† HR 1 EAS 
(L) Section 125(i)(2)(B). 
(M) Section 135(b)(2)(B)(ii). 
(N) Section 137(f)(2). 
(O) Section 146(d)(2)(B). 
(P) Section 147(c)(2)(H)(ii). 
(Q) Section 151(d)(4)(B). 
(R) Section 179(b)(6)(A)(ii). 
(S) 
Subsections 
(b)(5)(C)(i)(II) 
and 
(g)(8)(B) of section 219. 
(T) Section 220(g)(2). 
(U) Section 221(f)(1)(B). 
(V) Section 223(g)(1)(B). 
(W) Section 408A(c)(3)(D)(ii). 
(X) Section 430(c)(7)(D)(vii)(II). 
(Y) Section 512(d)(2)(B). 
(Z) Section 513(h)(2)(C)(ii). 
(AA) Section 831(b)(2)(D)(ii). 
(BB) Section 877A(a)(3)(B)(i)(II). 
(CC) Section 2010(c)(3)(B)(ii). 
(DD) Section 2032A(a)(3)(B). 
(EE) Section 2503(b)(2)(B). 
(FF) Section 4261(e)(4)(A)(ii). 
(GG) Section 5000A(c)(3)(D)(ii). 
(HH) Section 6323(i)(4)(B). 
(II) Section 6334(g)(1)(B).
† HR 1 EAS 
(JJ) Section 6601(j)(3)(B). 
(KK) Section 6651(i)(1). 
(LL) Section 6652(c)(7)(A). 
(MM) Section 6695(h)(1). 
(NN) Section 6698(e)(1). 
(OO) Section 6699(e)(1). 
(PP) Section 6721(f)(1). 
(QQ) Section 6722(f)(1). 
(RR) Section 7345(f)(2). 
(SS) Section 7430(c)(1). 
(TT) Section 9831(d)(2)(D)(ii)(II). 
(2) Sections 41(e)(5)(C)(ii) and 68(b)(2)(B) are 
each amended— 
(A) by striking ‘‘1(f)(3)(B)’’ and inserting 
‘‘1(f)(3)(A)(ii)’’, and 
(B) by striking ‘‘1992’’ and inserting 
‘‘2016’’. 
(3) Section 42(h)(6)(G) is amended— 
(A) by striking ‘‘for ‘calendar year 1987’ ’’ 
in clause (i)(II) and inserting ‘‘for ‘calendar 
year 2016’ in subparagraph (A)(ii) thereof’’, and 
(B) by striking ‘‘if the CPI for any cal-
endar year’’ and all that follows in clause (ii) 
and inserting ‘‘if the C–CPI–U for any calendar 
year (as defined in section 1(f)(6)) exceeds the
† HR 1 EAS 
C–CPI–U for the preceding calendar year by 
more than 5 percent, the C–CPI–U for the base 
calendar year shall be increased such that such 
excess shall never be taken into account under 
clause (i). In the case of a base calendar year be-
fore 2017, the C–CPI–U for such year shall be 
determined by multiplying the CPI for such year 
by 
the 
amount 
determined 
under 
section 
1(f)(3)(B).’’. 
(4) Section 59(j)(2)(B) is amended by striking 
‘‘for ‘1992’ in subparagraph (B)’’ and inserting ‘‘for 
‘2016’ in subparagraph (A)(ii)’’. 
(5) Section 132(f)(6)(A)(ii) is amended by strik-
ing ‘‘for ‘calendar year 1992’ ’’ and inserting ‘‘for 
‘calendar year 2016’ in subparagraph (A)(ii) there-
of’’. 
(6) Section 162(o)(3) is amended by striking 
‘‘adjusted for changes in the Consumer Price Index 
(as defined in section 1(f)(5)) since 1991’’ and insert-
ing ‘‘adjusted by increasing any such amount under 
the 1991 agreement by an amount equal to— 
‘‘(A) such amount, multiplied by 
‘‘(B) the cost-of-living adjustment deter-
mined under section 1(f)(3) for the calendar year 
in which the taxable year begins, by substituting
† HR 1 EAS 
‘calendar year 1990’ for ‘calendar year 2016’ in 
subparagraph (A)(ii) thereof’’. 
(7) 
So 
much 
of 
clause 
(ii) 
of 
section 
213(d)(10)(B) as precedes the last sentence is amend-
ed to read as follows: 
‘‘(ii) MEDICAL
CARE
COST
ADJUST-
MENT.—For purposes of clause (i), the med-
ical care cost adjustment for any calendar 
year is the percentage (if any) by which— 
‘‘(I) the medical care component 
of the C–CPI–U (as defined in section 
1(f)(6)) for August of the preceding cal-
endar year, exceeds 
‘‘(II) such component of the CPI 
(as defined in section 1(f)(4)) for Au-
gust of 1996, multiplied by the amount 
determined under section 1(f)(3)(B).’’. 
(8) Subparagraph (B) of section 280F(d)(7) is 
amended to read as follows: 
‘‘(B) AUTOMOBILE
PRICE
INFLATION
AD-
JUSTMENT.—For purposes of this paragraph— 
‘‘(i) IN
GENERAL.—The automobile 
price inflation adjustment for any calendar 
year is the percentage (if any) by which—
† HR 1 EAS 
‘‘(I) the C–CPI–U automobile 
component for October of the preceding 
calendar year, exceeds 
‘‘(II) the automobile component of 
the CPI (as defined in section 1(f)(4)) 
for October of 1987, multiplied by the 
amount determined under 1(f)(3)(B). 
‘‘(ii) C–CPI–U AUTOMOBILE
COMPO-
NENT.—The term ‘C–CPI–U automobile 
component’ means the automobile compo-
nent of the Chained Consumer Price Index 
for All Urban Consumers (as described in 
section 1(f)(6)).’’. 
(9) Section 911(b)(2)(D)(ii)(II) is amended by 
striking ‘‘for ‘1992’ in subparagraph (B)’’ and insert-
ing ‘‘for ‘2016’ in subparagraph (A)(ii)’’. 
(10) Paragraph (2) of section 1274A(d) is 
amended to read as follows: 
‘‘(2) ADJUSTMENT FOR INFLATION.—In the case 
of any debt instrument arising out of a sale or ex-
change during any calendar year after 1989, each 
dollar amount contained in the preceding provisions 
of this section shall be increased by an amount equal 
to— 
‘‘(A) such amount, multiplied by
† HR 1 EAS 
‘‘(B) the cost-of-living adjustment deter-
mined under section 1(f)(3) for the calendar year 
in which the taxable year begins, by substituting 
‘calendar year 1988’ for ‘calendar year 2016’ in 
subparagraph (A)(ii) thereof. 
Any increase under the preceding sentence shall be 
rounded to the nearest multiple of $100 (or, if such 
increase is a multiple of $50, such increase shall be 
increased to the nearest multiple of $100).’’. 
(11) Section 4161(b)(2)(C)(i)(II) is amended by 
striking ‘‘for ‘1992’ in subparagraph (B)’’ and insert-
ing ‘‘for ‘2016’ in subparagraph (A)(ii)’’. 
