Page:United States Statutes at Large Volume 100 Part 3.djvu/299

 PUBLIC LAW 99-514—OCT. 22, 1986

100 STAT. 2107

Subtitle B—Provisions Related to Tax Credits SEC. 111. INCREASE IN EARNED INCOME CREDIT.

(a) INCREASE IN AMOUNT OF CREDIT.—Subsection (a) of section 32 (relating to earned income credit) is amended— (1) by striking out "11 percent" and inserting in lieu thereof b "14 percent", and (2) by striking out "$5,000" and inserting in lieu thereof "$5,714". Oa) INCREASE IN INCOME LEVEL AT WHICH PHASEOUT BEGINS.—

Subsection O> of section 32 is amended to read as follows: t) "(b) LIMITATION.—The amount of the credit allowable to a taxpayer under subsection (a) for any taxable year shall not exceed the excess (if any) of— "(1) the maximum credit allowable under subsection (a) to any taxpayer, over "(2) 10 percent 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. In the case of any taxable year beginning in 1987, paragraph (2) shall be applied by substituting '$6,500' for '$9,000'." (c) INFLATION ADJUSTMENTS.—Section 32 is amended by adding at the end thereof the following new subsection: "(i) INFLATION ADJUSTMENTS.—

"(1) IN GENERAL.—In the case of any taxable year beginning after the applicable calendar year, each dollar amount referred to in paragraph (2)(B) shall be increased by an amount equal to— "(A) such dollar amount, multiplied by "(B) 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 1984' for 'calendar year 1987' in subparagraph (B) thereof. "(2) DEFINITIONS, ETC.—For purposes of paragraph (1)— "(A) APPLICABLE CALENDAR YEAR.—The term 'applicable calendar year' means— -,if 3 G "(i) 1986 in the case of the dollar amounts referred to in clause (i) or (ii) of subparagraph (B), and "(ii) 1987 in the case of the dollar amount referred to in clause (iii) of subparagraph (B). "(B) DOLLAR AMOUNTS.—The dollar amounts referred to, J in this subparagraph are— "(i) the $5,714 amount contained in subsection (a), -e- Au "(ii) the $6,500 amount contained in the last sentence of subsection (b), and "(iii) the $9,000 amount contained in subsection (b)(2). "(3) ROUNDING.—If any increase determined under paragraph (1) is not a multiple of $10, such increase shall be rounded to the i nearest multiple of $10 (or, if such increase is a multiple of $5, such increase shall be increased to the next higher multiple of $10)." (d) CONFORMING AMENDMENTS.—

(1) Paragraph (2) of section 32(f) (relating to amount of credit to be determined under tables) is amended by striking out subparagraphs (A) and (B) and inserting in lieu thereof the following:

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