Page:United States Statutes at Large Volume 95.djvu/226

 95 STAT. 200

PUBLIC LAW 97-34—AUG. 13, 1981 the class of individuals who are shareholders or owners (or their spouses or dependents), each of whom (on any day of the year) owns more than 5 percent of the stock or of the capital or profits interest in the employer. "(4) No FUNDING REQUIRED.—A program referred to in paragraph (1) is not required to be funded. "(5) NOTIFICATION OF ELIGIBLE EMPLOYEES.—Reasonable notifi-

cation of the availability and terms of the program shall be provided to eligible employees. "(6) STATEMENT OF EXPENSES.—The plan shall furnish to an employee, on or before January 31, a written statement showing the amounts paid or expenses incurred by the employer in providing dependent care assistance to such employee during the previous calendar year. "(e) DEFINITIONS AND SPECIAL RULES.—For purposes of this section— "(1) DEPENDENT CARE ASSISTANCE.—The term 'dependent care assistance' means the payment of, or provision of, those services which if paid for by the employee would be considered employment-related expenses under section 44A(c)(2) (relating to expenses for household and dependent care services necessary for gainful employment). "(2) EARNED INCOME.—The term 'earned income* shall have the meaning given such term in section 43(c)(2), but such term shall not include any amounts paid or incurred by an employer for dependent care assistance to an employee. "(3) EMPLOYEE.—The term 'employee' includes, for any year, an individual who is an employee within the meaning of section 401(c)(1) (relating to self-employed individuals). "(4) EMPLOYER.—An individual who owns the entire interest in an unincorporated trade or business shall be treated as his own employer. A partnership shall be treated as the employer of each partner who is an employee within the meaning of paragraph (3). "(5) ATTRIBUTION RULES.— "(A) OWNERSHIP OF STOCK.—Ownership of stock in a corpo-

ration shall be determined in accordance with the rules provided under subsections (d) and (e) of section 1563 (without regard to section 1563(e)(3)(C)). "(B) INTEREST IN UNINCORPORATED TRADE OR BUSINESS.—

The interest of an employee in a trade or business which is • ^" not incorporated shall be determined in accordance with regulations prescribed by the Secretary, which shall be beised on principles similar to the principles which apply in the case of subparagraph (A). "(6) UTIUZATION TEST NOT APPLICABLE.—A dependent care assistance program shall not be held or considered to fail to meet any requirements of subsection (d) merely because of utilization rates for the different types of assistance made available under the program. "(7) DISALLOWANCE OF EXCLUDED AMOUNTS AS CREDIT OR DEDUC-

TION.—No deduction or credit shall be allowed under any other section of this chapter for any amount excluded from income by reason of this section." (2) EXCLUSION FROM WAGES.— (A) EMPLOYMENT TAXES AND COLLECTION OF INCOME TAX.—

26 USC 3121, 3306.

Subtitle C is amended by striking out "section 127" in section 3121(a)(18) (relating to the Federal Insurance C!ontributions Act), section 3306(b)(13) (relating to the Federal

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