‘‘(5) AREA COST-OF-LIVING ADJUSTMENT.— 
‘‘(A) IN
GENERAL.—Each of the dollar 
amounts otherwise in effect under paragraphs 
(1) and (3)(C) for any taxable year beginning 
after 2010 shall be multiplied by the applicable 
multiplier for the taxable year which applies to 
the statistical area in which the taxpayer’s pri-
mary place of abode during the taxable year is 
located. 
‘‘(B) 
APPLICABLE
MULTIPLIERS.—For 
purposes of this paragraph— 
‘‘(i) IN
GENERAL.—Not later than 
December 15 of each calendar year, the 
Secretary shall prescribe an applicable 
multiplier for each statistical area of the 
United States which shall apply to taxable 
years beginning during the succeeding cal-
endar year. 
‘‘(ii) 
DETERMINATION
OF
MULTI-
PLIERS.— 
‘‘(I) In the case of a statistical 
area where the cost-of-living differen-
tial for the calendar year does not ex-
ceed 125 percent, the applicable mul-
tiplier is 1. 
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‘‘(II) In the case of a statistical 
area not described in subclause (I), 
the applicable multiplier is the cost-of- 
living differential for the calendar 
year. 
‘‘(iii) COST
OF
LIVING
DIFFEREN-
TIAL.—The cost-of-living differential for 
any statistical area for any calendar year 
is the percentage determined by dividing— 
‘‘(I) the cost-of-living for such 
area for the preceding calendar year, 
by 
‘‘(II) the average cost-of-living 
for the United States for the pre-
ceding calendar year. 
‘‘(iv) COST-OF-LIVING FOR AREA.— 
‘‘(I) IN GENERAL.—For each cal-
endar year beginning after 2009, the 
Secretary of Labor shall determine 
and publish a cost-of-living index for 
each statistical area. 
‘‘(II) METHODOLOGY.—The cost- 
of-living index determined under sub-
clause (I) for any statistical area for 
any calendar year shall be based on 
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average market prices for the area for 
the 12-month period ending on Au-
gust 31 of such calendar year. The 
market prices taken into account 
under the preceding sentence shall be 
selected and used under the same 
methodology as is used by the Sec-
retary of Labor in developing the Con-
sumer Price Index for All Urban Con-
sumers. 
‘‘(v) STATISTICAL
AREA.—For pur-
poses of this subsection the term ‘statis-
tical area’ means— 
‘‘(I) any metropolitan statistical 
area as defined by the Secretary of 
Commerce, and 
‘‘(II) the portion of any State not 
within a metropolitan statistical area 
as so defined.’’. 
(b) EFFECTIVE DATE.— 
(1) IN GENERAL.—The amendments made by 
this section shall apply to taxable years beginning 
after December 31, 2010. 
(2) TRANSITION RULE.—Notwithstanding sec-
tion 151(d)(5)(B) of the Internal Revenue Code (as 
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added by this section), the date for prescribing ap-
plicable multipliers for taxable years beginning in 
calendar year 2011 shall be the date 1 year after the 
date of the enactment of this Act. 
Æ 
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