PUBLIC LAW 110–245—JUNE 17, 2008 

HEROES EARNINGS ASSISTANCE AND RELIEF 

TAX ACT OF 2008 


dkrause on GSDDPC44 with PUBLIC LAWS
122 STAT. 1624 PUBLIC LAW 110–245—JUNE 17, 2008 

Public Law 110–245 

110th Congress 

An Act 

To amend the Internal Revenue Code of 1986 to provide benefits for military 

personnel, and for other purposes. 

Be it enacted by the Senate and House of Representatives of 

the United States of America in Congress assembled, 

SECTION 1. SHORT TITLE, ETC. 

(a) SHORT TITLE.—This Act may be cited as the ‘‘Heroes 

Earnings Assistance and Relief Tax Act of 2008’’. 

(b) REFERENCE.—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. 

(c) TABLE OF CONTENTS.—The table of contents for this Act 

is as follows: 

Sec. 1. Short title, etc. 

TITLE I—BENEFITS FOR MILITARY 

Sec. 101. Recovery rebate provided to military families. 

Sec. 102. Election to include combat pay as earned income for purposes of earned 

income tax credit. 

Sec. 103. Modification of mortgage revenue bonds for veterans. 

Sec. 104. Survivor and disability payments with respect to qualified military service. 

Sec. 105. Treatment of differential military pay as wages. 

Sec. 106. Special period of limitation when uniformed services retired pay is reduced as a result of award of disability compensation. 

Sec. 107. Distributions from retirement plans to individuals called to active duty. 

Sec. 108. Authority to disclose return information for certain veterans programs 

made permanent. 

Sec. 109. Contributions of military death gratuities to Roth IRAs and Education 

Savings Accounts. 

Sec. 110. Suspension of 5-year period during service with the Peace Corps. 

Sec. 111. Credit for employer differential wage payments to employees who are active duty members of the uniformed services. 

Sec. 112. State payments to service members treated as qualified military benefits. 

Sec. 113. Permanent exclusion of gain from sale of a principal residence by certain 

employees of the intelligence community. 

Sec. 114. Special disposition rules for unused benefits in health flexible spending 

arrangements of individuals called to active duty. 

Sec. 115. Technical correction related to exclusion of certain property tax rebates 

and other benefits provided to volunteer firefighters and emergency 

medical responders. 

TITLE II—IMPROVEMENTS IN SUPPLEMENTAL SECURITY INCOME 

Sec. 201. Treatment of uniformed service cash remuneration as earned income. 

Sec. 202. State annuities for certain veterans to be disregarded in determining supplemental security income benefits. 

Sec. 203. Exclusion of AmeriCorps benefits for purposes of determining supplemental security income eligibility and benefit amounts. 

26 USC 1 et seq. 

26 USC 1 note. 

Heroes Earnings 

Assistance and 

Relief Tax Act of 

2008. 

June 17, 2008 

[H.R. 6081] 


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Sec. 204. Effective date. 

TITLE III—REVENUE PROVISIONS 

Sec. 301. Revision of tax rules on expatriation. 

Sec. 302. Certain domestically controlled foreign persons performing services under 

contract with United States Government treated as American employers. 

Sec. 303. Increase in minimum penalty on failure to file a return of tax. 

TITLE IV—PARITY IN THE APPLICATION OF CERTAIN LIMITS TO MENTAL 

HEALTH BENEFITS 

Sec. 401. Parity in the application of certain limits to mental health benefits. 

TITLE I—BENEFITS FOR MILITARY 

SEC. 101. RECOVERY REBATE PROVIDED TO MILITARY FAMILIES. 

(a) IN GENERAL.—Subsection (h) of section 6428 (relating to 

identification number requirement) is amended by adding at the 

end the following new paragraph: 

‘‘(3) SPECIAL RULE FOR MEMBERS OF THE ARMED FORCES.— 

Paragraph (1) shall not apply to a joint return where at least 

1 spouse was a member of the Armed Forces of the United 

States at any time during the taxable year.’’. 

(b) EFFECTIVE DATE.—The amendments made by this section 

shall take effect as if included in the amendments made by section 

101 of the Economic Stimulus Act of 2008. 

SEC. 102. ELECTION TO INCLUDE COMBAT PAY AS EARNED INCOME 

FOR PURPOSES OF EARNED INCOME TAX CREDIT. 

(a) IN GENERAL.—Clause (vi) of section 32(c)(2)(B) (defining 

earned income) is amended to read as follows: 

‘‘(vi) a taxpayer may elect to treat amounts 

excluded from gross income by reason of section 112 

as earned income.’’. 

(b) CONFORMING AMENDMENT.—Paragraph (4) of section 6428(e) 

is amended by striking ‘‘except that—’’ and all that follows through 

‘‘(B) such term shall’’ and inserting ‘‘except that such term shall’’. 

(c) SUNSET NOT APPLICABLE.—Section 105 of the Working Families Tax Relief Act of 2004 (relating to application of EGTRRA 

sunset to this title) shall not apply to section 104(b) of such Act. 

(d) EFFECTIVE DATE.—The amendments made by this section 

shall apply to taxable years ending after December 31, 2007. 

SEC. 103. MODIFICATION OF MORTGAGE REVENUE BONDS FOR VETERANS. 

(a) QUALIFIED MORTGAGE BONDS USED TO FINANCE RESIDENCES

FOR VETERANS WITHOUT REGARD TO FIRST-TIME HOMEBUYER

REQUIREMENT.—Subparagraph (D) of section 143(d)(2) (relating to 

exceptions) is amended by striking ‘‘and before January 1, 2008’’. 

(b) INCREASE IN BOND LIMITATION FOR ALASKA, OREGON, AND

WISCONSIN.—Clause (ii) of section 143(l)(3)(B) (relating to State 

veterans limit) is amended by striking ‘‘$25,000,000’’ each place 

it appears and inserting ‘‘$100,000,000’’. 

(c) DEFINITION OF QUALIFIED VETERAN.—Paragraph (4) of section 143(l) (defining qualified veteran) is amended to read as follows: 

‘‘(4) QUALIFIED VETERAN.—For purposes of this subsection, 

the term ‘qualified veteran’ means any veteran who— 

‘‘(A) served on active duty, and 

26 USC 32 note. 

26 USC 32 note. 

26 USC 6428 

note. 

26 USC 6428. 


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122 STAT. 1626 PUBLIC LAW 110–245—JUNE 17, 2008 

‘‘(B) applied for the financing before the date 25 years 

after the last date on which such veteran left active 

service.’’. 

(d) EFFECTIVE DATE.—The amendments made by this section 

shall apply to bonds issued after December 31, 2007. 

(e) TRANSITION RULE.—In the case of any bond issued after 

December 31, 2007, and before the date of the enactment of this 

Act, subparagraph (B) of section 143(l)(4) of the Internal Revenue 

Code of 1986, as amended by this section, shall be applied by 

substituting ‘‘30 years’’ for ‘‘25 years’’. 

SEC. 104. SURVIVOR AND DISABILITY PAYMENTS WITH RESPECT TO 

QUALIFIED MILITARY SERVICE. 

(a) PLAN QUALIFICATION REQUIREMENT FOR DEATH BENEFITS

UNDER USERRA-QUALIFIED ACTIVE MILITARY SERVICE.—Subsection 

(a) of section 401 (relating to requirements for qualification) is 

amended by inserting after paragraph (36) the following new paragraph: 

‘‘(37) DEATH BENEFITS UNDER USERRA-QUALIFIED ACTIVE

MILITARY SERVICE.—A trust shall not constitute a qualified 

trust unless the plan provides that, in the case of a participant 

who dies while performing qualified military service (as defined 

in section 414(u)), the survivors of the participant are entitled 

to any additional benefits (other than benefit accruals relating 

to the period of qualified military service) provided under the 

plan had the participant resumed and then terminated employment on account of death.’’. 

(b) TREATMENT IN THE CASE OF DEATH OR DISABILITY

RESULTING FROM ACTIVE MILITARY SERVICE FOR BENEFIT ACCRUAL

PURPOSES.—Subsection (u) of section 414 (relating to special rules 

relating to veterans’ reemployment rights under USERRA) is 

amended by redesignating paragraphs (9) and (10) as paragraphs 

(10) and (11), respectively, and by inserting after paragraph (8) 

the following new paragraph: 

‘‘(9) TREATMENT IN THE CASE OF DEATH OR DISABILITY

RESULTING FROM ACTIVE MILITARY SERVICE.— 

‘‘(A) IN GENERAL.—For benefit accrual purposes, an 

employer sponsoring a retirement plan may treat an individual who dies or becomes disabled (as defined under 

the terms of the plan) while performing qualified military 

service with respect to the employer maintaining the plan 

as if the individual has resumed employment in accordance 

with the individual’s reemployment rights under chapter 

43 of title 38, United States Code, on the day preceding 

death or disability (as the case may be) and terminated 

employment on the actual date of death or disability. In 

the case of any such treatment, and subject to subparagraphs (B) and (C), any full or partial compliance by such 

plan with respect to the benefit accrual requirements of 

paragraph (8) with respect to such individual shall be 

treated for purposes of paragraph (1) as if such compliance 

were required under such chapter 43. 

‘‘(B) NONDISCRIMINATION REQUIREMENT.—Subparagraph (A) shall apply only if all individuals performing 

qualified military service with respect to the employer 

maintaining the plan (as determined under subsections 

(b), (c), (m), and (o)) who die or became disabled as a 

Applicability. 

26 USC 401. 

Applicability. 

