H.R. 5771 — what changed
Tax Increase Prevention Act of 2014
From Introduced in House to Engrossed in House. 3 sections amended and 16 added between Introduced in House and Engrossed in House.
Section 1 Short title, etc
changed
Short title— This Act division may be cited as the “Tax Increase Prevention Act of 2014”.
Amendment of 1986 Code— Except as otherwise expressly provided, whenever in this Act an amendment or repeal is expressed in terms of an amendment to, or repeal of, a section or other provision, the reference shall be considered to be made to a section or other provision of the Internal Revenue Code of 1986.
Table of contents— The table of contents for this Act is as follows:
Sec. 160 Extension of excise tax credits relating to certain fuels
Excise tax credits and outlay payments for biodiesel and renewable diesel fuel mixtures—
Paragraph (6) of section 6426(c) is amended by striking “December 31, 2013” and inserting “December 31, 2014”.
Subparagraph (B) of section 6427(e)(6) is amended by striking “December 31, 2013” and inserting “December 31, 2014”.
Extension of alternative fuels excise tax credits—
changed
In general— Sections 6426(d)(5) and 6426(e)(3) are each amended by striking “December 31, 2013” and inserting “December 31, 2014”.
Outlay payments for alternative fuels— Subparagraph (C) of section 6427(e)(6) is amended by striking “December 31, 2013” and inserting “December 31, 2014”.
Extension of alternative fuels excise tax credits relating to liquefied hydrogen—
In general— Sections 6426(d)(5) and 6426(e)(3), as amended by subsection (b), are each amended by striking “(September 30, 2014 in the case of any sale or use involving liquefied hydrogen)”.
Outlay payments for alternative fuels— Paragraph (6) of section 6427(e) is amended—
by striking “except as provided in subparagraph (D), any” in subparagraph (C), as amended by this Act, and inserting “any”,
by striking the comma at the end of subparagraph (C) and inserting “, and”, and
by striking subparagraph (D) and redesignating subparagraph (E) as subparagraph (D).
Effective dates—
In general— Except as provided in paragraph (2), the amendments made by this section shall apply to fuel sold or used after December 31, 2013.
Liquefied hydrogen— The amendments made by subsection (c) shall apply to fuel sold or used after September 30, 2014.
Special rule for certain periods during 2014— Notwithstanding any other provision of law, in the case of—
any biodiesel mixture credit properly determined under section 6426(c) of the Internal Revenue Code of 1986 for periods after December 31, 2013, and before the date of the enactment of this Act, and
any alternative fuel credit properly determined under section 6426(d) of such Code for such periods,
Sec. 161 Extension of credit for alternative fuel vehicle refueling property
added
added
In general— Subsection (g) of section 30C is amended by striking “placed in service” and all that follows and inserting “placed in service after December 31, 2014.”.
added
Effective date— The amendment made by this section shall apply to property placed in service after December 31, 2013.
Sec. 221 Deadwood provisions
In general—
Adjustments in tax tables so that inflation will not result in tax increases— Paragraph (7) of section 1(f) is amended to read as follows:
“(7) Special rule for certain brackets—In prescribing tables under paragraph (1) which apply to taxable years beginning in a calendar year after 1994, the cost-of-living adjustment used in making adjustments to the dollar amounts at which the 36 percent rate bracket begins or at which the 39.6 percent rate bracket begins shall be determined under paragraph (3) by substituting “1993” for “1992”.”
Certain plug-in electric vehicles—
Subpart B of part IV of subchapter A of chapter 1 is amended by striking section 30 (and by striking the item relating to such section in the table of sections for such subpart).
Subsection (b) of section 38, as amended by section 209(f)(1) of this Act, is amended by inserting “plus” at the end of paragraph (35), by striking paragraph (36), and by redesignating paragraph (37) as paragraph (36).
Subclause (VI) of section 48C(c)(1)(A)(i) is amended by striking “, qualified plug-in electric vehicles (as defined by section 30(d)),”.
Section 1016(a) is amended by striking paragraph (25).
Section 6501(m) is amended by striking “section 30(e)(6),”.
Earned income credit—
Paragraph (1) of section 32(b) is amended—
by striking subparagraphs (B) and (C), and
by striking “(A) In general.—In the case of taxable years beginning after 1995:” in subparagraph (A) and moving the table 2 ems to the left.
Subparagraph (B) of section 32(b)(2) is amended by striking “increased by” and all that follows and inserting “increased by $3,000.”.
First-time homebuyer credit— Section 6213(g)(2), as amended by section 214(a)(2) of this Act, is amended by striking subparagraph (P).
Making work pay credit—
Subpart C of part IV of subchapter A of chapter 1 is amended by striking section 36A (and by striking the item relating to such section in the table of sections for such subpart).
Subparagraph (A) of section 6211(b)(4) is amended by striking “, 36A”.
Section 6213(g)(2) is amended by striking subparagraph (N).
General business credits— Subsection (d) of section 38 is amended by striking paragraph (3).
Low-income housing credit— Subclause (I) of section 42(h)(3)(C)(ii) is amended by striking “($1.50 for 2001)”.
Minimum tax credit—
Section 53 is amended by striking subsections (e) and (f).
The amendment made by clause (i) striking subsection (f) of section 53 of the Internal Revenue Code of 1986 shall not be construed to allow any tax abated by reason of section 53(f)(1) of such Code (as in effect before such amendment) to be included in the amount determined under section 53(b)(1) of such Code.
Paragraph (4) of section 6211(b)(4) is amended by striking “, 53(e)”.
Adjustments based on adjusted current earnings— Clause (ii) of section 56(g)(4)(F) is amended by striking “In the case of any taxable year beginning after December 31, 1992, clause” and inserting “Clause”.
Items of tax preference; depletion— Paragraph (1) of section 57(a) is amended by striking “Effective with respect to taxable years beginning after December 31, 1992, this” and inserting “This”.
Intangible drilling costs—
Clause (i) of section 57(a)(2)(E) is amended by striking “In the case of any taxable year beginning after December 31, 1992, this” and inserting “This”.
Clause (ii) of section 57(a)(2)(E) is amended by striking “(30 percent in case of taxable years beginning in 1993)”.
Environmental tax—
Subchapter A of chapter 1 is amended by striking part VII (and by striking the item relating to such part in the table of parts for such subchapter).
Paragraph (2) of section 26(b) is amended by striking subparagraph (B).
Section 30A(c) is amended by striking paragraph (1) and by redesignating paragraphs (2), (3), and (4) as paragraphs (1), (2), and (3), respectively.
Subsection (a) of section 164 is amended by striking paragraph (5).
Section 275(a) is amended by striking the last sentence.
Section 882(a)(1) is amended by striking “, 59A”.
Section 936(a)(3) is amended by striking subparagraph (A) and by redesignating subparagraphs (B), (C), and (D) as subparagraphs (A), (B), and (C), respectively.
Section 1561(a) is amended—
by inserting “and” at the end of paragraph (2), by striking “, and” at the end of paragraph (3) and inserting a period, and by striking paragraph (4), and
by striking “, the amount specified in paragraph (3), and the amount specified in paragraph (4)” and inserting “and the amount specified in paragraph (3)”.
Section 4611(e) is amended—
by striking “section 59A, this section,” in paragraph (2)(B) and inserting “this section”, and
in paragraph (3)(A)—
by striking “section 59A, ”, and
by striking the comma after “rate)”.
Section 6425(c)(1)(A) is amended by inserting “plus” at end of clause (i), by striking “plus” and inserting “over” at the end of clause (ii), and by striking clause (iii).
Section 6655 is amended—
in subsections (e)(2)(A)(i) and (e)(2)(B)(i), by striking “taxable income, alternative minimum taxable income, and modified alternative minimum taxable income” and inserting “taxable income and alternative minimum taxable income”,
in subsection (e)(2)(B), by striking clause (iii), and
in subsection (g)(1)(A), by inserting “plus” at the end of clause (ii), by striking clause (iii), and by redesignating clause (iv) as clause (iii).
Section 9507(b)(1) is amended by striking “59A,”.
Standard deduction—
So much of paragraph (1) of section 63(c) as follows “the sum of—” is amended to read as follows:
“(A) the basic standard deduction, and
“(B) the additional standard deduction.”
Subsection (c) of section 63 is amended by striking paragraphs (7), (8), and (9).
Annuities; certain proceeds of endowment and life insurance contracts— Section 72 is amended—
in subsection (c)(4), by striking “; except that if such date was before January 1, 1954, then the annuity starting date is January 1, 1954”, and
in subsection (g)(3), by striking “January 1, 1954, or” and “, whichever is later”.
Unemployment compensation— Section 85 is amended by striking subsection (c).
Accident and health plans— Section 105(f) is amended by striking “or (d)”.
Flexible spending arrangements— Section 106(c)(1) is amended by striking “Effective on and after January 1, 1997, gross” and inserting “Gross”.
Certain combat zone compensation of members of the armed forces— Subsection (c) of section 112 is amended—
by striking “(after June 24, 1950)” in paragraph (2), and
by striking “such zone;” and all that follows in paragraph (3) and inserting “such zone.”.
Legal service plans—
Part III of subchapter B of chapter 1 is amended by striking section 120 (and by striking the item relating to such section in the table of sections for such subpart).
Section 414(n)(3)(C) is amended by striking “120,”.
Section 414(t)(2) is amended by striking “120,”.
Section 501(c) is amended by striking paragraph (20).
Section 3121(a) is amended by striking paragraph (17).
Section 3231(e) is amended by striking paragraph (7).
Section 3306(b) is amended by striking paragraph (12).
Section 6039D(d)(1) is amended by striking “120,”.
Section 209(a)(14) of the Social Security Act is amended—
by striking subparagraph (B), and
by striking “(14)(A)” and inserting “(14)”.
Principal residence— Section 121(b)(3) is amended—
by striking subparagraph (B), and
in subparagraph (A), by striking “(A) In general.—” and moving the text 2 ems to the left.
Certain reduced uniformed services retirement pay— Section 122(b)(1) is amended by striking “after December 31, 1965,”.
Great plains conservation program— Section 126(a) is amended by striking paragraph (6) and by redesignating paragraphs (7), (8), (9), and (10) as paragraphs (6), (7), (8), and (9), respectively.
Treble damage payments under the antitrust law— Section 162(g) is amended by striking the last sentence.
State legislators’ travel expenses away from home— Paragraph (4) of section 162(h) is amended by striking “For taxable years beginning after December 31, 1980, this” and inserting “This”.
Interest—
Section 163 is amended—
by striking paragraph (6) of subsection (d), and
by striking paragraph (5) of subsection (h).
Section 56(b)(1)(C) is amended by striking clause (ii) and by redesignating clauses (iii), (iv), and (v) as clauses (ii), (iii), and (iv), respectively.
Qualified motor vehicle taxes— Section 164, as amended by section 209(c) of this Act, is amended by striking subsections (a)(6) and (b)(6).
