I 
116TH CONGRESS 
2D SESSION 
H. R. 8440 
To provide disaster tax relief. 
IN THE HOUSE OF REPRESENTATIVES 
SEPTEMBER 29, 2020 
Mr. THOMPSON of California (for himself, Mr. BLUMENAUER, and Ms. 
FINKENAUER) introduced the following bill; which was referred to the 
Committee on Ways and Means, and in addition to the Committee on 
Small Business, for a period to be subsequently determined by the Speak-
er, in each case for consideration of such provisions as fall within the ju-
risdiction of the committee concerned 
A BILL 
To provide disaster tax relief. 
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled, 
SECTION 1. SHORT TITLE; TABLE OF CONTENTS. 
(a) SHORT TITLE.—This Act may be cited as the 
‘‘Disaster Tax Relief Act of 2020’’. 
(b) TABLE OF CONTENTS.—The table of contents for 
this Act is as follows: 
Sec. 1. Short title; table of contents. 
Sec. 2. Definitions. 
Sec. 3. Special disaster-related rules for use of retirement funds. 
Sec. 4. Employee retention credit for employers affected by qualified disasters. 
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Sec. 5. Other disaster-related tax relief provisions. 
Sec. 6. Treatment of certain possessions. 
SEC. 2. DEFINITIONS. 
For purposes of this Act— 
(1) QUALIFIED DISASTER AREA.— 
(A) IN
GENERAL.—The term ‘‘qualified 
disaster area’’ means any area with respect to 
which a major disaster was declared, during the 
period beginning on December 28, 2019, and 
ending on the date which is 60 days after the 
date of the enactment of this Act, by the Presi-
dent under section 401 of the Robert T. Staf-
ford Disaster Relief and Emergency Assistance 
Act if the incident period of the disaster with 
respect to which such declaration is made be-
gins on or before the date of the enactment of 
this Act. 
(B) COVID–19 EXCEPTION.—Such term 
shall not include any area with respect to which 
such a major disaster has been so declared only 
by reason of COVID–19. 
(2) QUALIFIED
DISASTER
ZONE.—The term 
‘‘qualified disaster zone’’ means that portion of any 
qualified disaster area which was determined by the 
President, during the period beginning on December 
28, 2019, and ending on the date which is 60 days 
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after the date of the enactment of this Act, to war-
rant individual or individual and public assistance 
from the Federal Government under the Robert T. 
Stafford Disaster Relief and Emergency Assistance 
Act by reason of the qualified disaster with respect 
to such disaster area. 
(3) QUALIFIED
DISASTER.—The term ‘‘quali-
fied disaster’’ means, with respect to any qualified 
disaster area, the disaster by reason of which a 
major disaster was declared with respect to such 
area. 
(4) INCIDENT PERIOD.—The term ‘‘incident pe-
riod’’ means, with respect to any qualified disaster, 
the period specified by the Federal Emergency Man-
agement Agency as the period during which such 
disaster occurred (except that for purposes of this 
Act such period shall not be treated as beginning be-
fore December 28, 2019, or ending after the date 
which is 30 days after the date of the enactment of 
this Act). 
SEC. 3. SPECIAL DISASTER-RELATED RULES FOR USE OF 
RETIREMENT FUNDS. 
(a) TAX-FAVORED WITHDRAWALS FROM RETIRE-
MENT PLANS.— 
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(1) IN GENERAL.—Section 72(t) of the Internal 
Revenue Code of 1986 shall not apply to any quali-
fied disaster distribution. 
(2) AGGREGATE DOLLAR LIMITATION.— 
(A) IN GENERAL.—For purposes of this 
subsection, the aggregate amount of distribu-
tions received by an individual which may be 
treated as qualified disaster distributions for 
any taxable year shall not exceed the excess (if 
any) of— 
(i) $100,000, over 
(ii) the aggregate amounts treated as 
qualified disaster distributions received by 
such individual for all prior taxable years. 
(B) TREATMENT
OF
PLAN
DISTRIBU-
TIONS.—If a distribution to an individual would 
(without regard to subparagraph (A)) be a 
qualified disaster distribution, a plan shall not 
be treated as violating any requirement of the 
Internal Revenue Code of 1986 merely because 
the plan treats such distribution as a qualified 
disaster distribution, unless the aggregate 
amount of such distributions from all plans 
maintained by the employer (and any member 
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of any controlled group which includes the em-
ployer) to such individual exceeds $100,000. 
