H. R. 1308 
One Hundred Eighth Congress 
of the 
United States of America 
AT THE SECOND SESSION 
Begun and held at the City of Washington on Tuesday, 
the twentieth day of January, two thousand and four 
An Act 
To amend the Internal Revenue Code of 1986 to provide tax relief for working 
families, and for other purposes. 
Be it enacted by the Senate and House of Representatives of 
the United States of America in Congress assembled, 
SECTION 1. SHORT TITLE; AMENDMENT OF 1986 CODE; TABLE OF CON-
TENTS. 
(a) SHORT TITLE.—This Act may be cited as the ‘‘Working 
Families Tax Relief Act of 2004’’. 
(b) AMENDMENT OF 1986 CODE.—Except as otherwise expressly 
provided, whenever in this Act an amendment or repeal is expressed 
in terms of an amendment to, or repeal of, a section or other 
provision, the reference shall be considered to be made to a section 
or other provision of the Internal Revenue Code of 1986. 
(c) TABLE OF CONTENTS.—The table of contents for this Act 
is as follows: 
Sec. 1. Short title; amendment of 1986 Code; table of contents. 
TITLE I—EXTENSION OF FAMILY TAX PROVISIONS 
Sec. 101. Repeal of scheduled reductions in child tax credit, marriage penalty relief, 
and 10-percent rate bracket. 
Sec. 102. Acceleration of increase in refundability of the child tax credit. 
Sec. 103. 1-year extension of minimum tax relief to individuals. 
Sec. 104. Earned income includes combat pay. 
Sec. 105. Application of EGTRRA sunset to this title. 
TITLE II—UNIFORM DEFINITION OF CHILD 
Sec. 201. Uniform definition of child, etc. 
Sec. 202. Modifications of definition of head of household. 
Sec. 203. Modifications of dependent care credit. 
Sec. 204. Modifications of child tax credit. 
Sec. 205. Modifications of earned income credit. 
Sec. 206. Modifications of deduction for personal exemption for dependents. 
Sec. 207. Technical and conforming amendments. 
Sec. 208. Effective date. 
TITLE III—EXTENSIONS OF CERTAIN EXPIRING PROVISIONS 
Sec. 301. Research credit. 
Sec. 302. Parity in the application of certain limits to mental health benefits. 
Sec. 303. Work opportunity credit and welfare-to-work credit. 
Sec. 304. Qualified zone academy bonds. 
Sec. 305. Cover over of tax on distilled spirits. 
Sec. 306. Deduction for corporate donations of scientific property and computer 
technology. 
Sec. 307. Deduction for certain expenses of school teachers. 
Sec. 308. Expensing of environmental remediation costs. 
Sec. 309. Certain New York Liberty Zone benefits. 
Sec. 310. Tax incentives for investment in the District of Columbia. 
Sec. 311. Disclosure of tax information to facilitate combined employment tax re-
porting.
H. R. 1308—2 
Sec. 312. Allowance of nonrefundable personal credits against regular and min-
imum tax liability. 
Sec. 313. Credit for electricity produced from certain renewable resources. 
Sec. 314. Taxable income limit on percentage depletion for oil and natural gas pro-
duced from marginal properties. 
Sec. 315. Indian employment tax credit. 
Sec. 316. Accelerated depreciation for business property on Indian reservation. 
Sec. 317. Disclosure of return information relating to student loans. 
Sec. 318. Elimination of phaseout of credit for qualified electric vehicles for 2004 
and 2005. 
Sec. 319. Elimination of phaseout for deduction for clean-fuel vehicle property for 
2004 and 2005. 
Sec. 320. Disclosures relating to terrorist activities. 
Sec. 321. Joint review of strategic plans and budget for the Internal Revenue Serv-
ice. 
Sec. 322. Availability of medical savings accounts. 
TITLE IV—TAX TECHNICAL CORRECTIONS 
Sec. 401. Amendments related to Medicare Prescription Drug, Improvement, and 
Modernization Act of 2003. 
Sec. 402. Amendments related to Jobs and Growth Tax Relief Reconciliation Act of 
2003. 