26 USC 143 note. 

26 USC 143 note. 


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PUBLIC LAW 110–245—JUNE 17, 2008 122 STAT. 1627 

result of performing qualified military service prior to 

reemployment by the employer are credited with service 

and benefits on reasonably equivalent terms. 

‘‘(C) DETERMINATION OF BENEFITS.—The amount of 

employee contributions and the amount of elective deferrals 

of an individual treated as reemployed under subparagraph 

(A) for purposes of applying paragraph (8)(C) shall be determined on the basis of the individual’s average actual 

employee contributions or elective deferrals for the lesser 

of— 

‘‘(i) the 12-month period of service with the 

employer immediately prior to qualified military 

service, or 

‘‘(ii) if service with the employer is less than such 

12-month period, the actual length of continuous 

service with the employer.’’. 

(c) CONFORMING AMENDMENTS.— 

(1) Section 404(a)(2) is amended by striking ‘‘and (31)’’ 

and inserting ‘‘(31), and (37)’’. 

(2) Section 403(b) is amended by adding at the end the 

following new paragraph: 

‘‘(14) DEATH BENEFITS UNDER USERRA-QUALIFIED ACTIVE

MILITARY SERVICE.—This subsection shall not apply to an 

annuity contract unless such contract meets the requirements 

of section 401(a)(37).’’. 

(3) Section 457(g) is amended by adding at the end the 

following new paragraph: 

‘‘(4) DEATH BENEFITS UNDER USERRA-QUALIFIED ACTIVE MILITARY SERVICE.—A plan described in paragraph (1) shall not 

be treated as an eligible deferred compensation plan unless 

such plan meets the requirements of section 401(a)(37).’’. 

(d) EFFECTIVE DATE.— 

(1) IN GENERAL.—The amendments made by this section 

shall apply with respect to deaths and disabilities occurring 

on or after January 1, 2007. 

(2) PROVISIONS RELATING TO PLAN AMENDMENTS.— 

(A) IN GENERAL.—If this subparagraph applies to any 

plan or contract amendment, such plan or contract shall 

be treated as being operated in accordance with the terms 

of the plan during the period described in subparagraph 

(B)(iii). 

(B) AMENDMENTS TO WHICH SUBPARAGRAPH (A) 

APPLIES.— 

(i) IN GENERAL.—Subparagraph (A) shall apply to 

any amendment to any plan or annuity contract which 

is made— 

(I) pursuant to the amendments made by subsection (a) or pursuant to any regulation issued 

by the Secretary of the Treasury under subsection 

(a), and 

(II) on or before the last day of the first plan 

year beginning on or after January 1, 2010. 

In the case of a governmental plan (as defined in 

section 414(d) of the Internal Revenue Code of 1986), 

this clause shall be applied by substituting ‘‘2012’’ for 

‘‘2010’’ in subclause (II). 

26 USC 401 note. 

26 USC 404. 


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122 STAT. 1628 PUBLIC LAW 110–245—JUNE 17, 2008 

(ii) CONDITIONS.—This paragraph shall not apply 

to any amendment unless— 

(I) the plan or contract is operated as if such 

plan or contract amendment were in effect for 

the period described in clause (iii), and 

(II) such plan or contract amendment applies 

retroactively for such period. 

(iii) PERIOD DESCRIBED.—The period described in 

this clause is the period— 

(I) beginning on the effective date specified 

by the plan, and 

(II) ending on the date described in clause 

(i)(II) (or, if earlier, the date the plan or contract 

amendment is adopted). 

SEC. 105. TREATMENT OF DIFFERENTIAL MILITARY PAY AS WAGES. 

(a) INCOME TAX WITHHOLDING ON DIFFERENTIAL WAGE PAYMENTS.— 

(1) IN GENERAL.—Section 3401 (relating to definitions) is 

amended by adding at the end the following new subsection: 

‘‘(h) DIFFERENTIAL WAGE PAYMENTS TO ACTIVE DUTY MEMBERS

OF THE UNIFORMED SERVICES.— 

‘‘(1) IN GENERAL.—For purposes of subsection (a), any differential wage payment shall be treated as a payment of wages 

by the employer to the employee. 

‘‘(2) DIFFERENTIAL WAGE PAYMENT.—For purposes of paragraph (1), the term ‘differential wage payment’ means any 

payment which— 

‘‘(A) is made by an employer to an individual with 

respect to any period during which the individual is performing service in the uniformed services (as defined in 

chapter 43 of title 38, United States Code) while on active 

duty for a period of more than 30 days, and 

‘‘(B) represents all or a portion of the wages the individual would have received from the employer if the individual were performing service for the employer.’’. 

(2) EFFECTIVE DATE.—The amendment made by this subsection shall apply to remuneration paid after December 31, 

2008. 

(b) TREATMENT OF DIFFERENTIAL WAGE PAYMENTS FOR RETIREMENT PLAN PURPOSES.— 

(1) PENSION PLANS.— 

(A) IN GENERAL.—Section 414(u) (relating to special 

rules relating to veterans’ reemployment rights under 

USERRA), as amended by section 103(b), is amended by 

adding at the end the following new paragraph: 

‘‘(12) TREATMENT OF DIFFERENTIAL WAGE PAYMENTS.— 

‘‘(A) IN GENERAL.—Except as provided in this paragraph, for purposes of applying this title to a retirement 

plan to which this subsection applies— 

‘‘(i) an individual receiving a differential wage payment shall be treated as an employee of the employer 

making the payment, 

‘‘(ii) the differential wage payment shall be treated 

as compensation, and 

‘‘(iii) the plan shall not be treated as failing to 

meet the requirements of any provision described in 

26 USC 3401 

note. 

26 USC 3401. 


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paragraph (1)(C) by reason of any contribution or benefit which is based on the differential wage payment. 

‘‘(B) SPECIAL RULE FOR DISTRIBUTIONS.— 

‘‘(i) IN GENERAL.—Notwithstanding subparagraph 

(A)(i), for purposes of section 401(k)(2)(B)(i)(I), 

403(b)(7)(A)(ii), 403(b)(11)(A), or 457(d)(1)(A)(ii), an 

individual shall be treated as having been severed 

from employment during any period the individual is 

performing service in the uniformed services described 

in section 3401(h)(2)(A). 

‘‘(ii) LIMITATION.—If an individual elects to receive 

a distribution by reason of clause (i), the plan shall 

provide that the individual may not make an elective 

deferral or employee contribution during the 6-month 

period beginning on the date of the distribution. 

‘‘(C) NONDISCRIMINATION REQUIREMENT.—Subparagraph (A)(iii) shall apply only if all employees of an 

employer (as determined under subsections (b), (c), (m), 

and (o)) performing service in the uniformed services 

described in section 3401(h)(2)(A) are entitled to receive 

differential wage payments on reasonably equivalent terms 

and, if eligible to participate in a retirement plan maintained by the employer, to make contributions based on 

the payments on reasonably equivalent terms. For purposes 

of applying this subparagraph, the provisions of paragraphs 

(3), (4), and (5) of section 410(b) shall apply. 

‘‘(D) DIFFERENTIAL WAGE PAYMENT.—For purposes of 

this paragraph, the term ‘differential wage payment’ has 

the meaning given such term by section 3401(h)(2).’’. 

(B) CONFORMING AMENDMENT.—The heading for section 414(u) is amended by inserting ‘‘AND TO DIFFERENTIAL

WAGE PAYMENTS TO MEMBERS ON ACTIVE DUTY’’ after 

‘‘USERRA’’. 

(2) DIFFERENTIAL WAGE PAYMENTS TREATED AS COMPENSATION FOR INDIVIDUAL RETIREMENT PLANS.—Section 219(f)(1) 

(defining compensation) is amended by adding at the end the 

following new sentence: ‘‘The term compensation includes any 

differential wage payment (as defined in section 3401(h)(2)).’’. 

(3) EFFECTIVE DATE.—The amendments made by this subsection shall apply to years beginning after December 31, 2008. 

(c) PROVISIONS RELATING TO PLAN AMENDMENTS.— 

(1) IN GENERAL.—If this subsection applies to any plan 

or annuity contract amendment, such plan or contract shall 

be treated as being operated in accordance with the terms 

of the plan or contract during the period described in paragraph 

(2)(B)(i). 

(2) AMENDMENTS TO WHICH SECTION APPLIES.— 

(A) IN GENERAL.—This subsection shall apply to any 

amendment to any plan or annuity contract which is 

made— 

(i) pursuant to any amendment made by subsection 

(b)(1), and 

(ii) on or before the last day of the first plan 

year beginning on or after January 1, 2010. 

26 USC 414 note. 

26 USC 219 note. 

26 USC 414. 

Applicability. 


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122 STAT. 1630 PUBLIC LAW 110–245—JUNE 17, 2008 

In the case of a governmental plan (as defined in section 

414(d) of the Internal Revenue Code of 1986), this subparagraph shall be applied by substituting ‘‘2012’’ for ‘‘2010’’ 

in clause (ii). 

(B) CONDITIONS.—This subsection shall not apply to 

any plan or annuity contract amendment unless— 

(i) during the period beginning on the date the 

amendment described in subparagraph (A)(i) takes 

effect and ending on the date described in subparagraph (A)(ii) (or, if earlier, the date the plan or contract 

amendment is adopted), the plan or contract is operated as if such plan or contract amendment were in 

effect, and 

(ii) such plan or contract amendment applies retroactively for such period. 

SEC. 106. SPECIAL PERIOD OF LIMITATION WHEN UNIFORMED SERVICES RETIRED PAY IS REDUCED AS A RESULT OF AWARD 

OF DISABILITY COMPENSATION. 