(C) CONTROLLED GROUP.—For purposes 
of subparagraph (B), the term ‘‘controlled 
group’’ means any group treated as a single 
employer under subsection (b), (c), (m), or (o) 
of section 414 of the Internal Revenue Code of 
1986. 
(D) SPECIAL RULE FOR INDIVIDUALS AF-
FECTED BY MORE THAN ONE DISASTER.—The 
limitation of subparagraph (A) shall be applied 
separately with respect to distributions made 
with respect to each qualified disaster. 
(3) AMOUNT DISTRIBUTED MAY BE REPAID.— 
(A) IN GENERAL.—Any individual who re-
ceives a qualified disaster distribution may, at 
any time during the 3-year period beginning on 
the day after the date on which such distribu-
tion was received, make 1 or more contributions 
in an aggregate amount not to exceed the 
amount of such distribution to an eligible retire-
ment plan of which such individual is a bene-
ficiary and to which a rollover contribution of 
such distribution could be made under section 
402(c), 403(a)(4), 403(b)(8), 408(d)(3), or 
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457(e)(16), of the Internal Revenue Code of 
1986, as the case may be. 
(B) TREATMENT OF REPAYMENTS OF DIS-
TRIBUTIONS
FROM
ELIGIBLE
RETIREMENT 
PLANS
OTHER
THAN
IRAS.—For purposes of 
the Internal Revenue Code of 1986, if a con-
tribution is made pursuant to subparagraph (A) 
with respect to a qualified disaster distribution 
from an eligible retirement plan other than an 
individual retirement plan, then the taxpayer 
shall, to the extent of the amount of the con-
tribution, be treated as having received the 
qualified disaster distribution in an eligible roll-
over 
distribution 
(as 
defined 
in 
section 
402(c)(4) of such Code) and as having trans-
ferred the amount to the eligible retirement 
plan in a direct trustee to trustee transfer with-
in 60 days of the distribution. 
(C) TREATMENT OF REPAYMENTS OF DIS-
TRIBUTIONS FROM IRAS.—For purposes of the 
Internal Revenue Code of 1986, if a contribu-
tion is made pursuant to subparagraph (A) 
with respect to a qualified disaster distribution 
from an individual retirement plan (as defined 
by section 7701(a)(37) of such Code), then, to 
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the extent of the amount of the contribution, 
the qualified disaster distribution shall be treat-
ed as a distribution described in section 
408(d)(3) of such Code and as having been 
transferred to the eligible retirement plan in a 
direct trustee to trustee transfer within 60 days 
of the distribution. 
(4) DEFINITIONS.—For purposes of this sub-
section— 
(A) 
QUALIFIED
DISASTER
DISTRIBU-
TION.—Except as provided in paragraph (2), 
the term ‘‘qualified disaster distribution’’ means 
any distribution from an eligible retirement 
plan made— 
(i) on or after the first day of the in-
cident period of a qualified disaster and 
before the date which is 180 days after the 
date of the enactment of this Act, and 
(ii) to an individual whose principal 
place of abode at any time during the inci-
dent period of such qualified disaster is lo-
cated in the qualified disaster area with re-
spect to such qualified disaster and who 
has sustained an economic loss by reason 
of such qualified disaster. 
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(B) ELIGIBLE
RETIREMENT
PLAN.—The 
term ‘‘eligible retirement plan’’ shall have the 
meaning 
given 
such 
term 
by 
section 
402(c)(8)(B) of the Internal Revenue Code of 
1986. 
(5) INCOME INCLUSION SPREAD OVER 3-YEAR 
PERIOD.— 
(A) IN
GENERAL.—In the case of any 
qualified disaster distribution, unless the tax-
payer elects not to have this paragraph apply 
for any taxable year, any amount required to be 
included in gross income for such taxable year 
shall be so included ratably over the 3-taxable- 
year period beginning with such taxable year. 
(B) SPECIAL RULE.—For purposes of sub-
paragraph (A), rules similar to the rules of sub-
paragraph (E) of section 408A(d)(3) of the In-
ternal Revenue Code of 1986 shall apply. 
(6) SPECIAL RULES.— 
(A) EXEMPTION OF DISTRIBUTIONS FROM 
TRUSTEE TO TRUSTEE TRANSFER AND WITH-
HOLDING
RULES.—For purposes of sections 
401(a)(31), 402(f), and 3405 of the Internal 
Revenue Code of 1986, qualified disaster dis-
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tributions shall not be treated as eligible roll-
over distributions. 