Sec. 403. Amendments related to Job Creation and Worker Assistance Act of 2002. 
Sec. 404. Amendments related to Economic Growth and Tax Relief Reconciliation 
Act of 2001. 
Sec. 405. Amendments related to Community Renewal Tax Relief Act of 2000. 
Sec. 406. Amendments related to Taxpayer Relief Act of 1997. 
Sec. 407. Amendments related to Small Business Job Protection Act of 1996. 
Sec. 408. Clerical amendments. 
TITLE I—EXTENSION OF FAMILY TAX 
PROVISIONS 
SEC. 101. REPEAL OF SCHEDULED REDUCTIONS IN CHILD TAX CREDIT, 
MARRIAGE PENALTY RELIEF, AND 10-PERCENT RATE 
BRACKET. 
(a) CHILD TAX CREDIT.—Subsection (a) of section 24 (relating 
to child tax credit) is amended to read as follows: 
‘‘(a) ALLOWANCE OF CREDIT.—There shall be allowed as a credit 
against the tax imposed by this chapter for the taxable year with 
respect to each qualifying child of the taxpayer an amount equal 
to $1,000.’’. 
(b) MARRIAGE PENALTY RELIEF IN STANDARD DEDUCTION.— 
(1) IN GENERAL.—Paragraph (2) of section 63(c) (relating 
to basic standard deduction) is amended to read as follows: 
‘‘(2) BASIC STANDARD DEDUCTION.—For purposes of para-
graph (1), the basic standard deduction is— 
‘‘(A) 200 percent of the dollar amount in effect under 
subparagraph (C) for the taxable year in the case of— 
‘‘(i) a joint return, or 
‘‘(ii) a surviving spouse (as defined in section 2(a)), 
‘‘(B) $4,400 in the case of a head of household (as 
defined in section 2(b)), or 
‘‘(C) $3,000 in any other case.’’. 
(2) CONFORMING AMENDMENTS.— 
(A) Section 63(c)(4) is amended by striking ‘‘(2)(D)’’ 
each place it occurs and inserting ‘‘(2)(C)’’. 
(B) Section 63(c) is amended by striking paragraph 
(7). 
(c) MARRIAGE PENALTY RELIEF
IN 15-PERCENT INCOME TAX 
BRACKET.—Paragraph (8) of section 1(f) is amended to read as 
follows:
H. R. 1308—3 
‘‘(8) ELIMINATION
OF
MARRIAGE
PENALTY
IN
15-PERCENT 
BRACKET.—With respect to taxable years beginning after 
December 31, 2003, in prescribing the tables under paragraph 
(1)— 
‘‘(A) the maximum taxable income in the 15-percent 
rate bracket in the table contained in subsection (a) (and 
the minimum taxable income in the next higher taxable 
income bracket in such table) shall be 200 percent of the 
maximum taxable income in the 15-percent rate bracket 
in the table contained in subsection (c) (after any other 
adjustment under this subsection), and 
‘‘(B) the comparable taxable income amounts in the 
table contained in subsection (d) shall be 1⁄2 of the amounts 
determined under subparagraph (A).’’. 
(d) 10-PERCENT RATE BRACKET.— 
(1) IN GENERAL.—Clause (i) of section 1(i)(1)(B) is amended 
by striking ‘‘($12,000 in the case of taxable years beginning 
after December 31, 2004, and before January 1, 2008)’’. 
(2) INFLATION ADJUSTMENT.—Subparagraph (C) of section 
1(i)(1) is amended to read as follows: 
‘‘(C) INFLATION ADJUSTMENT.—In prescribing the tables 
under subsection (f) which apply with respect to taxable 
years beginning in calendar years after 2003— 
‘‘(i) the cost-of-living adjustment shall be deter-
mined under subsection (f)(3) by substituting ‘2002’ 
for ‘1992’ in subparagraph (B) thereof, and 
‘‘(ii) the adjustments under clause (i) shall not 
apply to the amount referred to in subparagraph 
(B)(iii). 
If any amount after adjustment under the preceding sen-
tence is not a multiple of $50, such amount shall be rounded 
to the next lowest multiple of $50.’’. 