Disaster losses—
Subsection (h) of section 165 is amended by striking paragraph (3) and by redesignating paragraphs (4) and (5) as paragraphs (3) and (4), respectively.
Paragraph (3) of section 165(h), as so redesignated, is amended by striking “paragraphs (2) and (3)” and inserting “paragraph (2)”.
Subsection (i) of section 165 is amended—
in paragraph (1)—
by striking “(as defined by clause (ii) of subsection (h)(3)(C))”, and
by striking “(as defined by clause (i) of such subsection)”,
by striking “(as defined by subsection (h)(3)(C)(i)” in paragraph (4), and
by adding at the end the following new paragraph:
“(5) Federally declared disasters—For purposes of this subsection—
“(A) In general—The term Federally declared disaster means any disaster subsequently determined by the President of the United States to warrant assistance by the Federal Government under the Robert T. Stafford Disaster Relief and Emergency Assistance Act.
“(B) Disaster area—The term disaster area means the area so determined to warrant such assistance.”
Section 1033(h)(3) is amended by striking “section 165(h)(3)(C)” and inserting “section 165(i)(5)”.
Charitable, etc., contributions and gifts— Section 170 is amended—
by striking paragraph (3) of subsection (b),
by striking paragraph (6) of subsection (e), and
by striking subsection (k).
Amortizable bond premium—
Subparagraph (B) of section 171(b)(1) is amended to read as follows:
“(B)
“(i) with reference to the amount payable on maturity (or if it results in a smaller amortizable bond premium attributable to the period before the call date, with reference to the amount payable on the earlier call date), in the case of a bond described in subsection (a)(1), and
“(ii) with reference to the amount payable on maturity or on an earlier call date, in the case of a bond described in subsection (a)(2).”
Paragraphs (2) and (3)(B) of section 171(b) are each amended by striking “paragraph (1)(B)(ii)” and inserting “paragraph (1)(B)(i)”.
Net operating loss carrybacks, carryovers, and carryforwards—
Section 172, as amended by section 211(c)(1)(B) of this Act, is amended—
by striking subparagraphs (D), (H), (I), and (J) of subsection (b)(1) and by redesignating subparagraphs (E), (F), and (G) as subparagraphs (D), (E), and (F), respectively, and
by striking subsections (g) and (j) and by redesignating subsections (h), (i), and (k) as subsections (g), (h), and (i), respectively.
Each of the following provisions of section 172 (as amended by section 211(c)(1)(B) of this Act and as redesignated by subparagraph (A)) are amended as follows:
By striking “ending after August 2, 1989” in subsection (b)(1)(D)(i)(II).
By striking “subsection (h)” in subsection (b)(1)(D)(ii) and inserting “subsection (g)”.
By striking “section 165(h)(3)(C)(i)” in subsection (b)(1)(E)(ii)(II) and inserting “section 165(i)(5)”.
By striking “subsection (i)” and all that follows in the last sentence of subsection (b)(1)(E)(ii) and inserting “subsection (h)).”.
By striking “subsection (i)” in subsection (b)(1)(F) and inserting “subsection (h)”.
By striking subparagraph (F) of paragraph (2) of subsection (g).
By striking “subsection (b)(1)(E)” each place it appears in subsection (g)(4) and inserting “subsection (b)(1)(D)”.
By striking the last sentence of subsection (h)(1).
By striking “subsection (b)(1)(G)” each place it appears in subsection (h)(3) and inserting “subsection (b)(1)(F)”.
Subsection (d) of section 56 is amended by striking paragraph (3).
Paragraph (5) of section 382(l) is amended by striking subparagraph (F) and by redesignating subparagraphs (G) and (H) as subparagraphs (F) and (G), respectively.
Research and experimental expenditures— Subparagraph (A) of section 174(a)(2) is amended to read as follows:
“(A) Without consent—A taxpayer may, without the consent of the Secretary, adopt the method provided in this subsection for his first taxable year for which expenditures described in paragraph (1) are paid or incurred.”
Amortization of certain research and experimental expenditures— Paragraph (2) of section 174(b) is amended by striking “beginning after December 31, 1953”.
Soil and water conservation expenditures— Paragraph (1) of section 175(d) is amended to read as follows:
“(1) Without consent—A taxpayer may, without the consent of the Secretary, adopt the method provided in this section for the taxpayer’s first taxable year for which expenditures described in subsection (a) are paid or incurred.”
Clean-fuel vehicles—
Part VI of subchapter A of chapter 1 is amended by striking section 179A (and by striking the item relating to such section in the table of sections for such part).
Section 30C(e) is amended by adding at the end the following:
“(7) Reference—For purposes of this section, any reference to section 179A shall be treated as a reference to such section as in effect immediately before its repeal.”
Section 62(a) is amended by striking paragraph (14).
Section 263(a)(1) is amended by striking subparagraph (H).
Section 280F(a)(1) is amended by striking subparagraph (C).
Section 312(k)(3) is amended by striking “179A,” each place it appears.
Section 1016(a) is amended by striking paragraph (24).
Section 1245(a) is amended by striking “179A,” each place it appears in paragraphs (2)(C) and (3)(C).
Qualified disaster expenses— Part VI of subchapter A of chapter 1 is amended by striking section 198A (and by striking the item relating to such section in the table of sections for such part).
Activities not engaged in for profit— Section 183(e)(1) is amended by striking the last sentence.
Domestic production activities—
Subsection (a) of section 199 is amended—
by striking paragraph (2),
by redesignating subparagraphs (A) and (B) of paragraph (1) as paragraphs (1) and (2), respectively, and by moving paragraphs (1) and (2) (as so redesignated) 2 ems to the left, and
by striking “Allowance of deduction.—” and all that follows through “There shall be allowed” and inserting the following:
“(a) Allowance of deduction—There shall be allowed”
Paragraphs (2) and (6)(B) of section 199(d) are each amended by striking “(a)(1)(B)” and inserting “(a)(2)”.
Retirement savings—
Subparagraph (A) of section 219(b)(5) is amended to read as follows:
“(A) In general—The deductible amount is $5,000.”
Clause (ii) of section 219(b)(5)(B) is amended to read as follows:
“(ii) Applicable amount—For purposes of clause (i), the applicable amount is $1,000.”
Paragraph (5) of section 219(b) is amended by striking subparagraph (C) and by redesignating subparagraph (D) as subparagraph (C).
Clause (ii) of section 219(g)(2)(A) is amended by striking “for a taxable year beginning after December 31, 2006”.
Section 219(g)(3)(B) is amended by striking clauses (i) and (ii) and inserting the following:
“(i) In the case of a taxpayer filing a joint return, $80,000.
“(ii) In the case of any other taxpayer (other than a married individual filing a separate return), $50,000.”
Paragraph (8) of section 219(g) is amended by striking “the dollar amount in the last row of the table contained in paragraph (3)(B)(i), the dollar amount in the last row of the table contained in paragraph (3)(B)(ii), and the dollar amount contained in paragraph (7)(A),” and inserting “each of the dollar amounts in paragraphs (3)(B)(i), (3)(B)(ii), and (7)(A)”.
Reports regarding qualified voluntary retirement contributions—
Section 219 is amended by striking paragraph (4) of subsection (f) and subsection (h).
Section 6652 is amended by striking subsection (g).
Interest on education loans— Paragraph (1) of section 221(b) is amended by striking “shall not exceed” and all that follows and inserting “shall not exceed $2,500.”.
Dividends received on certain preferred stock; and dividends paid on certain preferred stock of public utilities—
Sections 244 and 247 are hereby repealed, and the table of sections for part VIII of subchapter B of chapter 1 is amended by striking the items relating to sections 244 and 247.
Paragraph (5) of section 172(d) is amended to read as follows:
“(5) Computation of deduction for dividends received—The deductions allowed by section 243 (relating to dividends received by corporations) and 245 (relating to dividends received from certain foreign corporations) shall be computed without regard to section 246(b) (relating to limitation on aggregate amount of deductions).”
Paragraph (1) of section 243(c) is amended to read as follows:
“(1) In general—In the case of any dividend received from a 20-percent owned corporation, subsection (a)(1) shall be applied by substituting “80 percent” for “70 percent”.”
Section 243(d) is amended by striking paragraph (4).
Section 246 is amended—
by striking “, 244,” in subsection (a)(1),
in subsection (b)(1)—
by striking “sections 243(a)(1), 244(a),” and inserting “section 243(a)(1)”,
by striking “244(a),” the second place it appears, and
by striking “subsection (a) or (b) of section 245, and 247,” and inserting “and subsection (a) or (b) of section 245,”, and
by striking “, 244,” in subsection (c)(1).
Section 246A is amended by striking “, 244,” both places it appears in subsections (a) and (e).
Sections 263(g)(2)(B)(iii), 277(a), 301(e)(2), 469(e)(4), 512(a)(3)(A), subparagraphs (A), (C), and (D) of section 805(a)(4), 805(b)(5), 812(e)(2)(A), 815(c)(2)(A)(iii), 832(b)(5), 833(b)(3)(E), and 1059(b)(2)(B) are each amended by striking “, 244,” each place it appears.
Section 1244(c)(2)(C) is amended by striking “244,”.
Section 805(a)(4)(B) is amended by striking “, 244(a),” each place it appears.
Section 810(c)(2)(B) is amended by striking “244 (relating to dividends on certain preferred stock of public utilities),”.
The amendments made by this paragraph shall not apply to preferred stock issued before October 1, 1942 (determined in the same manner as under section 247 of the Internal Revenue Code of 1986 as in effect before its repeal by such amendments).
Organization expenses— Section 248(c) is amended by striking “beginning after December 31, 1953,” and by striking the last sentence.
Bond repurchase premium— Section 249(b)(1) is amended by striking “, in the case of bonds or other evidences of indebtedness issued after February 28, 1913,”.
Amount of gain where loss previously disallowed— Section 267(d) is amended by striking “(or by reason of section 24(b) of the Internal Revenue Code of 1939)” in paragraph (1), by striking “after December 31, 1953,” in paragraph (2), by striking the second sentence, and by striking “or by reason of section 118 of the Internal Revenue Code of 1939” in the last sentence.
Acquisitions made to evade or avoid income tax— Paragraphs (1) and (2) of section 269(a) are each amended by striking “or acquired on or after October 8, 1940,”.
Meals and entertainment— Paragraph (3) of section 274(n) is amended—
by striking “(A) In general.—”,
by striking “substituting “the applicable percentage” for” and inserting “substituting “80 percent” for”, and
by striking subparagraph (B).
Interest on indebtedness incurred by corporations to acquire stock or assets of another corporation—
Section 279 is amended—
by striking “after December 31, 1967,” in subsection (a)(2),
by striking “after October 9, 1969,” in subsection (b),
by striking “after October 9, 1969, and” in subsection (d)(5), and
by striking subsection (i) and redesignating subsection (j) as subsection (i).
