,,ii  #aae? ,,congress  #a/ ,session    
,s4 #aich  ,,9 ,,! ,,s5ate ,,( ,,!      
,,unit$ ,,/ates  ,octob] #e1 #bjag,ms4  
,baldw9 7= h]self & ,mr4 ,book]7        
introduc$ ! foll[+ bill2 :i* 0 read     
twice & ref]r$ to ! ,committee on       
,f9ance  ,a ,,bill  ,to e/abli% a policy
 framework t (f]s & rew>ds "w1 /r5g!ns !
 inc5tive to "w1 greatly r$uces pov]ty1 
& creates new jobs 9 ! ,unit$ ,/ates1 & 
= o!r purposes4  #a4 ,%ort title2 table 
( cont5ts  7a7 ,%ort title ,?is ,act may
 be cit$ z ! ,/rong] ,way ,act4  7b7    
,table ( cont5ts ,! table ( cont5ts (   
?is ,act is z foll[s3 ,sec4 #a4 ,%ort   
title2 table ( cont5ts4,,title          
,i--,transitional jobs program,sec4     
#aja4 ,purposes4,sec4 #ajb4             
,def9itions4,sec4 #ajc4 ,transitional   
jobs4,sec4 #ajd4 ,au?orization (        
appropriations4,,title ,,ii--,pov]ty    
r$uction tax credits,sec4 #bja4 ,re=m ( 
e>n$ income cr$it4,sec4 #bjb4           
,e/abli%m5t ( fully refundable *ild tax 
cr$it4  ,i ,transitional jobs program   

#aja4 ,purposes ,! purposes ( !         
transitional jobs program "u ?is title  
are to--  7#a7 r$uce pov]ty &           
unemploym5t2  7#b7 (f] unemploy$ or     
p>tially employ$ individuals !          
opportunity to "w 9 a transitional job =
 ! purpose ( enabl+ su* individuals to  
ga91 ?r\gh wage-pay+ jobs1 ! exp]i5ce & 
skills ne$$ to move into regul>         
employm5t2 &  7#c7 assi/ employ]s to    
create new regul> employm5t4  #ajb4     
,def9itions ,9 ?is title3  7#a7 ,employ]
 ( record ,! t]m employ] ( record means 
a local gov]nm5t1 nonpr(it1 or =-pr(it  
entity select$ "u section               
#ajc7;c77#c77;,a7 to c>ry out !         
responsibilities describ$ 9 section     
#ajc7;d74  7#b7 ,ho/ site employ] ,! t]m
 ho/ site employ] means an employ] t--  
7,a7 provides an individual :o is       
eligible = a transitional job ) !       
opportunity to "w 9 a specific          
transitional job = :i* ! individual is  
qualifi$1 z det]m9$ by su* employ]1 at a
 worksite t is "u ! direct sup]vision ( 

su* employ]2 &  7,b7 agrees to be       
responsible =--  7i7 select+1 tra9+1 &  
sup]vis+ ! transitional job work]1      
includ+ provid+ a writt5 job            
description1 initial tra9+1 ongo+       
managem5t1 & p]iodic p]=mance reviews2  
7ii7 c]tify+ to ! employ] ( record1 9 ! 
mann] prescrib$ by ! ,secret>y1 ! numb] 
( h\rs t ! transitional job work] has   
work$ = ! ho/ site employ]2 &  7iii7    
coop]at+ ) ! employ] ( record 9         
facilitat+ ! movem5t ( ! transitional   
job work] into regul> employm5t4  7#c7  
,local area ,! t]m local area means a   
city1 c\nty1 or o!r g5]al purpose       
political subdivision ( a ,/ate4  7#d7  
,regul> employm5t ,! t]m regul>         
employm5t means regul>1 unsubsidiz$     
employm5t1 z def9$ by ! ,secret>y4  7#e7
 ,secret>y ,! t]m ,secret>y means !     
,secret>y ( ,labor4  7#f7 ,/ate ,! t]m  
,/ate means ea* ( ! sev]al ,/ates ( !   
,unit$ ,/ates1 ! ,di/rict ( ,columbia1 &
 ! ,commonweal? ( ,pu]to ,rico4  7#g7   
,transitional job ,! t]m transitional   

