75
STAT.]
PUBLIC LAW 87-293-SEPT. 22, 1961
625
CONSTRUCTION
SEC. 26. If any provision of this Act or the application of any provision to any circumstances or persons shall be held invalid, the validity of the remainder of this Act and the applicability of such provision to other circumstances or persons shall not be affected thereby. EFFECTIVE DATE
SEC. 27. This Act shall take effect on the date of its enactment. TITLE II — AMENDMENT OF I N T E R N A L R E V E N U E CODE AND S O C I A L S E C U R I T Y ACT TAXATION OF ALLOWANCES
SEC. 201. (a) Section 912 of the Internal Revenue Code of 1954 lH^i^-^°^(relating to exemption from gross income for certain allowances) is amended by adding at the end thereof the following new paragraph: "(3) PEACE CORPS ALLOWANCES.—In the case of an individual who is a volunteer or volunteer leader within the meaning of the Peace Corps Act and members of his family, amounts received as allowances under section 5 or 6 of the Peace Corps Act other than amounts received as— " (A) termination payments under section 5(c) or section 6(1) of such Act, " (B) leave allowances, " (C) if such individual is a volunteer leader training in the United States, allowances to members of his family, and " (D) such portion of living allowances as the President may determine under the Peace Corps Act as constituting basic compensation." (b) Section 1303(b) of the Internal Revenue Code of 1954 (relat- ^g'^ul'c^ia^o^.' ing to definition of back pay) is amended by adding at the end thereof the following new paragraph: "(4) Termination payments under section 5(c) or section 6(1) of the Peace Corps Act which are received or accrued by an individual during the taxable year on account of any period of service, as a volunteer or volunteer leader under the Peace Corps Act, occurring prior to the taxable year." (c) Section 3401(a) of the Internal Revenue Code of 1954 (relating ^ ^^^- ^^^^ to the definition of wages for purposes of the collection of income tax at source on wages) is amended by striking out the period at the end of paragraph (12) and inserting in lieu thereof "; or", and by adding at the end thereof the following new paragraph: "(13) pursuant to any provision of law other than section 5(c) or 6(1) of the Peace Corps Act, for service performed as a volunteer or volunteer leader within the meaning of such Act." (d) The amendments made by subsections (a) and (b) of this section shall apply with respect to taxable years ending after March 1, 1961. The amendment made by subsection (c) shall apply with respect to remuneration paid after the date of the enactment of this Act.
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