(12) Section 4980I(b)(3)(C)(v)(II) is amended by 
striking ‘‘for ‘1992’ in subparagraph (B)’’ and insert-
ing ‘‘for ‘2016’ in subparagraph (A)(ii)’’. 
(13) Section 6039F(d) is amended by striking 
‘‘subparagraph (B) thereof shall be applied by sub-
stituting ‘1995’ for ‘1992’ ’’ and inserting ‘‘subpara-
graph (A)(ii) thereof shall be applied by substituting 
‘1995’ for ‘2016’ ’’. 
(14) Section 7872(g)(5) is amended to read as 
follows: 
‘‘(5) ADJUSTMENT OF LIMIT FOR INFLATION.—In 
the case of any loan made during any calendar year
† HR 1 EAS 
after 1986, the dollar amount in paragraph (2) shall 
be increased by an amount equal to— 
‘‘(A) such amount, multiplied by 
‘‘(B) the cost-of-living adjustment deter-
mined under section 1(f)(3) for the calendar year 
in which the taxable year begins, by substituting 
‘calendar year 1985’ for ‘calendar year 2016’ in 
subparagraph (A)(ii) thereof. 
Any increase under the preceding sentence shall be 
rounded to the nearest multiple of $100 (or, if such 
increase is a multiple of $50, such increase shall be 
increased to the nearest multiple of $100).’’. 
(e) EFFECTIVE DATE.—The amendments made by this 
section shall apply to taxable years beginning after Decem-
ber 31, 2017. 
PART II—DEDUCTION FOR QUALIFIED BUSINESS 
INCOME OF PASS-THRU ENTITIES 
SEC. 11011. DEDUCTION FOR QUALIFIED BUSINESS IN-
COME. 
(a) IN GENERAL.—Part VI of subchapter B of chapter 
1 is amended by adding at the end the following new sec-
tion:
† HR 1 EAS 
‘‘SEC. 199A. QUALIFIED BUSINESS INCOME. 
‘‘(a) IN GENERAL.—In the case of a taxpayer other 
than a corporation, there shall be allowed as a deduction 
for any taxable year an amount equal to the lesser of— 
‘‘(1) the combined qualified business income 
amount of the taxpayer, or 
‘‘(2) an amount equal to 23 percent of the excess 
(if any) of— 
‘‘(A) the taxable income of the taxpayer for 
the taxable year, over 
‘‘(B) any net capital gain (as defined in 
section 1(h)) of the taxpayer for the taxable year. 
‘‘(b) 
COMBINED
QUALIFIED
BUSINESS
INCOME 
AMOUNT.—For purposes of this section— 
‘‘(1) IN GENERAL.—The term ‘combined quali-
fied business income amount’ means, with respect to 
any taxable year, an amount equal to— 
‘‘(A) the sum of the amounts determined 
under paragraph (2) for each qualified trade or 
business carried on by the taxpayer, plus 
‘‘(B) 23 percent of the aggregate amount of 
the qualified REIT dividends and qualified coop-
erative dividends of the taxpayer for the taxable 
year. 
‘‘(2) DETERMINATION OF DEDUCTIBLE AMOUNT 
FOR EACH TRADE OR BUSINESS.—The amount deter-
† HR 1 EAS 
mined under this paragraph with respect to any 
qualified trade or business is the lesser of— 
‘‘(A) 23 percent of the taxpayer’s qualified 
business income with respect to the qualified 
trade or business, or 
‘‘(B) 50 percent of the W–2 wages with re-
spect to the qualified trade or business. 
‘‘(3) MODIFICATIONS TO THE WAGE LIMIT BASED 
ON TAXABLE INCOME.— 
‘‘(A) EXCEPTION
FROM
WAGE
LIMIT.—In 
the case of any taxpayer whose taxable income 
for the taxable year does not exceed the threshold 
amount, paragraph (2) shall be applied without 
regard to subparagraph (B). 
‘‘(B) PHASE-IN OF LIMIT FOR CERTAIN TAX-
PAYERS.— 
‘‘(i) IN GENERAL.—If— 
‘‘(I) the taxable income of a tax-
payer for any taxable year exceeds the 
threshold amount, but does not exceed 
the sum of the threshold amount plus 
$50,000 ($100,000 in the case of a 
joint return), and 
‘‘(II) 
the 
amount 
determined 
under paragraph (2)(B) (determined
† HR 1 EAS 
without regard to this subparagraph) 
with respect to any qualified trade or 
business carried on by the taxpayer is 
less than the amount determined under 
paragraph (2)(A) with respect such 
trade or business, 
then paragraph (2) shall be applied with re-
spect to such trade or business without re-
gard to subparagraph (B) thereof and by re-
ducing the amount determined under sub-
paragraph (A) thereof by the amount deter-
mined under clause (ii). 
‘‘(ii) AMOUNT
OF
REDUCTION.—The 
amount determined under this subpara-
graph is the amount which bears the same 
ratio to the excess amount as— 
‘‘(I) the amount by which the tax-
payer’s taxable income for the taxable 
year exceeds the threshold amount, 
bears to 
‘‘(II) $50,000 ($100,000 in the 
case of a joint return). 
‘‘(iii) EXCESS AMOUNT.—For purposes 
of clause (ii), the excess amount is the excess 
of—
† HR 1 EAS 
‘‘(I) the amount determined under 
paragraph (2)(A) (determined without 
regard to this paragraph), over 
‘‘(II) 
the 
amount 
determined 
under paragraph (2)(B) (determined 
without regard to this paragraph). 
‘‘(4) WAGES, ETC.— 
‘‘(A) IN GENERAL.—The term ‘W–2 wages’ 
means, with respect to any person for any tax-
able year of such person, the amounts described 
in paragraphs (3) and (8) of section 6051(a) 
paid by such person with respect to employment 
of employees by such person during the calendar 
year ending during such taxable year. 
‘‘(B) LIMITATION TO WAGES ATTRIBUTABLE 
TO
QUALIFIED
BUSINESS
INCOME.—Such term 
shall not include any amount which is not prop-
erly allocable to qualified business income for 
purposes of subsection (c)(1). 
‘‘(C) RETURN
REQUIREMENT.—Such term 
shall not include any amount which is not prop-
erly included in a return filed with the Social 
Security Administration on or before the 60th 
day after the due date (including extensions) for 
such return.
† HR 1 EAS 
‘‘(5) ACQUISITIONS, DISPOSITIONS, AND SHORT 
TAXABLE YEARS.—The Secretary shall provide for the 
application of this subsection in cases of a short tax-
able year or where the taxpayer acquires, or disposes 
of, the major portion of a trade or business or the 
major portion of a separate unit of a trade or busi-
ness during the taxable year. 
‘‘(c) QUALIFIED BUSINESS INCOME.—For purposes of 
this section— 
‘‘(1) IN GENERAL.—The term ‘qualified business 
income’ means, for any taxable year, the net amount 
of qualified items of income, gain, deduction, and loss 
with respect to any qualified trade or business of the 
taxpayer. 