(a) IN GENERAL.—Subsection (d) of section 6511 (relating to 

special rules applicable to income taxes) is amended by adding 

at the end the following new paragraph: 

‘‘(8) SPECIAL RULES WHEN UNIFORMED SERVICES RETIRED

PAY IS REDUCED AS A RESULT OF AWARD OF DISABILITY COMPENSATION.— 

‘‘(A) PERIOD OF LIMITATION ON FILING CLAIM.—If the 

claim for credit or refund relates to an overpayment of 

tax imposed by subtitle A on account of— 

‘‘(i) the reduction of uniformed services retired pay 

computed under section 1406 or 1407 of title 10, United 

States Code, or 

‘‘(ii) the waiver of such pay under section 5305 

of title 38 of such Code, 

as a result of an award of compensation under title 38 

of such Code pursuant to a determination by the Secretary 

of Veterans Affairs, the 3-year period of limitation prescribed in subsection (a) shall be extended, for purposes 

of permitting a credit or refund based upon the amount 

of such reduction or waiver, until the end of the 1-year 

period beginning on the date of such determination. 

‘‘(B) LIMITATION TO 5 TAXABLE YEARS.—Subparagraph 

(A) shall not apply with respect to any taxable year which 

began more than 5 years before the date of such determination.’’. 

(b) EFFECTIVE DATE.—The amendment made by subsection (a) 

shall apply to claims for credit or refund filed after the date of 

the enactment of this Act note. 

(c) TRANSITION RULES.—In the case of a determination 

described in paragraph (8) of section 6511(d) of the Internal Revenue 

Code of 1986 (as added by this section) which is made by the 

Secretary of Veterans Affairs after December 31, 2000, and before 

the date of the enactment of this Act, such paragraph— 

(1) shall not apply with respect to any taxable year which 

began before January 1, 2001, and 

(2) shall be applied by substituting for ‘‘the date of such 

determination’’ in subparagraph (A) thereof. 

Applicability. 

26 USC 6511 

note. 

26 USC 6511 

note. 

26 USC 6511. 


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SEC. 107. DISTRIBUTIONS FROM RETIREMENT PLANS TO INDIVIDUALS 

CALLED TO ACTIVE DUTY. 

(a) IN GENERAL.—Clause (iv) of section 72(t)(2)(G) is amended 

by striking ‘‘, and before December 31, 2007’’. 

(b) EFFECTIVE DATE.—The amendment made by this section 

shall apply to individuals ordered or called to active duty on or 

after December 31, 2007. 

SEC. 108. AUTHORITY TO DISCLOSE RETURN INFORMATION FOR CERTAIN VETERANS PROGRAMS MADE PERMANENT. 

(a) IN GENERAL.—Paragraph (7) of section 6103(l) is amended 

by striking the last sentence thereof. 

(b) CONFORMING AMENDMENT.—Section 6103(l)(7)(D)(viii)(III) is 

amended by striking ‘‘sections 1710(a)(1)(I), 1710(a)(2), 1710(b), and 

1712(a)(2)(B)’’ and inserting ‘‘sections 1710(a)(2)(G), 1710(a)(3), and 

1710(b)’’. 

(c) EFFECTIVE DATE.—The amendment made by subsection (a) 

shall apply to requests made after September 30, 2008. 

SEC. 109. CONTRIBUTIONS OF MILITARY DEATH GRATUITIES TO ROTH 

IRAS AND EDUCATION SAVINGS ACCOUNTS. 

(a) PROVISION IN EFFECT BEFORE PENSION PROTECTION ACT.— 

Subsection (e) of section 408A (relating to qualified rollover contribution), as in effect before the amendments made by section 

824 of the Pension Protection Act of 2006, is amended to read 

as follows: 

‘‘(e) QUALIFIED ROLLOVER CONTRIBUTION.—For purposes of this 

section— 

‘‘(1) IN GENERAL.—The term ‘qualified rollover contribution’ 

means a rollover contribution to a Roth IRA from another 

such account, or from an individual retirement plan, but only 

if such rollover contribution meets the requirements of section 

408(d)(3). Such term includes a rollover contribution described 

in section 402A(c)(3)(A). For purposes of section 408(d)(3)(B), 

there shall be disregarded any qualified rollover contribution 

from an individual retirement plan (other than a Roth IRA) 

to a Roth IRA. 

‘‘(2) MILITARY DEATH GRATUITY.— 

‘‘(A) IN GENERAL.—The term ‘qualified rollover contribution’ includes a contribution to a Roth IRA maintained 

for the benefit of an individual made before the end of 

the 1-year period beginning on the date on which such 

individual receives an amount under section 1477 of title 

10, United States Code, or section 1967 of title 38 of such 

Code, with respect to a person, to the extent that such 

contribution does not exceed— 

‘‘(i) the sum of the amounts received during such 

period by such individual under such sections with 

respect to such person, reduced by 

‘‘(ii) the amounts so received which were contributed to a Coverdell education savings account under 

section 530(d)(9). 

‘‘(B) ANNUAL LIMIT ON NUMBER OF ROLLOVERS NOT

TO APPLY.—Section 408(d)(3)(B) shall not apply with respect 

to amounts treated as a rollover by subparagraph (A). 

‘‘(C) APPLICATION OF SECTION 72.—For purposes of 

applying section 72 in the case of a distribution which 

26 USC 6103 

note. 

26 USC 72 note. 

26 USC 72. 


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is not a qualified distribution, the amount treated as a 

rollover by reason of subparagraph (A) shall be treated 

as investment in the contract.’’. 

(b) PROVISION IN EFFECT AFTER PENSION PROTECTION ACT.— Subsection (e) of section 408A, as in effect after the amendments 

made by section 824 of the Pension Protection Act of 2006, is 

amended to read as follows: 

‘‘(e) QUALIFIED ROLLOVER CONTRIBUTION.—For purposes of this 

section— 

‘‘(1) IN GENERAL.—The term ‘qualified rollover contribution’ 

means a rollover contribution— 

‘‘(A) to a Roth IRA from another such account, 

‘‘(B) from an eligible retirement plan, but only if— 

‘‘(i) in the case of an individual retirement plan, 

such rollover contribution meets the requirements of 

section 408(d)(3), and 

‘‘(ii) in the case of any eligible retirement plan 

(as defined in section 402(c)(8)(B) other than clauses 

(i) and (ii) thereof), such rollover contribution meets 

the requirements of section 402(c), 403(b)(8), or 

457(e)(16), as applicable. 

For purposes of section 408(d)(3)(B), there shall be disregarded any qualified rollover contribution from an individual retirement plan (other than a Roth IRA) to a Roth 

IRA. 

‘‘(2) MILITARY DEATH GRATUITY.— 

‘‘(A) IN GENERAL.—The term ‘qualified rollover contribution’ includes a contribution to a Roth IRA maintained 

for the benefit of an individual made before the end of 

the 1-year period beginning on the date on which such 

individual receives an amount under section 1477 of title 

10, United States Code, or section 1967 of title 38 of such 

Code, with respect to a person, to the extent that such 

contribution does not exceed— 

‘‘(i) the sum of the amounts received during such 

period by such individual under such sections with 

respect to such person, reduced by 

‘‘(ii) the amounts so received which were contributed to a Coverdell education savings account under 

section 530(d)(9). 

‘‘(B) ANNUAL LIMIT ON NUMBER OF ROLLOVERS NOT

TO APPLY.—Section 408(d)(3)(B) shall not apply with respect 

to amounts treated as a rollover by the subparagraph (A). 

‘‘(C) APPLICATION OF SECTION 72.—For purposes of 

applying section 72 in the case of a distribution which 

is not a qualified distribution, the amount treated as a 

rollover by reason of subparagraph (A) shall be treated 

as investment in the contract.’’. 

(c) EDUCATION SAVINGS ACCOUNTS.—Subsection (d) of section 

530 is amended by adding at the end the following new paragraph: 

‘‘(9) MILITARY DEATH GRATUITY.— ‘‘(A) IN GENERAL.—For purposes of this section, the 

term ‘rollover contribution’ includes a contribution to a 

Coverdell education savings account made before the end 

of the 1-year period beginning on the date on which the 

contributor receives an amount under section 1477 of title 

10, United States Code, or section 1967 of title 38 of such 

26 USC 408. 


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Code, with respect to a person, to the extent that such 

contribution does not exceed— 

‘‘(i) the sum of the amounts received during such 

period by such contributor under such sections with 

respect to such person, reduced by 

‘‘(ii) the amounts so received which were contributed to a Roth IRA under section 408A(e)(2) or to 

another Coverdell education savings account. 

‘‘(B) ANNUAL LIMIT ON NUMBER OF ROLLOVERS NOT

TO APPLY.—The last sentence of paragraph (5) shall not 

apply with respect to amounts treated as a rollover by 

the subparagraph (A). 

‘‘(C) APPLICATION OF SECTION 72.—For purposes of 

applying section 72 in the case of a distribution which 

is includible in gross income under paragraph (1), the 

amount treated as a rollover by reason of subparagraph 

(A) shall be treated as investment in the contract.’’. 

(d) EFFECTIVE DATES.— 

(1) IN GENERAL.—Except as provided by paragraphs (2) 

and (3), the amendments made by this section shall apply 

with respect to deaths from injuries occurring on or after the 

date of the enactment of this Act. 

(2) APPLICATION OF AMENDMENTS TO DEATHS FROM INJURIES

OCCURRING ON OR AFTER OCTOBER 7, 2001, AND BEFORE ENACTMENT.—The amendments made by this section shall apply to 

any contribution made pursuant to section 408A(e)(2) or 

530(d)(5) of the Internal Revenue Code of 1986, as amended 

by this Act, with respect to amounts received under section 

1477 of title 10, United States Code, or under section 1967 

of title 38 of such Code, for deaths from injuries occurring 

on or after October 7, 2001, and before the date of the enactment of this Act if such contribution is made not later than 

1 year after the date of the enactment of this Act. 

