Page:United States Statutes at Large Volume 90 Part 2.djvu/89

 PUBLIC LAW 94-455—OCT. 4, 1976

9 0 STAT. 1557

(A) Section 209(b) of the T a x Reduction Act of 1975 is 26 USC 43note. amended by striking out " January 1, 1977" and inserting i n lieu thereof " January 1, 1978". (B) Subsections (a) and (b) of section 43 (relating to 26 USC 43. earned income credit,) are amended to read as follows: "(a)

ALLOWANCE o r C R E D I T. — I n the case of a n eligible i n d i v i d u a l,

there is allowed as a credit against the tax imposed by this chapter for the taxable year a n amount equal to 10 percent of so much of the earned income for the taxable year as does not exceed $4,000. " (b) L I M I T A T I O N. — The amount of the credit allowable to a taxp a y e r under subsection (a) for any taxable year shall be reduced ( b u t not below zero) by a n amount equal to 10 percent of so much of the adjusted gross income (or, if greater, the earned income) of the tax p a y e r for the taxable year as exceeds $4,000." (2) DEFINITION OF ELIGIBLE INDIVIDUAL.—Subparagraph

(A^

of section 43(c)(1) (relating to definition of eligible individual) is amended to read as follows: " (A) maintains a household (within the meaning of section 4 4 A (f)(1)) i n the United States which is the principal place of abode of that individual and— " (i) a child of that individual if such child meets the requirements of section 151(e)(1)(B) (relating to additional exemptions for dependents), or " ( i i) a child of that individual who is disabled (within the meaning of section 7 2 (m)(7)) and with respect to whom that individual is entitled to claim a deduction under section 1 5 1; and",

Post, p. 1563.

(d) WITHHOLDING AMENDMENTS.—

(1) Subsection (a) of section 3402 (relating to income tax 26 USC 3402. collected a t source) is amended to read as follows: "(a)

REQUIREMENTo r W I T H H O L D I N G. — E x c e p t as otherwise p r o -

vided i n this section, every employer making payment of wages shall deduct and witlihold upon such wages a tax determined i n accordance with tables prescribed by the Secretary. W i t h respect to wages paid p r i o r to January 1, 1978, the tables so prescribed shall be the same as the tables prescribed under this section which were in eifect on January 1, 1976. W i t h respect to wages paid after December 31, 1977, the Secretary shall prescribe new tables which shall be the same as the tables prescribed under this subsection which were in effect on January 1, 1975, except that such tables shall be modified to the extent necessary to reflect the amendments made to subsections (b) and (c) of section 141 by the T a x Reform Act of 1976. For Ante, p. 1556. purposes of applying such taliles, the term 'the amount of wages' "The amount of means the amount by which the wages exceed the number of with- wages." holding exemptions claimed, multiplied by the amount of one such exemption as shown in the table in subsection (b)(1). " (2) Paragraph (6) of section 3402(c) (relating to wage bracket w i t h h o l d i n g), as such paragraph was in effect on the d a y before the date of the enactment of the T a x Reduction Act of 1975, is amended by striking out "table 7 contained in sub- 26 USC 1 note, section (a) " and inserting in lieu thereof " the table for a n annual payroll period prescribed pursuant to subsection (a) ". (3) Subparagraph (B) of section 3402(m)(1) (relating to withholding allowance based on itemized deductions) is amended to read as follows: " (B) an amount equal to the lesser of (i) 16 percent of his estimated wages, or ( i i) $2,800 ($2,400 i n the case of an individual

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