‘‘(2) CARRYOVER OF LOSSES.—If the net amount 
of qualified income, gain, deduction, and loss with re-
spect to qualified trade or businesses of the taxpayer 
amount for any taxable year is less than zero, such 
amount shall be treated as a loss from a qualified 
trade or business in the succeeding taxable year. 
‘‘(3) QUALIFIED ITEMS OF INCOME, GAIN, DE-
DUCTION, AND
LOSS.—For purposes of this sub-
section— 
‘‘(A) IN
GENERAL.—The term ‘qualified 
items of income, gain, deduction, and loss’
† HR 1 EAS 
means items of income, gain, deduction, and loss 
to the extent such items are— 
‘‘(i) effectively connected with the con-
duct of a trade or business within the 
United States (within the meaning of sec-
tion 864(c), determined by substituting 
‘qualified trade or business (within the 
meaning of section 199A)’ for ‘nonresident 
alien individual or a foreign corporation’ or 
for ‘a foreign corporation’ each place it ap-
pears), and 
‘‘(ii) included or allowed in deter-
mining taxable income for the taxable year. 
‘‘(B) EXCEPTIONS.—The following invest-
ment items shall not be taken into account as a 
qualified item of income, gain, deduction, or loss: 
‘‘(i) Any item of short-term capital 
gain, short-term capital loss, long-term cap-
ital gain, or long-term capital loss. 
‘‘(ii) Any dividend, income equivalent 
to a dividend, or payment in lieu of divi-
dends described in section 954(c)(1)(G). 
‘‘(iii) Any interest income other than 
interest income which is properly allocable 
to a trade or business.
† HR 1 EAS 
‘‘(iv) Any item of gain or loss de-
scribed in subparagraph (C) or (D) of sec-
tion 954(c)(1) (applied by substituting 
‘qualified trade or business’ for ‘controlled 
foreign corporation’). 
‘‘(v) Any item of income, gain, deduc-
tion, or loss taken into account under sec-
tion 954(c)(1)(F) (determined without re-
gard to clause (ii) thereof and other than 
items attributable to notional principal con-
tracts entered into in transactions quali-
fying under section 1221(a)(7)). 
‘‘(vi) Any amount received from an 
annuity which is not received in connection 
with the trade or business. 
‘‘(vii) Any item of deduction or loss 
properly allocable to an amount described 
in any of the preceding clauses. 
‘‘(4) TREATMENT
OF
REASONABLE
COMPENSA-
TION AND GUARANTEED PAYMENTS.—Qualified busi-
ness income shall not include— 
‘‘(A) reasonable compensation paid to the 
taxpayer by any qualified trade or business of 
the taxpayer for services rendered with respect to 
the trade or business,
† HR 1 EAS 
‘‘(B) any guaranteed payment described in 
section 707(c) paid to a partner for services ren-
dered with respect to the trade or business, and 
‘‘(C) to the extent provided in regulations, 
any payment described in section 707(a) to a 
partner for services rendered with respect to the 
trade or business. 
‘‘(d) QUALIFIED TRADE OR BUSINESS.—For purposes 
of this section— 
‘‘(1) IN GENERAL.—The term ‘qualified trade or 
business’ means any trade or business other than a 
specified service trade or business or the trade or busi-
ness of performing services as an employee. 
‘‘(2) SPECIFIED SERVICE TRADE OR BUSINESS.— 
The term ‘specified service trade or business’ means 
any trade or business involving the performance of 
services described in section 1202(e)(3)(A), including 
investing and investment management, trading, or 
dealing in securities (as defined in section 475(c)(2)), 
partnership interests, or commodities (as defined in 
section 475(e)(2)). 
‘‘(3) EXCEPTION FOR SPECIFIED SERVICE BUSI-
NESSES BASED ON TAXPAYER’S INCOME.— 
‘‘(A) IN
GENERAL.—If, for any taxable 
year, the taxable income of any taxpayer is less
† HR 1 EAS 
than the sum of the threshold amount plus 
$50,000 ($100,000 in the case of a joint return), 
then— 
‘‘(i) the exception under paragraph (1) 
shall not apply to specified service trades or 
businesses of the taxpayer for the taxable 
year, but 
‘‘(ii) only the applicable percentage of 
qualified items of income, gain, deduction, 
or loss, and the W–2 wages, of the taxpayer 
allocable to such specified service trades or 
businesses shall be taken into account in 
computing the qualified business income 
and W–2 wages of the taxpayer for the tax-
able year for purposes of applying this sec-
tion. 
‘‘(B) APPLICABLE PERCENTAGE.—For pur-
poses of subparagraph (A), the term ‘applicable 
percentage’ means, with respect to any taxable 
year, 100 percent reduced (not below zero) by the 
percentage equal to the ratio of— 
‘‘(i) the taxable income of the taxpayer 
for the taxable year in excess of the thresh-
old amount, bears to
† HR 1 EAS 
‘‘(ii) $50,000 ($100,000 in the case of 
a joint return). 
‘‘(e) OTHER DEFINITIONS.—For purposes of this sec-
tion— 
‘‘(1) TAXABLE INCOME.—Taxable income shall be 
computed without regard to the deduction allowable 
under this section. 
‘‘(2) THRESHOLD AMOUNT.— 
‘‘(A) IN
GENERAL.—The term ‘threshold 
amount’ means $250,000 (200 percent of such 
amount in the case of a joint return). 
‘‘(B) INFLATION ADJUSTMENT.—In the case 
of any taxable year beginning after 2018, the 
dollar amount in paragraph (1) shall be in-
creased 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 2017’ for ‘calendar year 2016’ in sub-
paragraph (A)(ii) thereof. 
If any amount as increased under the preceding 
sentence is not a multiple of $1,000, such
† HR 1 EAS 
amount shall be rounded to the nearest multiple 
of $1,000. 
‘‘(3) QUALIFIED
REIT
DIVIDEND.—The term 
‘qualified REIT dividend’ means any dividend from 
a real estate investment trust received during the tax-
able year which— 
‘‘(A) is not a capital gain dividend, as de-
fined in section 857(b)(3), and 
‘‘(B) is not qualified dividend income, as 
defined in section 1(h)(11). 
‘‘(4) QUALIFIED COOPERATIVE DIVIDEND.—The 
term ‘qualified cooperative dividend’ means any pa-
tronage dividend (as defined in section 1388(a)), any 
per-unit retain allocation (as defined in section 
1388(f)), and any qualified written notice of alloca-
tion (as defined in section 1388(c)), or any similar 
amount received from an organization described in 
subparagraph (B)(ii), which— 
‘‘(A) is includible in gross income, and 
‘‘(B) is received from— 
‘‘(i) an organization or corporation de-
scribed in section 501(c)(12) or 1381(a), or 
‘‘(ii) an organization which is gov-
erned under this title by the rules applicable
† HR 1 EAS 
to cooperatives under this title before the en-
actment of subchapter T. 
