‘‘(6) SPECIAL RULES FOR SUPPORT.—For pur-
poses of this subsection—
‘‘(A) payments to a spouse which are in-
cludible in the gross income of such spouse 
under section 71 or 682 shall not be treated as 
a payment by the payor spouse for the support 
of any dependent, 
‘‘(B) amounts expended for the support of 
a child or children shall be treated as received 
from the noncustodial parent (as defined in 
subsection (e)(3)(B)) to the extent that such 
parent provided amounts for such support, and 
‘‘(C) in the case of the remarriage of a 
parent, support of a child received from the 
parent’s spouse shall be treated as received 
from the parent. 
‘‘(e) SPECIAL RULE FOR CERTAIN PRE-2005 IN-
STRUMENTS.— 
‘‘(1) IN GENERAL.—Notwithstanding subsection 
(c)(4) or subsection (d)(1)(C), a child who has par-
ents who—
‘‘(A) are divorced or legally separated 
under a decree of divorce or separate mainte-
nance,
‘‘(B) are separated under a written separa-
tion agreement, or 
‘‘(C) live apart at all times during the last 
6 months of the calendar year, shall be treated 
as being the qualifying child of the noncustodial 
parent for a calendar year if the requirements 
of subparagraph (B) are met. 
‘‘(2) REQUIREMENTS.—For purposes of sub-
paragraph (A), the requirements of this subpara-
graph are met if—
‘‘(A) such child would, but for this para-
graph, be the qualifying child of the custodial 
parent, and 
‘‘(B) a qualified pre-2005 instrument be-
tween the parents is applicable to such child for 
the taxable year beginning in such calendar 
year. 
In the case of an agreement executed before 
January 1, 1985, the requirements of this sub-
paragraph are met only if, in addition to meet-
ing the requirements of clauses (i) and (ii), the 
noncustodial parent provides at least $600 for 
the support of such child during such calendar 
year.
‘‘(3) QUALIFIED PRE-2005 INSTRUMENT.—For 
purposes of this paragraph, the term ‘qualified pre-
2005 instrument’ means any written declaration re-
ferred to in subsection (e)(2) (as in effect on the day 
before the date of the enactment of the Child Tax 
Fairness Act of 2003)—
‘‘(A) which is executed before January 1, 
2005, and 
‘‘(B) which is not modified on or after 
such date in a modification which expressly pro-
vides that this subsection shall not apply to 
such declaration. 
‘‘(4) CUSTODIAL PARENT AND NONCUSTODIAL 
PARENT.—For purposes of this subsection—
‘‘(A) CUSTODIAL PARENT.—The term ‘cus-
todial parent’ means the parent with whom a 
child shared the same principal place of abode 
for the greater portion of the calendar year. 
‘‘(B) NONCUSTODIAL PARENT.—The term 
‘noncustodial parent’ means the parent who is 
not the custodial parent. 
‘‘(5) 
EXCEPTION
FOR
MULTIPLE-SUPPORT 
AGREEMENTS.—This subsection shall not apply in 
any case where over one-half of the support of the
child is treated as having been received from a tax-
payer under the provision of subsection (d)(3). 
‘‘(f) OTHER DEFINITIONS AND RULES.—For pur-
poses of this section—
‘‘(1) CHILD DEFINED.—
‘‘(A) IN
GENERAL.—The term ‘child’ 
means an individual who is—
‘‘(i) a son, daughter, stepson, or step-
daughter of the taxpayer, or 
‘‘(ii) an eligible foster child of the tax-
payer. 
‘‘(B) ADOPTED
CHILD.—In determining 
whether any of the relationships specified in 
subparagraph (A)(i) or paragraph (4) exists, a 
legally adopted individual of the taxpayer, or an 
individual who is placed with the taxpayer by 
an authorized placement agency for adoption by 
the taxpayer, shall be treated as a child of such 
individual by blood. 
‘‘(C) ELIGIBLE FOSTER CHILD.—For pur-
poses of subparagraph (A)(ii), the term ‘eligible 
foster child’ means an individual who is placed 
with the taxpayer by an authorized placement 
agency or by judgment, decree, or other order 
of any court of competent jurisdiction.
‘‘(2) STUDENT DEFINED.—The term ‘student’ 
means an individual who during each of 5 calendar 
months during the calendar year in which the tax-
able year of the taxpayer begins—
‘‘(A) is a full-time student at an edu-
cational 
organization 
described 
in 
section 
170(b)(1)(A)(ii), or 
‘‘(B) is pursuing a full-time course of insti-
tutional on-farm training under the supervision 
of an accredited agent of an educational organi-
zation described in section 170(b)(1)(A)(ii) or 
of a State or political subdivision of a State. 