job means a job (f]$ to an eligible     
individual ?r\gh ! program au?oriz$ "u  
section #ajc t--  7,a7 provides ! rate (
 pay describ$ 9 section #ajc7;d77#f72 & 
7,b7 provides ! individual ) employm5t  
(--  7i7 n less ?an #af h\rs p] week2 & 
7ii7 n m ?an #dj h\rs p] week1 :5 comb9$
 ) any h\rs p] week ( "w t ! individual 
is employ$ ?r\gh any o!r employ] 7if    
applicable74  #ajc4 ,transitional jobs  
7a7 ,program au?oriz$ ,f am\nts made    
available "u section #ajd1 ! ,secret>y  
%all e/abli% a program1 ?r\gh grant     
agreem5ts describ$ 9 subsection 7c7 )   
,/ate & local gov]nm5t ag5cies1 t       
provides eligible unemploy$ or p>tially 
employ$ individuals ) opportunities to  
"w 9 a transitional job = ! purpose (   
enabl+ su* individuals to ga91 ?r\gh    
wage-pay+ jobs1 ! exp]i5ce & skills ne$$
 to move into regul> employm5t4  7b7    
,eligibility ,to be eligible = a        
transitional job1 an individual %all--  
7#a7 be a resid5t ( ! ,unit$ ,/ates1 & a
 resid5t ( ! ,/ate 9 :i* ! individual   

applies = a transitional job2  7#b7 be n
 less ?an #ah ye>s ( age2  7#c7 n be    
inc>c]at$ 9 any ,f$]al or ,/ate p5al    
in/itution1 unless ! individual is      
p>ticipat+ 9 a "w-release program       
au?oriz$ by ! ,unit$ ,/ates or a ,/ate &
 ! ,unit$ ,/ates or ! ,/ate au?orizes   
employm5t "u ?is circum/ance 9 a        
transitional job2 &  7#d7 be unemploy$1 
or employ$ = less ?an #cj h\rs p] week1 
= n less ?an #d consecutive weeks prec$+
 ! individual's application = a         
transitional job4  7c7 ,transitional    
jobs program adm9i/ration  7#a7 ,9 g5]al
 ,! ,secret>y %all ent] into agreem5ts )
 ,/ate & local gov]nm5t ag5cies "u :i*--
 7,a7 ! ,/ate & local gov]nm5t ag5cies  
c>ry out all activities describ$ 9      
p>agraph 7#c72 &  7,b7 ! ,secret>y      
provides grants to ! ,/ate & local      
gov]nm5t ag5cies to c>ry out su*        
activities4  7#b7 ,selection crit]ia ,! 
,secret>y %all select ,/ate & local     
gov]nm5t ag5cies = ! agreem5ts describ$ 
9 p>agraph 7#a7 bas$ on--  7,a7 !       

ag5cies' level ( exp]i5ce & commitm5t to
 transitional jobs programs2 &  7,b7 su*
 o!r crit]ia z ! ,secret>y det]m9es     
appropriate1 :i* may include crit]ia    
relat+ to ! implem5tation by su* ag5cies
 ( transitional jobs program models "u  
?is title4  7#c7 ,activities ,!         
activities describ$ 9 ?is p>agraph are !
 foll[+3 7,a7 ,select1 on a competitive 
basis1 & ent] into a contract ) "o or m 
local gov]nm5t1 nonpr(it1 or =-pr(it    
entities to--  7i7 adm9i/] !            
transitional jobs program 9 ! ,/ate or  
local area to be s]v$2 &  7ii7 function 
z ! employ] ( record describ$ 9         
subsection 7d74  7,b7 ,pay ea* entity   
select$ to s]ve z an employ] ( record1  
bas$ ^u ! t]ms ( ! contract & full      
docum5tation ( p]=mance1 = ! entity's   
p]=mance ( its contractually def9$      
s]vices 9 adm9i/]+ ! transitional jobs  
program1 includ+ reimbursem5t ( ! entity
 = appropriate wages & taxes ! entity   
has paid1 z requir$ "u p>agraphs 7#f7 & 
7#g7 ( subsection 7d71 to or on behalf (