(3) PENSION PROTECTION ACT CHANGES.—Section 408A(e)(1) 

of the Internal Revenue Code of 1986 (as in effect after the 

amendments made by subsection (b)) shall apply to taxable 

years beginning after December 31, 2007. 

SEC. 110. SUSPENSION OF 5-YEAR PERIOD DURING SERVICE WITH THE 

PEACE CORPS. 

(a) IN GENERAL.—Subsection (d) of section 121 (relating to 

special rules) is amended by adding at the end the following new 

paragraph: 

‘‘(12) PEACE CORPS.— 

‘‘(A) IN GENERAL.—At the election of an individual with 

respect to a property, the running of the 5-year period 

described in subsections (a) and (c)(1)(B) and paragraph 

(7) of this subsection with respect to such property shall 

be suspended during any period that such individual or 

such individual’s spouse is serving outside the United 

States— 

‘‘(i) on qualified official extended duty (as defined 

in paragraph (9)(C)) as an employee of the Peace Corps, 

or 

‘‘(ii) as an enrolled volunteer or volunteer leader 

under section 5 or 6 (as the case may be) of the Peace 

Corps Act (22 U.S.C. 2504, 2505). 

26 USC 121. 

Applicability. 

26 USC 408A 

note. 


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‘‘(B) APPLICABLE RULES.—For purposes of subparagraph (A), rules similar to the rules of subparagraphs (B) 

and (D) shall apply.’’. 

(b) EFFECTIVE DATE.—The amendment made by subsection (a) 

shall apply to taxable years beginning after December 31, 2007. 

SEC. 111. CREDIT FOR EMPLOYER DIFFERENTIAL WAGE PAYMENTS 

TO EMPLOYEES WHO ARE ACTIVE DUTY MEMBERS OF THE 

UNIFORMED SERVICES. 

(a) IN GENERAL.—Subpart D of part IV of subchapter A of 

chapter 1 (relating to business credits) is amended by adding at 

the end the following new section: 

‘‘SEC. 45P. EMPLOYER WAGE CREDIT FOR EMPLOYEES WHO ARE 

ACTIVE DUTY MEMBERS OF THE UNIFORMED SERVICES. 

‘‘(a) GENERAL RULE.—For purposes of section 38, in the case 

of an eligible small business employer, the differential wage payment credit for any taxable year is an amount equal to 20 percent 

of the sum of the eligible differential wage payments for each 

of the qualified employees of the taxpayer during such taxable 

year. 

‘‘(b) DEFINITIONS.—For purposes of this section— 

‘‘(1) ELIGIBLE DIFFERENTIAL WAGE PAYMENTS.—The term 

‘eligible differential wage payments’ means, with respect to 

each qualified employee, so much of the differential wage payments (as defined in section 3401(h)(2)) paid to such employee 

for the taxable year as does not exceed $20,000. 

‘‘(2) QUALIFIED EMPLOYEE.—The term ‘qualified employee’ 

means a person who has been an employee of the taxpayer 

for the 91-day period immediately preceding the period for 

which any differential wage payment is made. 

‘‘(3) ELIGIBLE SMALL BUSINESS EMPLOYER.— ‘‘(A) IN GENERAL.—The term ‘eligible small business 

employer’ means, with respect to any taxable year, any 

employer which— 

‘‘(i) employed an average of less than 50 employees 

on business days during such taxable year, and 

‘‘(ii) under a written plan of the employer, provides 

eligible differential wage payments to every qualified 

employee of the employer. 

‘‘(B) CONTROLLED GROUPS.—For purposes of subparagraph (A), all persons treated as a single employer under 

subsection (b), (c), (m), or (o) of section 414 shall be treated 

as a single employer. 

‘‘(c) COORDINATION WITH OTHER CREDITS.—The amount of 

credit otherwise allowable under this chapter with respect to compensation paid to any employee shall be reduced by the credit 

determined under this section with respect to such employee. 

‘‘(d) DISALLOWANCE FOR FAILURE TO COMPLY WITH EMPLOYMENT OR REEMPLOYMENT RIGHTS OF MEMBERS OF THE RESERVE

COMPONENTS OF THE ARMED FORCES OF THE UNITED STATES.— 

No credit shall be allowed under subsection (a) to a taxpayer for— 

‘‘(1) any taxable year, beginning after the date of the enactment of this section, in which the taxpayer is under a final 

order, judgment, or other process issued or required by a district 

court of the United States under section 4323 of title 38 of 

the United States Code with respect to a violation of chapter 

43 of such title, and 

26 USC 121 note. 


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‘‘(2) the 2 succeeding taxable years. 

‘‘(e) CERTAIN RULES TO APPLY.—For purposes of this section, 

rules similar to the rules of subsections (c), (d), and (e) of section 

52 shall apply. 

‘‘(f) TERMINATION.—This section shall not apply to any payments made after December 31, 2009.’’. 

(b) CREDIT TREATED AS PART OF GENERAL BUSINESS CREDIT.— 

Section 38(b) (relating to general business credit) is amended by 

striking ‘‘plus’’ at the end of paragraph (31), by striking the period 

at the end of paragraph (32) and inserting ‘‘, plus’’, and by adding 

at the end of following new paragraph: 

‘‘(33) the differential wage payment credit determined 

under section 45P(a).’’. 

(c) NO DEDUCTION FOR COMPENSATION TAKEN INTO ACCOUNT

FOR CREDIT.—Section 280C(a) (relating to rule for employment 

credits) is amended by inserting ‘‘45P(a),’’ after ‘‘45A(a),’’. 

(d) CLERICAL AMENDMENT.—The table of sections for subpart 

D of part IV of subchapter A of chapter 1 is amended by adding 

at the end the following new item: 

‘‘Sec. 45P. Employer wage credit for employees who are active duty members of the 

uniformed services.’’. 

(e) EFFECTIVE DATE.—The amendments made by this section 

shall apply to amounts paid after the date of the enactment of 

this Act. 

SEC. 112. STATE PAYMENTS TO SERVICE MEMBERS TREATED AS 

QUALIFIED MILITARY BENEFITS. 

(a) IN GENERAL.—Section 134(b) (defining qualified military 

benefit) is amended by adding at the end the following new paragraph: 

‘‘(6) CERTAIN STATE PAYMENTS.—The term ‘qualified military benefit’ includes any bonus payment by a State or political 

subdivision thereof to any member or former member of the 

uniformed services of the United States or any dependent of 

such member only by reason of such member’s service in an 

combat zone (as defined in section 112(c)(2), determined without 

regard to the parenthetical).’’. 

(b) EFFECTIVE DATE.—The amendment made by this section 

shall apply to payments made before, on, or after the date of 

the enactment of this Act. 

SEC. 113. PERMANENT EXCLUSION OF GAIN FROM SALE OF A PRINCIPAL RESIDENCE BY CERTAIN EMPLOYEES OF THE 

INTELLIGENCE COMMUNITY. 

(a) IN GENERAL.—Paragraph (9) of section 121(d) is amended 

by striking subparagraph (E). 

(b) DUTY STATION MAY BE INSIDE UNITED STATES.—Section 

121(d)(9)(C) (defining qualified official extended duty) is amended 

by striking clause (vi). 

(c) EFFECTIVE DATE.—The amendments made by this section 

shall apply to sales or exchanges after the date of the enactment 

of this Act. 

26 USC 121 note. 

26 USC 134 note. 

26 USC 38 note. 

26 USC 38. 


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SEC. 114. SPECIAL DISPOSITION RULES FOR UNUSED BENEFITS IN 

HEALTH FLEXIBLE SPENDING ARRANGEMENTS OF 

INDIVIDUALS CALLED TO ACTIVE DUTY. 

(a) IN GENERAL.—Section 125 (relating to cafeteria plans) is 

amended by redesignating subsections (h) and (i) as subsection 

(i) and (j), respectively, and by inserting after subsection (g) the 

following new subsection: 

‘‘(h) SPECIAL RULE FOR UNUSED BENEFITS IN HEALTH FLEXIBLE

SPENDING ARRANGEMENTS OF INDIVIDUALS CALLED TO ACTIVE

DUTY.— 

‘‘(1) IN GENERAL.—For purposes of this title, a plan or 

other arrangement shall not fail to be treated as a cafeteria 

plan or health flexible spending arrangement merely because 

such arrangement provides for qualified reservist distributions. 

‘‘(2) QUALIFIED RESERVIST DISTRIBUTION.—For purposes of 

this subsection, the term ‘qualified reservist distribution’ 

means, any distribution to an individual of all or a portion 

of the balance in the employee’s account under such arrangement if— 

‘‘(A) such individual was (by reason of being a member 

of a reserve component (as defined in section 101 of title 

37, United States Code)) ordered or called to active duty 

for a period in excess of 179 days or for an indefinite 

period, and 

‘‘(B) such distribution is made during the period beginning on the date of such order or call and ending on 

the last date that reimbursements could otherwise be made 

under such arrangement for the plan year which includes 

the date of such order or call.’’. 

(b) EFFECTIVE DATE.—The amendment made by this section 

shall apply to distributions made after the date of the enactment 

of this Act. 

SEC. 115. TECHNICAL CORRECTION RELATED TO EXCLUSION OF CERTAIN PROPERTY TAX REBATES AND OTHER BENEFITS PROVIDED TO VOLUNTEER FIREFIGHTERS AND EMERGENCY 

MEDICAL RESPONDERS. 

(a) SOCIAL SECURITY TAXES.— 

(1) Section 3121(a) (relating to definition of wages) is 

amended by striking ‘‘or’’ at the end of paragraph (21), by 

striking the period at the end of paragraph (22) and inserting 

‘‘; or’’, and by inserting after paragraph (22) the following 

new paragraph: 

‘‘(23) any benefit or payment which is excludable from 

the gross income of the employee under section 139B(b).’’. 

(2) Section 209(a) of the Social Security Act is amended 

by striking ‘‘or’’ at the end of paragraph (18), by striking the 

period at the end of paragraph (19) and inserting ‘‘; or’’, and 

by inserting after paragraph (19) the following new paragraph: 

‘‘(20) Any benefit or payment which is excludable from 

the gross income of the employee under section 139B(b) of 

the Internal Revenue Code of 1986).’’. 

(b) UNEMPLOYMENT TAXES.—Section 3306(b) (relating to definition of wages) is amended by striking ‘‘or’’ at the end of paragraph 

(18), by striking the period at the end of paragraph (19) and 

inserting ‘‘; or’’, and by inserting after paragraph (19) the following 

new paragraph: 

26 USC 3306. 

42 USC 409. 

26 USC 125 note. 

26 USC 125. 


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‘‘(20) any benefit or payment which is excludable from 

the gross income of the employee under section 139B(b).’’. 

(c) WAGE WITHHOLDING.—Section 3401(a) (defining wages) is 

amended by striking ‘‘or’’ at the end of paragraph (21), by striking 

the period at the end of paragraph (22) and inserting ‘‘; or’’, and 

by inserting after paragraph (22) the following new paragraph: 

‘‘(23) for any benefit or payment which is excludable from 

the gross income of the employee under section 139B(b).’’. 

(d) EFFECTIVE DATE.—The amendments made by this section 

shall take effect as if included in section 5 of the Mortgage Forgiveness Debt Relief Act of 2007. 

TITLE II—IMPROVEMENTS IN 

SUPPLEMENTAL SECURITY INCOME 

SEC. 201. TREATMENT OF UNIFORMED SERVICE CASH REMUNERATION 

AS EARNED INCOME. 

(a) IN GENERAL.—Section 1612(a)(1)(A) of the Social Security 

Act (42 U.S.C. 1382a(a)(1)(A)) is amended by inserting ‘‘(and, in 

the case of cash remuneration paid for service as a member of 

a uniformed service (other than payments described in paragraph 

(2)(H) of this subsection or subsection (b)(20)), without regard to 

the limitations contained in section 209(d))’’ before the semicolon. 

(b) CERTAIN HOUSING PAYMENTS TREATED AS IN-KIND SUPPORT

AND MAINTENANCE.—Section 1612(a)(2) of such Act (42 U.S.C. 

1382a(a)(2)) is amended— 

(1) by striking ‘‘and’’ at the end of subparagraph (F); 

(2) by striking the period at the end of subparagraph (G) 

and inserting ‘‘; and’’; and 

(3) by adding at the end the following: 

‘‘(H) payments to or on behalf of a member of a uniformed service for housing of the member (and his or 

her dependents, if any) on a facility of a uniformed service, 

including payments provided under section 403 of title 

37, United States Code, for housing that is acquired or 

constructed under subchapter IV of chapter 169 of title 

10 of such Code, or any related provision of law, and 

any such payments shall be treated as support and maintenance in kind subject to subparagraph (A) of this paragraph.’’. 

SEC. 202. STATE ANNUITIES FOR CERTAIN VETERANS TO BE DISREGARDED IN DETERMINING SUPPLEMENTAL SECURITY 

INCOME BENEFITS. 

(a) INCOME DISREGARD.—Section 1612(b) of the Social Security 

Act (42 U.S.C. 1382a(b)) is amended— 

(1) by striking ‘‘and’’ at the end of paragraph (22); 

(2) by striking the period at the end of paragraph (23) 

and inserting ‘‘; and’’; and 

(3) by adding at the end the following: 

‘‘(24) any annuity paid by a State to the individual (or 

such spouse) on the basis of the individual’s being a veteran 

(as defined in section 101 of title 38, United States Code), 

and blind, disabled, or aged.’’. 

(b) RESOURCE DISREGARD.—Section 1613(a) of such Act (42 

U.S.C. 1382b(a)) is amended— 

26 USC 3121 

note. 

26 USC 3401. 


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(1) by striking ‘‘and’’ at the end of paragraph (14); 

(2) by striking the period at the end of paragraph (15) 

and inserting ‘‘; and’’; and 

(3) by inserting after paragraph (15) the following: 

‘‘(16) for the month of receipt and every month thereafter, 

any annuity paid by a State to the individual (or such spouse) 

on the basis of the individual’s being a veteran (as defined 

in section 101 of title 38, United States Code), and blind, 

disabled, or aged.’’. 

SEC. 203. EXCLUSION OF AMERICORPS BENEFITS FOR PURPOSES OF 

DETERMINING SUPPLEMENTAL SECURITY INCOME ELIGIBILITY AND BENEFIT AMOUNTS. 

Section 1612(b) of the Social Security Act (42 U.S.C. 1382a(b)), 

as amended by section 202(a) of this Act, is amended— 

(1) in paragraph (23), by striking ‘‘and’’ at the end; 

(2) in paragraph (24), by striking the period and inserting 

‘‘; and’’; and 

(3) by adding at the end the following: 

‘‘(25) any benefit (whether cash or in-kind) conferred upon 

(or paid on behalf of) a participant in an AmeriCorps position 

approved by the Corporation for National and Community 

Service under section 123 of the National and Community 

Service Act of 1990 (42 U.S.C. 12573).’’. 

SEC. 204. EFFECTIVE DATE. 

The amendments made by this title shall be effective with 

respect to benefits payable for months beginning after 60 days 

after the date of the enactment of this Act. 

TITLE III—REVENUE PROVISIONS 

SEC. 301. REVISION OF TAX RULES ON EXPATRIATION. 

(a) IN GENERAL.—Subpart A of part II of subchapter N of 

chapter 1 is amended by inserting after section 877 the following 

new section: 

‘‘SEC. 877A. TAX RESPONSIBILITIES OF EXPATRIATION. 

‘‘(a) GENERAL RULES.—For purposes of this subtitle— 

‘‘(1) MARK TO MARKET.—All property of a covered expatriate 

shall be treated as sold on the day before the expatriation 

date for its fair market value. 

‘‘(2) RECOGNITION OF GAIN OR LOSS.—In the case of any 

sale under paragraph (1)— 

‘‘(A) notwithstanding any other provision of this title, 

any gain arising from such sale shall be taken into account 

for the taxable year of the sale, and 

‘‘(B) any loss arising from such sale shall be taken 

into account for the taxable year of the sale to the extent 

otherwise provided by this title, except that section 1091 

shall not apply to any such loss. 

Proper adjustment shall be made in the amount of any gain 

or loss subsequently realized for gain or loss taken into account 

under the preceding sentence, determined without regard to 

paragraph (3). 

‘‘(3) EXCLUSION FOR CERTAIN GAIN.— 

42 USC 1382a 

note. 


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‘‘(A) IN GENERAL.—The amount which would (but for 

this paragraph) be includible in the gross income of any 

individual by reason of paragraph (1) shall be reduced 

(but not below zero) by $600,000. 

‘‘(B) ADJUSTMENT FOR INFLATION.— ‘‘(i) IN GENERAL.—In the case of any taxable year 

beginning in a calendar year after 2008, the dollar 

amount in subparagraph (A) shall be increased by an 

amount equal to— 

‘‘(I) such dollar amount, multiplied by 

‘‘(II) the cost-of-living adjustment determined 

under section 1(f)(3) for the calendar year in which 

the taxable year begins, by substituting ‘calendar 

year 2007’ for ‘calendar year 1992’ in subparagraph 

(B) thereof. 

‘‘(ii) ROUNDING.—If any amount as adjusted under clause (i) is not a multiple of $1,000, such amount 

shall be rounded to the nearest multiple of $1,000. 

‘‘(b) ELECTION TO DEFER TAX.— 

‘‘(1) IN GENERAL.—If the taxpayer elects the application 

of this subsection with respect to any property treated as sold 

by reason of subsection (a), the time for payment of the additional tax attributable to such property shall be extended until 

the due date of the return for the taxable year in which such 

property is disposed of (or, in the case of property disposed 

of in a transaction in which gain is not recognized in whole 

or in part, until such other date as the Secretary may prescribe). 

‘‘(2) DETERMINATION OF TAX WITH RESPECT TO PROPERTY.— 

For purposes of paragraph (1), the additional tax attributable 

to any property is an amount which bears the same ratio 

to the additional tax imposed by this chapter for the taxable 

year solely by reason of subsection (a) as the gain taken into 

account under subsection (a) with respect to such property 

bears to the total gain taken into account under subsection 

(a) with respect to all property to which subsection (a) applies. 

‘‘(3) TERMINATION OF EXTENSION.—The due date for payment of tax may not be extended under this subsection later 

than the due date for the return of tax imposed by this chapter 

for the taxable year which includes the date of death of the 

expatriate (or, if earlier, the time that the security provided 

with respect to the property fails to meet the requirements 

of paragraph (4), unless the taxpayer corrects such failure 

within the time specified by the Secretary). 

‘‘(4) SECURITY.— 

‘‘(A) IN GENERAL.—No election may be made under 

paragraph (1) with respect to any property unless adequate 

security is provided with respect to such property. 