‘‘(3) PLACE
OF
ABODE.—An individual shall 
not be treated as having the same principal place of 
abode of the taxpayer if at any time during the tax-
able year of the taxpayer the relationship between 
the individual and the taxpayer is in violation of 
local law. 
‘‘(4) 
BROTHER
AND
SISTER.—The 
terms 
‘brother’ and ‘sister’ include a brother or sister by 
the half blood. 
‘‘(5) TREATMENT OF MISSING CHILDREN.—
‘‘(A) IN
GENERAL.—Solely for the pur-
poses referred to in subparagraph (B), a child 
of the taxpayer—
‘‘(C) COMPARABLE TREATMENT OF CER-
TAIN
QUALIFYING
RELATIVES.—For purposes 
of this section, a child of the taxpayer—
‘‘(i) who is presumed by law enforce-
ment authorities to have been kidnapped 
by someone who is not a member of the 
family of such child or the taxpayer, and 
‘‘(ii) who was (without regard to this 
paragraph) a qualifying relative of the tax-
payer for the portion of the taxable year 
before the date of the kidnapping, 
shall be treated as a qualifying relative of the 
taxpayer for all taxable years ending during the 
period that the child is kidnapped.
‘‘(D) TERMINATION
OF
TREATMENT.—
Subparagraphs (A) and (C) shall cease to apply 
as of the first taxable year of the taxpayer be-
ginning after the calendar year in which there 
is a determination that the child is dead (or, if 
earlier, in which the child would have attained 
age 18). 
‘‘(6) ATTAINMENT OF AGE.—For purposes of 
this section, an individual is deemed to have attained 
an age on the anniversary of such individual’s date 
of birth.
‘‘(7) CROSS REFERENCES.—
‘‘For provision treating child as dependent of both 
parents for purposes of certain provisions, see sec-
tions 105(b), 132(h)(2)(B), and 213(d)(5).’’.
SEC. 102. MODIFICATIONS OF DEPENDENT CARE CREDIT. 
(a) IN GENERAL.—Section 21(a)(1) of the Internal 
Revenue Code of 1986 is amended by striking ‘‘In the case 
of an individual who maintains a household which includes 
as a member one or more qualifying individuals (as de-
fined in subsection (b)(1))’’ and inserting ‘‘In the case of 
an individual for which there are 1 or more qualifying indi-
viduals (as defined in subsection (b)(1)) with respect to 
such individual’’. 
(b) QUALIFYING INDIVIDUAL.—Paragraph (1) of sec-
tion 21(b) of the Internal Revenue Code of 1986 is amend-
ed to read as follows: 
‘‘(1) 
QUALIFYING
INDIVIDUAL.—The 
term 
‘qualifying individual’ means—
‘‘(A) a dependent of the taxpayer (as de-
fined in section 152(a)(1)) who has not attained 
age 13, determined without regard to section 
152(e), 
‘‘(B) a dependent of the taxpayer who is 
physically or mentally incapable of caring for 
himself or herself and who has the same prin-
cipal place of abode as the taxpayer for more 
than one-half of such taxable year, or
‘‘(C) the spouse of the taxpayer, if the 
spouse is physically or mentally incapable of 
caring for himself or herself and who has the 
same principal place of abode as the taxpayer 
for more than one-half of such taxable year.’’. 
(c) CONFORMING AMENDMENT.—Paragraph (1) of 
section 21(e) of the Internal Revenue Code of 1986 is 
amended to read as follows: 
‘‘(1) PLACE
OF
ABODE.—An individual shall 
not be treated as having the same principal place of 
abode of the taxpayer if at any time during the tax-
able year of the taxpayer the relationship between 
the individual and the taxpayer is in violation of 
local law. ’’. 
SEC. 103. MODIFICATIONS OF CHILD TAX CREDIT. 
(a) IN GENERAL.—Paragraph (1) of section 24(c) of 
the Internal Revenue Code of 1986 is amended to read 
as follows: 
‘‘(1) IN GENERAL.—The term ‘qualifying child’ 
means a qualifying child of the taxpayer (as defined 
in section 152(c)), determined without regard to sec-
tion 152(e), who has not attained age 17.’’. 
(b) CONFORMING AMENDMENT.—Section 24(c)(2) of 
the Internal Revenue Code of 1986 is amended by striking
‘‘the first sentence of section 152(b)(3)’’ and inserting 
‘‘subparagraph (A) of section 152(b)(3)’’. 
SEC. 104. MODIFICATIONS OF EARNED INCOME CREDIT. 
(a) QUALIFYING CHILD.—Paragraph (3) of section 
32(c) of the Internal Revenue Code of 1986 is amended 
to read as follows: 
‘‘(3) QUALIFYING CHILD.—
‘‘(A) IN GENERAL.—The term ‘qualifying 
child’ means a qualifying child of the taxpayer 
(as defined in section 152(c), determined with-
out regard to paragraph (1)(D) thereof and sec-
tion 152(e)). 
‘‘(B) MARRIED
INDIVIDUAL.—The term 
‘qualifying child’ shall not include an individual 
who is married as of the close of the taxpayer’s 
taxable year unless the taxpayer is entitled to 
a deduction under section 151 for such taxable 
year with respect to such individual (or would 
be so entitled but for section 152(e)).
‘‘(C) PLACE OF ABODE.—For purposes of 
subparagraph (A), the requirements of section 
152(c)(1)(B) shall be met only if the principal 
place of abode is in the United States. 
‘‘(D) IDENTIFICATION REQUIREMENTS.—
‘‘(i) IN GENERAL.—A qualifying child 
shall not be taken into account under sub-
section (b) unless the taxpayer includes the 
name, age, and TIN of the qualifying child 
on the return of tax for the taxable year. 
‘‘(ii) OTHER
METHODS.—The Sec-
retary may prescribe other methods for 
providing the information described in 
clause (i).’’. 
(b) CONFORMING AMENDMENTS.—
(1) Section 32(c)(1) of the Internal Revenue 
Code of 1986 is amended by striking subparagraph 
(C) and by redesignating subparagraphs (D), (E), 
(F), and (G) as subparagraphs (C), (D), (E), and 
(F), respectively. 
(2) Section 32(c)(4) of such Code is amended 
by striking ‘‘(3)(E)’’ and inserting ‘‘(3)(C)’’. 
(3) Section 32(m) of such Code is amended by 
striking ‘‘subsections (c)(1)(F)’’ and inserting ‘‘sub-
sections (c)(1)(E)’’. 
SEC. 105. MODIFICATIONS OF DEDUCTION FOR PERSONAL 
EXEMPTION FOR DEPENDENTS. 
Subsection (c) of section 151 of the Internal Revenue 
Code of 1986 is amended to read as follows:
‘‘(c) ADDITIONAL EXEMPTION FOR DEPENDENTS.—
An exemption of the exemption amount for each individual 
who is a dependent (as defined in section 152) of the tax-
payer for the taxable year.’’
SEC. 106. TECHNICAL AND CONFORMING AMENDMENTS. 
(1) Section 21(e)(5) of the Internal Revenue 
Code of 1986 is amended—
(A) by striking ‘‘paragraph (2) or (4) of’’ 
in subparagraph (A), and 
(B) by striking ‘‘within the meaning of sec-
tion 152(e)(1)’’ and inserting ‘‘as defined in 
section 152(e)(3)(A)’’. 
(2) Section 21(e)(6)(B) of such Code is amend-
ed by striking ‘‘section 151(c)(3)’’ and inserting 
‘‘section 152(f)(1)’’. 
(3) Section 25B(c)(2)(B) of such Code is 
amended by striking ‘‘151(c)(4)’’ and inserting 
‘‘152(f)(2)’’. 
(4)(A) Subparagraphs (A) and (B) of section 
51(i)(1) of such Code are each amended by striking 
‘‘paragraphs (1) through (8) of section 152(a)’’ both 
places it appears and inserting ‘‘subparagraphs (A) 
through (G) of section 152(d)(2)’’.
(B) Section 51(i)(1)(C) of such Code is amend-
ed 
by 
striking 
‘‘152(a)(9)’’ 
and 
inserting 
‘‘152(d)(2)(H)’’. 
(5) Section 72(t)(7)(A)(iii) of such Code is 
amended by striking ‘‘151(c)(3)’’ and inserting 
‘‘152(f)(1)’’. 
(6) Section 129(c)(2) of such Code is amended 
by striking ‘‘151(c)(3)’’ and inserting ‘‘152(f)(1)’’. 
(7) The first sentence of section 132(h)(2)(B) 
of such Code is amended by striking ‘‘151(c)(3)’’ 
and inserting ‘‘152(f)(1)’’. 
(8) Section 153 of such Code is amended by 
striking paragraph (1) and by redesignating para-
graphs (2), (3), and (4) as paragraphs (1), (2), and 
(3), respectively. 
(9) Section 170(g)(3) of such Code is amended 
by striking ‘‘paragraphs (1) through (8) of section 
152(a)’’ and inserting ‘‘subparagraphs (A) through 
(G) of section 152(d)(2)’’. 
(10) The second sentence of section 213(d)(11) 
of such Code is amended by striking ‘‘paragraphs 
(1) through (8) of section 152(a)’’ and inserting 
‘‘subparagraphs 
(A) 
through 
(G) 
of 
section 
152(d)(2)’’.
(11) Section 529(e)(2)(B) of such Code is 
amended by striking ‘‘paragraphs (1) through (8) of 
section 152(a)’’ and inserting ‘‘subparagraphs (A) 
through (G) of section 152(d)(2)’’. 
(12) Section 2032A(c)(7)(D) of such Code is 
amended by striking ‘‘section 151(c)(4)’’ and insert-
ing ‘‘section 152(f)(2)’’. 
(13) Section 7701(a)(17) of such Code is 
amended by striking ‘‘152(b)(4), 682,’’ and inserting 
‘‘682’’. 
(14) Section 7702B(f)(2)(C)(iii) of such Code is 
amended by striking ‘‘paragraphs (1) through (8) of 
section 152(a)’’ and inserting ‘‘subparagraphs (A) 
through (G) of section 152(d)(2)’’. 
(15) Section 7703(b)(1) of such Code is amend-
ed—
(A) by striking ‘‘151(c)(3)’’ and inserting 
‘‘152(f)(1)’’, and 
(B) by striking ‘‘paragraph (2) or (4) of’’. 
SEC. 107. EFFECTIVE DATE. 
The amendments made by this title shall apply to tax-
able years beginning after December 31, 2003.
TITLE II—OTHER 
SIMPLIFICATION PROVISIONS
SEC. 201. HEAD OF HOUSEHOLD FILING STATUS REPLACED 
WITH SPECIAL PERSONAL EXEMPTION. 
(a) INCREASED PERSONAL EXEMPTION FOR SINGLE 
PARENTS, ETC.—Section 151 of the Internal Revenue 
Code of 1986 is amended by redesignating subsections (d) 
and (e) as subsection (e) and (f) and by inserting after 
subsection (c) the following new subsection:
‘‘(d) ADDITIONAL EXEMPTION
FOR SINGLE PAR-
ENTS, ETC.—
‘‘(1) IN GENERAL.—An exemption of $3,700 in 
the case of an individual who—
‘‘(A) is not married at the close of the tax-
able year, 
‘‘(B) is not a surviving spouse, and 
‘‘(C)(i) maintains as his home a household 
which constitutes for more than one-half of 
such taxable year the principal place of abode, 
as a member of such household, of—
‘‘(I) a qualifying child, or 
‘‘(II) a qualifying relative if the tax-
payer is entitled to a deduction for the tax-
able year for such person under subsection 
(c), or
‘‘(ii) maintains a household which con-
stitutes for such taxable year the principal place 
of abode of the father or mother of the tax-
payer, if the taxpayer is entitled to a deduction 
for the taxable year for such father or mother 
under subsection (c). 
For purposes of this paragraph, an individual shall 
be considered as maintaining a household only if 
over half of the cost of maintaining the household 
during the taxable year is furnished by such indi-
vidual. 
‘‘(2) MARITAL STATUS.—Marital status shall be 
determined in accordance with section 7703; except 
that an individual shall be treated as not married for 
purposes of this subsection if at any time during 
such year the spouse of such individual is a non-
resident alien. 
‘‘(3) LIMITATIONS.—Paragraph (1) shall not 
apply to any individual—
‘‘(A) if at any time during the taxable year 
he is a nonresident alien, or 
‘‘(B) who would not be a dependent for the 
taxable year but for section 152(d)(3). 
‘‘(4) INFLATION ADJUSTMENT.—
‘‘(A) IN GENERAL.—In the case of a tax-
able year beginning in a calendar year after 
2004, the dollar amount contained in paragraph 
(1) shall be increased by an amount equal to—
‘‘(i) such dollar amount, multiplied by 
‘‘(ii) the cost-of-living adjustment de-
termined under section 1(f )(3) for the cal-
endar year in which the taxable year be-
gins, determined by substituting ‘calendar 
year 2003’ for ‘calendar year 1992’ in sub-
paragraph (B) thereof. 
‘‘(B) ROUNDING.—Any increase deter-
mined under subparagraph (A) shall be rounded 
to the nearest multiple of $50.’’. 
(b) REPEAL OF HEAD OF HOUSEHOLD FILING STA-
TUS.—Subsection (b) of section 1 of such Code (relating 
to heads of household) is repealed. 
(c) CONFORMING AMENDMENTS.—
(1) Section 1(c) of such Code is amended—
(A) in the heading by striking ‘‘SPOUSES 
AND HEADS OF HOUSEHOLDS).—’’ and insert-
ing ‘‘SPOUSES).—’’, and 
(B) by striking ‘‘or the head of a house-
hold as defined in section 2(b)’’.