(e) EFFECTIVE DATE.—The amendments made by this section 
shall apply to taxable years beginning after December 31, 2003. 
SEC. 102. ACCELERATION OF INCREASE IN REFUNDABILITY OF THE 
CHILD TAX CREDIT. 
(a) ACCELERATION
OF REFUNDABILITY.—Section 24(d)(1)(B)(i) 
(relating to portion of credit refundable) is amended by striking 
‘‘(10 percent in the case of taxable years beginning before January 
1, 2005)’’. 
(b) EFFECTIVE DATE.—The amendment made by this section 
shall apply to taxable years beginning after December 31, 2003. 
SEC. 103. EXTENSION OF MINIMUM TAX RELIEF TO INDIVIDUALS. 
(a) IN GENERAL.—Subparagraphs (A) and (B) of section 55(d)(1) 
of the Internal Revenue Code of 1986 (relating to exemption amount 
for taxpayers other than corporations) are each amended by striking 
‘‘2003 and 2004’’ and inserting ‘‘2003, 2004, and 2005’’. 
(b) EFFECTIVE DATE.—The amendments made by this section 
shall apply to taxable years beginning after December 31, 2004. 
SEC. 104. EARNED INCOME INCLUDES COMBAT PAY. 
(a) CHILD TAX CREDIT.—Section 24(d)(1) (relating to portion 
of credit refundable) is amended by adding at the end the following 
new sentence: ‘‘For purposes of subparagraph (B), any amount 
excluded from gross income by reason of section 112 shall be treated
H. R. 1308—4 
as earned income which is taken into account in computing taxable 
income for the taxable year.’’. 
(b) EARNED INCOME CREDIT.—Subparagraph (B) of section 
32(c)(2) (relating to earned income) is amended— 
(1) by striking ‘‘and’’ at the end of clause (iv), 
(2) by striking the period at the end of clause (v) and 
inserting ‘‘, and’’, and 
(3) by adding at the end the following: 
‘‘(vi) in the case of any taxable year ending— 
‘‘(I) after the date of the enactment of this 
clause, and 
‘‘(II) before January 1, 2006, 
a taxpayer may elect to treat amounts excluded from 
gross income by reason of section 112 as earned 
income.’’. 
(c) EFFECTIVE DATE.— 
(1) CHILD
TAX
CREDIT.—The amendment made by sub-
section (a) shall apply to taxable years beginning after 
December 31, 2003. 
(2) EARNED INCOME CREDIT.—The amendments made by 
subsection (b) shall apply to taxable years ending after the 
date of the enactment of this Act. 
SEC. 105. APPLICATION OF EGTRRA SUNSET TO THIS TITLE. 
Each amendment made by this title shall be subject to title 
IX of the Economic Growth and Tax Relief Reconciliation Act of 
2001 to the same extent and in the same manner as the provision 
of such Act to which such amendment relates. 
TITLE II—UNIFORM DEFINITION OF 
CHILD 
SEC. 201. UNIFORM DEFINITION OF CHILD, ETC. 
Section 152 is amended to read as follows: 
‘‘SEC. 152. DEPENDENT DEFINED. 
‘‘(a) IN GENERAL.—For purposes of this subtitle, the term 
‘dependent’ means— 
‘‘(1) a qualifying child, or 
‘‘(2) a qualifying relative. 
‘‘(b) EXCEPTIONS.—For purposes of this section— 
‘‘(1) DEPENDENTS
INELIGIBLE.—If an individual is a 
dependent of a taxpayer for any taxable year of such taxpayer 
beginning in a calendar year, such individual shall be treated 
as having no dependents for any taxable year of such individual 
beginning in such calendar year. 
‘‘(2) MARRIED
DEPENDENTS.—An individual shall not be 
treated as a dependent of a taxpayer under subsection (a) 
if such individual has made a joint return with the individual’s 
spouse under section 6013 for the taxable year beginning in 
the calendar year in which the taxable year of the taxpayer 
begins. 