The amendments made by this paragraph shall not—
apply to obligations issued on or before October 9, 1969 (determined in the same manner as under section 279 of the Internal Revenue Code of 1986 as in effect before such amendments), and
be construed to require interest on obligations issued on or before December 31, 1967, to be taken into account under section 279(a)(2) of such Code (as in effect after such amendments).
Bank holding companies—
Clause (iii) of section 304(b)(3)(D) is repealed.
The heading of subparagraph (D) of section 304(b)(3) is amended by striking “and special rule”.
Effect on earnings and profits— Subsection (d) of section 312 is amended by striking paragraph (2) and redesignating paragraph (3) as paragraph (2).
Disqualified stock— Paragraph (3) of section 355(d) is amended by striking “after October 9, 1990, and” each place it appears.
Basis to corporations— Section 362 is amended by striking “on or after June 22, 1954” in subsection (a) and by striking “, on or after June 22, 1954,” each place it appears in subsection (c).
Temporary waiver of minimum required distribution— Section 401(a)(9) is amended by striking subparagraph (H).
Individual retirement accounts— Clause (i) of section 408(p)(2)(E) is amended to read as follows:
“(i) In general—For purposes of subparagraph (A)(ii), the applicable amount is $10,000.”
Tax credit employee stock ownership plans— Section 409 is amended by striking subsection (q).
Catch-up contributions— Clauses (i) and (ii) of section 414(v)(2)(B) are amended to read as follows:
“(i) In the case of an applicable employer plan other than a plan described in section 401(k)(11) or 408(p), the applicable dollar amount is $5,000.
“(ii) In the case of an applicable employer plan described in section 401(k)(11) or 408(p), the applicable dollar amount is $2,500.”
Employee stock purchase plans— Section 423(a) is amended by striking “after December 31, 1963,”.
Pension related transition rules—
Section 402(g)(1)(B) is amended by striking “shall be” and all that follows and inserting “is $15,000.”.
Subparagraph (D) of section 417(e)(3) is amended—
by striking clauses (ii) and (iii),
by striking “if—” and all that follows through “section 430(h)(2)(D)” and inserting “if section 430(h)(2)(D)”, and
by striking “described in such section,” and inserting “described in such section.”.
Clause (iii) of section 205(g)(3)(B) of the Employee Retirement Income Security Act of 1974 (29 U.S.C. 1055(g)(3)(B)) is amended—
by striking subclauses (II) and (III),
by striking “if—” and all that follows through “section 303(h)(2)(D)” and inserting “if section 303(h)(2)(D)”, and
by striking “described in such section,” and inserting “described in such section.”.
Paragraph (5) of section 430(c) is amended by striking subparagraph (B) and by striking “(A) In general.—”.
Paragraph (5) of section 303(c) of the Employee Retirement Income Security Act of 1974 (29 U.S.C. 1083(c)) is amended by striking subparagraph (B) and by striking “(A) In general.—”.
Paragraph (2) of section 430(h) is amended by striking subparagraph (G).
Paragraph (2) of section 303(h) of the Employee Retirement Income Security Act of 1974 (29 U.S.C. 1083(h)) is amended by striking subparagraph (G).
Paragraph (3) of section 436(j), as added by section 113(a)(1)(B) of the Pension Protection Act of 2006, is amended by striking subparagraphs (B) and (C) and by striking “(A) In general.—”.
Subparagraph (C) of section 206(g)(9) of the Employee Retirement Income Security Act of 1974 (29 U.S.C. 1056(g)(9)) is amended by striking clauses (ii) and (iii) and by striking “(i) In general.—”.
Section 436(j) is amended by striking the paragraph (3) added by section 203(a)(2) of the Preservation of Access to Care for Medicare Beneficiaries and Pension Relief Act of 2010.
Section 206(g)(9) of the Employee Retirement Income Security Act of 1974 (29 U.S.C. 1056(g)(9)) is amended by striking subparagraph (D).
Section 436 is amended by striking subsection (m).
Section 206(g) of the Employee Retirement Income Security Act of 1974 (29 U.S.C. 1056(g)) is amended by striking paragraph (11).
Section 457(e)(15)(A) is amended by striking “shall be” and all that follows and inserting “is $15,000.”.
Limitation on deductions for certain farming—
Section 464 is amended by striking “any farming syndicate (as defined in subsection (c))” both places it appears in subsections (a) and (b) and inserting “any taxpayer to whom subsection (d) applies”.
Subsection (c) of section 464 is hereby moved to the end of section 461 and redesignated as subsection (j).
Such subsection (j) is amended—
by striking “For purposes of this section” in paragraph (1) and inserting “For purposes of subsection (i)(4)”, and
by adding at the end the following new paragraphs:
“(3) Farming—For purposes of this subsection, the term farming has the meaning given to such term by section 464(e).
“(4) Limited entrepreneur—For purposes of this subsection, the term limited entrepreneur means a person who—
“(A) has an interest in an enterprise other than as a limited partner, and
“(B) does not actively participate in the management of such enterprise.”
Paragraph (4) of section 461(i) is amended by striking “section 464(c)” and inserting “subsection (j)”.
Section 464 is amended—
by striking subsections (e) and (g) and redesignating subsections (d) and (f) as subsections (c) and (d), respectively, and
by adding at the end the following new subsection:
“(e) Farming—For purposes of this section, the term farming means the cultivation of land or the raising or harvesting of any agricultural or horticultural commodity including the raising, shearing, feeding, caring for, training, and management of animals. For purposes of the preceding sentence, trees (other than trees bearing fruit or nuts) shall not be treated as an agricultural or horticultural commodity.”
Subsection (d) of section 464 of such Code (as redesignated by subparagraph (C)) is amended—
by striking paragraph (1) and redesignating paragraphs (2), (3), and (4) as paragraphs (1), (2), and (3), respectively, and
by striking “Subsections (a) and (b) to apply to” in the heading.
Subparagraph (A) of section 58(a)(2) is amended by striking “section 464(c)” and inserting “section 461(j)”.
Deductions limited to amount at risk— Subparagraph (A) of section 465(c)(3) is amended by striking “In the case of taxable years beginning after December 31, 1978, this” and inserting “This”.
Passive activity losses and credits limited—
Section 469 is amended by striking subsection (m).
Subsection (b) of section 58 is amended by adding “and” at the end of paragraph (1), by striking paragraph (2), and by redesignating paragraph (3) as paragraph (2).
Adjustments required by changes in method of accounting— Section 481(b)(3) is amended by striking subparagraph (C).
Exemption from tax on corporations, certain trusts, etc— Section 501 is amended by striking subsection (s).
Requirements for exemption—
Section 503(a)(1) is amended to read as follows:
“(1) General rule—An organization described in paragraph (17) or (18) of section 501(c), or described in section 401(a) and referred to in section 4975(g) (2) or (3), shall not be exempt from taxation under section 501(a) if it has engaged in a prohibited transaction.”
Paragraph (2) of section 503(a) is amended by striking “described in section 501(c)(17) or (18) or paragraph (a)(1)(B)” and inserting “described in paragraph (1)”.
Subsection (c) of section 503 is amended by striking “described in section 501(c)(17) or (18) or subsection (a)(1)(B)” and inserting “described in subsection (a)(1)”.
Accumulated taxable income— Paragraph (1) of section 535(b) and paragraph (1) of section 545(b) are each amended by striking “section 531” and all that follows and inserting “section 531 or the personal holding company tax imposed by section 541.”.
Definition of property— Subsection (b) of section 614 is amended—
by striking paragraphs (3)(C) and (5), and
in paragraph (4), by striking “whichever of the following years is later: The first taxable year beginning after December 31, 1963, or” .
Amounts received by surviving annuitant under joint and survivor annuity contract— Subparagraph (A) of section 691(d)(1) is amended by striking “after December 31, 1953, and”.
Income taxes of members of armed forces on death— Section 692(a)(1) is amended by striking “after June 24, 1950”.
Special rules for computing reserves— Paragraph (7) of section 807(e) is amended by striking subparagraph (B) and redesignating subparagraph (C) as subparagraph (B).
Insurance company taxable income—
Section 832(e) is amended by striking “of taxable years beginning after December 31, 1966,”.
Section 832(e)(6) is amended by striking “In the case of any taxable year beginning after December 31, 1970, the” and inserting “The”.
Capitalization of certain policy acquisition expenses— Section 848 is amended by striking subsection (j).
Tax on nonresident alien individuals— Subparagraph (B) of section 871(a)(1) is amended to read as follows:
“(B) gains described in subsection (b) or (c) of section 631,”
Limitation on credit— Paragraph (2) of section 904(d) is amended by striking subparagraph (J).
Foreign earned income— Clause (i) of section 911(b)(2)(D) is amended to read as follows:
“(i) In general—The exclusion amount for any calendar year is $80,000.”
Basis of property acquired from decedent—
Section 1014(a)(2) is amended to read as follows:
“(2) in the case of an election under section 2032, its value at the applicable valuation date prescribed by such section,”
Section 1014(b) is amended by striking paragraphs (7) and (8).
Adjusted basis— Section 1016(a) is amended by striking paragraph (12).
Property on which lessee has made improvements— Section 1019 is amended by striking the last sentence.
Involuntary conversion— Section 1033 is amended by striking subsection (j) and by redesignating subsections (k) and (l) as subsections (j) and (k), respectively.
Property acquired during affiliation— Section 1051 is hereby repealed, and the table of sections for part IV of subchapter O of chapter 1 is amended by striking the item relating to section 1051.
Capital gains and losses— Section 1222 is amended by striking the last sentence.
Holding period of property—
Paragraph (1) of section 1223 is amended by striking “after March 1, 1954,”.
Paragraph (4) of section 1223 is amended by striking ““(or under so much of section 1052(c) as refers to section 113(a)(23) of the Internal Revenue Code of 1939)””.
Paragraphs (6) and (8) of section 1223 are repealed.
Property used in the trade or business and involuntary conversions— Subparagraph (A) of section 1231(c)(2) is amended by striking “beginning after December 31, 1981”.
Sale or exchange of patents— Section 1235 is amended—
by striking subsection (c) and by redesignating subsections (d) and (e) as subsections (c) and (d), respectively, and
by striking “subsection (d)” in subsection (b)(2)(B) and inserting “subsection (c)”.
Dealers in securities— Subsection (b) of section 1236 is amended by striking “after November 19, 1951,”.
Sale of patents— Subsection (a) of section 1249 is amended by striking “after December 31, 1962,”.
Gain from disposition of farmland— Paragraph (1) of section 1252(a) is amended—
by striking “after December 31, 1969” the first place it appears, and
by striking “after December 31, 1969,” in subparagraph (A).
Treatment of amounts received on retirement or sale or exchange of debt instruments— Subsection (c) of section 1271 is amended to read as follows:
“(c) Special rule for certain obligations with respect to which original issue discount not currently includible
“(1) In general—On the sale or exchange of debt instruments issued by a government or political subdivision thereof after December 31, 1954, and before July 2, 1982, or by a corporation after December 31, 1954, and on or before May 27, 1969, any gain realized which does not exceed—
“(A) an amount equal to the original issue discount, or
“(B) if at the time of original issue there was no intention to call the debt instrument before maturity, an amount which bears the same ratio to the original issue discount as the number of complete months that the debt instrument was held by the taxpayer bears to the number of complete months from the date of original issue to the date of maturity, shall be considered as ordinary income.
“(2) Subsection (a)(2)(A) not to apply—Subsection (a)(2)(A) shall not apply to any debt instrument referred to in paragraph (1) of this subsection.
“(3) Cross reference—For current inclusion of original issue discount, see section 1272.”
Amount and method of adjustment— Section 1314 is amended by striking subsection (d) and by redesignating subsection (e) as subsection (d).
Election; revocation; termination— Clause (iii) of section 1362(d)(3)(A) is amended by striking “unless” and all that follows and inserting “unless the corporation was an S corporation for such taxable year.”.
Old-age, survivors, and disability insurance— Subsection (a) of section 1401 is amended by striking “the following percent” and all that follows and inserting “12.4 percent of the amount of the self-employment income for such taxable year.”.
Hospital insurance— Paragraph (1) of section 1401(b) is amended by striking: “the following percent” and all that follows and inserting “2.9 percent of the amount of the self-employment income for such taxable year.”.
Ministers, members of religious orders, and christian science practitioners— Paragraph (3) of section 1402(e) is amended—
by striking “whichever of the following dates is later: (A)”, and
by striking “;or (B)”’ and all that follows and inserting a period.
Withholding of tax on nonresident aliens— The first sentence of subsection (b) of section 1441 and the first sentence of paragraph (5) of section 1441(c) are each amended by striking “gains subject to tax” and all that follows through “October 4, 1966” and inserting “and gains subject to tax under section 871(a)(1)(D)”.
Affiliated group defined— Subparagraph (A) of section 1504(a)(3) is amended by striking “for a taxable year which includes any period after December 31, 1984” in clause (i) and by striking “in a taxable year beginning after December 31, 1984” in clause (ii).
Disallowance of the benefits of the graduated corporate rates and accumulated earnings credit—
Subsection (a) of section 1551 is amended—
by striking paragraph (1) and by redesignating paragraphs (2) and (3) as paragraphs (1) and (2), respectively, and
by striking “after June 12, 1963,” each place it appears.
Section 1551(b) is amended—
by striking “or (2)” in paragraph (1), and
by striking “(a)(3)” in paragraph (2) and inserting “(a)(2)”.
Credit for state death taxes—
Part II of subchapter A of chapter 11 is amended by striking section 2011 (and by striking the item relating to such section in the table of sections for such subpart).
Section 2106(a)(4) is amended by striking “section 2011(a)” and inserting “2058(a)”.
Subchapter A of chapter 13 is amended by striking section 2604 (and by striking the item relating to such section in the table of sections for such subpart).
Clause (ii) of section 164(b)(4)(A) is amended by inserting “(as in effect before its repeal)” after “section 2604”.
Section 2654(a)(1) is amended by striking “(computed without regard to section 2604)”.
Gross estate— Subsection (c) of section 2031 is amended by striking paragraph (3) and by amending paragraph (1)(B) to read as follows:
“(II) $500,000.”
Part IV of subchapter A of chapter 11 is amended by striking section 2057 (and by striking the item relating to such section in the table of sections for such subpart).
Paragraph (10) of section 2031(c) is amended by inserting “(as in effect before its repeal)” immediately before the period at the end thereof.
Property within the United States— Subsection (c) of section 2104 is amended by striking “With respect to estates of decedents dying after December 31, 1969, deposits” and inserting “Deposits”.
FICA taxes—
Subsection (a) of section 3101 is amended by striking “the following percentages” and all that follows and inserting “6.2 percent of the wages (as defined in section 3121(a)) received by the individual with respect to employment (as defined in section 3121(b))”.
Subsection (a) of section 3111 is amended by striking “the following percentages” and all that follows and inserting “6.2 percent of the wages (as defined in section 3121(a)) paid by the employer with respect to employment (as defined in section 3121(b)).”.
Subsection (b) of section 3111 is amended by striking “the following percentages” and all that follows and inserting “1.45 percent of the wages (as defined in section 3121(a)) paid by the employer with respect to employment (as defined in section 3121(b)).”.
Section 3121(b) is amended by striking paragraph (17).
Section 210(a) of the Social Security Act is amended by striking paragraph (17).
Railroad retirement—
Subsection (b) of section 3201 is amended to read as follows:
“(b) Tier 2 tax—In addition to other taxes, there is hereby imposed on the income of each employee a tax equal to the percentage determined under section 3241 for any calendar year of the compensation received during such calendar year by such employee for services rendered by such employee.”
Subsection (b) of section 3211 is amended to read as follows:
“(b) Tier 2 tax—In addition to other taxes, there is hereby imposed on the income of each employee representative a tax equal to the percentage determined under section 3241 for any calendar year of the compensation received during such calendar year by such employee representative for services rendered by such employee representative.”
Subsection (b) of section 3221 is amended to read as follows:
“(b) Tier 2 tax—In addition to other taxes, there is hereby imposed on every employer an excise tax, with respect to having individuals in his employ, equal to the percentage determined under section 3241 for any calendar year of the compensation paid during such calendar year by such employer for services rendered to such employer.”
Subsection (b) of section 3231 is amended—
by striking “compensation; except” and all that follows in the first sentence and inserting “compensation.”, and
by striking the second sentence.
Credits against Federal unemployment tax—
Paragraph (4) of section 3302(f) is amended—
by striking “subsection—” and all that follows through “(A) In general.—The” and inserting “subsection, the”,
by striking subparagraph (B),
by redesignating clauses (i) and (ii) as subparagraphs (A) and (B), respectively, and
by moving the text of such subparagraphs (as so redesignated) 2 ems to the left.
Paragraph (5) of section 3302(f) is amended by striking subparagraph (D) and by redesignating subparagraph (E) as subparagraph (D).
Domestic service employment taxes— Section 3510(b) is amended by striking paragraph (4).
Luxury passenger automobiles—
Chapter 31 is amended by striking subchapter A (and by striking the item relating to such subchapter in the table of subchapters for such chapter).
Section 4221 is amended—
in subsections (a) and (d)(1), by striking “subchapter A or” and inserting “subchapter”,
in subsection (a), by striking “In the case of taxes imposed by subchapter A of chapter 31, paragraphs (1), (3), (4), and (5) shall not apply.”, and
in subsection (c), by striking “4001(c), 4001(d), or”.
Section 4222 is amended by striking “4001(c), 4001(d),”.
Section 4293 is amended by striking “subchapter A of chapter 31,”.
removed
Tax on fuel used in commercial transportation on inland waterways— Section 4042(b)(2)(A) is amended to read as follows:
removed
“(A) The Inland Waterways Trust Fund financing rate is 20 cents per gallon.”
renumbered
was (2)(106)
Transportation by air— Section 4261(e) is amended—
renumbered
was (2)(106)(3)
in paragraph (1), by striking subparagraph (C), and
renumbered
was (2)(106)(4)
by striking paragraph (5).
added
Taxes on failure to distribute income—
removed
Taxes on failure to distribute income—
renumbered
was (2)(107)(2)
Subsection (g) of section 4942 is amended by striking “For all taxable years beginning on or after January 1, 1975, subject” in paragraph (2)(A) and inserting “Subject”.
renumbered
was (2)(107)(3)
Section 4942(i)(2) is amended by striking “beginning after December 31, 1969, and”.
renumbered
was (2)(108)
Taxes on taxable expenditures— Section 4945(f) is amended by striking “(excluding therefrom any preceding taxable year which begins before January 1, 1970)”.
renumbered
was (2)(109)
Definitions and special rules— Section 4682(h) is amended—
renumbered
was (2)(109)(3)
by striking paragraph (1) and redesignating paragraphs (2), (3), and (4) as paragraphs (1), (2), and (3), respectively, and
renumbered
was (2)(109)(4)
in paragraph (1) (as so redesignated)—
renumbered
was (2)(109)(4)(2)
by striking the heading and inserting “In general”, and
renumbered
was (2)(109)(4)(3)
by striking “after 1991” in subparagraph (C).
renumbered
was (2)(110)
Returns— Subsection (a) of section 6039D is amended by striking “beginning after December 31, 1984,”.
renumbered
was (2)(111)
Information returns— Subsection (c) of section 6060 is amended by striking ““year”” and all that follows and inserting “year.”.
renumbered
was (2)(112)
Collection— Section 6302 is amended—
renumbered
was (2)(112)(3)
in subsection (e)(2), by striking “imposed by” and all that follows through “with respect to” and inserting “imposed by sections 4251, 4261, or 4271 with respect to”,
renumbered
was (2)(112)(4)
by striking the last sentence of subsection (f)(1), and
renumbered
was (2)(112)(5)
in subsection (h)—
renumbered
was (2)(112)(5)(2)
by striking paragraph (2) and redesignating paragraphs (3) and (4) as paragraphs (2) and (3), respectively, and
renumbered
was (2)(112)(5)(3)
by amending paragraph (3) (as so redesignated) to read as follows:
“(3) Coordination with other electronic fund transfer requirements—Under regulations, any tax required to be paid by electronic fund transfer under section 5061(e) or 5703(b) shall be paid in such a manner as to ensure that the requirements of the second sentence of paragraph (1)(A) of this subsection are satisfied.”
renumbered
was (2)(113)
Abatements— Section 6404(f) is amended by striking paragraph (3).
added
2008 Recovery rebate for individuals—
removed
2008 Recovery rebate for individuals—
renumbered
was (2)(114)(2)
Subchapter B of chapter 65 is amended by striking section 6428 (and by striking the item relating to such section in the table of sections for such subchapter).
renumbered
was (2)(114)(3)
Subparagraph (A) of section 6211(b)(4) is amended by striking “6428,”.
renumbered
was (2)(114)(4)
Paragraph (2) of section 6213(g), as amended by section 214(a)(2) of this Act and paragraphs (4) and (5)(C) of this subsection, is amended by striking subparagraph (Q), by redesignating subparagraph (O) as subparagraph (N), by inserting “and” at the end of subparagraph (M), and by striking the comma at the end of subparagraph (N) (as so redesignated) and inserting a period.
renumbered
was (2)(114)(5)
Paragraph (2) of section 1324(b) of title 31, United States Code, is amended by striking “6428, or 6431,” and inserting “or 6431”.
renumbered
was (2)(115)
Advance payment of portion of increased child credit for 2003— Subchapter B of chapter 65 is amended by striking section 6429 (and by striking the item relating to such section in the table of sections for such subchapter).
renumbered
was (2)(116)
Failure by corporation to pay estimated income tax— Clause (i) of section 6655(g)(4)(A) is amended by striking “(or the corresponding provisions of prior law)”.
renumbered
was (2)(117)
Retirement— Section 7447(i)(3)(B)(ii) is amended by striking “at 4 percent per annum to December 31, 1947, and 3 percent per annum thereafter”, and inserting “at 3 percent per annum”.
added
Annuities to surviving spouses and dependent children of judges—
removed
Annuities to surviving spouses and dependent children of judges—
renumbered
was (2)(118)(2)
Paragraph (2) of section 7448(a) is amended—
renumbered
was (2)(118)(2)(2)
by striking “or under section 1106 of the Internal Revenue Code of 1939”, and
renumbered
was (2)(118)(2)(3)
by striking “or pursuant to section 1106(d) of the Internal Revenue Code of 1939”.
renumbered
was (2)(118)(3)
Subsection (g) of section 7448 is amended by striking “or other than pursuant to section 1106 of the Internal Revenue Code of 1939”.
renumbered
was (2)(118)(4)
Subsections (g), (j)(1), and (j)(2) of section 7448 are each amended by striking “at 4 percent per annum to December 31, 1947, and 3 percent per annum thereafter” and inserting “at 3 percent per annum”.
renumbered
was (2)(119)
Merchant marine capital construction funds— Paragraph (4) of section 7518(g) is amended by striking “any nonqualified withdrawal” and all that follows through “‘shall be determined” and inserting “any nonqualified withdrawal shall be determined”.
added
Valuation tables—
removed
Valuation tables—
renumbered
was (2)(120)(2)
Subsection (c) of section 7520 is amended by striking paragraph (2) and redesignating paragraph (3) as paragraph (2).
renumbered
was (2)(120)(3)
Paragraph (2) of section 7520(c) (as redesignated by subparagraph (A)) is amended—
renumbered
was (2)(120)(3)(2)
by striking “Not later than December 31, 1989, the” and inserting “The”, and
renumbered
was (2)(120)(3)(3)
by striking “thereafter” in the last sentence thereof.
renumbered
was (2)(121)
Definition of employee— Section 7701(a)(20) is amended by striking “chapter 21” and all that follows and inserting “chapter 21.”.
Effective date—
General rule— Except as otherwise provided in subsection (a) or paragraph (2) of this subsection, the amendments made by this section shall take effect on the date of enactment of this Act.
Savings provision— If—
any provision amended or repealed by the amendments made by this section applied to—
any transaction occurring before the date of the enactment of this Act,
any property acquired before such date of enactment, or
any item of income, loss, deduction, or credit taken into account before such date of enactment, and
the treatment of such transaction, property, or item under such provision would (without regard to the amendments or repeals made by this section) affect the liability for tax for periods ending after date of enactment, nothing in the amendments or repeals made by this section shall be construed to affect the treatment of such transaction, property, or item for purposes of determining liability for tax for periods ending after such date of enactment.
Section 1 Short title; etc
added
added
Short title— This division may be cited as the “Achieving a Better Life Experience Act of 2014” or the “ABLE Act of 2014”.
added
Amendment of 1986 Code— Except as otherwise expressly provided, whenever in this Act an amendment or repeal is expressed in terms of an amendment to, or repeal of, a section or other provision, the reference shall be considered to be made to a section or other provision of the Internal Revenue Code of 1986.
Sec. 101 Purposes
addedadded The purposes of this title are as follows:
added
To encourage and assist individuals and families in saving private funds for the purpose of supporting individuals with disabilities to maintain health, independence, and quality of life.
added
To provide secure funding for disability-related expenses on behalf of designated beneficiaries with disabilities that will supplement, but not supplant, benefits provided through private insurance, the Medicaid program under title XIX of the Social Security Act, the supplemental security income program under title XVI of such Act, the beneficiary’s employment, and other sources.
Sec. 102 Qualified ABLE programs
added
added
In general— Subchapter F of chapter 1 is amended by inserting after section 529 the following new section:
added “529A. Qualified ABLE programs
added “(a) General rule—A qualified ABLE program shall be exempt from taxation under this subtitle. Notwithstanding the preceding sentence, such program shall be subject to the taxes imposed by section 511 (relating to imposition of tax on unrelated business income of charitable organizations).
added “(b) Qualified ABLE program—For purposes of this section—
added “(1) In general—The term qualified ABLE program means a program established and maintained by a State, or agency or instrumentality thereof—
added “(A) under which a person may make contributions for a taxable year, for the benefit of an individual who is an eligible individual for such taxable year, to an ABLE account which is established for the purpose of meeting the qualified disability expenses of the designated beneficiary of the account,
added “(B) which limits a designated beneficiary to 1 ABLE account for purposes of this section,
added “(C) which allows for the establishment of an ABLE account only for a designated beneficiary who is a resident of such State or a resident of a contracting State, and
added “(D) which meets the other requirements of this section.
added “(2) Cash contributions—A program shall not be treated as a qualified ABLE program unless it provides that no contribution will be accepted—
added “(A) unless it is in cash, or
added “(B) except in the case of contributions under subsection (c)(1)(C), if such contribution to an ABLE account would result in aggregate contributions from all contributors to the ABLE account for the taxable year exceeding the amount in effect under section 2503(b) for the calendar year in which the taxable year begins.
added “(3) Separate accounting—A program shall not be treated as a qualified ABLE program unless it provides separate accounting for each designated beneficiary.
added “(4) Limited investment direction—A program shall not be treated as a qualified ABLE program unless it provides that any designated beneficiary under such program may, directly or indirectly, direct the investment of any contributions to the program (or any earnings thereon) no more than 2 times in any calendar year.
added “(5) No pledging of interest as security—A program shall not be treated as a qualified ABLE program if it allows any interest in the program or any portion thereof to be used as security for a loan.
added “(6) Prohibition on excess contributions—A program shall not be treated as a qualified ABLE program unless it provides adequate safeguards to prevent aggregate contributions on behalf of a designated beneficiary in excess of the limit established by the State under section 529(b)(6). For purposes of the preceding sentence, aggregate contributions include contributions under any prior qualified ABLE program of any State or agency or instrumentality thereof.
added “(c) Tax treatment
added “(1) Distributions
added “(A) In general—Any distribution under a qualified ABLE program shall be includible in the gross income of the distributee in the manner as provided under section 72 to the extent not excluded from gross income under any other provision of this chapter.
added “(B) Distributions for qualified disability expenses—For purposes of this paragraph, if distributions from a qualified ABLE program—
added “(i) do not exceed the qualified disability expenses of the designated beneficiary, no amount shall be includible in gross income, and
added “(ii) in any other case, the amount otherwise includible in gross income shall be reduced by an amount which bears the same ratio to such amount as such expenses bear to such distributions.
added “(C) Change in designated beneficiaries or programs
added “(i) Rollovers from ABLE accounts—Subparagraph (A) shall not apply to any amount paid or distributed from an ABLE account to the extent that the amount received is paid, not later than the 60th day after the date of such payment or distribution, into another ABLE account for the benefit of the same designated beneficiary or an eligible individual who is a family member of the designated beneficiary.
added “(ii) Change in designated beneficiaries—Any change in the designated beneficiary of an interest in a qualified ABLE program during a taxable year shall not be treated as a distribution for purposes of subparagraph (A) if the new beneficiary is an eligible individual for such taxable year and a member of the family of the former beneficiary.
added “(iii) Limitation on certain rollovers—Clause (i) shall not apply to any transfer if such transfer occurs within 12 months from the date of a previous transfer to any qualified ABLE program for the benefit of the designated beneficiary.
added “(D) Operating rules—For purposes of applying section 72—
added “(i) except to the extent provided by the Secretary, all distributions during a taxable year shall be treated as one distribution, and
added “(ii) except to the extent provided by the Secretary, the value of the contract, income on the contract, and investment in the contract shall be computed as of the close of the calendar year in which the taxable year begins.
added “(2) Gift tax rules—For purposes of chapters 12 and 13—
added “(A) Contributions—Any contribution to a qualified ABLE program on behalf of any designated beneficiary—
added “(i) shall be treated as a completed gift to such designated beneficiary which is not a future interest in property, and
added “(ii) shall not be treated as a qualified transfer under section 2503(e).
added “(B) Treatment of distributions—In no event shall a distribution from an ABLE account to such account’s designated beneficiary be treated as a taxable gift.
added “(C) Treatment of transfer to new designated beneficiary—The taxes imposed by chapters 12 and 13 shall not apply to a transfer by reason of a change in the designated beneficiary under subsection (c)(1)(C).
added “(3) Additional tax for distributions not used for disability expenses
added “(A) In general—The tax imposed by this chapter for any taxable year on any taxpayer who receives a distribution from a qualified ABLE program which is includible in gross income shall be increased by 10 percent of the amount which is so includible.
added “(B) Exception—Subparagraph (A) shall not apply if the payment or distribution is made to a beneficiary (or to the estate of the designated beneficiary) on or after the death of the designated beneficiary.
added “(C) Contributions returned before certain date—Subparagraph (A) shall not apply to the distribution of any contribution made during a taxable year on behalf of the designated beneficiary if—
added “(i) such distribution is received on or before the day prescribed by law (including extensions of time) for filing such designated beneficiary’s return for such taxable year, and
added “(ii) such distribution is accompanied by the amount of net income attributable to such excess contribution.
added “(4) Loss of ABLE account treatment—If an ABLE account is established for a designated beneficiary, no account subsequently established for such beneficiary shall be treated as an ABLE account. The preceding sentence shall not apply in the case of an account established for purposes of a rollover described in paragraph (1)(C)(i) of this section if the transferor account is closed as of the end of the 60th day referred to in paragraph (1)(C)(i).
added “(d) Reports
added “(1) In general—Each officer or employee having control of the qualified ABLE program or their designee shall make such reports regarding such program to the Secretary and to designated beneficiaries with respect to contributions, distributions, the return of excess contributions, and such other matters as the Secretary may require.
added “(2) Certain aggregated information—For research purposes, the Secretary shall make available to the public reports containing aggregate information, by diagnosis and other relevant characteristics, on contributions and distributions from the qualified ABLE program. In carrying out the preceding sentence an item may not be made available to the public if such item can be associated with, or otherwise identify, directly or indirectly, a particular individual.
added “(3) Notice of establishment of ABLE account—A qualified ABLE program shall submit a notice to the Secretary upon the establishment of an ABLE account. Such notice shall contain the name and State of residence of the designated beneficiary and such other information as the Secretary may require.
added “(4) Electronic distribution statements—For purposes of section 4 of the Achieving a Better Life Experience Act of 2014, States shall submit electronically on a monthly basis to the Commissioner of Social Security, in the manner specified by the Commissioner, statements on relevant distributions and account balances from all ABLE accounts.
added “(5) Requirements—The reports and notices required by paragraphs (1), (2), and (3) shall be filed at such time and in such manner and furnished to such individuals at such time and in such manner as may be required by the Secretary.
added “(e) Other definitions and special rules—For purposes of this section—
added “(1) Eligible individual—An individual is an eligible individual for a taxable year if during such taxable year—
added “(A) the individual is entitled to benefits based on blindness or disability under title II or XVI of the Social Security Act, and such blindness or disability occurred before the date on which the individual attained age 26, or
added “(B) a disability certification with respect to such individual is filed with the Secretary for such taxable year.
added “(2) Disability certification
added “(A) In general—The term “disability certification” means, with respect to an individual, a certification to the satisfaction of the Secretary by the individual or the parent or guardian of the individual that—
added “(i) certifies that—
added “(I) the individual has a medically determinable physical or mental impairment, which results in marked and severe functional limitations, and which can be expected to result in death or which has lasted or can be expected to last for a continuous period of not less than 12 months, or is blind (within the meaning of section 1614(a)(2) of the Social Security Act), and
added “(II) such blindness or disability occurred before the date on which the individual attained age 26, and
added “(ii) includes a copy of the individual’s diagnosis relating to the individual’s relevant impairment or impairments, signed by a physician meeting the criteria of section 1861(r)(1) of the Social Security Act.
added “(B) Restriction on use of certification—No inference may be drawn from a disability certification for purposes of establishing eligibility for benefits under title II, XVI, or XIX of the Social Security Act.
added “(3) Designated beneficiary—The term “designated beneficiary” in connection with an ABLE account established under a qualified ABLE program means the eligible individual who established an ABLE account and is the owner of such account.
added “(4) Member of family—The term “member of the family” means, with respect to any designated beneficiary, an individual who bears a relationship to such beneficiary which is described in subparagraph section 152(d)(2)(B). For purposes of the preceding sentence, a rule similar to the rule of section 152(f)(1)(B) shall apply.
added “(5) Qualified disability expenses—The term qualified disability expenses means any expenses related to the eligible individual’s blindness or disability which are made for the benefit of an eligible individual who is the designated beneficiary, including the following expenses: education, housing, transportation, employment training and support, assistive technology and personal support services, health, prevention and wellness, financial management and administrative services, legal fees, expenses for oversight and monitoring, funeral and burial expenses, and other expenses, which are approved by the Secretary under regulations and consistent with the purposes of this section.
added “(6) ABLE account—The term “ABLE account” means an account established by an eligible individual, owned by such eligible individual, and maintained under a qualified ABLE program.
added “(7) Contracting State—The term “contracting State” means a State without a qualified ABLE program which has entered into a contract with a State with a qualified ABLE program to provide residents of the contracting State access to a qualified ABLE program.
added “(f) Transfer to State—Subject to any outstanding payments due for qualified disability expenses, upon the death of the designated beneficiary, all amounts remaining in the qualified ABLE account not in excess of the amount equal to the total medical assistance paid for the designated beneficiary after the establishment of the account, net of any premiums paid from the account or paid by or on behalf of the beneficiary to a Medicaid Buy-In program under any State Medicaid plan established under title XIX of the Social Security Act, shall be distributed to such State upon filing of a claim for payment by such State. For purposes of this paragraph, the State shall be a creditor of an ABLE account and not a beneficiary. Subsection (c)(3) shall not apply to a distribution under the preceding sentence.
added “(g) Regulations—The Secretary shall prescribe such regulations or other guidance as the Secretary determines necessary or appropriate to carry out the purposes of this section, including regulations—
added “(1) to enforce the 1 ABLE account per eligible individual limit,
added “(2) providing for the information required to be presented to open an ABLE account,
added “(3) to generally define qualified disability expenses,
added “(4) developed in consultation with the Commissioner of Social Security, relating to disability certifications and determinations of disability, including those conditions deemed to meet the requirements of subsection (e)(1)(B),
added “(5) to prevent fraud and abuse with respect to amounts claimed as qualified disability expenses,
added “(6) under chapters 11, 12, and 13 of this title, and
added “(7) to allow for transfers from one ABLE account to another ABLE account.”
added
Tax on excess contributions—
added
In general— Subsection (a) of section 4973 (relating to tax on excess contributions to certain tax-favored accounts and annuities) is amended by striking “or” at the end of paragraph (4), by inserting “or” at the end of paragraph (5), and by inserting after paragraph (5) the following new paragraph:
added “(6) an ABLE account (within the meaning of section 529A),”
added
Excess contribution— Section 4973 is amended by adding at the end the following new subsection:
added “(h) Excess contributions to ABLE account—For purposes of this section—
added “(1) In general—In the case of an ABLE account (within the meaning of section 529A), the term excess contributions means the amount by which the amount contributed for the taxable year to such account (other than contributions under section 529A(c)(1)(C)) exceeds the contribution limit under section 529A(b)(2)(B).
added “(2) Special rule—For purposes of this subsection, any contribution which is distributed out of the ABLE account in a distribution to which the last sentence of section 529A(b)(2) applies shall be treated as an amount not contributed.”
added
Penalty for failure to file reports— Section 6693(a)(2) is amended by striking “and” at the end of subparagraph (D), by redesignating subparagraph (E) as subparagraph (F), and by inserting after subparagraph (D) the following:
added “(E) section 529A(d) (relating to qualified ABLE programs), and”
added
Records— Section 552a(a)(8)(B) of title 5, United States Code, is amended—
added
in clause (viii), by striking “or” at the end;
added
in clause (ix), by adding “or” at the end; and
added
by adding at the end the following new clause:
added “(x) matches performed pursuant to section 3(d)(4) of the Achieving a Better Life Experience Act of 2014;”
added
Other conforming amendments—
added
Section 26(b)(2) is amended by striking “and” at the end of subparagraph (W), by striking the period at the end of subparagraph (X) and inserting “, and”, and by inserting after subparagraph (X) the following:
added “(Y) section 529A(c)(3)(A) (relating to additional tax on ABLE account distributions not used for qualified disability expenses).”
added
Section 877A is amended—
added
in subsection (e)(2) by inserting “a qualified ABLE program (as defined in section 529A),” after “529),”, and
added
in subsection (g)(6) by inserting “529A(c)(3),” after “529(c)(6),”.
added
Section 4965(c) is amended by striking “or” at the end of paragraph (6), by striking the period at the end of paragraph (7) and inserting “, or”, and by inserting after paragraph (7) the following new paragraph:
added “(8) a program described in section 529A.”
added
The heading for part VIII of subchapter F of chapter 1 is amended by striking “Higher Education” and inserting “Certain”.
added
The item in the table of parts for subchapter F of chapter 1 relating to part VIII is amended to read as follows:
added
The table of sections for part VIII of subchapter F of chapter 1 is amended by inserting after the item relating to section 529 the following new item:
added
Paragraph (4) of section 1027(g) of the Consumer Financial Protection Act of 2010 (12 U.S.C. 5517(g)(4)) is amended by inserting “, 529A” after “529”.
added
Effective date—
added
In general— The amendments made by this section shall apply to taxable years beginning after December 31, 2014.
added
Regulations— The Secretary of the Treasury (or the Secretary’s designee) shall promulgate the regulations or other guidance required under section 529A(g) of the Internal Revenue Code of 1986, as added by subsection (a), not later than 6 months after the date of the enactment of this Act.
Sec. 103 Treatment of ABLE accounts under certain Federal programs
added
added
Account funds disregarded for purposes of certain other means-Tested Federal programs— Notwithstanding any other provision of Federal law that requires consideration of 1 or more financial circumstances of an individual, for the purpose of determining eligibility to receive, or the amount of, any assistance or benefit authorized by such provision to be provided to or for the benefit of such individual, any amount (including earnings thereon) in the ABLE account (within the meaning of section 529A of the Internal Revenue Code of 1986) of such individual, any contributions to the ABLE account of the individual, and any distribution for qualified disability expenses (as defined in subsection (e)(5) of such section) shall be disregarded for such purpose with respect to any period during which such individual maintains, makes contributions to, or receives distributions from such ABLE account, except that, in the case of the supplemental security income program under title XVI of the Social Security Act—
added
a distribution for housing expenses (within the meaning of such subsection) shall not be so disregarded, and
added
in the case of such program, any amount (including such earnings) in such ABLE account shall be considered a resource of the designated beneficiary to the extent that such amount exceeds $100,000.
added
Suspension of SSI benefits during periods of excessive account funds—
added
In general— The benefits of an individual under the supplemental security income program under title XVI of the Social Security Act shall not be terminated, but shall be suspended, by reason of excess resources of the individual attributable to an amount in the ABLE account (within the meaning of section 529A of the Internal Revenue Code of 1986) of the individual not disregarded under subsection (a) of this section.
added
No impact on Medicaid eligibility— An individual who would be receiving payment of such supplemental security income benefits but for the application of paragraph (1) shall be treated for purposes of title XIX of the Social Security Act as if the individual continued to be receiving payment of such benefits.
added
Effective date— This section shall take effect on the date of the enactment of this Act.
Sec. 104 Treatment of able accounts in bankruptcy
added
added
Exclusion from property of the estate— Section 541(b) of the title 11, United States Code, is amended—
added
in paragraph (8), by striking “or” at the end;
added
in paragraph (9), by striking the period at the end and inserting a semicolon and “or”; and
added
by inserting after paragraph (9) the following:
added “(10) funds placed in an account of a qualified ABLE program (as defined in section 529A(b) of the Internal Revenue Code of 1986) not later than 365 days before the date of the filing of the petition in a case under this title, but—
added “(A) only if the designated beneficiary of such account was a child, stepchild, grandchild, or stepgrandchild of the debtor for the taxable year for which funds were placed in such account;
added “(B) only to the extent that such funds—
added “(i) are not pledged or promised to any entity in connection with any extension of credit; and
added “(ii) are not excess contributions (as described in section 4973(h) of the Internal Revenue Code of 1986); and
added “(C) in the case of funds placed in all such accounts having the same designated beneficiary not earlier than 720 days nor later than 365 days before such date, only so much of such funds as does not exceed $6,225.”
added
Debtor’s monthly expenses— Section 707(b)(2)(A)(ii)(II) of title 11, United States Code, is amended by adding at the end “Such monthly expenses may include, if applicable, contributions to an account of a qualified ABLE program to the extent such contributions are not excess contributions (as described in section 4973(h) of the Internal Revenue Code of 1986) and if the designated beneficiary of such account is a child, stepchild, grandchild, or stepgrandchild of the debtor.”.
added
Record of debtor’s interest— Section 521(c) of title 11, United States Code, is amended by inserting “, an interest in an account in a qualified ABLE program (as defined in section 529A(b) of such Code,” after “Internal Revenue Code of 1986)”.
added
Effective date— The amendments made by this section shall apply with respect to cases commenced under title 11, United States Code, on or after the date of the enactment of this Act.
Sec. 105 Investment direction rule for 529 plans
added
added
Amendments relating to investment direction rule for 529 plans—
added
Paragraph (4) of section 529(b) is amended by striking “may not directly or indirectly” and all that follows and inserting “may, directly or indirectly, direct the investment of any contributions to the program (or any earnings thereon) no more than 2 times in any calendar year.”.
added
The heading of paragraph (4) of section 529(b)is amended by striking “No” and inserting “Limited”.
added
Effective date— The amendments made by this section shall apply to taxable years beginning after December 31, 2014.
Sec. 201 Correction to workers compensation offset age
added
added
Retirement age— Section 224(a) of the Social Security Act (42 U.S.C. 424a(a)) is amended, in the matter preceding paragraph (1), by striking “the age of 65” and inserting “retirement age (as defined in section 216(l)(1))”.
added
Effective date— The amendment made by subsection (a) shall apply with respect to any individual who attains 65 years of age on or after the date that is 12 months after the date of the enactment of this Act.
Sec. 202 Accelerated application of relative value targets for misvalued services in the Medicare physician fee schedule
addedadded Section 1848(c) of the Social Security Act (42 U.S.C. 1395w–4(c)) is amended—
added
in subclause (VIII) of paragraph (2)(B)(v), as added by section 220(d)(2) of the Protecting Access to Medicare Act of 2014 (Public Law 113–93)—
added
by striking “2017” and inserting “2016”; and
added
by redesignating such subclause as subclause (IX);
added
in paragraph (2)(O)—
added
in the matter preceding clause (i), by striking “2017 through 2020” and inserting “2016 through 2018”;
added
in clause (iii), by striking “2017” and inserting “2016”; and
added
in clause (v), by inserting “(or, for 2016, 1.0 percent)” after “0.5 percent”; and
added
in paragraph (7), by striking “2017” and inserting “2016”.
Sec. 203 Consistent treatment of vacuum erection systems in Medicare Parts B and D
addedadded Section 1834(a)(1) of the Social Security Act (42 U.S.C. 1395m(a)(1)) is amended by adding at the end the following new subparagraph:
added “(I) Treatment of vacuum erection systems—Effective for items and services furnished on and after July 1, 2015, vacuum erection systems described as prosthetic devices described in section 1861(s)(8) shall be treated in the same manner as erectile dysfunction drugs are treated for purposes of section 1860D-2(e)(2)(A).”
Sec. 204 One-year delay of implementation of oral-only policy under Medicare ESRD prospective payment system
addedadded Section 632(b)(1) of the American Taxpayer Relief Act of 2012 (42 U.S.C. 1395rr note), as amended by section 217(a)(1) of the Protecting Access to Medicare Act of 2014 (Public Law 113–93), is amended by striking “2024” and inserting “2025”.
Sec. 205 Modification relating to Inland Waterways Trust Fund financing rate
added
added
In general— Section 4042(b)(2)(A) is amended to read as follows:
added “(A) The Inland Waterways Trust Fund financing rate is 29 cents per gallon.”
added
Effective date— The amendment made by this section shall apply to fuel used after March 31, 2015.
Sec. 206 Certified professional employer organizations
added
added
Employment taxes— Chapter 25 is amended by adding at the end the following new section:
added “3511. Certified professional employer organizations
added “(a) General rules—For purposes of the taxes, and other obligations, imposed by this subtitle—
added “(1) a certified professional employer organization shall be treated as the employer (and no other person shall be treated as the employer) of any work site employee performing services for any customer of such organization, but only with respect to remuneration remitted by such organization to such work site employee, and
added “(2) the exemptions, exclusions, definitions, and other rules which are based on type of employer and which would (but for paragraph (1)) apply shall apply with respect to such taxes imposed on such remuneration.
added “(b) Successor employer status—For purposes of sections 3121(a)(1), 3231(e)(2)(C), and 3306(b)(1)—
added “(1) a certified professional employer organization entering into a service contract with a customer with respect to a work site employee shall be treated as a successor employer and the customer shall be treated as a predecessor employer during the term of such service contract, and
added “(2) a customer whose service contract with a certified professional employer organization is terminated with respect to a work site employee shall be treated as a successor employer and the certified professional employer organization shall be treated as a predecessor employer.
added “(c) Liability of certified professional employer organization—Solely for purposes of its liability for the taxes and other obligations imposed by this subtitle—
added “(1) a certified professional employer organization shall be treated as the employer of any individual (other than a work site employee or a person described in subsection (f)) who is performing services covered by a contract meeting the requirements of section 7705(e)(2), but only with respect to remuneration remitted by such organization to such individual, and
added “(2) the exemptions, exclusions, definitions, and other rules which are based on type of employer and which would (but for paragraph (1)) apply shall apply with respect to such taxes imposed on such remuneration.
added “(d) Treatment of credits
added “(1) In general—For purposes of any credit specified in paragraph (2)—
added “(A) such credit with respect to a work site employee performing services for the customer applies to the customer, not the certified professional employer organization,
added “(B) the customer, and not the certified professional employer organization, shall take into account wages and employment taxes—
added “(i) paid by the certified professional employer organization with respect to the work site employee, and
added “(ii) for which the certified professional employer organization receives payment from the customer, and
added “(C) the certified professional employer organization shall furnish the customer and the Secretary with any information necessary for the customer to claim such credit.
added “(2) Credits specified—A credit is specified in this paragraph if such credit is allowed under—
added “(A) section 41 (credit for increasing research activity),
added “(B) section 45A (Indian employment credit),
added “(C) section 45B (credit for portion of employer social security taxes paid with respect to employee cash tips),
added “(D) section 45C (clinical testing expenses for certain drugs for rare diseases or conditions),
added “(E) section 45R (employee health insurance expenses of small employers),
added “(F) section 51 (work opportunity credit),
added “(G) section 1396 (empowerment zone employment credit), and
added “(H) any other section as provided by the Secretary.
added “(e) Special rule for related party—This section shall not apply in the case of a customer which bears a relationship to a certified professional employer organization described in section 267(b) or 707(b). For purposes of the preceding sentence, such sections shall be applied by substituting “10 percent” for “50 percent”.
added “(f) Special rule for certain individuals—For purposes of the taxes imposed under this subtitle, an individual with net earnings from self-employment derived from the customer’s trade or business (including a partner in a partnership that is a customer) is not a work site employee with respect to remuneration paid by a certified professional employer organization.
added “(g) Reporting requirements and obligations—The Secretary shall develop such reporting and recordkeeping rules, regulations, and procedures as the Secretary determines necessary or appropriate to ensure compliance with this title by certified professional employer organizations or persons that have been so certified. Such rules shall include—
added “(1) notification of the Secretary in such manner as the Secretary shall prescribe in the case of the commencement or termination of a service contract described in section 7705(e)(2) between such a person and a customer, and the employer identification number of such customer,
added “(2) such information as the Secretary determines necessary for the customer to claim the credits identified in subsection (d) and the manner in which such information is to be provided, as prescribed by the Secretary, and
added “(3) such other information as the Secretary determines is essential to promote compliance with respect to the credits identified in subsection (d) and section 3302, and
added “(h) Regulations—The Secretary shall prescribe such regulations as may be necessary or appropriate to carry out the purposes of this section.”
added
Certified professional employer organization defined— Chapter 79 is amended by adding at the end the following new section:
added “7705. Certified professional employer organizations
added “(a) In general—For purposes of this title, the term certified professional employer organization means a person who applies to be treated as a certified professional employer organization for purposes of section 3511 and has been certified by the Secretary as meeting the requirements of subsection (b).
added “(b) Certification requirements—A person meets the requirements of this subsection if such person—
added “(1) demonstrates that such person (and any owner, officer, and other persons as may be specified in regulations) meets such requirements as the Secretary shall establish, including requirements with respect to tax status, background, experience, business location, and annual financial audits,
added “(2) agrees that it will satisfy the bond and independent financial review requirements of subsection (c) on an ongoing basis,
added “(3) agrees that it will satisfy such reporting obligations as may be imposed by the Secretary,
added “(4) computes its taxable income using an accrual method of accounting unless the Secretary approves another method,
added “(5) agrees to verify on such periodic basis as the Secretary may prescribe that it continues to meet the requirements of this subsection, and
added “(6) agrees to notify the Secretary in writing within such time as the Secretary may prescribe of any change that materially affects the continuing accuracy of any agreement or information that was previously made or provided under this subsection.
added “(c) Bond and independent financial review
added “(1) In general—An organization meets the requirements of this paragraph if such organization—
added “(A) meets the bond requirements of paragraph (2), and
added “(B) meets the independent financial review requirements of paragraph (3).
added “(2) Bond
added “(A) In general—A certified professional employer organization meets the requirements of this paragraph if the organization has posted a bond for the payment of taxes under subtitle C (in a form acceptable to the Secretary) that is in an amount at least equal to the amount specified in subparagraph (B).
added “(B) Amount of bond—For the period April 1 of any calendar year through March 31 of the following calendar year, the amount of the bond required is equal to the greater of—
added “(i) 5 percent of the organization's liability under section 3511 for taxes imposed by subtitle C during the preceding calendar year (but not to exceed $1,000,000), or
added “(ii) $50,000.
added “(3) Independent financial review requirements—A certified professional employer organization meets the requirements of this paragraph if such organization—
added “(A) has, as of the most recent audit date, caused to be prepared and provided to the Secretary (in such manner as the Secretary may prescribe) an opinion of an independent certified public accountant as to whether the certified professional employer organization’s financial statements are presented fairly in accordance with generally accepted accounting principles, and
added “(B) provides to the Secretary an assertion regarding Federal employment tax payments and an examination level attestation on such assertion from an independent certified public accountant not later than the last day of the second month beginning after the end of each calendar quarter.
added “(4) Controlled group rules—For purposes of the requirements of paragraphs (2) and (3), all certified professional employer organizations that are members of a controlled group within the meaning of sections 414(b) and (c) shall be treated as a single organization.
added “(5) Failure to file assertion and attestation—If the certified professional employer organization fails to file the assertion and attestation required by paragraph (3) with respect to any calendar quarter, then the requirements of paragraph (3) with respect to such failure shall be treated as not satisfied for the period beginning on the due date for such attestation.
added “(6) Audit date—For purposes of paragraph (3)(A), the audit date shall be six months after the completion of the organization's fiscal year.
added “(d) Suspension and revocation authority—The Secretary may suspend or revoke a certification of any person under subsection (b) for purposes of section 3511 if the Secretary determines that such person is not satisfying the agreements or requirements of subsections (b) or (c), or fails to satisfy applicable accounting, reporting, payment, or deposit requirements.
added “(e) Work site employee—For purposes of this title—
added “(1) In general—The term work site employee means, with respect to a certified professional employer organization, an individual who—
added “(A) performs services for a customer pursuant to a contract which is between such customer and the certified professional employer organization and which meets the requirements of paragraph (2), and
added “(B) performs services at a work site meeting the requirements of paragraph (3).
added “(2) Service contract requirements—A contract meets the requirements of this paragraph with respect to an individual performing services for a customer if such contract is in writing and provides that the certified professional employer organization shall—
added “(A) assume responsibility for payment of wages to such individual, without regard to the receipt or adequacy of payment from the customer for such services,
added “(B) assume responsibility for reporting, withholding, and paying any applicable taxes under subtitle C, with respect to such individual's wages, without regard to the receipt or adequacy of payment from the customer for such services,
added “(C) assume responsibility for any employee benefits which the service contract may require the certified professional employer organization to provide, without regard to the receipt or adequacy of payment from the customer for such benefits,
added “(D) assume responsibility for recruiting, hiring, and firing workers in addition to the customer’s responsibility for recruiting, hiring, and firing workers,
added “(E) maintain employee records relating to such individual, and
added “(F) agree to be treated as a certified professional employer organization for purposes of section 3511 with respect to such individual.
added “(3) Work site coverage requirement—The requirements of this paragraph are met with respect to an individual if at least 85 percent of the individuals performing services for the customer at the work site where such individual performs services are subject to 1 or more contracts with the certified professional employer organization which meet the requirements of paragraph (2) (but not taking into account those individuals who are excluded employees within the meaning of section 414(q)(5)).
added “(f) Public disclosure—The Secretary shall make available to the public the name and address of—
added “(1) each person certified as a professional employer organization under subsection (a), and
added “(2) each person whose certification as a professional employer organization is suspended or revoked under subsection (d).
added “(g) Determination of employment status—Except to the extent necessary for purposes of section 3511, nothing in this section shall be construed to affect the determination of who is an employee or employer for purposes of this title.
added “(h) Regulations—The Secretary shall prescribe such regulations as may be necessary or appropriate to carry out the purposes of this section.”
added
Conforming amendments—
added
Section 3302 is amended by adding at the end the following new subsection:
added “(h) Treatment of certified professional employer organizations—If a certified professional employer organization (as defined in section 7705), or a customer of such organization, makes a contribution to the State’s unemployment fund with respect to wages paid to a work site employee, such certified professional employer organization shall be eligible for the credits available under this section with respect to such contribution.”
added
Section 3303(a) is amended—
added
by striking the period at the end of paragraph (3) and inserting “; and” and by inserting after paragraph (3) the following new paragraph:
added “(4) if the taxpayer is a certified professional employer organization (as defined in section 7705) that is treated as the employer under section 3511, such certified professional employer organization is permitted to collect and remit, in accordance with paragraphs (1), (2), and (3), contributions during the taxable year to the State unemployment fund with respect to a work site employee.”
added
in the last sentence—
added
by striking “paragraphs (1), (2), and (3)” and inserting “paragraphs (1), (2), (3), and (4)”, and
added
by striking “paragraph (1), (2), or (3)” and inserting “paragraph (1), (2), (3), or (4)”.
added
Section 6053(c) is amended by adding at the end the following new paragraph:
added “(8) Certified professional employer organizations—For purposes of any report required by this subsection, in the case of a certified professional employer organization that is treated under section 3511 as the employer of a work site employee, the customer with respect to whom a work site employee performs services shall be the employer for purposes of reporting under this section and the certified professional employer organization shall furnish to the customer and the Secretary any information the Secretary prescribes as necessary to complete such reporting no later than such time as the Secretary shall prescribe.”
added
Section 6652 is amended by adding at the end the following new subsection:
added “(n) Failure to make reports required under sections 3511, 6053(c)(8), and 7705—In the case of a failure to make a report required under section 3511, 6053(c)(8), or 7705 which contains the information required by such section on the date prescribed therefor (determined with regard to any extension of time for filing), there shall be paid (on notice and demand by the Secretary and in the same manner as tax) by the person failing to make such report, an amount equal to $50 for each report with respect to which there was such a failure. In the case of any failure due to negligence or intentional disregard the preceding sentence shall be applied by substituting “$100” for “$50”.”
added
Clerical amendments—
added
The table of sections for chapter 25 is amended by adding at the end the following new item:
added
The table of sections for chapter 79 is amended by inserting after the item relating to section 7704 the following new item:
added
User fees— Section 7528(b) is amended by adding at the end the following new paragraph:
added “(4) Certified professional employer organizations—The fee charged under the program in connection with the certification by the Secretary of a professional employer organization under section 7705 shall be an annual fee not to exceed $1,000 per year.”
added
Effective dates—
added
In general— The amendments made by this section shall apply with respect to wages for services performed on or after January 1 of the first calendar year beginning more than 12 months after the date of the enactment of this Act.
added
Certification program— The Secretary of the Treasury shall establish the certification program described in section 7705(b) of the Internal Revenue Code of 1986, as added by subsection (b), not later than 6 months before the effective date determined under paragraph (1).
added
No inference— Nothing contained in this section or the amendments made by this section shall be construed to create any inference with respect to the determination of who is an employee or employer—
added
for Federal tax purposes (other than the purposes set forth in the amendments made by this section), or
added
for purposes of any other provision of law.
Sec. 207 Exclusion of dividends from controlled foreign corporations from the definition of personal holding company income for purposes of the personal holding company rules
added
added
In general— Section 543(a)(1) is amended—
added
by redesignating subparagraphs (C) and (D) as subparagraphs (D) and (E), respectively, and
added
by inserting after subparagraph (B) the following:
added “(C) dividends received by a United States shareholder (as defined in section 951(b)) from a controlled foreign corporation (as defined in section 957(a)),”
added
Effective date— The amendments made by this Act shall apply to taxable years ending on or after the date of the enactment of this Act.
Sec. 208 Inflation adjustment for certain civil penalties under the Internal Revenue Code of 1986
added
added
Failure to file tax return or pay tax— Section 6651 is amended by adding at the end the following new subsection:
added “(i) Adjustment for inflation
added “(1) In general—In the case of any return required to be filed in a calendar year beginning after 2014, the $135 dollar amount under subsection (a) shall be increased by such dollar amount multiplied by the cost-of-living adjustment determined under section 1(f)(3) determined by substituting “calendar year 2013” for “calendar year 1992” in subparagraph (B) thereof.
added “(2) Rounding—If any amount adjusted under paragraph (1) is not a multiple of $5, such amount shall be rounded to the next lowest multiple of $5.”
added
Failure to file certain information returns, registration statements, etc—
added
In general— Section 6652(c) is amended by adding at the end the following new paragraph:
added “(6) Adjustment for inflation
added “(A) In general—In the case of any failure relating to a return required to be filed in a calendar year beginning after 2014, each of the dollar amounts under paragraphs (1), (2), and (3) shall be increased by such dollar amount multiplied by the cost-of-living adjustment determined under section 1(f)(3) determined by substituting “calendar year 2013” for “calendar year 1992” in subparagraph (B) thereof.
added “(B) Rounding—If any amount adjusted under subparagraph (A)—
added “(i) is not less than $5,000 and is not a multiple of $500, such amount shall be rounded to the next lowest multiple of $500, and
added “(ii) is not described in clause (i) and is not a multiple of $5, such amount shall be rounded to the next lowest multiple of $5.”
added
Conforming amendments—
added
The last sentence of section 6652(c)(1)(A) is amended by striking “the first sentence of this subparagraph shall be applied by substituting “$100” for “$20” and” and inserting “in applying the first sentence of this subparagraph, the amount of the penalty for each day during which a failure continues shall be $100 in lieu of the amount otherwise specified, and”.
added
Section 6652(c)(2)(C)(ii) is amended by striking “the first sentence of paragraph (1)(A)” and all that follows and inserting “in applying the first sentence of paragraph (1)(A), the amount of the penalty for each day during which a failure continues shall be $100 in lieu of the amount otherwise specified, and in lieu of applying the second sentence of paragraph (1)(A), the maximum penalty under paragraph (1)(A) shall not exceed $50,000, and”.
added
Other assessable penalties with respect to the preparation of tax returns for other persons— Section 6695 is amended by adding at the end the following new subsection:
added “(h) Adjustment for inflation
added “(1) In general—In the case of any failure relating to a return or claim for refund filed in a calendar year beginning after 2014, each of the dollar amounts under subsections (a), (b), (c), (d), (e), (f), and (g) shall be increased by such dollar amount multiplied by the cost-of-living adjustment determined under section 1(f)(3) determined by substituting “calendar year 2013” for “calendar year 1992” in subparagraph (B) thereof.
added “(2) Rounding—If any amount adjusted under subparagraph (A)—
added “(A) is not less than $5,000 and is not a multiple of $500, such amount shall be rounded to the next lowest multiple of $500, and
added “(B) is not described in clause (i) and is not a multiple of $5, such amount shall be rounded to the next lowest multiple of $5.”
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Failure to file partnership return— Section 6698 is amended by adding at the end the following new subsection:
added “(e) Adjustment for inflation
added “(1) In general—In the case of any return required to be filed in a calendar year beginning after 2014, the $195 dollar amount under subsection (b)(1) shall be increased by such dollar amount multiplied by the cost-of-living adjustment determined under section 1(f)(3) determined by substituting “calendar year 2013” for “calendar year 1992” in subparagraph (B) thereof.
added “(2) Rounding—If any amount adjusted under paragraph (1) is not a multiple of $5, such amount shall be rounded to the next lowest multiple of $5.”
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Failure to file S corporation return— Section 6699 is amended by adding at the end the following new subsection:
added “(e) Adjustment for inflation
added “(1) In general—In the case of any return required to be filed in a calendar year beginning after 2014, the $195 dollar amount under subsection (b)(1) shall be increased by such dollar amount multiplied by the cost-of-living adjustment determined under section 1(f)(3) determined by substituting “calendar year 2013” for “calendar year 1992” in subparagraph (B) thereof.
added “(2) Rounding—If any amount adjusted under paragraph (1) is not a multiple of $5, such amount shall be rounded to the next lowest multiple of $5.”
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Failure to file correct information returns— Section 6721(f)(1) is amended by striking “For each fifth calendar year beginning after 2012” and inserting “In the case of any failure relating to a return required to be filed in a calendar year beginning after 2014”.
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Failure to furnish correct payee statements— Section 6722(f)(1) is amended by striking “For each fifth calendar year beginning after 2012” and inserting “In the case of any failure relating to a statement required to be furnished in a calendar year beginning after 2014”.
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Effective date— The amendments made by this section shall apply to returns required to be filed after December 31, 2014.
Sec. 209 Increase in continuous levy
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In general— Paragraph (3) of section 6331(h) is amended by striking the period at the end and inserting “and by substituting “30 percent” for “15 percent” in the case of any specified payment due to a Medicare provider or supplier under title XVIII of the Social Security Act.”.
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Effective date— The amendment made by this section shall apply to payments made after 180 days after the date of the enactment of this Act.