 eligible individuals :o work$ 9        
transitional jobs 9 ! entity's capacity 
z an employ] ( record4 ,a ,/ate or local
 gov]nm5tal ag5cy may require a ho/     
employ] to pay a portion ( ! appropriate
 wages & taxes = ! individual4  7,c7    
,coop]ate ) ! ,comptroll] ,g5]al ( !    
,unit$ ,/ates1 ! ,congressional ,budget 
,(fice1 & o!r ,f$]al & ,/ate ag5cies 9 !
 p]=mance ( audits & ! conduct ( fiscal 
& programmatic ov]sight4  7,d7 ,annually
 submit to ! ,secret>y1 & to ! ,gov]nor 
or o!r *ief executive (fic] ( ! ,/ate 9 
:i* ! program is locat$ & ! ,/ate       
legislature1 a report on ! ,/ate or     
local gov]nm5t ag5cy's role &           
accompli%m5ts 9 ! op]ation ( !          
transitional jobs program1 9 a =mat     
specifi$ by ! ,secret>y4  7,e7 ,conduct1
 or ent] into arrangem5ts ) indep5d5t   
academic or rese>* organizations to     
conduct1 p]iodic evaluations ( !        
effectiv5ess ( ! program )9 ! ,/ate or  
local area s]v$ 9--  7i7 r$uc+ pov]ty & 
unemploym5t2  7ii7 enabl+ unemploy$ &   

und]employ$ individuals to ga9 !        
exp]i5ce & skills ne$$ to move into     
regul> employm5t2 &  7iii7 assi/+       
employ]s 9 creat+ new regul> employm5t4 
7,f7 ,promulgate any rules necess>y = ! 
ag5cy's op]ation ( ! transitional jobs  
program4  7#d7 ,scope ( program  7,a7 ,9
 g5]al ,! ,secret>y %all1 to ! greate/  
ext5t practicable & subject to !        
availability ( appropriations1 ensure t 
! agreem5ts describ$ 9 p>agraph 7#a7    
make ! transitional jobs program        
available to eligible individuals 9 all 
local areas ( all ,/ates4  7,b7         
,individuals ) significant b>ri]s to    
employm5t ,not)/&+ subp>agraph 7,a71 a  
,/ate or local gov]nm5t ag5cy ent]+ into
 an agreem5t "u p>agraph 7#a7 may1 9    
c>ry+ out ! activities describ$ 9       
p>agraph 7#c71 *oose to t>get !         
assi/ance to eligible individuals "u    
subsection 7b7 :o h significant b>ri]s  
to employm5t4  7,c7 ,use ( exi/+ sy/ems 
,a ,/ate or local gov]nm5t ag5cy ent]+  
into an agreem5t "u p>agraph 7#a7 may   

c>ry out ! activities describ$ 9        
p>agraph 7#c7 ?r\gh1 or 9 alignm5t )1   
o!r subsidiz$ employm5t & job tra9+     
activities or sy/ems available )9 !     
,/ate or local area4  7d7               
,responsibilities ( an employ] ( record 
,ea* local gov]nm5t1 nonpr(it1 or       
=-pr(it entity select$ to s]ve z an     
employ] ( record "u subsection          
7c77#c77;,a7 %all d ea* ( ! foll[+3     
7#a7 ,det]m9e ! eligibility (           
individuals apply+ = ! transitional jobs
 program "u ?is title4  7#b7 ,conduct   
ori5tation activities = individuals t ! 
employ] ( record has det]m9$ are        
eligible = ! transitional jobs program4 
7#c7 ,assess ! education1 prior "w      
exp]i5ce1 & o!r relevant factors ( ea*  
eligible individual :o reque/s a        
transitional job1 = ! purpose ( assi/+ !
 individual to be successful 9 apply+ = 
& p]=m+ well 9 a specific transitional  
job4  7#d7 ,connect ea* eligible        
individual reque/+ a transitional job to
 ! "o-/op deliv]y sy/em e/abli%$ "u     