‘‘(3) CITIZENS OR NATIONALS OF OTHER COUNTRIES.— 
‘‘(A) IN
GENERAL.—The term ‘dependent’ does not 
include an individual who is not a citizen or national of 
the United States unless such individual is a resident
H. R. 1308—5 
of the United States or a country contiguous to the United 
States. 
‘‘(B) EXCEPTION FOR ADOPTED CHILD.—Subparagraph 
(A) shall not exclude any child of a taxpayer (within the 
meaning of subsection (f)(1)(B)) from the definition of 
‘dependent’ if— 
‘‘(i) for the taxable year of the taxpayer, the child 
has the same principal place of abode as the taxpayer 
and is a member of the taxpayer’s household, and 
‘‘(ii) the taxpayer is a citizen or national of the 
United States. 
‘‘(c) QUALIFYING CHILD.—For purposes of this section— 
‘‘(1) IN GENERAL.—The term ‘qualifying child’ means, with 
respect to any taxpayer for any taxable year, an individual— 
‘‘(A) who bears a relationship to the taxpayer described 
in paragraph (2), 
‘‘(B) who has the same principal place of abode as 
the taxpayer for more than one-half of such taxable year, 
‘‘(C) who meets the age requirements of paragraph 
(3), and 
‘‘(D) who has not provided over one-half of such individ-
ual’s own support for the calendar year in which the taxable 
year of the taxpayer begins. 
‘‘(2) RELATIONSHIP.—For purposes of paragraph (1)(A), an 
individual bears a relationship to the taxpayer described in 
this paragraph if such individual is— 
‘‘(A) a child of the taxpayer or a descendant of such 
a child, or 
‘‘(B) a brother, sister, stepbrother, or stepsister of the 
taxpayer or a descendant of any such relative. 
‘‘(3) AGE REQUIREMENTS.— 
‘‘(A) IN GENERAL.—For purposes of paragraph (1)(C), 
an individual meets the requirements of this paragraph 
if such individual— 
‘‘(i) has not attained the age of 19 as of the close 
of the calendar year in which the taxable year of the 
taxpayer begins, or 
‘‘(ii) is a student who has not attained the age 
of 24 as of the close of such calendar year. 
‘‘(B) SPECIAL RULE FOR DISABLED.—In the case of an 
individual who is permanently and totally disabled (as 
defined in section 22(e)(3)) at any time during such cal-
endar year, the requirements of subparagraph (A) shall 
be treated as met with respect to such individual. 
‘‘(4) SPECIAL RULE RELATING TO 2 OR MORE CLAIMING QUALI-
FYING CHILD.— 
‘‘(A) IN GENERAL.—Except as provided in subparagraph 
(B), if (but for this paragraph) an individual may be and 
is claimed as a qualifying child by 2 or more taxpayers 
for a taxable year beginning in the same calendar year, 
such individual shall be treated as the qualifying child 
of the taxpayer who is— 
‘‘(i) a parent of the individual, or 
‘‘(ii) if clause (i) does not apply, the taxpayer with 
the highest adjusted gross income for such taxable 
year.
H. R. 1308—6 
‘‘(B) MORE
THAN
PARENT
CLAIMING
QUALIFYING 
CHILD.—If the parents claiming any qualifying child do 
not file a joint return together, such child shall be treated 
as the qualifying child of— 
‘‘(i) the parent with whom the child resided for 
the longest period of time during the taxable year, 
or 
‘‘(ii) if the child resides with both parents for the 
same amount of time during such taxable year, the 
parent with the highest adjusted gross income. 
‘‘(d) QUALIFYING RELATIVE.—For purposes of this section— 
‘‘(1) IN
GENERAL.—The term ‘qualifying relative’ means, 
with respect to any taxpayer for any taxable year, an indi-
vidual— 
‘‘(A) who bears a relationship to the taxpayer described 
in paragraph (2), 
‘‘(B) whose gross income for the calendar year in which 
such taxable year begins is less than the exemption amount 
(as defined in section 151(d)), 
‘‘(C) with respect to whom the taxpayer provides over 
one-half of the individual’s support for the calendar year 
in which such taxable year begins, and 
‘‘(D) who is not a qualifying child of such taxpayer 
or of any other taxpayer for any taxable year beginning 
in the calendar year in which such taxable year begins. 
