I 
109TH CONGRESS 
1ST SESSION H. R. 1929 
To amend the Internal Revenue Code of 1986 to update the optional methods 
for computing net earnings from self-employment. 
IN THE HOUSE OF REPRESENTATIVES 
APRIL 27, 2005 
Mr. LEWIS of Kentucky (for himself, Mr. BISHOP of Georgia, and Mr. ROG-
ERS of Kentucky) introduced the following bill; which was referred to the 
Committee on Ways and Means 
A BILL 
To amend the Internal Revenue Code of 1986 to update 
the optional methods for computing net earnings from 
self-employment. 
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled, 
SECTION 1. MODIFICATION TO OPTIONAL METHOD OF 
COMPUTING NET EARNINGS FROM SELF-EM-
PLOYMENT. 
(a) AMENDMENTS
TO
THE INTERNAL REVENUE 
CODE OF 1986.—
(1) IN GENERAL.—The matter following para-
graph (16) of section 1402(a) of the Internal Rev-
enue Code of 1986 is amended— 
(A) by striking ‘‘$2,400’’ each place it ap-
pears and inserting ‘‘the upper limit’’, and 
(B) by striking ‘‘$1,600’’ each place it ap-
pears and inserting ‘‘the lower limit’’. 
(2) DEFINITIONS.—Section 1402 of such Code 
is amended by adding at the end the following new 
subsection: 
‘‘(l) UPPER AND LOWER LIMITS.—For purposes of 
subsection (a)— 
‘‘(1) LOWER LIMIT.—The lower limit for any 
taxable year is the sum of the amounts required 
under section 213(d) of the Social Security Act for 
a quarter of coverage in effect with respect to each 
calendar quarter ending with or within such taxable 
year. 
‘‘(2) UPPER LIMIT.—The upper limit for any 
taxable year is the amount equal to 150 percent of 
the lower limit for such taxable year.’’. 
(b) AMENDMENTS TO THE SOCIAL SECURITY ACT.— 
(1) IN GENERAL.—The matter following para-
graph (15) of section 211(a) of the Social Security 
Act is amended—
(A) by striking ‘‘$2,400’’ each place it ap-
pears and inserting ‘‘the upper limit’’, and 
(B) by striking ‘‘$1,600’’ each place it ap-
pears and inserting ‘‘the lower limit’’. 
(2) DEFINITIONS.—Section 211 of such Act is 
amended by adding at the end the following new 
subsection: 
‘‘Upper and Lower Limits 
‘‘(k) For purposes of subsection (a)— 
‘‘(1) The lower limit for any taxable year is the 
sum of the amounts required under section 213(d) 
for a quarter of coverage in effect with respect to 
each calendar quarter ending with or within such 
taxable year. 
‘‘(2) The upper limit for any taxable year is the 
amount equal to 150 percent of the lower limit for 
such taxable year.’’. 
(3) CONFORMING
AMENDMENT.—Section 212 
of such Act is amended— 
(A) in subsection (b), by striking ‘‘For’’ 
and inserting ‘‘Except as provided in subsection 
(c), for’’; and 
(B) by adding at the end the following new 
subsection:
‘‘(c) For the purpose of determining average indexed 
monthly earnings, average monthly wage, and quarters of 
coverage in the case of any individual who elects the option 
described in clause (ii) or (iv) in the matter following sec-
tion 211(a)(15) for any taxable year that does not begin 
with or during a particular calendar year and end with 
or during such year, the self-employment income of such 
individual deemed to be derived during such taxable year 
shall be allocated to the two calendar years, portions of 
which are included within such taxable year, in the same 
proportion to the total of such deemed self-employment 
income as the sum of the amounts applicable under section 
213(d) for the calendar quarters ending with or within 
each such calendar year bears to the lower limit for such 
taxable year specified in section 211(k)(1).’’. 
(c) EFFECTIVE DATE.—The amendments made by 
this section shall apply to taxable years beginning after 
December 31, 2004. 
Æ