‘‘(f) SPECIAL RULES.— 
‘‘(1) APPLICATION TO PARTNERSHIPS AND S COR-
PORATIONS.— 
‘‘(A) IN GENERAL.—In the case of a part-
nership or S corporation— 
‘‘(i) this section shall be applied at the 
partner or shareholder level, 
‘‘(ii) each partner or shareholder shall 
take into account such person’s allocable 
share of each qualified item of income, gain, 
deduction, and loss, and 
‘‘(iii) each partner or shareholder shall 
be treated for purposes of subsection (b) as 
having W–2 wages for the taxable year in 
an amount equal to such person’s allocable 
share of the W–2 wages of the partnership 
or S corporation for the taxable year (as de-
termined under regulations prescribed by 
the Secretary). 
For purposes of clause (iii), a partner’s or share-
holder’s allocable share of W–2 wages shall be de-
termined in the same manner as the partner’s or 
shareholder’s allocable share of wage expenses.
† HR 1 EAS 
For purposes of this subparagraph, in the case of 
an S corporation, an allocable share shall be the 
shareholder’s pro rata share of an item. 
‘‘(B) APPLICATION
TO
TRUSTS
AND
ES-
TATES.—This section shall not apply to any 
trust or estate. 
‘‘(C) TREATMENT OF TRADES OR BUSINESS 
IN PUERTO RICO.— 
‘‘(i) IN GENERAL.—In the case of any 
taxpayer with qualified business income 
from sources within the commonwealth of 
Puerto Rico, if all such income is taxable 
under section 1 for such taxable year, then 
for purposes of determining the qualified 
business income of such taxpayer for such 
taxable year, the term ‘United States’ shall 
include the Commonwealth of Puerto Rico. 
‘‘(ii) SPECIAL
RULE
FOR
APPLYING 
WAGE LIMITATION.—In the case of any tax-
payer described in clause (i), the determina-
tion of W–2 wages of such taxpayer with re-
spect to any qualified trade or business con-
ducted in Puerto Rico shall be made with-
out regard to any exclusion under section
† HR 1 EAS 
3401(a)(8) for remuneration paid for serv-
ices in Puerto Rico. 
‘‘(2) COORDINATION WITH MINIMUM TAX.—For 
purposes of determining alternative minimum taxable 
income under section 55, qualified business income 
shall be determined without regard to any adjust-
ments under sections 56 through 59. 
‘‘(3) DEDUCTION LIMITED TO INCOME TAXES.— 
The deduction under subsection (a) shall only be al-
lowed for purposes of this chapter. 
‘‘(4) REGULATIONS.—The Secretary shall pre-
scribe such regulations as are necessary to carry out 
the purposes of this section, including regulations— 
‘‘(A) for requiring or restricting the alloca-
tion of items and wages under this section and 
such reporting requirements as the Secretary de-
termines appropriate, and 
‘‘(B) for the application of this section in 
the case of tiered entities. 
‘‘(g) DEDUCTION ALLOWED TO SPECIFIED AGRICUL-
TURAL OR HORTICULTURAL COOPERATIVES.— 
‘‘(1) IN GENERAL.—In the case of any taxable 
year of a specified agricultural or horticultural coop-
erative beginning after December 31, 2018, there shall
† HR 1 EAS 
be allowed a deduction in an amount equal to the 
lesser of— 
‘‘(A) 23 percent of the cooperative’s taxable 
income for the taxable year, or 
‘‘(B) 50 percent of the W–2 wages of the co-
operative with respect to its trade or business. 
‘‘(2) SPECIFIED
AGRICULTURAL
OR
HORTI-
CULTURAL COOPERATIVE.—For purposes of this sub-
section, the term ‘specified agricultural or horti-
cultural cooperative’ means an organization to which 
part I of subchapter T applies which is engaged in— 
‘‘(A) 
the 
manufacturing, 
production, 
growth, or extraction in whole or significant 
part of any agricultural or horticultural prod-
uct, 
‘‘(B) the marketing of agricultural or horti-
cultural products which its patrons have so man-
ufactured, produced, grown, or extracted, or 
‘‘(C) the provision of supplies, equipment, 
or services to farmers or to organizations de-
scribed in subparagraph (A) or (B). 
‘‘(h) TERMINATION.—This section shall not apply to 
taxable years beginning after December 31, 2025.’’. 
(b) APPLICATION TO PUBLICLY TRADED PARTNER-
SHIPS.—
† HR 1 EAS 
(1) IN
GENERAL.—Section 199A(b)(1)(B), as 
added by subsection (a), is amended by striking ‘‘and 
qualified cooperative dividends’’ and inserting ‘‘, 
qualified cooperative dividends, and qualified pub-
licly traded partnership income’’. 
(2) QUALIFIED PUBLICLY TRADED PARTNERSHIP 
INCOME.—Section 199A(e), as added by subsection 
(a), is amended by adding at the end the following 
new paragraph: 
‘‘(5) QUALIFIED
PUBLICLY
TRADED
PARTNER-
SHIP INCOME.—The term ‘qualified publicly traded 
partnership income’ means, with respect to any quali-
fied trade or business of a taxpayer, the sum of— 
‘‘(A) the net amount of such taxpayer’s allo-
cable share of each qualified item of income, 
gain, deduction, and loss (as defined in sub-
section (c)(3) and determined after the applica-
tion of subsection (c)(4)) from a publicly traded 
partnership (as defined in section 7704(a)) 
which is not treated as a corporation under sec-
tion 7704(c), plus 
‘‘(B) any gain recognized by such taxpayer 
upon disposition of its interest in such partner-
ship to the extent such gain is treated as an 
amount realized from the sale or exchange of
† HR 1 EAS 
property other than a capital asset under section 
751(a).’’. 
(3) 
CONFORMING
AMENDMENT.—Section 
199A(c)(1), as added by subsection (a), is amended by 
adding at the end the following new sentence: ‘‘Such 
term shall not include any qualified publicly traded 
partnership income.’’. 
(c) ACCURACY-RELATED PENALTY ON DETERMINATION 
OF
APPLICABLE
PERCENTAGE.—Section 6662(d)(1) is 
amended by inserting at the end the following new subpara-
graph: 
‘‘(C) SPECIAL RULE FOR TAXPAYERS CLAIM-
ING SECTION 199A DEDUCTION.—In the case of 
any taxpayer who claims the deduction allowed 
under section 199A for the taxable year, sub-
paragraph (A) shall be applied by substituting ‘5 
percent’ for ‘10 percent’.’’. 
(d) CONFORMING AMENDMENTS.— 
(1) Section 170(b)(2)(D) is amended by striking 
‘‘, and’’ at the end of clause (iv), by redesignating 
clause (v) as clause (vi), and by inserting after clause 
(iv) the following new clause: 
‘‘(v) section 199A, and’’. 
(2) Section 172(d) is amended by adding at the 
end the following new paragraph:
† HR 1 EAS 
‘‘(8) QUALIFIED
BUSINESS
INCOME
DEDUC-
TION.—The deduction under section 199A shall not be 
allowed.’’. 
(3) Section 246(b)(1) is amended by inserting 
‘‘199A,’’ before ‘‘243(a)(1)’’. 
(4) Section 613(a) is amended by inserting ‘‘and 
without the deduction under section 199A’’ after ‘‘and 
without the deduction under section 199’’. 