(B) QUALIFIED DISASTER DISTRIBUTIONS 
TREATED AS MEETING PLAN DISTRIBUTION RE-
QUIREMENTS.—For purposes the Internal Rev-
enue Code of 1986, a qualified disaster dis-
tribution shall be treated as meeting the re-
quirements 
of 
sections 
401(k)(2)(B)(i), 
403(b)(7)(A)(ii), 403(b)(11), and 457(d)(1)(A) 
of such Code. 
(b) RECONTRIBUTIONS
OF
WITHDRAWALS
FOR 
HOME PURCHASES.— 
(1) RECONTRIBUTIONS.— 
(A) IN GENERAL.—Any individual who re-
ceived a qualified distribution may, during the 
applicable period, make 1 or more contributions 
in an aggregate amount not to exceed the 
amount of such qualified distribution to an eli-
gible retirement plan (as defined in section 
402(c)(8)(B) of the Internal Revenue Code of 
1986) of which such individual is a beneficiary 
and to which a rollover contribution of such dis-
tribution could be made under section 402(c), 
403(a)(4), 403(b)(8), or 408(d)(3), of such 
Code, as the case may be. 
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(B) TREATMENT OF REPAYMENTS.—Rules 
similar to the rules of subparagraphs (B) and 
(C) of subsection (a)(3) shall apply for purposes 
of this subsection. 
(2) QUALIFIED DISTRIBUTION.—For purposes 
of this subsection, the term ‘‘qualified distribution’’ 
means any distribution— 
(A) 
described 
in 
section 
401(k)(2)(B)(i)(IV), 403(b)(7)(A)(ii) (but only 
to the extent such distribution relates to finan-
cial hardship), 403(b)(11)(B), or 72(t)(2)(F), 
of the Internal Revenue Code of 1986, 
(B) which was to be used to purchase or 
construct a principal residence in a qualified 
disaster area, but which was not so used on ac-
count of the qualified disaster with respect to 
such area, and 
(C) which was received during the period 
beginning on the date which is 180 days before 
the first day of the incident period of such 
qualified disaster and ending on the date which 
is 30 days after the last day of such incident 
period. 
(3) APPLICABLE PERIOD.—For purposes of this 
subsection, the term ‘‘applicable period’’ means, in 
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the case of a principal residence in a qualified dis-
aster area with respect to any qualified disaster, the 
period beginning on the first day of the incident pe-
riod of such qualified disaster and ending on the 
date which is 180 days after the date of the enact-
ment of this Act. 
(c) LOANS FROM QUALIFIED PLANS.— 
(1) INCREASE IN LIMIT ON LOANS NOT TREAT-
ED
AS
DISTRIBUTIONS.—In the case of any loan 
from a qualified employer plan (as defined under 
section 72(p)(4) of the Internal Revenue Code of 
1986) to a qualified individual made during the 180- 
day period beginning on the date of the enactment 
of this Act— 
(A) clause (i) of section 72(p)(2)(A) of 
such Code shall be applied by substituting 
‘‘$100,000’’ for ‘‘$50,000’’, and 
(B) clause (ii) of such section shall be ap-
plied by substituting ‘‘the present value of the 
nonforfeitable accrued benefit of the employee 
under the plan’’ for ‘‘one-half of the present 
value of the nonforfeitable accrued benefit of 
the employee under the plan’’. 
(2) DELAY OF REPAYMENT.—In the case of a 
qualified individual (with respect to any qualified 
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disaster) with an outstanding loan (on or after the 
first day of the incident period of such qualified dis-
aster) from a qualified employer plan (as defined in 
section 72(p)(4) of the Internal Revenue Code of 
1986)— 
(A) if the due date pursuant to subpara-
graph (B) or (C) of section 72(p)(2) of such 
Code for any repayment with respect to such 
loan occurs during the period beginning on the 
first day of the incident period of such qualified 
disaster and ending on the date which is 180 
days after the last day of such incident period, 
such due date shall be delayed for 1 year (or, 
if later, until the date which is 180 days after 
the date of the enactment of this Act), 
(B) any subsequent repayments with re-
spect to any such loan shall be appropriately 
adjusted to reflect the delay in the due date 
under subparagraph (A) and any interest accru-
ing during such delay, and 
(C) in determining the 5-year period and 
the term of a loan under subparagraph (B) or 
(C) of section 72(p)(2) of such Code, the period 
described in subparagraph (A) of this para-
graph shall be disregarded. 
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(3) QUALIFIED INDIVIDUAL.—For purposes of 
this subsection, the term ‘‘qualified individual’’ 
means any individual— 
(A) whose principal place of abode at any 
time during the incident period of any qualified 
disaster is located in the qualified disaster area 
with respect to such qualified disaster, and 
(B) who has sustained an economic loss by 
reason of such qualified disaster. 
(d) PROVISIONS
RELATING
TO
PLAN
AMEND-
MENTS.— 
(1) IN GENERAL.—If this subsection applies to 
any amendment to any plan or annuity contract, 
such plan or contract shall be treated as being oper-
ated in accordance with the terms of the plan during 
the period described in paragraph (2)(B)(i). 
(2) AMENDMENTS TO WHICH SUBSECTION AP-
PLIES.— 
(A) IN
GENERAL.—This subsection shall 
apply to any amendment to any plan or annuity 
contract which is made— 
(i) pursuant to any provision of this 
section, or pursuant to any regulation 
issued by the Secretary or the Secretary of 
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Labor under any provision of this section, 
and 
(ii) on or before the last day of the 
first plan year beginning on or after Janu-
ary 1, 2020, or such later date as the Sec-
retary may prescribe. 
In the case of a governmental plan (as defined 
in section 414(d) of the Internal Revenue Code 
of 1986), clause (ii) shall be applied by sub-
stituting the date which is 2 years after the 
date otherwise applied under clause (ii). 
(B) CONDITIONS.—This subsection shall 
not apply to any amendment unless— 
(i) during the period— 
(I) beginning on the date that 
this section or the regulation de-
scribed in subparagraph (A)(i) takes 
effect (or in the case of a plan or con-
tract amendment not required by this 
section or such regulation, the effec-
tive date specified by the plan), and 
(II) ending on the date described 
in subparagraph (A)(ii) (or, if earlier, 
the date the plan or contract amend-
ment is adopted), 
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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. 4. EMPLOYEE RETENTION CREDIT FOR EMPLOYERS 
AFFECTED BY QUALIFIED DISASTERS. 
(a) IN GENERAL.—For purposes of section 38 of the 
Internal Revenue Code of 1986, in the case of an eligible 
employer, the 2020 qualified disaster employee retention 
credit shall be treated as a credit listed at the end of sub-
section (b) of such section. For purposes of this sub-
section, the 2020 qualified disaster employee retention 
credit for any taxable year is an amount equal to 40 per-
cent of the qualified wages with respect to each eligible 
employee of such employer for such taxable year. The 
amount of qualified wages with respect to any employee 
which may be taken into account under this subsection 
by the employer for any taxable year shall not exceed 
$6,000 (reduced by the amount of qualified wages with 
respect to such employee which may be so taken into ac-
count for any prior taxable year). 
(b) DEFINITIONS.—For purposes of this section— 
(1) ELIGIBLE EMPLOYER.—The term ‘‘eligible 
employer’’ means any employer— 
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(A) which conducted an active trade or 
business in a qualified disaster zone at any time 
during the incident period of the qualified dis-
aster with respect to such qualified disaster 
zone, and 
(B) with respect to whom the trade or 
business described in subparagraph (A) is inop-
erable at any time during the period beginning 
on the first day of the incident period of such 
qualified disaster and ending on the date of the 
enactment of this Act, as a result of damage 
sustained by reason of such qualified disaster. 
(2) ELIGIBLE EMPLOYEE.—The term ‘‘eligible 
employee’’ means with respect to an eligible em-
ployer an employee whose principal place of employ-
ment with such eligible employer (determined imme-
diately before the qualified disaster referred to in 
paragraph (1)) was in the qualified disaster zone re-
ferred to in such paragraph. 
(3) QUALIFIED WAGES.—The term ‘‘qualified 
wages’’ means wages (as defined in section 51(c)(1) 
of the Internal Revenue Code of 1986, but without 
regard to section 3306(b)(2)(B) of such Code) paid 
or incurred by an eligible employer with respect to 
an eligible employee at any time on or after the date 
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on which the trade or business described in para-
graph (1) first became inoperable at the principal 
place of employment of the employee (determined 
immediately before the qualified disaster referred to 
in such paragraph) and before the earlier of— 
(A) the date on which such trade or busi-
ness has resumed significant operations at such 
principal place of employment, or 
(B) the date which 150 days after the last 
day of the incident period of the qualified dis-
aster referred to in paragraph (1). 