section #aba7;e7 ( ! ,work=ce           
,innovation & ,opportunity ,act 7#bi    
,u4,s4,c4 #caea7;e771 & to o!r res\rces 
t provide assi/ance to job seek]s4  7#e7
 ,(f] ea* eligible individual :o desires
 to "w 9 a transitional job & meets !   
eligibility requirem5ts "u p>agraphs    
7#a7 ?r\gh 7#d7 ( subsection 7b7 !      
opportunity to "w = a ho/ site employ]4 
,! ho/ site employ] may be--  7,a7 !    
employ] ( record2 or  7,b7 ano!r        
organization t has ent]$ into an        
agreem5t ) ! employ] ( record1 & z "p ( 
su* agreem5t1 agrees to function z1 &   
meet ! responsibilities (1 a ho/ site   
employ]1 = a p]iod n to exce$ #cj weeks1
 subject to ! requirem5ts ( subsection  
7e74  7#f7 ,pay ea* individual describ$ 
9 p>agraph 7#e71 = ea* h\r ( "w p]=m$ = 
! ho/ site employ]1 an am\nt at a rate (
 pay t is equal to1 or great] ?an1 !    
great] (--  7,a7 ! m9imum wage rate     
applicable 9 ! ,/ate 9 :i* ! applicable 
position is locat$2  7,b7 ! wage rate   
applicable "u section #f ( ! ,fair      

,labor ,/&>ds ,act ( #aich 7#bi         
,u4,s4,c4 #bjf72 or  7,c7 if ! ,/ate or 
local gov]nm5tal ag5cy det]m9es         
appropriate1 ! prevail+ wage rate1 z    
det]m9$ by ! ,/ate or local gov]nm5tal  
ag5cy1 = ! type ( "w p]=m$ by !         
individual4  7#g7 ,) respect to !       
employm5t ( ea* individual describ$ 9   
p>agraph 7#e7-- 7,a7 pay any applicable 
,f$]al taxes = employ]s1 includ+ !      
employ] taxes impos$ "u sections #caaa1 
#cbba1 & #ccja ( ! ,int]nal ,rev5ue     
,code ( #aihf2  7,b7 pay any o!r ,/ate  
or local gov]nm5t taxes t employ]s 9 !  
relevant ,/ate or local area are requir$
 to pay2  7,c7 )hold f ! individual's   
e>n+s ! taxes impos$ "u sections #caja &
 #cbja ( ! ,int]nal ,rev5ue ,code (     
#aihf1 & any o!r ,f$]al1 ,/ate1 or local
 tax requir$ to be )held = employees2   
7,d7 complete & submit to ! appropriate 
gov]nm5t ag5cies1 all requir$ ,f$]al1   
,/ate1 & local tax-relat$ &             
employm5t-relat$ =ms t an employ] w\ld  
typically submit1 includ+ by ensur+ t   

ea* individual provides ! in=mation     
necess>y = ! completion ( su* =ms2  7,e7
 provide ! individual ) a ,=m ,w-#b     
,wage & ,tax ,/atem5t = ! cal5d> ye>2   
7,f7 provide = work]s' comp5sation      
cov]age = ! individual "u ! applicable  
,f$]al & ,/ate work]s' comp5sation laws2
  7,g7 p]=m1 ei!r directly or ?r\gh an  
agreem5t describ$ 9 p>agraph 7#e77;,b7 )
 a ho/ site employ]1 all o!r functions t
 an employ] w\ld typically p]=m2  7,h7  
comply ) any applicable requirem5ts =   
provid+ heal? insurance cov]age1 includ+
 "u ! ,pati5t ,protection & ,af=dable   
,c>e ,act 7,public ,law #aaa-adh7 & any 
am5dm5ts made by t ,act2 &  7,i7 provide
 any b5efits t are o!rwise requir$ (    
employ]s 9 ! relevant ,/ate or local    
area4  7#h7 ,ensure t no transitional   
job w\ld result 9 a violation ( any ( ! 
work] protections provid$ 9 subsection  
7f74  7e7 ,duration ( transitional job  
7#a7 ,9 g5]al ,an individual may "w 9 a 
transitional job = a p]iod n to exce$   
#cj weeks1 z long z--  7,a7 ! individual

 cont9ues to meet ! eligibility         
requirem5ts = a transitional job "u     
p>agraphs 7#a7 ?r\gh 7#c7 ( subsection  
7b72  7,b7 ! individual1 dur+ ! p]iod ( 
employm5t 9 ! transitional job1 pursues 
ef=ts to replace h\rs ( "w 9 !          
transitional job ) regul> employm5t2    
7,c7 ! individual has n-- 7i7 obta9$    
regul> employm5t t consi/5tly equals or 
exce$s #cj h\rs ( "w p] week2 or  7ii7  
turn$ d[n any appropriate (f] = su*     
regul> employm5t1 z det]m9$ by !        
,secret>y2 &  7,d7 if ! individual      
receives & accepts an appropriate (f] = 
su* regul> employm5t1 ! individual does 
n po/pone ! />t+ date = su* employm5t   
beyond ! e>lie/ date practicable1 z     
det]m9$ by ! ,secret>y1 ev5 if su* date 
occurs be=e ! individual has rea*$ !    
maximum transitional job "t p]iod ( #cj 
weeks4  7#b7 ,additional transitional   
job ,a ,/ate or local gov]nm5t ag5cy    
adm9i/]+ a transitional jobs program "u 
?is section %all1 subject to !          
availability ( funds1 all[ an individual

 :o has complet$ ! maximum numb] ( weeks
 9 a transitional job an opportunity to 
"w 9 a diff]5t transitional job1 "u !   
same t]ms & conditions e/abli%$ "u ?is  
section1 if ! individual--  7,a7 is     
unable1 aft] ! end ( #cj weeks (        
employm5t 9 a transitional job1 to f9d  
regul> employm5t t consi/5tly equals or 
exce$s #cj h\rs p] week2  7,b7 engages 9
 an int5sive job se>*1 z def9$ by !     
,secret>y1 = n less ?an #d consecutive  
weeks foll[+ ! completion ( a           
transitional job1 & rema9s unable to f9d
 regul> employm5t2 &  7,c7 meets !      
eligibility requirem5ts "u p>agraphs    
7#a7 ?r\gh 7#d7 ( subsection 7b74  7f7  
,work] protections  7#a7 ,prohibition   
aga9/ violation ( contracts ,a          
transitional job %all n violate an exi/+
 contract = s]vices or a collective     
b>ga9+ agreem5t1 & a transitional job t 
w\ld violate a collective b>ga9+        
agreem5t %all n be und]tak5 )\t ! writt5
 concurr5ce ( ! labor organization &    
employ] conc]n$4  7#b7 ,o!r prohibitions

 ,an individual describ$ 9 subsection   
7d77#e7 %all n be assign$ to a          
transitional job-- 7,a7 :5 any o!r      
individual is on lay(f f ! same or any  
sub/antially equival5t job2  7,b7 if !  
employ] has t]m9at$ ! employm5t ( any   
regul> employee or o!rwise caus$ an     
involunt>y r$uction 9 its work=ce ) !   
int5tion ( fill+ ! vacancy s creat$ ) ! 
individual work+ 9 ! transitional job2  
or  7,c7 if ! employ] has caus$ an      
involunt>y r$uction to less ?an full "t 
9 h\rs ( any employee 9 ! same or a     
sub/antially equival5t job4  7g7        
,evaluations ,! ,secret>y may res]ve n m
 ?an a total ( #aj p]c5t ( ! am\nts made
 available "u section #ajd =--  7#a7    
evaluations ( transitional jobs program 
models implem5t$ ) grants aw>d$ "u ?is  
title2 &  7#b7 o!r evaluations ( grants 
& activities c>ri$ out "u ?is title4    
#ajd4 ,au?orization ( appropriations    
,!re are au?oriz$ to be appropriat$ to  
c>ry out ?is title su* sums z may be    
necess>y4  ,,ii ,pov]ty r$uction tax    

cr$its  #bja4 ,re=m ( e>n$ income cr$it 
7a7 ,9 g5]al ,section #cb ( ! ,int]nal  
,rev5ue ,code ( #aihf is am5d$-- 7#a7 by
 am5d+ subsection 7b7 to read z foll[s3 
7b7 ,p]c5tages & am\nts ,= purposes (   
subsection 7a73 7#a7 ,p]c5tages ,! cr$it
 p]c5tage & ! phase\t p]c5tage %all be  
det]m9$ z foll[s3 ,9 ! case ( an        
eligible individual )3,! cr$it p]c5tage 
is3,! phase\t p]c5tage is3,no qualify+  
*ildr5#bc4aebc4aea qualify+ *ild#gj     
#bc4heb qualify+ *ildr5#ge   #bd4ejc or 
m qualify+ *ildr5#hj   #bi4gj4  7#b7    
,am\nts  7,a7 ,9 g5]al ,subject to      
subp>agraph 7,b71 ! e>n$ income am\nt & 
! phase\t am\nt %all be det]m9$ z       
foll[s3 ,9 ! case ( an eligible         
individual )3,! e>n$ income am\nt is3,! 
phase\t am\nt is3,no qualify+           
*ildr5#f1fabaf1ifia qualify+            
*ild#h1bggae1jjjb qualify+              
*ildr5#i1fgeae1jjjc qualify+            
*ildr5#ab1bbjae1jjj4  7,b7 ,jo9t returns
  7i7 ,9 g5]al ,except z provid$ 9      
clause 7ii71 9 ! case ( a jo9t return   

fil$ by an eligible individual & su*    
individual's sp\se1 ! phase\t am\nt     
det]m9$ "u subp>agraph 7,a7 %all be     
increas$ by #e1eej4  7ii7 ,taxpay]s ) no
 qualify+ *ildr5 ,9 ! case ( a jo9t     
return fil$ by an eligible individual & 
su* individual's sp\se :o d n h a       
qualify+ *ild = ! taxable ye>1 ! phase\t
 am\nt 9 ! ?ird column ( ! fir/ r[ ( !  
table 9 subp>agraph 7,a7 %all be        
increas$ by #h1jjj4  2  7#b7 9 subclause
 7,,ii7 ( subsection 7c77#a77;,a77ii71  
by /rik+ atta9$ age #be b n atta9$ age  
#fe & ins]t+ atta9$ age #ba b n atta9$  
age #fg2 &  7#c7 by am5d+ subsection 7j7
 to read z foll[s3  7j7 ,inflation      
adju/m5ts  7#a7 ,9 g5]al ,9 ! case ( any
 taxable ye> beg9n+ aft] #bjag1 ea* ( ! 
doll> am\nts 9 subp>agraph 7,a7 (       
subsection 7b77#b7 7aft] be+ increas$ "u
 subp>agraph 7,b7 !re(7 %all be increas$
 by an am\nt equal to--  7,a7 su* doll> 
am\nt1 multipli$ by  7,b7 ! co/-(-liv+  
adju/m5t det]m9$ "u section #a7;f77#c7 =
 ! cal5d> ye> 9 :i* ! taxable ye> beg9s1