(5) Section 613A(d)(1) is amended by redesig-
nating subparagraphs (C), (D), and (E) as subpara-
graphs (D), (E), and (F), respectively, and by insert-
ing after subparagraph (B), the following new sub-
paragraph: 
‘‘(C) any deduction allowable under section 
199A,’’. 
(6) The table of sections for part VI of sub-
chapter B of chapter 1 is amended by inserting at the 
end the following new item: 
‘‘Sec. 199A. Qualified business income.’’. 
(e) EFFECTIVE DATE.—The amendments made by this 
section shall apply to taxable years beginning after Decem-
ber 31, 2017. 
SEC. 11012. LIMITATION ON LOSSES FOR TAXPAYERS 
OTHER THAN CORPORATIONS. 
(a) IN GENERAL.—Section 461 is amended by adding 
at the end the following new subsection:
† HR 1 EAS 
‘‘(l) LIMITATION ON EXCESS BUSINESS LOSSES OF 
NONCORPORATE TAXPAYERS.— 
‘‘(1) LIMITATION.—In the case of taxable year of 
a taxpayer other than a corporation beginning after 
December 31, 2017, and before January 1, 2026— 
‘‘(A) subsection (j) (relating to limitation 
on excess farm losses of certain taxpayers) shall 
not apply, and 
‘‘(B) any excess business loss of the tax-
payer for the taxable year shall not be allowed. 
‘‘(2) DISALLOWED LOSS CARRYOVER.—Any loss 
which is disallowed under paragraph (1) shall be 
treated as a net operating loss carryover to the fol-
lowing taxable year under section 172. 
‘‘(3) EXCESS BUSINESS LOSS.—For purposes of 
this subsection— 
‘‘(A) IN GENERAL.—The term ‘excess busi-
ness loss’ means the excess (if any) of— 
‘‘(i) the aggregate deductions of the 
taxpayer for the taxable year which are at-
tributable to trades or businesses of such 
taxpayer (determined without regard to 
whether or not such deductions are dis-
allowed for such taxable year under para-
graph (1)), over
† HR 1 EAS 
‘‘(ii) the sum of— 
‘‘(I) the aggregate gross income or 
gain of such taxpayer for the taxable 
year which is attributable to such 
trades or businesses, plus 
‘‘(II) $250,000 (200 percent of 
such amount in the case of a joint re-
turn). 
‘‘(B) ADJUSTMENT FOR INFLATION.—In the 
case of any taxable year beginning after Decem-
ber 31, 2018, the $250,000 amount in subpara-
graph (A)(ii)(II) 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 ‘2017’ for 
‘2016’ in subparagraph (A)(ii) thereof. 
If any amount as increased under the pre-
ceding sentence is not a multiple of $1,000, 
such amount shall be rounded to the nearest 
multiple of $1,000.
† HR 1 EAS 
‘‘(4) APPLICATION OF SUBSECTION IN CASE OF 
PARTNERSHIPS AND S CORPORATIONS.—In the case of 
a partnership or S corporation— 
‘‘(A) this subsection shall be applied at the 
partner or shareholder level, and 
‘‘(B) each partner’s or shareholder’s allo-
cable share of the items of income, gain, deduc-
tion, or loss of the partnership or S corporation 
for any taxable year from trades or businesses 
attributable to the partnership or S corporation 
shall be taken into account by the partner or 
shareholder in applying this subsection to the 
taxable year of such partner or shareholder with 
or within which the taxable year of the partner-
ship or S corporation ends. 
For purposes of this paragraph, in the case of an S 
corporation, an allocable share shall be the share-
holder’s pro rata share of an item. 
‘‘(5) ADDITIONAL
REPORTING.—The Secretary 
shall prescribe such additional reporting requirements 
as the Secretary determines appropriate to carry out 
the purposes of this subsection. 
‘‘(6) COORDINATION
WITH
SECTION
469.—This 
subsection shall be applied after the application of 
section 469.’’.
† HR 1 EAS 
(b) EFFECTIVE DATE.—The amendments made by this 
section shall apply to taxable years beginning after Decem-
ber 31, 2017. 
PART III—TAX BENEFITS FOR FAMILIES AND 
INDIVIDUALS 
SEC. 11021. INCREASE IN STANDARD DEDUCTION. 
(a) IN GENERAL.—Subsection (c) of section 63 is 
amended by adding at the end the following new paragraph: 
‘‘(7) SPECIAL RULES FOR TAXABLE YEARS 2018 
THROUGH 2025.—In the case of a taxable year begin-
ning after December 31, 2017, and before January 1, 
2026— 
‘‘(A) INCREASE
IN
STANDARD
DEDUC-
TION.—Paragraph (2) shall be applied— 
‘‘(i) by substituting ‘$18,000’ for 
‘$4,400’ in subparagraph (B), and 
‘‘(ii) by substituting ‘$12,000’ for 
‘$3,000’ in subparagraph (C). 
‘‘(B) ADJUSTMENT FOR INFLATION.— 
‘‘(i) IN
GENERAL.—Paragraph (4) 
shall not apply to the dollar amounts con-
tained in paragraphs (2)(B) and (2)(C). 
‘‘(ii) 
ADJUSTMENT
OF
INCREASED 
AMOUNTS.—In the case of a taxable year be-
ginning after 2018, the $18,000 and
† HR 1 EAS 
$12,000 amounts in subparagraph (A) shall 
each be increased by an amount equal to— 
‘‘(I) such dollar amount, multi-
plied by 
‘‘(II) the cost-of-living adjustment 
determined under section 1(f)(3) for 
the calendar year in which the taxable 
year begins, determined by substituting 
‘2017’ for ‘2016’ in subparagraph 
(A)(ii) thereof.’’. 
(b) EFFECTIVE DATE.—The amendment made by this 
section shall apply to taxable years beginning after Decem-
ber 31, 2017. 
SEC. 11022. INCREASE IN AND MODIFICATION OF CHILD 
TAX CREDIT. 
(a) IN GENERAL.—Section 24 is amended by adding 
at the end the following new subsection: 
‘‘(h) SPECIAL RULES
FOR TAXABLE YEARS 2018 
THROUGH 2025.— 
‘‘(1) IN GENERAL.—In the case of a taxable year 
beginning after December 31, 2017, and before Janu-
ary 1, 2026, this section shall be applied as provided 
in paragraphs (2), (3), (5), (6), (7), and (8). In the 
case of taxable year beginning after December 31,
† HR 1 EAS 
2017 and before January 1, 2025, this section shall 
be applied as provided in paragraph (4). 
‘‘(2) CREDIT AMOUNT.—Subsection (a) shall be 
applied by substituting ‘$2,000’ for ‘$1,000’. 
‘‘(3) LIMITATION.—In lieu of the amount deter-
mined under subsection (b)(2), the threshold amount 
shall be $500,000. 
‘‘(4) DEFINITION OF QUALIFYING CHILD.—Para-
graph (1) of subsection (c) shall be applied by sub-
stituting ‘18’ for ‘17’. 
