable to a prior taxable year. Amounts not includ- ible in gross income under this chapter shall not constitute 'back (b) TECHNICAL A1MENDMENTr. - The title of section 107 is amended by adding at the end thereof the following: "AND BACK PAY". (c) TAXABLE YEAS TO WHICH ApprIcBLE.- The amendments made by this section shall be effective with respect to taxable years beginning after December 31,1940. Ante, p. 37. 53 Stat. 878. 26 U. 8. C., Supp. III,§ 107. Infra. 53 Stat. 878. 26 U. S. 0., Supp. m., 107. Supr. 39 58 STAT.]
�
