H. R. 2778
One Hundred Fourth Congress
of the
United States of America
AT THE SECOND SESSION
Begun and held at the City of Washington on Wednesday,
the third day of January, one thousand nine hundred and ninety-six
An Act
To provide that members of the Armed Forces performing services for the peacekeep-
ing efforts in Bosnia and Herzegovina, Croatia, and Macedonia shall be entitled
to tax benefits in the same manner as if such services were performed in a
combat zone, 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. TREATMENT OF CERTAIN INDIVIDUALS PERFORMING
SERVICES IN CERTAIN HAZARDOUS DUTY AREAS.
(a) GENERAL RULE.—For purposes of the following provisions
of the Internal Revenue Code of 1986, a qualified hazardous duty
area shall be treated in the same manner as if it were a combat
zone (as determined under section 112 of such Code):
(1) Section 2(a)(3) (relating to special rule where deceased
spouse was in missing status).
(2) Section 112 (relating to the exclusion of certain combat
pay of members of the Armed Forces).
(3) Section 692 (relating to income taxes of members of
Armed Forces on death).
(4) Section 2201 (relating to members of the Armed Forces
dying in combat zone or by reason of combat-zone-incurred
wounds, etc.).
(5) Section 3401(a)(1) (defining wages relating to combat
pay for members of the Armed Forces).
(6) Section 4253(d) (relating to the taxation of phone service
originating from a combat zone from members of the Armed
Forces).
(7) Section 6013(f)(1) (relating to joint return where individ-
ual is in missing status).
(8) Section 7508 (relating to time for performing certain
acts postponed by reason of service in combat zone).
(b) QUALIFIED HAZARDOUS DUTY AREA.—For purposes of this
section, the term ‘‘qualified hazardous duty area’’ means Bosnia
and Herzegovina, Croatia, or Macedonia, if as of the date of the
enactment of this section any member of the Armed Forces of
the United States is entitled to special pay under section 310
of title 37, United States Code (relating to special pay; duty subject
to hostile fire or imminent danger) for services performed in such
country. Such term includes any such country only during the
period such entitlement is in effect. Solely for purposes of applying
section 7508 of the Internal Revenue Code of 1986, in the case
of an individual who is performing services as part of Operation
Joint Endeavor outside the United States while deployed away
from such individual’s permanent duty station, the term ‘‘qualified
H. R. 2778—2
hazardous duty area’’ includes, during the period for which such
entitlement is in effect, any area in which such services are per-
formed.
(c) EXCLUSION OF COMBAT PAY FROM WITHHOLDING LIMITED
TO AMOUNT EXCLUDABLE FROM GROSS INCOME.—Paragraph (1) of
section 3401(a) of the Internal Revenue Code of 1986 (defining
wages) is amended by inserting before the semicolon the following:
‘‘to the extent remuneration for such service is excludable from
gross income under such section’’.
(d) INCREASE
IN COMBAT PAY EXCLUSION
FOR OFFICERS
TO
HIGHEST AMOUNT APPLICABLE TO ENLISTED PERSONNEL.—
(1) IN
GENERAL.—Subsection (b) of section 112 of such
Code (relating to commissioned officers) is amended by striking
‘‘$500’’ and inserting ‘‘the maximum enlisted amount’’.
(2) MAXIMUM ENLISTED AMOUNT.—Subsection (c) of section
112 of such Code (relating to definitions) is amended by adding
at the end the following new paragraph:
‘‘(5) The term ‘maximum enlisted amount’ means, for any
month, the sum of—
‘‘(A) the highest rate of basic pay payable for such
month to any enlisted member of the Armed Forces of
the United States at the highest pay grade applicable to
enlisted members, and
‘‘(B) in the case of an officer entitled to special pay
under section 310 of title 37, United States Code, for such
month, the amount of such special pay payable to such
officer for such month.’’.
(e) EFFECTIVE DATE.—
(1) IN GENERAL.—Except as provided in paragraph (2), the
provisions of and amendments made by this section shall take
effect on November 21, 1995.
(2) WITHHOLDING.—Subsection (a)(5) and the amendment
made by subsection (c) shall apply to remuneration paid after
the date of the enactment of this Act.
SEC. 2. EXTENSION OF INTERNAL REVENUE SERVICE USER FEES.
Subsection (c) of section 10511 of the Revenue Act of 1987
is amended by striking ‘‘October 1, 2000’’ and by inserting ‘‘October
1, 2003’’.
Speaker of the House of Representatives.
Vice President of the United States and
President of the Senate.