Such term shall include wages paid without regard 
to whether the employee performs no services, per-
forms services at a different place of employment 
than such principal place of employment, or per-
forms services at such principal place of employment 
before significant operations have resumed. Such 
term shall not include any wages taken into account 
under section 2301 of the Coronavirus Aid, Relief, 
and Economic Security Act. 
(c) SPECIAL RULES.— 
(1) EMPLOYEE
NOT
TAKEN
INTO
ACCOUNT 
MORE THAN ONCE.—An employee shall not be treat-
ed as an eligible employee for purposes of this sub-
section for any period with respect to any employer 
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if such employer is allowed a credit under section 51 
of the Internal Revenue Code of 1986 with respect 
to such employee for such period. 
(2) DENIAL OF DOUBLE BENEFIT.—Any wages 
taken into account in determining the credit allowed 
under this section shall not be taken into account as 
wages for purposes of sections 41, 45A, 45P, 45S, 
51, and 1396 of the Internal Revenue Code of 1986. 
(3) CERTAIN OTHER RULES TO APPLY.—For 
purposes of this subsection, rules similar to the rules 
of sections 51(i)(1), 52, and 280C(a), of the Internal 
Revenue Code of 1986, shall apply. 
(d) ELECTION TO NOT TAKE CERTAIN WAGES INTO 
ACCOUNT.— 
(1) IN GENERAL.—This section shall not apply 
to qualified wages paid by an eligible employer with 
respect to which such employer makes an election 
(at such time and in such manner as the Secretary 
may prescribe) to have this section not apply to such 
wages. 
(2) COORDINATION WITH PAYCHECK PROTEC-
TION
PROGRAM.—The Secretary, in consultation 
with the Administrator of the Small Business Ad-
ministration, shall issue guidance providing that 
payroll costs paid or incurred during the covered pe-
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riod shall not fail to be treated as qualified wages 
under this section by reason of an election under 
paragraph (1) to the extent that a covered loan of 
the eligible employer is not forgiven by reason of a 
decision under section 1106(g) of the CARES Act. 
Terms used in the preceding sentence which are also 
used in section 1106 of such Act shall have the same 
meaning as when used in such section. 
(e) AMENDMENT TO PAYCHECK PROTECTION PRO-
GRAM.—Section 1106(a)(8) of the CARES Act is amended 
by inserting ‘‘, except that such costs shall not include 
qualified wages taken into account in determining the 
credit allowed under section 4 of the Disaster Tax Relief 
Act of 2020’’ before the period at the end. 
SEC. 5. OTHER DISASTER-RELATED TAX RELIEF PROVI-
SIONS. 
(a) SPECIAL RULES FOR QUALIFIED DISASTER RE-
LIEF CONTRIBUTIONS.— 
(1) IN GENERAL.—In the case of a qualified 
disaster relief contribution made by a corporation— 
(A) section 2205(a)(2)(B) of the CARES 
Act shall be applied first to qualified contribu-
tions without regard to any qualified disaster 
relief contributions and then separately to such 
qualified disaster relief contribution, and 
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(B) in applying such section to such quali-
fied disaster relief contributions, clause (i) 
thereof shall be applied— 
(i) by substituting ‘‘100 percent’’ for 
‘‘25 percent’’, and 
(ii) by treating qualified contributions 
other than qualified disaster relief con-
tributions as contributions allowed under 
section 170(b)(2) of the Internal Revenue 
Code of 1986. 
(2) QUALIFIED
DISASTER
RELIEF
CONTRIBU-
TION.—For purposes of this subsection, the term 
‘‘qualified disaster relief contribution’’ means any 
qualified 
contribution 
(as 
defined 
in 
section 
2205(a)(3) of the CARES Act) if— 
(A) such contribution— 
(i) is paid, during the period begin-
ning on December 28, 2019, and ending 
on the date which is 60 days after the date 
of the enactment of this Act, and 
(ii) is made for relief efforts in one or 
more qualified disaster areas, 
(B) the taxpayer obtains from such organi-
zation contemporaneous written acknowledg-
ment (within the meaning of section 170(f)(8) 
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of such Code) that such contribution was used 
(or is to be used) for relief efforts described in 
subparagraph (A)(ii), and 
(C) the taxpayer has elected the applica-
tion of this subsection with respect to such con-
tribution. 