 det]m9$ by sub/itut+ cal5d> ye> #bjaf =
 cal5d> ye> #aiib 9 subp>agraph 7,b7    
!re(4  7#b7 ,r\nd+ ,if any doll> am\nt  
increas$ "u p>agraph 7#a7 is n a        
multiple ( #ej1 su* doll> am\nt %all be 
r\nd$ to ! ne>e/ multiple ( #ej4  4  7b7
 ,effective date ,! am5dm5ts made by ?is
 section %all apply to taxable ye>s     
beg9n+ aft] ,decemb] #ca1 #bjaf4  #bjb4 
,e/abli%m5t ( fully refundable *ild tax 
cr$it  7a7 ,cr$it made refundable  7#a7 
,9 g5]al ,! ,int]nal ,rev5ue ,code (    
#aihf is am5d$--  7,a7 by r$esignat+    
section #bd z section #cf;,c2 &  7,b7 by
 mov+ section #cf;,c 7z s r$esignat$7 f 
subp>t ,a ( "p ,,iv ( sub*apt] ,a (     
*apt] #a to ! location imm$iately be=e  
section #cg 9 subp>t ,c ( "p ,,iv (     
sub*apt] ,a ( *apt] #a4  7#b7 ,con=m+   
am5dm5ts  7,a7 ,section #cf;,c ( su*    
,code1 z r$esignat$ by subsection 7a71  
is am5d$ by /rik+ subsection 7d74  7,b7 
,! table ( sections = subp>t ,a ( "p    
,,iv ( sub*apt] ,a ( *apt] #a ( subtitle
 ,a ( su* ,code is am5d$ by /rik+ ! item

 relat+ to section #bd4  7,c7 ,! table (
 sections = subp>t ,c ( "p ,,iv (       
sub*apt] ,a ( *apt] #a ( subtitle ,a (  
su* ,code is am5d$ by ins]t+ aft] ! item
 relat+ to section #cf;,b ! foll[+3     
,sec4 #cf;,c4 ,*ild tax cr$it44  7,d7   
,subp>agraph 7,b7 ( section #de,r7f77#c7
 ( su* ,code is am5d$ to read z foll[s3 
7,b7 ,special rule ,any am\nts paid     
pursuant to an agreem5t "u section      
#caba7l7 7relat+ to agreem5ts ent]$ into
 by ,am]ican employ]s ) respect to =eign
 affiliates7 :i* are equival5t to !     
taxes ref]r$ to 9 subp>agraph 7,a7 %all 
be treat$ z taxes ref]r$ to 9 su*       
subp>agraph4  4  7,e7 ,section          
#aeb7;f77#f77;,b77ii7 ( su* ,code is    
am5d$ by /rik+ section #bd & ins]t+     
section #cf;,c4  7,f7 ,p>agraph 7#bf7 ( 
section #eja7;c7 ( su* ,code is am5d$ 9 
! flu% matt] at ! end by /rik+ section  
#bd7;c7 & ins]t+ section #cf;,c7c74     
7,g7 ,section #fbaa7;b77#d77;,a7 ( su*  
,code is am5d$-- 7i7 by /rik+ #bd7;d712 
&  7ii7 by ins]t+ 1 #cf;,c aft] #cf;,b4 

7,h7 ,section #fbac7;g77#b7 ( su* ,code 
is am5d$--  7i7 9 subp>agraph 7,i71 by  
/rik+ section #bd7;e7 & ins]t+ section  
#cf;,c7e72  7ii7 9 subp>agraph 7,l71 by 
/rik+ #bd1 or #cb & ins]t+ #cb1 or      
#cf;,c2 &  7iii7 9 subp>agraph 7,p7--   
7,i7 by /rik+ #bd7;h77#b7 & ins]t+      
#cf;,c7g77#b72  7,,ii7 by /rik+ #bd &   
ins]t+ #cf;,c2 &  7,,iii7 by /rik+      
7h77#b7 !re( & ins]t+ 7g77#b7 !re(4     
7,i7 ,section #fdjb7m7 ( su* ,code is   
am5d$ by /rik+ #bd 7by reason (         
subsection 7d7 !re(7 or #cb & ins]t+ #cb
 or #cf;,c4  7,j7 ,section #ffie7;g7 (  
su* ,code is am5d$ by /rik+ #bd1        
#be;,a7a77#a71 or #cb & ins]t+          
#be;,a7a77#a71 #cb1 or #cf;,c4  7,k7    
,p>agraph 7#b7 ( section #acbd7;b7 (    
title #ca1 ,unit$ ,/ates ,code1 is am5d$
 by ins]t+ 1 #cf;,c aft] #cf;,b4  7b7   
,modification ( cr$it  7#a7 ,cr$it am\nt
 ,subsection 7a7 ( section #cf;,c ( !   
,int]nal ,rev5ue ,code ( #aihf1 z       
r$esignat$ by subsection 7a77#a71 is    
am5d$ to read z foll[s3  7a7 ,all[ance (