‘‘(2) RELATIONSHIP.—For purposes of paragraph (1)(A), an 
individual bears a relationship to the taxpayer described in 
this paragraph if the individual is any of the following with 
respect to the taxpayer: 
‘‘(A) A child or a descendant of a child. 
‘‘(B) A brother, sister, stepbrother, or stepsister. 
‘‘(C) The father or mother, or an ancestor of either. 
‘‘(D) A stepfather or stepmother. 
‘‘(E) A son or daughter of a brother or sister of the 
taxpayer. 
‘‘(F) A brother or sister of the father or mother of 
the taxpayer. 
‘‘(G) A son-in-law, daughter-in-law, father-in-law, 
mother-in-law, brother-in-law, or sister-in-law. 
‘‘(H) An individual (other than an individual who at 
any time during the taxable year was the spouse, deter-
mined without regard to section 7703, of the taxpayer) 
who, for the taxable year of the taxpayer, has the same 
principal place of abode as the taxpayer and is a member 
of the taxpayer’s household. 
‘‘(3) SPECIAL RULE RELATING TO MULTIPLE SUPPORT AGREE-
MENTS.—For purposes of paragraph (1)(C), over one-half of 
the support of an individual for a calendar year shall be treated 
as received from the taxpayer if— 
‘‘(A) no one person contributed over one-half of such 
support, 
‘‘(B) over one-half of such support was received from 
2 or more persons each of whom, but for the fact that 
any such person alone did not contribute over one-half 
of such support, would have been entitled to claim such 
individual as a dependent for a taxable year beginning 
in such calendar year,
H. R. 1308—7 
‘‘(C) the taxpayer contributed over 10 percent of such 
support, and 
‘‘(D) each person described in subparagraph (B) (other 
than the taxpayer) who contributed over 10 percent of 
such support files a written declaration (in such manner 
and form as the Secretary may by regulations prescribe) 
that such person will not claim such individual as a 
dependent for any taxable year beginning in such calendar 
year. 
‘‘(4) SPECIAL RULE RELATING TO INCOME OF HANDICAPPED 
DEPENDENTS.— 
‘‘(A) IN GENERAL.—For purposes of paragraph (1)(B), 
the gross income of an individual who is permanently and 
totally disabled (as defined in section 22(e)(3)) at any time 
during the taxable year shall not include income attrib-
utable to services performed by the individual at a shel-
tered workshop if— 
‘‘(i) the availability of medical care at such work-
shop is the principal reason for the individual’s pres-
ence there, and 
‘‘(ii) the income arises solely from activities at such 
workshop which are incident to such medical care. 
‘‘(B) SHELTERED WORKSHOP DEFINED.—For purposes of 
subparagraph (A), the term ‘sheltered workshop’ means 
a school— 
‘‘(i) which provides special instruction or training 
designed to alleviate the disability of the individual, 
and 
‘‘(ii) which is operated by an organization described 
in section 501(c)(3) and exempt from tax under section 
501(a), or by a State, a possession of the United States, 
any political subdivision of any of the foregoing, the 
United States, or the District of Columbia. 
‘‘(5) SPECIAL RULES FOR SUPPORT.—For purposes of this 
subsection— 
‘‘(A) payments to a spouse which are includible in 
the gross income of such spouse under section 71 or 682 
shall not be treated as a payment by the payor spouse 
for the support of any dependent, and 
‘‘(B) in the case of the remarriage of a parent, support 
of a child received from the parent’s spouse shall be treated 
as received from the parent. 
‘‘(e) SPECIAL RULE FOR DIVORCED PARENTS.— 
‘‘(1) IN
GENERAL.—Notwithstanding subsection (c)(1)(B), 
(c)(4), or (d)(1)(C), if— 
‘‘(A) a child receives over one-half of the child’s support 
during the calendar year from the child’s parents— 
‘‘(i) who are divorced or legally separated under 
a decree of divorce or separate maintenance, 
‘‘(ii) who are separated under a written separation 
agreement, or 
‘‘(iii) who live apart at all times during the last 
6 months of the calendar year, and 
‘‘(B) such child is in the custody of 1 or both of the 
child’s parents for more than one-half of the calendar year,
H. R. 1308—8 
such child shall be treated as being the qualifying child or 
qualifying relative of the noncustodial parent for a calendar 
year if the requirements described in paragraph (2) are met. 