‘‘(5) PARTIAL CREDIT ALLOWED FOR CERTAIN 
OTHER DEPENDENTS.— 
‘‘(A) IN GENERAL.—The credit determined 
under subsection (a) (after the application of 
paragraph (2)) shall be increased by $500 for 
each dependent of the taxpayer (as defined in 
section 152) other than a qualifying child de-
scribed in subsection (c) (after the application of 
paragraph (4)). 
‘‘(B) EXCEPTION
FOR
CERTAIN
NONCITI-
ZENS.—Subparagraph (A) shall not apply with 
respect to any individual who would not be a de-
pendent if subparagraph (A) of section 152(b)(3) 
were applied without regard to all that follows 
‘resident of the United States’.
† HR 1 EAS 
‘‘(6) MAXIMUM AMOUNT OF REFUNDABLE CRED-
IT.— 
‘‘(A) IN
GENERAL.—Subsection (d)(1)(A) 
shall be applied without regard to paragraphs 
(2) and (5) of this subsection. 
‘‘(B) ADJUSTMENT FOR INFLATION.—In the 
case of a taxable year beginning after 2017, sub-
section (d)(1)(A) shall be applied as if the $1,000 
amount in subsection (a) were increased (but not 
to exceed the amount under paragraph (2) of this 
subsection) 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. 
Any increase determined under the preceding 
sentence shall be rounded to the next highest 
multiple of $100. 
‘‘(7) EARNED INCOME THRESHOLD FOR REFUND-
ABLE CREDIT.—Subsection (d)(1)(B)(i) shall be ap-
plied by substituting ‘$2,500’ for ‘$3,000’. 
‘‘(8) SOCIAL SECURITY NUMBER REQUIRED.—No 
credit shall be allowed under subsection (d) to a tax-
payer with respect to any qualifying child unless the
† HR 1 EAS 
taxpayer includes the social security number of such 
child on the return of tax for the taxable year. For 
purposes of the preceding sentence, the term ‘social se-
curity number’ means a social security number issued 
to an individual by the Social Security Administra-
tion, but only if the social security number is issued 
to a citizen of the United States or is issued pursuant 
to subclause (I) (or that portion of subclause (III) 
that relates to subclause (I)) of section 205(c)(2)(B)(i) 
of the Social Security Act.’’. 
(b) EFFECTIVE DATE.—The amendment made by this 
section shall apply to taxable years beginning after Decem-
ber 31, 2017. 
SEC. 11023. INCREASED LIMITATION FOR CERTAIN CHARI-
TABLE CONTRIBUTIONS. 
(a) IN GENERAL.—Section 170(b)(1) is amended by 
redesignating subparagraph (G) as subparagraph (H) and 
by inserting after subparagraph (F) the following new sub-
paragraph: 
‘‘(G) INCREASED
LIMITATION
FOR
CASH 
CONTRIBUTIONS.— 
‘‘(i) IN GENERAL.—In the case of any 
contribution of cash to an organization de-
scribed in subparagraph (A), the total 
amount of such contributions which may be
† HR 1 EAS 
taken into account under subsection (a) for 
any taxable year beginning after December 
31, 2017, and before January 1, 2026, shall 
not exceed 60 percent of the taxpayer’s con-
tribution base for such year. 
‘‘(ii) CARRYOVER.—If the aggregate 
amount of contributions described in clause 
(i) exceeds the applicable limitation under 
clause (i) for any taxable year described in 
such clause, such excess shall be treated (in 
a manner consistent with the rules of sub-
section (d)(1)) as a charitable contribution 
to which clause (i) applies in each of the 5 
succeeding years in order of time. 
‘‘(iii) COORDINATION WITH SUBPARA-
GRAPHS (A) AND (B).— 
‘‘(I) IN GENERAL.—Contributions 
taken into account under this subpara-
graph shall not be taken into account 
under subparagraph (A). 
‘‘(II) LIMITATION
REDUCTION.— 
For each taxable year described in 
clause (i), and each taxable year to 
which any contribution under this sub-
paragraph is carried over under clause
† HR 1 EAS 
(ii), subparagraph (A) shall be applied 
by reducing (but not below zero) the 
contribution limitation allowed for the 
taxable year under such subparagraph 
by the aggregate contributions allowed 
under this subparagraph for such tax-
able year, and subparagraph (B) shall 
be applied by treating any reference to 
subparagraph (A) as a reference to 
both subparagraph (A) and this sub-
paragraph.’’. 
(b) EFFECTIVE DATE.—The amendment made by this 
section shall apply to contributions in taxable years begin-
ning after December 31, 2017. 
SEC. 11024. INCREASED CONTRIBUTIONS TO ABLE AC-
COUNTS. 
(a) INCREASE IN LIMITATION FOR CONTRIBUTIONS 
FROM COMPENSATION
OF INDIVIDUALS WITH DISABIL-
ITIES.— 
(1) IN
GENERAL.—Section 529A(b)(2)(B) is 
amended to read as follows: 
‘‘(B) except in the case of contributions 
under subsection (c)(1)(C), if such contribution 
to an ABLE account would result in aggregate 
contributions from all contributors to the ABLE
† HR 1 EAS 
account for the taxable year exceeding the sum 
of— 
‘‘(i) the amount in effect under section 
2503(b) for the calendar year in which the 
taxable year begins, plus 
‘‘(ii) in the case of any contribution by 
a designated beneficiary described in para-
graph (7) before January 1, 2026, the lesser 
of— 
‘‘(I) compensation (as defined by 
section 219(f)(1)) includible in the des-
ignated beneficiary’s gross income for 
the taxable year, or 
‘‘(II) an amount equal to the pov-
erty line for a one-person household, as 
determined for the calendar year pre-
ceding the calendar year in which the 
taxable year begins.’’. 
(2) RESPONSIBILITY FOR CONTRIBUTION LIMITA-
TION.—Paragraph (2) of section 529A(b) is amended 
by adding at the end the following: ‘‘A designated 
beneficiary (or a person acting on behalf of such bene-
ficiary) shall maintain adequate records for purposes 
of ensuring, and shall be responsible for ensuring,
† HR 1 EAS 
that the requirements of subparagraph (B)(ii) are 
met.’’ 
(3) ELIGIBLE DESIGNATED BENEFICIARY.—Sec-
tion 529A(b) is amended by adding at the end the fol-
lowing: 
‘‘(7) SPECIAL
RULES
RELATED
TO
CONTRIBU-
TION LIMIT.—For purposes of paragraph (2)(B)(ii)— 
‘‘(A) DESIGNATED
BENEFICIARY.—A des-
ignated beneficiary described in this paragraph 
is an employee (including an employee within 
the meaning of section 401(c)) with respect to 
whom— 
‘‘(i) no contribution is made for the 
taxable year to a defined contribution plan 
(within the meaning of section 414(i)) with 
respect to which the requirements of section 
401(a) or 403(a) are met, 
‘‘(ii) no contribution is made for the 
taxable year to an annuity contract de-
scribed in section 403(b), and 
‘‘(iii) no contribution is made for the 
taxable year to an eligible deferred com-
pensation plan described in section 457(b). 