 cr$it ,9 ! case ( a taxpay] ) #a or m  
qualify+ *ildr51 !re %all be all[$ z a  
cr$it aga9/ ! tax impos$ by ?is subtitle
 = ! taxable ye> an am\nt equal to #de  
p]c5t ( ! taxpay]'s e>n$ income 7)9 !   
mean+ ( section #cb7 :i* is tak5 into   
acc\nt 9 comput+ taxable income = !     
taxable ye>4  4  7#b7 ,limitations      
,subsection 7b7 ( section #cf;,c ( su*  
,code1 z s r$esignat$1 is am5d$ to read 
z foll[s3  7b7 ,limitation  7#a7 ,9     
g5]al ,! am\nt ( ! cr$it det]m9$ "u     
subsection 7a7 = any taxable ye> %all n 
exce$ an am\nt equal to ! product (     
#a1jjj & ! numb] ( qualify+ *ildr5 ( !  
taxpay] = ! taxable ye>4  7#b7 ,r$uction
 bas$ on modifi$ adju/$ gross income    
7,a7 ,9 g5]al ,! am\nt :i* w\ld 7b = ?is
 p>agraph7 be all[able z a cr$it "u ?is 
section 7det]m9$ aft] ! application (   
p>agraph 7#a77 %all be r$uc$ 7b n bel[  
z]o7 by #ej = ea* #a1jjj 7or fraction   
!re(7 by :i* ! taxpay]'s modifi$ adju/$ 
gross income exce$s--  7i7 #aaj1jjj1 9 !
 case ( a jo9t return1  7ii7 #ge1jjj1 9 

! case ( an individual :o is n m>ri$1 & 
7iii7 #ee1jjj1 9 ! case ( a m>ri$       
individual fil+ a sep>ate return4  7,b7 
,m>ital /atus2 adju/$ gross income ,=   
purposes ( ?is p>agraph--  7i7 m>ital   
/atus %all be det]m9$ "u section #ggjc1 
&  7ii7 ! t]m modifi$ adju/$ gross      
income means adju/$ gross income        
increas$ by any am\nt exclud$ f gross   
income "u section #iaa1 #ica1 or #icc4  
4  7#c7 ,adju/m5t = inflation ,section  
#cf;,c ( su* ,code1 z s r$esignat$1 is  
am5d$ by ins]t+ aft] subsection 7c7 !   
foll[+ new subsection3  7d7 ,adju/m5t = 
inflation  7#a7 ,9 g5]al ,9 ! case ( any
 taxable ye> beg9n+ aft] #bjag1 ! #a1jjj
 am\nt 9 subsection 7b77#a7 %all be     
increas$ by an am\nt equal to--  7,a7   
su* doll> am\nt1 multipli$ by  7,b7 !   
co/-(-liv+ adju/m5t det]m9$ "u section  
#a7;f77#c7 = ! cal5d> ye> 9 :i* !       
taxable ye> beg9s det]m9$ by sub/itut+  
cal5d> ye> #bjaf = cal5d> ye> #aiib 9   
subp>agraph 7,b7 !re(4  7#b7 ,r\nd+ ,if 
any increase det]m9$ "u p>agraph 7#a7 is

 n a multiple ( #ej1 su* increase %all  
be r\nd$ to ! ne>e/ multiple ( #ej4  4  
7c7 ,effective date ,! am5dm5ts made by 
?is section %all apply to taxable ye>s  
beg9n+ aft] ,decemb] #ca1 #bjaf4