Page:United States Statutes at Large Volume 104 Part 2.djvu/818

 104 STAT. 1388-410 PUBLIC LAW 101-508 —NOV. 5, 1990 "(i) such amount is paid, reimbursed, or subsidized by the Federal Government, a State or local government, or any agency or instrumentality thereof; and "(ii) the payment, reimbursement, or subsidy of such Eunount is not includible in the gross income of the recipient. "(c) DEFINITIONS AND SPECIAL RULES. —For purposes of this section— " (1) ELIGIBLE INDIVIDUAL.— " (A) IN GENERAL. —The term 'eligible individual' means any individual who has a qualifying child for the taxable year. "(B) QuAUFYiNG CHILD INELIGIBLE.— If an individual is the qualifying child of a taxpayer for any taxable year of such taxpayer beginning in a calendar year, such in^vidual shall not be treated as an eligible individual for any taxable year of such individual beginning in such calendar year. "(C) 2 OR MORE ELIGIBLE INDIVIDUALS.—I f 2 Or morC individuals would (but for this subparagraph and after application of subparagraph (B)) be treated as eligible individuals with respect to the same qualifying child for taxable years beginning in the same calendar year, only the individual with the highest adjusted gross income for such taxable years shall be treated as an eligible individual with respect to such qualifying child. (D) EXCEPTION FOR INDIVIDUAL CLAIMING BENEFITS UNDER SECTION 911.— The term 'eligible individual' does not include any individual who claims the benefits of section 911 (relating to citizens or residents living abroad) for the taxable year. " (2) EARNED INCOME. — "(A) The term 'earned income' means— "(i) wages, salaries, tips, and other employee compensation, plus "(ii) the £unount of the taxpayer's net earnings from self-employment for the taxable year (within the meaning of section 1402(a)), but such net earnings shall be determined with regard to the deduction allowed to the taxpayer by section 164(f). "(B) For purposes of subparagraph (A)— "(i) the earned income of an individual shall be computed without regard to any community property laws, "(ii) no amount received as a pension or annuity shall be taken into account, and "(iii) no amount to which section 871(a) applies (relating to income of nonresident alien individuals not connected with United States business) shall be taken into account. "(3) QUALIFYING CHILD.— ' (A) IN GENERAL.—The term 'qualifying child' means, with respect to any taxpayer for any taxable year, an individual— "(i) who bears a relationship to the taxpayer described in subparagraph (B), "(ii) except as provided in subparagraph (B)(iii), who has the same principal place of abode as the taxpayer for more than one-half of such taxable year,

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