‘‘(B) POVERTY
LINE.—The term ‘poverty 
line’ has the meaning given such term by section
† HR 1 EAS 
673 of the Community Services Block Grant Act 
(42 U.S.C. 9902).’’. 
(b) ALLOWANCE OF SAVER’S CREDIT FOR ABLE CON-
TRIBUTIONS BY ACCOUNT HOLDER.—Section 25B(d)(1) is 
amended by striking ‘‘and’’ at the end of subparagraph 
(B)(ii), by striking the period at the end of subparagraph 
(C) and inserting ‘‘, and’’, and by inserting at the end the 
following: 
‘‘(D) the amount of contributions made be-
fore January 1, 2026, by such individual to the 
ABLE account (within the meaning of section 
529A) of which such individual is the designated 
beneficiary.’’. 
(c) EFFECTIVE DATE.—The amendments made by this 
section shall apply to taxable years beginning after the date 
of the enactment of this Act. 
SEC. 11025. ROLLOVERS TO ABLE PROGRAMS FROM 529 
PROGRAMS. 
(a) IN GENERAL.—Clause (i) of section 529(c)(3)(C) 
is amended by striking ‘‘or’’ at the end of subclause (I), 
by striking the period at the end of subclause (II) and in-
serting ‘‘, or’’, and by adding at the end the following: 
‘‘(III) before January 1, 2026, to 
an ABLE account (as defined in sec-
tion 529A(e)(6)) of the designated bene-
† HR 1 EAS 
ficiary or a member of the family of 
the designated beneficiary. 
Subclause (III) shall not apply to so much 
of a distribution which, when added to all 
other contributions made to the ABLE ac-
count for the taxable year, exceeds the limi-
tation under section 529A(b)(2)(B)(i).’’. 
(b) EFFECTIVE DATE.—The amendments made by this 
section shall apply to distributions after the date of the en-
actment of this Act. 
SEC. 11026. TREATMENT OF CERTAIN INDIVIDUALS PER-
FORMING SERVICES IN THE SINAI PENIN-
SULA OF EGYPT. 
(a) IN GENERAL.—For purposes of the following provi-
sions of the Internal Revenue Code of 1986, with respect 
to the applicable period, 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 cer-
tain combat pay of members of the Armed Forces). 
(3) Section 692 (relating to income taxes of 
members of Armed Forces on death).
† HR 1 EAS 
(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 individual 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 pur-
poses of this section, the term ‘‘qualified hazardous duty 
area’’ means the Sinai Peninsula of Egypt, 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 spe-
cial pay; duty subject to hostile fire or imminent danger), 
for services performed in such location. Such term includes 
such location only during the period such entitlement is in 
effect. 
(c) APPLICABLE PERIOD.—
† HR 1 EAS 
(1) IN GENERAL.—Except as provided in para-
graph (2), the applicable period is— 
(A) the portion of the first taxable year end-
ing after June 9, 2015, which begins on such 
date, and 
(B) any subsequent taxable year beginning 
before January 1, 2026. 
(2) WITHHOLDING.—In the case of subsection 
(a)(5), the applicable period is— 
(A) the portion of the first taxable year end-
ing after the date of the enactment of this Act 
which begins on such date, and 
(B) any subsequent taxable year beginning 
before January 1, 2026. 
(d) EFFECTIVE DATE.— 
(1) IN GENERAL.—Except as provided in para-
graph (2), the provisions of this section shall take ef-
fect on June 9, 2015. 
(2) 
WITHHOLDING.—Subsection 
(a)(5) 
shall 
apply to remuneration paid after the date of the en-
actment of this Act.
† HR 1 EAS 
SEC. 11027. EXTENSION OF WAIVER OF LIMITATIONS WITH 
RESPECT TO EXCLUDING FROM GROSS IN-
COME AMOUNTS RECEIVED BY WRONGFULLY 
INCARCERATED INDIVIDUALS. 
(a) IN GENERAL.—Section 304(d) of the Protecting 
Americans from Tax Hikes Act of 2015 (26 U.S.C. 139F 
note) is amended by striking ‘‘1-year’’ and inserting ‘‘2- 
year’’. 
(b) EFFECTIVE DATE.—The amendments made by this 
section shall take effect on the date of the enactment of this 
Act. 
SEC. 11028. TEMPORARY REDUCTION IN MEDICAL EXPENSE 
DEDUCTION FLOOR. 
(a) IN GENERAL.—Subsection (f) of section 213 is 
amended to read as follows: 
‘‘(f) SPECIAL RULES FOR 2013 THROUGH 2018.—In 
the case of any taxable year— 
‘‘(1) beginning after December 31, 2012, and 
ending before January 1, 2017, in the case of a tax-
payer if such taxpayer or such taxpayer’s spouse has 
attained age 65 before the close of such taxable year, 
and 
‘‘(2) beginning after December 31, 2016, and 
ending before January 1, 2019, in the case of any 
taxpayer,
† HR 1 EAS 
subsection (a) shall be applied with respect to a taxpayer 
by substituting ‘7.5 percent’ for ‘10 percent’.’’. 
(b) MINIMUM TAX PREFERENCE NOT TO APPLY.—Sec-
tion 56(b)(1)(B) is amended by adding at the end the fol-
lowing new sentence:‘‘This subparagraph shall not apply to 
taxable years beginning after December 31, 2016, and end-
ing before January 1, 2019’’. 
(c) EFFECTIVE DATE.—The amendment made by this 
section shall apply to taxable years beginning after Decem-
ber 31, 2016. 
SEC. 11029. RELIEF FOR 2016 DISASTER AREAS. 
(a) IN GENERAL.—For purposes of this section, the 
term ‘‘2016 disaster area’’ means any area with respect to 
which a major disaster has been declared by the President 
under section 401 of the Robert T. Stafford Disaster Relief 
and Emergency Assistance Act during calendar year 2016. 
(b) SPECIAL RULES FOR USE OF RETIREMENT FUNDS 
WITH RESPECT
TO AREAS DAMAGED
BY 2016 DISAS-
TERS.— 
(1) TAX-FAVORED WITHDRAWALS FROM RETIRE-
MENT PLANS.— 
(A) IN GENERAL.—Section 72(t) of the In-
ternal Revenue Code of 1986 shall not apply to 
any qualified 2016 disaster distribution. 
(B) AGGREGATE DOLLAR LIMITATION.—
† HR 1 EAS 
(i) IN GENERAL.—For purposes of this 
subsection, the aggregate amount of dis-
tributions received by an individual which 
may be treated as qualified 2016 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 2016 disaster distributions 
received by such individual for all 
prior taxable years. 
(ii) TREATMENT
OF
PLAN
DISTRIBU-
TIONS.—If a distribution to an individual 
would (without regard to clause (i)) be a 
qualified 2016 disaster distribution, a plan 
shall not be treated as violating any re-
quirement of this title merely because the 
plan treats such distribution as a qualified 
2016 disaster distribution, unless the aggre-
gate amount of such distributions from all 
plans maintained by the employer (and any 
member of any controlled group which in-
cludes the employer) to such individual ex-
ceeds $100,000.
† HR 1 EAS 
(iii) CONTROLLED GROUP.—For pur-
poses of clause (ii), 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. 