(3) CROSS-REFERENCE.—For the suspension of 
the limitation on qualified disaster relief contribu-
tions made by an individual during 2020, see section 
2205(a) of the CARES Act. 
(b) SPECIAL RULES FOR QUALIFIED DISASTER-RE-
LATED PERSONAL CASUALTY LOSSES.— 
(1) IN GENERAL.—If an individual has a net 
disaster loss for any taxable year— 
(A) the amount determined under section 
165(h)(2)(A)(ii) of the Internal Revenue Code 
of 1986 shall be equal to the sum of— 
(i) such net disaster loss, and 
(ii) so much of the excess referred to 
in the matter preceding clause (i) of sec-
tion 165(h)(2)(A) of such Code (reduced 
by the amount in clause (i) of this sub-
paragraph) as exceeds 10 percent of the 
adjusted gross income of the individual, 
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(B) in the case of qualified disaster-related 
personal casualty losses, section 165(h)(1) of 
such Code shall be applied to by substituting 
‘‘$500’’ for ‘‘$500 ($100 for taxable years be-
ginning after December 31, 2009)’’, 
(C) the standard deduction determined 
under section 63(c) of such Code shall be in-
creased by the net disaster loss, and 
(D) section 56(b)(1)(E) of such Code shall 
not apply to so much of the standard deduction 
as is attributable to the increase under sub-
paragraph (C) of this paragraph. 
(2) NET DISASTER LOSS.—For purposes of this 
subsection, the term ‘‘net disaster loss’’ means the 
excess of qualified disaster-related personal casualty 
losses over personal casualty gains (as defined in 
section 165(h)(3)(A) of the Internal Revenue Code 
of 1986). 
(3) QUALIFIED DISASTER-RELATED PERSONAL 
CASUALTY
LOSSES.—For purposes of this sub-
section, the term ‘‘qualified disaster-related personal 
casualty losses’’ means losses described in section 
165(c)(3) of the Internal Revenue Code of 1986 
which arise in a qualified disaster area on or after 
the first day of the incident period of the qualified 
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disaster to which such area relates, and which are 
attributable to such qualified disaster. 
(c) TEMPORARY SPECIAL RULE FOR DETERMINING 
EARNED INCOME FOR TAXPAYERS WHOSE INCOME WAS 
AFFECTED BY COVID–19 DISASTER.— 
(1) IN GENERAL.—If the earned income of the 
taxpayer for the taxpayer’s first taxable year begin-
ning in 2020 is less than the earned income of the 
taxpayer for the preceding taxable year, the credits 
allowed under sections 24(d) and 32 of the Internal 
Revenue Code of 1986 may, at the election of the 
taxpayer, be determined by substituting— 
(A) such earned income for the preceding 
taxable year, for 
(B) such earned income for the taxpayer’s 
first taxable year beginning in 2020. 
(2) EARNED INCOME.— 
(A) IN GENERAL.—For purposes of this 
section, the term ‘‘earned income’’ has the 
meaning given such term under section 32(c) of 
the Internal Revenue Code of 1986. 
(B) APPLICATION TO JOINT RETURNS.— 
For purposes of subsection (a), in the case of 
a joint return, the earned income of the tax-
payer for the preceding taxable year shall be 
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the sum of the earned income of each spouse 
for such preceding taxable year. 
(3) SPECIAL RULES.— 
(A) ERRORS TREATED AS MATHEMATICAL 
ERROR.—For purposes of section 6213 of the 
Internal Revenue Code of 1986, an incorrect 
use on a return of earned income pursuant to 
subsection (a) shall be treated as a mathe-
matical or clerical error. 
(B) NO EFFECT ON DETERMINATION OF 
GROSS INCOME, ETC.—Except as otherwise pro-
vided in this subsection, the Internal Revenue 
Code of 1986 shall be applied without regard to 
any substitution under subsection (a). 
SEC. 6. TREATMENT OF CERTAIN POSSESSIONS. 
(a) PAYMENTS
TO POSSESSIONS WITH MIRROR 
CODE TAX SYSTEMS.—The Secretary of the Treasury 
shall pay to each possession of the United States which 
has a mirror code tax system amounts equal to the loss 
(if any) to that possession by reason of the application 
of the provisions of this Act. Such amounts shall be deter-
mined by the Secretary of the Treasury based on informa-
tion provided by the government of the respective posses-
sion. 
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as a refund due from a credit provision referred to in sub-
section (b)(2) of such section. 
Æ 
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