‘‘(B) ADEQUATE SECURITY.—For purposes of subparagraph (A), security with respect to any property shall be 

treated as adequate security if— 

‘‘(i) it is a bond which is furnished to, and accepted 

by, the Secretary, which is conditioned on the payment 

of tax (and interest thereon), and which meets the 

requirements of section 6325, or 

‘‘(ii) it is another form of security for such payment 

(including letters of credit) that meets such requirements as the Secretary may prescribe. 


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‘‘(5) WAIVER OF CERTAIN RIGHTS.—No election may be made 

under paragraph (1) unless the taxpayer makes an irrevocable 

waiver of any right under any treaty of the United States 

which would preclude assessment or collection of any tax 

imposed by reason of this section. 

‘‘(6) ELECTIONS.—An election under paragraph (1) shall 

only apply to property described in the election and, once made, 

is irrevocable. 

‘‘(7) INTEREST.—For purposes of section 6601, the last date 

for the payment of tax shall be determined without regard 

to the election under this subsection. 

‘‘(c) EXCEPTION FOR CERTAIN PROPERTY.—Subsection (a) shall 

not apply to— 

‘‘(1) any deferred compensation item (as defined in subsection (d)(4)), 

‘‘(2) any specified tax deferred account (as defined in subsection (e)(2)), and 

‘‘(3) any interest in a nongrantor trust (as defined in subsection (f)(3)). 

‘‘(d) TREATMENT OF DEFERRED COMPENSATION ITEMS.— 

‘‘(1) WITHHOLDING ON ELIGIBLE DEFERRED COMPENSATION

ITEMS.— 

‘‘(A) IN GENERAL.—In the case of any eligible deferred 

compensation item, the payor shall deduct and withhold 

from any taxable payment to a covered expatriate with 

respect to such item a tax equal to 30 percent thereof. 

‘‘(B) TAXABLE PAYMENT.—For purposes of subparagraph 

(A), the term ‘taxable payment’ means with respect to 

a covered expatriate any payment to the extent it would 

be includible in the gross income of the covered expatriate 

if such expatriate continued to be subject to tax as a 

citizen or resident of the United States. A deferred compensation item shall be taken into account as a payment 

under the preceding sentence when such item would be 

so includible. 

‘‘(2) OTHER DEFERRED COMPENSATION ITEMS.—In the case 

of any deferred compensation item which is not an eligible 

deferred compensation item— 

‘‘(A)(i) with respect to any deferred compensation item 

to which clause (ii) does not apply, an amount equal to 

the present value of the covered expatriate’s accrued benefit 

shall be treated as having been received by such individual 

on the day before the expatriation date as a distribution 

under the plan, and 

‘‘(ii) with respect to any deferred compensation item 

referred to in paragraph (4)(D), the rights of the covered 

expatriate to such item shall be treated as becoming 

transferable and not subject to a substantial risk of forfeiture on the day before the expatriation date, 

‘‘(B) no early distribution tax shall apply by reason 

of such treatment, and 

‘‘(C) appropriate adjustments shall be made to subsequent distributions from the plan to reflect such treatment. 

‘‘(3) ELIGIBLE DEFERRED COMPENSATION ITEMS.—For purposes of this subsection, the term ‘eligible deferred compensation item’ means any deferred compensation item with respect 

to which— 

Applicability. 


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‘‘(A) the payor of such item is— 

‘‘(i) a United States person, or 

‘‘(ii) a person who is not a United States person 

but who elects to be treated as a United States person 

for purposes of paragraph (1) and meets such requirements as the Secretary may provide to ensure that 

the payor will meet the requirements of paragraph 

(1), and 

‘‘(B) the covered expatriate— 

‘‘(i) notifies the payor of his status as a covered 

expatriate, and 

‘‘(ii) makes an irrevocable waiver of any right to 

claim any reduction under any treaty with the United 

States in withholding on such item. 

‘‘(4) DEFERRED COMPENSATION ITEM.—For purposes of this 

subsection, the term ‘deferred compensation item’ means— 

‘‘(A) any interest in a plan or arrangement described 

in section 219(g)(5), 

‘‘(B) any interest in a foreign pension plan or similar 

retirement arrangement or program, 

‘‘(C) any item of deferred compensation, and 

‘‘(D) any property, or right to property, which the individual is entitled to receive in connection with the performance of services to the extent not previously taken into 

account under section 83 or in accordance with section 

83. 

‘‘(5) EXCEPTION.—Paragraphs (1) and (2) shall not apply 

to any deferred compensation item to the extent attributable 

to services performed outside the United States while the covered expatriate was not a citizen or resident of the United 

States. 

‘‘(6) SPECIAL RULES.— 

‘‘(A) APPLICATION OF WITHHOLDING RULES.—Rules 

similar to the rules of subchapter B of chapter 3 shall 

apply for purposes of this subsection. 

‘‘(B) APPLICATION OF TAX.—Any item subject to the 

withholding tax imposed under paragraph (1) shall be subject to tax under section 871. 

‘‘(C) COORDINATION WITH OTHER WITHHOLDING

REQUIREMENTS.—Any item subject to withholding under 

paragraph (1) shall not be subject to withholding under 

section 1441 or chapter 24. 

‘‘(e) TREATMENT OF SPECIFIED TAX DEFERRED ACCOUNTS.— 

‘‘(1) ACCOUNT TREATED AS DISTRIBUTED.—In the case of 

any interest in a specified tax deferred account held by a 

covered expatriate on the day before the expatriation date— 

‘‘(A) the covered expatriate shall be treated as receiving 

a distribution of his entire interest in such account on 

the day before the expatriation date, 

‘‘(B) no early distribution tax shall apply by reason 

of such treatment, and 

‘‘(C) appropriate adjustments shall be made to subsequent distributions from the account to reflect such treatment. 

‘‘(2) SPECIFIED TAX DEFERRED ACCOUNT.—For purposes of 

paragraph (1), the term ‘specified tax deferred account’ means 

an individual retirement plan (as defined in section 7701(a)(37)) 


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other than any arrangement described in subsection (k) or 

(p) of section 408, a qualified tuition program (as defined in 

section 529), a Coverdell education savings account (as defined 

in section 530), a health savings account (as defined in section 

223), and an Archer MSA (as defined in section 220). 

‘‘(f) SPECIAL RULES FOR NONGRANTOR TRUSTS.— 

‘‘(1) IN GENERAL.—In the case of a distribution (directly 

or indirectly) of any property from a nongrantor trust to a 

covered expatriate— 

‘‘(A) the trustee shall deduct and withhold from such 

distribution an amount equal to 30 percent of the taxable 

portion of the distribution, and 

‘‘(B) if the fair market value of such property exceeds 

its adjusted basis in the hands of the trust, gain shall 

be recognized to the trust as if such property were sold 

to the expatriate at its fair market value. 

‘‘(2) TAXABLE PORTION.—For purposes of this subsection, 

the term ‘taxable portion’ means, with respect to any distribution, that portion of the distribution which would be includible 

in the gross income of the covered expatriate if such expatriate 

continued to be subject to tax as a citizen or resident of the 

United States. 

‘‘(3) NONGRANTOR TRUST.—For purposes of this subsection, 

the term ‘nongrantor trust’ means the portion of any trust 

that the individual is not considered the owner of under subpart 

E of part I of subchapter J. The determination under the 

preceding sentence shall be made immediately before the 

expatriation date. 

‘‘(4) SPECIAL RULES RELATING TO WITHHOLDING.—For purposes of this subsection— 

‘‘(A) rules similar to the rules of subsection (d)(6) shall 

apply, and 

‘‘(B) the covered expatriate shall be treated as having 

waived any right to claim any reduction under any treaty 

with the United States in withholding on any distribution 

to which paragraph (1)(A) applies unless the covered expatriate agrees to such other treatment as the Secretary 

determines appropriate. 

‘‘(5) APPLICATION.—This subsection shall apply to a nongrantor trust only if the covered expatriate was a beneficiary 

of the trust on the day before the expatriation date. 

‘‘(g) DEFINITIONS AND SPECIAL RULES RELATING TO EXPATRIATION.—For purposes of this section— 

‘‘(1) COVERED EXPATRIATE.— 

‘‘(A) IN GENERAL.—The term ‘covered expatriate’ means 

an expatriate who meets the requirements of subparagraph 

(A), (B), or (C) of section 877(a)(2). 

‘‘(B) EXCEPTIONS.—An individual shall not be treated 

as meeting the requirements of subparagraph (A) or (B) 

of section 877(a)(2) if— 

‘‘(i) the individual— 

‘‘(I) became at birth a citizen of the United 

States and a citizen of another country and, as 

of the expatriation date, continues to be a citizen 

of, and is taxed as a resident of, such other country, 

and 

Applicability. 


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‘‘(II) has been a resident of the United States 

(as defined in section 7701(b)(1)(A)(ii)) for not more 

than 10 taxable years during the 15-taxable year 

period ending with the taxable year during which 

the expatriation date occurs, or 

‘‘(ii)(I) the individual’s relinquishment of United 

States citizenship occurs before such individual attains 

age 181⁄2, and 

‘‘(II) the individual has been a resident of the 

United States (as so defined) for not more than 10 

taxable years before the date of relinquishment. 

‘‘(C) COVERED EXPATRIATES ALSO SUBJECT TO TAX AS

CITIZENS OR RESIDENTS.—In the case of any covered expatriate who is subject to tax as a citizen or resident of 

the United States for any period beginning after the 

expatriation date, such individual shall not be treated as 

a covered expatriate during such period for purposes of 

subsections (d)(1) and (f) and section 2801. 

‘‘(2) EXPATRIATE.—The term ‘expatriate’ means— 

‘‘(A) any United States citizen who relinquishes his 

citizenship, and 

‘‘(B) any long-term resident of the United States who 

ceases to be a lawful permanent resident of the United 

States (within the meaning of section 7701(b)(6)). 

