count under subsection (a) if such individual was 
taken into account under such subsection by the tax-
payer in any prior taxable year. 
(c) HURRICANE KATRINA DISPLACED INDIVIDUAL.— 
For purposes of this subsection, the term ‘‘Hurricane 
Katrina displaced individual’’ means, with respect to any 
taxpayer for any taxable year, a natural person who— 
(1) was (as of August 28, 2005) a resident of 
any area which is determined by the President to 
warrant individual or individual and public assist-
ance from the Federal Government under the Robert 
T. Stafford Disaster Relief and Emergency Assist-
ance Act by reason of Hurricane Katrina, 
(2) is displaced from the person’s residence lo-
cated in the area described in paragraph (1), and 
(3) is provided housing free of charge by the 
taxpayer in the principal residence of the taxpayer 
for a period of 60 consecutive days which ends in 
such taxable year. 
Such term shall not include the spouse or any dependent 
of the taxpayer. 
SEC. 108. SPECIAL RULE FOR DETERMINING EARNED IN-
COME. 
(a) IN GENERAL.—In the case of a qualified indi-
vidual, if the earned income of the taxpayer for the taxable
year of such taxpayer which includes August 28, 2005, 
is less than the earned income which is attributable to the 
taxpayer for the preceding taxable year, the credits al-
lowed under sections 24(d) and 32 of the Internal Revenue 
Code of 1986 may, at the election of the taxpayer, be de-
termined by substituting— 
(1) such earned income for the preceding tax-
able year, for 
(2) such earned income for the taxable year 
which includes August 28, 2005. 
(b) QUALIFIED INDIVIDUAL.—For purposes of this 
section, the term ‘‘qualified individual’’ means any indi-
vidual who was (as of August 28, 2005) a resident of any 
area which is determined by the President to warrant indi-
vidual or individual and public assistance from the Federal 
Government under the Robert T. Stafford Disaster Relief 
and Emergency Assistance Act by reason of Hurricane 
Katrina. 
(c) EARNED INCOME.—For purposes of this section, 
the term ‘‘earned income’’ has the meaning given such 
term under section 32(c) of such Code. 
(d) SPECIAL RULES.— 
(1) APPLICATION
TO
JOINT
RETURNS.—For 
purpose of subsection (a), in the case of a joint re-
turn for a taxable year which includes August 28, 
2005, 
(A) such subsection shall apply if either 
spouse is a qualified individual, 
(B) the earned income which is attrib-
utable to the taxpayer for the preceding taxable 
year shall be the sum of the earned income 
which is attributable to each spouse for such 
preceding taxable year, and 
(C) the substitution described in such sub-
section shall apply only with respect to earned 
income which is attributable to a spouse who is 
a qualified individual. 
(2) UNIFORM
APPLICATION
OF
ELECTION.— 
Any election made under subsection (a) shall apply 
with respect to both section 24(d) and section 32 of 
such Code. 
(3) ERRORS
TREATED
AS
MATHEMATICAL 
ERROR.—For purposes of section 6213 of such 
Code, an incorrect use on a return of earned income 
pursuant to subsection (a) shall be treated as a 
mathematical or clerical error. 
(4) NO EFFECT ON DETERMINATION OF GROSS 
INCOME.—For purposes of the Internal Revenue 
Code of 1986, gross income shall be determined