(C) AMOUNT
DISTRIBUTED
MAY
BE
RE-
PAID.— 
(i) IN GENERAL.—Any individual who 
receives a qualified 2016 disaster distribu-
tion may, at any time during the 3-year 
period beginning on the day after the date 
on which such distribution was received, 
make one or more contributions in an ag-
gregate amount not to exceed the amount of 
such distribution to an eligible retirement 
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 457(e)(16) of the Internal Rev-
enue Code of 1986, as the case may be. 
(ii) TREATMENT OF REPAYMENTS OF 
DISTRIBUTIONS
FROM
ELIGIBLE
RETIRE-
MENT PLANS OTHER THAN IRAS.—For pur-
† HR 1 EAS 
poses of the Internal Revenue Code of 1986, 
if a contribution is made pursuant to clause 
(i) with respect to a qualified 2016 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 contribution, be treated 
as having received the qualified 2016 dis-
aster distribution in an eligible rollover dis-
tribution (as defined in section 402(c)(4) of 
the Internal Revenue Code of 1986) and as 
having transferred the amount to the eligi-
ble retirement plan in a direct trustee to 
trustee transfer within 60 days of the dis-
tribution. 
(iii) TREATMENT OF REPAYMENTS FOR 
DISTRIBUTIONS FROM IRAS.—For purposes 
of the Internal Revenue Code of 1986, if a 
contribution is made pursuant to clause (i) 
with respect to a qualified 2016 disaster 
distribution from an individual retirement 
plan (as defined by section 7701(a)(37) of 
the Internal Revenue Code of 1986), then, to 
the extent of the amount of the contribution, 
the qualified 2016 disaster distribution
† HR 1 EAS 
shall be treated as a distribution described 
in section 408(d)(3) of such Code and as 
having been transferred to the eligible re-
tirement plan in a direct trustee to trustee 
transfer within 60 days of the distribution. 
(D) DEFINITIONS.—For purposes of this 
paragraph— 
(i) QUALIFIED
2016
DISASTER
DIS-
TRIBUTION.—Except as provided in sub-
paragraph (B), the term ‘‘qualified 2016 
disaster distribution’’ means any distribu-
tion from an eligible retirement plan made 
on or after January 1, 2016, and before 
January 1, 2018, to an individual whose 
principal place of abode at any time during 
calendar year 2016 was located in a dis-
aster area described in subsection (a) and 
who has sustained an economic loss by rea-
son of the events giving rise to the Presi-
dential declaration described in subsection 
(a) which was applicable to such area. 
(ii) ELIGIBLE
RETIREMENT
PLAN.— 
The term ‘‘eligible retirement plan’’ shall 
have the meaning given such term by sec-
† HR 1 EAS 
tion 402(c)(8)(B) of the Internal Revenue 
Code of 1986. 
(E) INCOME
INCLUSION
SPREAD
OVER
3- 
YEAR PERIOD.— 
(i) IN GENERAL.—In the case of any 
qualified 2016 disaster distribution, unless 
the taxpayer elects not to have this subpara-
graph apply for any taxable year, any 
amount required to be included in gross in-
come for such taxable year shall be so in-
cluded ratably over the 3-taxable-year pe-
riod beginning with such taxable year. 
(ii) SPECIAL RULE.—For purposes of 
clause (i), rules similar to the rules of sub-
paragraph (E) of section 408A(d)(3) of the 
Internal Revenue Code of 1986 shall apply. 
(F) SPECIAL RULES.— 
(i) EXEMPTION
OF
DISTRIBUTIONS 
FROM TRUSTEE TO TRUSTEE TRANSFER AND 
WITHHOLDING RULES.—For purposes of sec-
tions 401(a)(31), 402(f), and 3405 of the 
Internal Revenue Code of 1986, qualified 
2016 disaster distribution shall not be treat-
ed as eligible rollover distributions.
† HR 1 EAS 
(ii) QUALIFIED
2016
DISASTER
DIS-
TRIBUTIONS
TREATED
AS
MEETING
PLAN 
DISTRIBUTION
REQUIREMENTS.—For pur-
poses of the Internal Revenue Code of 1986, 
a qualified 2016 disaster distribution shall 
be treated as meeting the requirements of 
sections 401(k)(2)(B)(i), 403(b)(7)(A)(ii), 
403(b)(11), and 457(d)(1)(A) of the Internal 
Revenue Code of 1986. 
(2) PROVISIONS
RELATING
TO
PLAN
AMEND-
MENTS.— 
(A) IN GENERAL.—If this paragraph ap-
plies to any amendment to any plan or annuity 
contract, such plan or contract shall be treated 
as being operated in accordance with the terms 
of the plan during the period described in sub-
paragraph (B)(ii)(I). 
(B) AMENDMENTS TO WHICH SUBSECTION 
APPLIES.— 
(i) IN
GENERAL.—This paragraph 
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 regula-
362 
† HR 1 EAS 
‘‘(B) in the case of a controlled foreign cor-
poration, if distributed, would be excluded from 
the gross income of a United States shareholder 
under section 959. 
To the extent provided in regulations or other guid-
ance prescribed by the Secretary, in the case of any 
controlled foreign corporation which has shareholders 
which are not United States shareholders, accumu-
lated post-1986 deferred foreign income shall be ap-
propriately reduced by amounts which would be de-
scribed in subparagraph (B) if such shareholders were 
United States shareholders. 
‘‘(3) POST-1986
EARNINGS
AND
PROFITS.—The 
term ‘post-1986 earnings and profits’ means the earn-
ings and profits of the foreign corporation (computed 
in accordance with sections 964(a) and 986, and by 
only taking into account periods when the foreign cor-
poration was a specified foreign corporation) accumu-
lated in taxable years beginning after December 31, 
1986, and determined— 
‘‘(A) as of the date of the taxable year re-
ferred to in paragraph (1) or (2) of subsection 
(a), whichever is applicable with respect to such 
foreign corporation, and
363 
† HR 1 EAS 
‘‘(B) without diminution by reason of divi-
dends distributed during the taxable year ending 
with or including such date. 
‘‘(e) SPECIFIED FOREIGN CORPORATION.— 
‘‘(1) IN GENERAL.—For purposes of this section, 
the term ‘specified foreign corporation’ means— 
‘‘(A) any controlled foreign corporation, 
and 
‘‘(B) any section 902 corporation (as de-
fined in section 909(d)(5) as in effect before the 
date of the enactment of the Tax Cuts and Jobs 
Act). 
‘‘(2) APPLICATION
TO
SECTION
902
CORPORA-
TIONS.—For purposes of sections 951 and 961, a sec-
tion 902 corporation (as so defined) shall be treated 
as a controlled foreign corporation solely for purposes 
of taking into account the subpart F income of such 
corporation under subsection (a) (and for purposes of 
applying subsection (e)). 
‘‘(3) EXCLUSION OF PASSIVE FOREIGN INVEST-
MENT COMPANIES.—Such term shall not include any 
corporation which is a passive foreign investment 
company (as defined in section 1297) with respect to 
the shareholder and which is not a controlled foreign 
corporation.