‘‘(3) EXPATRIATION DATE.—The term ‘expatriation date’ 

means— 

‘‘(A) the date an individual relinquishes United States 

citizenship, or 

‘‘(B) in the case of a long-term resident of the United 

States, the date on which the individual ceases to be a 

lawful permanent resident of the United States (within 

the meaning of section 7701(b)(6)). 

‘‘(4) RELINQUISHMENT OF CITIZENSHIP.—A citizen shall be 

treated as relinquishing his United States citizenship on the 

earliest of— 

‘‘(A) the date the individual renounces his United 

States nationality before a diplomatic or consular officer 

of the United States pursuant to paragraph (5) of section 

349(a) of the Immigration and Nationality Act (8 U.S.C. 

1481(a)(5)), 

‘‘(B) the date the individual furnishes to the United 

States Department of State a signed statement of voluntary 

relinquishment of United States nationality confirming the 

performance of an act of expatriation specified in paragraph 

(1), (2), (3), or (4) of section 349(a) of the Immigration 

and Nationality Act (8 U.S.C. 1481(a)(1)–(4)), 

‘‘(C) the date the United States Department of State 

issues to the individual a certificate of loss of nationality, 

or 

‘‘(D) the date a court of the United States cancels 

a naturalized citizen’s certificate of naturalization. 

Subparagraph (A) or (B) shall not apply to any individual 

unless the renunciation or voluntary relinquishment is subsequently approved by the issuance to the individual of a certificate of loss of nationality by the United States Department 

of State. 


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122 STAT. 1644 PUBLIC LAW 110–245—JUNE 17, 2008 

‘‘(5) LONG-TERM RESIDENT.—The term ‘long-term resident’ 

has the meaning given to such term by section 877(e)(2). 

‘‘(6) EARLY DISTRIBUTION TAX.—The term ‘early distribution 

tax’ means any increase in tax imposed under section 72(t), 

220(e)(4), 223(f)(4), 409A(a)(1)(B), 529(c)(6), or 530(d)(4). 

‘‘(h) OTHER RULES.— ‘‘(1) TERMINATION OF DEFERRALS, ETC.—In the case of any 

covered expatriate, notwithstanding any other provision of this 

title— 

‘‘(A) any time period for acquiring property which 

would result in the reduction in the amount of gain recognized with respect to property disposed of by the taxpayer 

shall terminate on the day before the expatriation date, 

and 

‘‘(B) any extension of time for payment of tax shall 

cease to apply on the day before the expatriation date 

and the unpaid portion of such tax shall be due and payable 

at the time and in the manner prescribed by the Secretary. 

‘‘(2) STEP-UP IN BASIS.—Solely for purposes of determining 

any tax imposed by reason of subsection (a), property which 

was held by an individual on the date the individual first 

became a resident of the United States (within the meaning 

of section 7701(b)) shall be treated as having a basis on such 

date of not less than the fair market value of such property 

on such date. The preceding sentence shall not apply if the 

individual elects not to have such sentence apply. Such an 

election, once made, shall be irrevocable. 

‘‘(3) COORDINATION WITH SECTION 684.—If the expatriation 

of any individual would result in the recognition of gain under 

section 684, this section shall be applied after the application 

of section 684. 

‘‘(i) REGULATIONS.—The Secretary shall prescribe such regulations as may be necessary or appropriate to carry out the purposes 

of this section.’’. 

(b) TAX ON GIFTS AND BEQUESTS RECEIVED BY UNITED STATES

CITIZENS AND RESIDENTS FROM EXPATRIATES.— 

(1) IN GENERAL.—Subtitle B (relating to estate and gift 

taxes) is amended by inserting after chapter 14 the following 

new chapter: 

‘‘CHAPTER 15—GIFTS AND BEQUESTS FROM 

EXPATRIATES 

‘‘Sec. 2801. Imposition of tax. 

‘‘SEC. 2801. IMPOSITION OF TAX. 

‘‘(a) IN GENERAL.—If, during any calendar year, any United 

States citizen or resident receives any covered gift or bequest, 

there is hereby imposed a tax equal to the product of— 

‘‘(1) the highest rate of tax specified in the table contained 

in section 2001(c) as in effect on the date of such receipt 

(or, if greater, the highest rate of tax specified in the table 

applicable under section 2502(a) as in effect on the date), and 

‘‘(2) the value of such covered gift or bequest. 

‘‘(b) TAX TO BE PAID BY RECIPIENT.—The tax imposed by subsection (a) on any covered gift or bequest shall be paid by the 

person receiving such gift or bequest. 

Applicability. 


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PUBLIC LAW 110–245—JUNE 17, 2008 122 STAT. 1645 

‘‘(c) EXCEPTION FOR CERTAIN GIFTS.—Subsection (a) shall apply 

only to the extent that the value of covered gifts and bequests 

received by any person during the calendar year exceeds the dollar 

amount in effect under section 2503(b) for such calendar year. 

‘‘(d) TAX REDUCED BY FOREIGN GIFT OR ESTATE TAX.—The 

tax imposed by subsection (a) on any covered gift or bequest shall 

be reduced by the amount of any gift or estate tax paid to a 

foreign country with respect to such covered gift or bequest. 

‘‘(e) COVERED GIFT OR BEQUEST.— ‘‘(1) IN GENERAL.—For purposes of this chapter, the term 

‘covered gift or bequest’ means— 

‘‘(A) any property acquired by gift directly or indirectly 

from an individual who, at the time of such acquisition, 

is a covered expatriate, and 

‘‘(B) any property acquired directly or indirectly by 

reason of the death of an individual who, immediately 

before such death, was a covered expatriate. 

‘‘(2) EXCEPTIONS FOR TRANSFERS OTHERWISE SUBJECT TO

ESTATE OR GIFT TAX.—Such term shall not include— 

‘‘(A) any property shown on a timely filed return of 

tax imposed by chapter 12 which is a taxable gift by the 

covered expatriate, and 

‘‘(B) any property included in the gross estate of the 

covered expatriate for purposes of chapter 11 and shown 

on a timely filed return of tax imposed by chapter 11 

of the estate of the covered expatriate. 

‘‘(3) EXCEPTIONS FOR TRANSFERS TO SPOUSE OR CHARITY.— 

Such term shall not include any property with respect to which 

a deduction would be allowed under section 2055, 2056, 2522, 

or 2523, whichever is appropriate, if the decedent or donor 

were a United States person. 

‘‘(4) TRANSFERS IN TRUST.— 

‘‘(A) DOMESTIC TRUSTS.—In the case of a covered gift 

or bequest made to a domestic trust— 

‘‘(i) subsection (a) shall apply in the same manner 

as if such trust were a United States citizen, and 

‘‘(ii) the tax imposed by subsection (a) on such 

gift or bequest shall be paid by such trust. 

‘‘(B) FOREIGN TRUSTS.— 

‘‘(i) IN GENERAL.—In the case of a covered gift 

or bequest made to a foreign trust, subsection (a) shall 

apply to any distribution attributable to such gift or 

bequest from such trust (whether from income or corpus) to a United States citizen or resident in the same 

manner as if such distribution were a covered gift 

or bequest. 

‘‘(ii) DEDUCTION FOR TAX PAID BY RECIPIENT.— 

There shall be allowed as a deduction under section 

164 the amount of tax imposed by this section which 

is paid or accrued by a United States citizen or resident 

by reason of a distribution from a foreign trust, but 

only to the extent such tax is imposed on the portion 

of such distribution which is included in the gross 

income of such citizen or resident. 

‘‘(iii) ELECTION TO BE TREATED AS DOMESTIC

TRUST.—Solely for purposes of this section, a foreign 

trust may elect to be treated as a domestic trust. 

Applicability. 

Applicability. 

Applicability. 


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122 STAT. 1646 PUBLIC LAW 110–245—JUNE 17, 2008 

Such an election may be revoked with the consent 

of the Secretary. 

‘‘(f) COVERED EXPATRIATE.—For purposes of this section, the 

term ‘covered expatriate’ has the meaning given to such term by 

section 877A(g)(1).’’. 

(2) CLERICAL AMENDMENT.—The table of chapters for subtitle B is amended by inserting after the item relating to 

chapter 14 the following new item: 

‘‘CHAPTER 15. GIFTS AND BEQUESTS FROM EXPATRIATES.’’. 

(c) DEFINITION OF TERMINATION OF UNITED STATES CITIZENSHIP.— 

(1) IN GENERAL.—Section 7701(a) is amended by adding 

at the end the following new paragraph: 

‘‘(50) TERMINATION OF UNITED STATES CITIZENSHIP.— 

‘‘(A) IN GENERAL.—An individual shall not cease to 

be treated as a United States citizen before the date on 

which the individual’s citizenship is treated as relinquished 

under section 877A(g)(4). 

‘‘(B) DUAL CITIZENS.—Under regulations prescribed by 

the Secretary, subparagraph (A) shall not apply to an individual who became at birth a citizen of the United States 

and a citizen of another country.’’. 

(2) CONFORMING AMENDMENTS.— 

(A) Paragraph (1) of section 877(e) is amended to read 

as follows: 

‘‘(1) IN GENERAL.—Any long-term resident of the United 

States who ceases to be a lawful permanent resident of the 

United States (within the meaning of section 7701(b)(6)) shall 

be treated for purposes of this section and sections 2107, 2501, 

and 6039G in the same manner as if such resident were a 

citizen of the United States who lost United States citizenship 

on the date of such cessation or commencement.’’. 

