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103D CONGRESS

1ST SESSION H. R. 404

To repeal the provisions in the Internal Revenue Code of 1986 relating

to the inclusion of Social Security and certain railroad retirement benefits

in gross income to the extent such provisions do not apply to nonresident

aliens.

IN THE HOUSE OF REPRESENTATIVES

JANUARY 5, 1993

Mr. SOLOMON introduced the following bill; which was referred to the

Committee on Ways and Means

A BILL

To repeal the provisions in the Internal Revenue Code of

1986 relating to the inclusion of Social Security and

certain railroad retirement benefits in gross income to

the extent such provisions do not apply to nonresident

aliens.

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled,

3 SECTION 1. REPEAL OF PROVISION WHICH INCLUDES ONE4 HALF OF SOCIAL SECURITY AND RAILROAD

5 RETIREMENT BENEFITS IN GROSS INCOME.

6 (a) REPEAL OF PROVISION INCLUDING BENEFITS IN

7 GROSS INCOME.—Section 86 of the Internal Revenue
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1 Code of 1986 (relating to inclusion of social security and

2 tier 1 railroad retirement benefits in gross income) is here3 by repealed.

4 (b) REPEAL OF RETURN REQUIREMENT.—Section

5 6050F of such Code (relating to returns relating to Social

6 Security benefits) is hereby repealed.

7 (c) TECHNICAL AND CONFORMING AMENDMENTS.—

8 (1) Paragraph (3) of section 72(r) of such Code

9 is amended to read as follows:

10 ‘‘(3) TIER 1 RAILROAD RETIREMENT BENE11 FIT.—For purposes of paragraph (1), the term ‘tier

12 1 railroad retirement benefit’ means a monthly bene13 fit under section 3(a), 3(f)(3), 4(a), or 4(f) of the

14 Railroad Retirement Act of 1974.’’

15 (2) Paragraph (1) of section 6050G(a) of such

16 Code is amended by striking out ‘‘86(d)(4)’’ and in17 serting in lieu thereof ‘‘72(r)(3)’’.

18 (3) The table of sections for part II of sub19 chapter B of chapter 1 of such Code is amended by

20 striking out the item relating to section 86.

21 (4) The table of sections for subpart B of part

22 III of subchapter A of chapter 61 of such Code is

23 amended by striking out the item relating to section

24 6050F.
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1 (d) EFFECTIVE DATE.—The amendments made by

2 this section shall apply to benefits received after December

3 31, 1989, in taxable years beginning after such date.

4 SEC. 2. TAXATION OF ONE-HALF OF SOCIAL SECURITY BEN5 EFITS PAID TO NONRESIDENT ALIENS CON6 TINUED.

7 (a) IN GENERAL.—Section 871 of the Internal Reve8 nue Code of 1986 (relating to tax on nonresident alien

9 individuals) is amended by redesignating subsection (j) as

10 subsection (k) and by inserting after subsection (i) the fol11 lowing new subsection:

12 ‘‘(j) SOCIAL SECURITY BENEFIT DEFINED.—

13 ‘‘(1) IN GENERAL.—For purposes of this sec14 tion, the term ‘social security benefit’ means any

15 amount received by the taxpayer by reason of enti16 tlement to—

17 ‘‘(A) a monthly benefit under title II of the

18 Social Security Act, or

19 ‘‘(B) a tier 1 railroad retirement benefit.

20 For purposes of the preceding sentence, the amount

21 received by any taxpayer shall be determined as if

22 the Social Security Act did not contain section

23 203(i) thereof.

24 ‘‘(2) ADJUSTMENT FOR REPAYMENTS DURING

25 YEAR.—For purposes of this section, the amount of
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1 Social Security benefits received during any taxable

2 year shall be reduced by any repayment made by the

3 taxpayer during the taxable year of a Social Security

4 benefit previously received by the taxpayer (whether

5 or not such benefit was received during the taxable

6 year).

7 ‘‘(3) WORKMEN’S COMPENSATION BENEFITS

8 SUBSTITUTED FOR SOCIAL SECURITY BENEFITS.—

9 For purposes of this section, if, by reason of section

10 224 of the Social Security Act (or by reason of sec11 tion 3(a)(1) of the Railroad Retirement Act of

12 1974), any Social Security benefit is reduced by rea13 son of the receipt of a benefit under a workman’s

14 compensation act, the term ‘Social Security benefit’

15 includes that portion of such benefit received under

16 the workman’s compensation act which equals such

17 reduction.

18 ‘‘(4) TIER 1 RAILROAD RETIREMENT BENE19 FIT.—For purposes of paragraph (1), the term ‘tier

20 1 railroad retirement benefit’ has the meaning given

21 to such term by section 72(r)(3).’’

22 (b) TECHNICAL AND CONFORMING AMENDMENTS.—

23 (1) Paragraph (8) of section 861(a) of such

24 Code is amended by striking out ‘‘86(d)’’ and insert25 ing in lieu thereof ‘‘871(j)’’.
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1 (2) Paragraph (3) of subsection (a) of such sec2 tion 871 is amended to read as follows:

3 ‘‘(3) TAXATION OF SOCIAL SECURITY BENE4 FITS.—For purposes of this section and section

5 1441, one-half of any Social Security benefit shall be

6 included in gross income (notwithstanding section

7 207 of the Social Security Act).’’

8 (3) Paragraph (6) of section 6103(h) of such

9 Code is amended by striking out ‘‘86(d)’’ and insert10 ing in lieu thereof ‘‘871(j)’’.

11 (4) Subsection (e) of section 121 of the Social

12 Security Amendments of 1983 is amended—

13 (A) in paragraph (1) by striking out ‘‘sec14 tions 86 and’’ and inserting in lieu thereof ‘‘sec15 tion’’, and

16 (B) in paragraph (3)(B) by striking out

17 ‘‘86(d)(1)’’ and inserting in lieu thereof

18 ‘‘871(j)(1)’’.

19 (c) EFFECTIVE DATE.—The amendments made by

20 this section shall apply to benefits received during the first

21 taxable year after enactment of this Act.

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