(B) Paragraph (6) of section 7701(b) is amended by 

adding at the end the following flush sentence: 

‘‘An individual shall cease to be treated as a lawful permanent 

resident of the United States if such individual commences 

to be treated as a resident of a foreign country under the 

provisions of a tax treaty between the United States and the 

foreign country, does not waive the benefits of such treaty 

applicable to residents of the foreign country, and notifies the 

Secretary of the commencement of such treatment.’’. 

(C) Section 7701 is amended by striking subsection 

(n) and by redesignating subsections (o) and (p) as subsections (n) and (o), respectively. 

(d) TERMINATION OF SECTION 877.—Section 877 is amended 

by adding at the end the following new subsection: 

‘‘(h) TERMINATION.—This section shall not apply to any individual whose expatriation date (as defined in section 877A(g)(3)) 

is on or after the date of the enactment of this subsection.’’. 

(e) INFORMATION RETURNS.—Section 6039G is amended— 

(1) by inserting ‘‘or 877A’’ after ‘‘section 877(b)’’ in subsection (a), and 

(2) by inserting ‘‘or 877A’’ after ‘‘section 877(a)’’ in subsection (d). 

Regulations. 

26 USC 7701. 


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PUBLIC LAW 110–245—JUNE 17, 2008 122 STAT. 1647 

(f) CLERICAL AMENDMENT.—The table of sections for subpart 

A of part II of subchapter N of chapter 1 is amended by inserting 

after the item relating to section 877 the following new item: 

‘‘Sec. 877A. Tax responsibilities of expatriation.’’. 

(g) EFFECTIVE DATE.— (1) IN GENERAL.—Except as provided in this subsection, 

the amendments made by this section shall apply to any individual whose expatriation date (as so defined) is on or after 

the date of the enactment of this Act. 

(2) GIFTS AND BEQUESTS.—Chapter 15 of the Internal Revenue Code of 1986 (as added by subsection (b)) shall apply 

to covered gifts and bequests (as defined in section 2801 of 

such Code, as so added) received on or after the date of the 

enactment of this Act from transferors (or from the estates 

of transferors) whose expatriation date is on or after such 

date of enactment. 

SEC. 302. CERTAIN DOMESTICALLY CONTROLLED FOREIGN PERSONS 

PERFORMING SERVICES UNDER CONTRACT WITH UNITED 

STATES GOVERNMENT TREATED AS AMERICAN 

EMPLOYERS. 

(a) FICA TAXES.—Section 3121 (relating to definitions) is 

amended by adding at the end the following new subsection: 

‘‘(z) TREATMENT OF CERTAIN FOREIGN PERSONS AS AMERICAN

EMPLOYERS.— 

‘‘(1) IN GENERAL.—If any employee of a foreign person 

is performing services in connection with a contract between 

the United States Government (or any instrumentality thereof) 

and any member of any domestically controlled group of entities 

which includes such foreign person, such foreign person shall 

be treated for purposes of this chapter as an American employer 

with respect to such services performed by such employee. 

‘‘(2) DOMESTICALLY CONTROLLED GROUP OF ENTITIES.—For 

purposes of this subsection— 

‘‘(A) IN GENERAL.—The term ‘domestically controlled 

group of entities’ means a controlled group of entities the 

common parent of which is a domestic corporation. 

‘‘(B) CONTROLLED GROUP OF ENTITIES.—The term ‘controlled group of entities’ means a controlled group of corporations as defined in section 1563(a)(1), except that— 

‘‘(i) ‘more than 50 percent’ shall be substituted 

for ‘at least 80 percent’ each place it appears therein, 

and 

‘‘(ii) the determination shall be made without 

regard to subsections (a)(4) and (b)(2) of section 1563. 

A partnership or any other entity (other than a corporation) 

shall be treated as a member of a controlled group of 

entities if such entity is controlled (within the meaning 

of section 954(d)(3)) by members of such group (including 

any entity treated as a member of such group by reason 

of this sentence). 

‘‘(3) LIABILITY OF COMMON PARENT.—In the case of a foreign 

person who is a member of any domestically controlled group 

of entities, the common parent of such group shall be jointly 

and severally liable for any tax under this chapter for which 

such foreign person is liable by reason of this subsection, and 

26 USC 3121. 

Applicability. 

26 USC 2801 

note. 


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122 STAT. 1648 PUBLIC LAW 110–245—JUNE 17, 2008 

for any penalty imposed on such person by this title with 

respect to any failure to pay such tax or to file any return 

or statement with respect to such tax or wages subject to 

such tax. No deduction shall be allowed under this title for 

any liability imposed by the preceding sentence. 

‘‘(4) PROVISIONS PREVENTING DOUBLE TAXATION.— 

‘‘(A) AGREEMENTS.—Paragraph (1) shall not apply to 

any services which are covered by an agreement under 

subsection (l). 

‘‘(B) EQUIVALENT FOREIGN TAXATION.—Paragraph (1) 

shall not apply to any services if the employer establishes 

to the satisfaction of the Secretary that the remuneration 

paid by such employer for such services is subject to a 

tax imposed by a foreign country which is substantially 

equivalent to the taxes imposed by this chapter. 

‘‘(5) CROSS REFERENCE.—For relief from taxes in cases covered by certain international agreements, see sections 3101(c) 

and 3111(c).’’. 

(b) SOCIAL SECURITY BENEFITS.—Subsection (e) of section 210 

of the Social Security Act (42 U.S.C. 410(e)) is amended— 

(1) by striking ‘‘(e) The term’’ and inserting ‘‘(e)(1) The 

term’’, 

(2) by redesignating clauses (1) through (6) as clauses 

(A) through (F), respectively, and 

(3) by adding at the end the following new paragraph: 

‘‘(2)(A) If any employee of a foreign person is performing services in connection with a contract between the United States 

Government (or any instrumentality thereof) and any member of 

any domestically controlled group of entities which includes such 

foreign person, such foreign person shall be treated as an American 

employer with respect to such services performed by such employee. 

‘‘(B) For purposes of this paragraph— 

‘‘(i) The term ‘domestically controlled group of entities’ 

means a controlled group of entities the common parent of 

which is a domestic corporation. 

‘‘(ii) The term ‘controlled group of entities’ means a controlled group of corporations as defined in section 1563(a)(1) 

of the Internal Revenue Code of 1986, except that— 

‘‘(I) ‘more than 50 percent’ shall be substituted for 

‘at least 80 percent’ each place it appears therein, and 

‘‘(II) the determination shall be made without regard 

to subsections (a)(4) and (b)(2) of section 1563 of such 

Code. 

A partnership or any other entity (other than a corporation) 

shall be treated as a member of a controlled group of entities 

if such entity is controlled (within the meaning of section 

954(d)(3) of such Code) by members of such group (including 

any entity treated as a member of such group by reason of 

this sentence). 

‘‘(C) Subparagraph (A) shall not apply to any services to which 

paragraph (1) of section 3121(z) of the Internal Revenue Code 

of 1986 does not apply by reason of paragraph (4) of such section.’’. 

(c) EFFECTIVE DATE.—The amendment made by this section 

shall apply to services performed in calendar months beginning 

more than 30 days after the date of the enactment of this Act. 

26 USC 3121 

note. 


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SEC. 303. INCREASE IN MINIMUM PENALTY ON FAILURE TO FILE A 

RETURN OF TAX. 

(a) IN GENERAL.—Subsection (a) of section 6651 is amended 

by striking ‘‘$100’’ in the last sentence and inserting ‘‘$135’’. 

(b) EFFECTIVE DATE.—The amendment made by this section 

shall apply to returns required to be filed after December 31, 

2008. 

TITLE IV—PARITY IN THE APPLICATION 

OF CERTAIN LIMITS TO MENTAL 

HEALTH BENEFITS 

SEC. 401. PARITY IN THE APPLICATION OF CERTAIN LIMITS TO 

MENTAL HEALTH BENEFITS. 

(a) INTERNAL REVENUE CODE OF 1986.—Subsection (f) of section 

9812 is amended— 

(1) by striking ‘‘and’’ at the end of paragraph (2), and 

(2) by striking paragraph (3) and inserting the following 

new paragraphs: 

‘‘(3) on or after January 1, 2008, and before the date 

of the enactment of the Heroes Earnings Assistance and Relief 

Tax Act of 2008, and 

‘‘(4) after December 31, 2008.’’. 

(b) EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974.— 

Subsection (f) of section 712 of the Employee Retirement Income 

Security Act of 1974 (29 U.S.C. 1185a(f)) is amended by striking 

‘‘services furnished after December 31, 2007’’ and inserting ‘‘services 

furnished— 

‘‘(1) on or after January 1, 2008, and before the date 

of the enactment of the Heroes Earnings Assistance and Relief 

Tax Act of 2008, and 

‘‘(2) after December 31, 2008.’’. 

26 USC 6651 

note. 

26 USC 6651. 


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122 STAT. 1650 PUBLIC LAW 110–245—JUNE 17, 2008 

LEGISLATIVE HISTORY—H.R. 6081: 

CONGRESSIONAL RECORD, Vol. 154 (2008): 

May 20, considered and passed House. 

May 22, considered and passed Senate. 

Æ 

(c) PUBLIC HEALTH SERVICE ACT.—Subsection (f) of section 

2705 of the Public Health Service Act (42 U.S.C. 300gg-5(f)) is 

amended by striking ‘‘services furnished after December 31, 2007’’ 

and inserting ‘‘services furnished— 

‘‘(1) on or after January 1, 2008, and before the date 

of the enactment of the Heroes Earnings Assistance and Relief 

Tax Act of 2008, and 

‘‘(2) after December 31, 2008.’’. 

Approved June 17, 2008. 


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