‘‘(2) REQUIREMENTS.—For purposes of paragraph (1), the 
requirements described in this paragraph are met if— 
‘‘(A) a decree of divorce or separate maintenance or 
written 
separation 
agreement 
between 
the 
parents 
applicable to the taxable year beginning in such calendar 
year provides that— 
‘‘(i) the noncustodial parent shall be entitled to 
any deduction allowable under section 151 for such 
child, or 
‘‘(ii) the custodial parent will sign a written dec-
laration (in such manner and form as the Secretary 
may prescribe) that such parent will not claim such 
child as a dependent for such taxable year, or 
‘‘(B) in the case of such an agreement executed before 
January 1, 1985, the noncustodial parent provides at least 
$600 for the support of such child during such calendar 
year. 
For purposes of subparagraph (B), amounts expended for the 
support of a child or children shall be treated as received 
from the noncustodial parent to the extent that such parent 
provided amounts for such support. 
‘‘(3) CUSTODIAL PARENT AND NONCUSTODIAL PARENT.—For 
purposes of this subsection— 
‘‘(A) CUSTODIAL PARENT.—The term ‘custodial parent’ 
means the parent with whom a child shared the same 
principal place of abode for the greater portion of the 
calendar year. 
‘‘(B) NONCUSTODIAL PARENT.—The term ‘noncustodial 
parent’ means the parent who is not the custodial parent. 
‘‘(4) EXCEPTION FOR MULTIPLE-SUPPORT AGREEMENTS.—This 
subsection shall not apply in any case where over one-half 
of the support of the child is treated as having been received 
from a taxpayer under the provision of subsection (d)(3). 
‘‘(f) OTHER DEFINITIONS AND RULES.—For purposes of this sec-
tion— 
‘‘(1) CHILD DEFINED.— 
‘‘(A) IN GENERAL.—The term ‘child’ means an individual 
who is— 
‘‘(i) a son, daughter, stepson, or stepdaughter of 
the taxpayer, or 
‘‘(ii) an eligible foster child of the taxpayer. 
‘‘(B) ADOPTED CHILD.—In determining whether any of 
the relationships specified in subparagraph (A)(i) or para-
graph (4) exists, a legally adopted individual of the tax-
payer, or an individual who is lawfully placed with the 
taxpayer for legal adoption by the taxpayer, shall be treated 
as a child of such individual by blood. 
‘‘(C) ELIGIBLE FOSTER CHILD.—For purposes of subpara-
graph (A)(ii), the term ‘eligible foster child’ means an indi-
vidual who is placed with the taxpayer by an authorized 
placement agency or by judgment, decree, or other order 
of any court of competent jurisdiction.
H. R. 1308—9 
‘‘(2) STUDENT DEFINED.—The term ‘student’ means an indi-
vidual who during each of 5 calendar months during the cal-
endar year in which the taxable year of the taxpayer begins— 
‘‘(A) is a full-time student at an educational organiza-
tion described in section 170(b)(1)(A)(ii), or 
‘‘(B) is pursuing a full-time course of institutional on- 
farm training under the supervision of an accredited agent 
of an educational organization described in section 
170(b)(1)(A)(ii) or of a State or political subdivision of a 
State. 
‘‘(3) DETERMINATION OF HOUSEHOLD STATUS.—An individual 
shall not be treated as a member of the taxpayer’s household 
if at any time during the taxable year of the taxpayer the 
relationship between such individual and the taxpayer is in 
violation of local law. 
‘‘(4) BROTHER AND SISTER.—The terms ‘brother’ and ‘sister’ 
include a brother or sister by the half blood. 
‘‘(5) SPECIAL
SUPPORT
TEST
IN
CASE
OF
STUDENTS.—For 
purposes of subsections (c)(1)(D) and (d)(1)(C), in the case of 
an individual who is— 
‘‘(A) a child of the taxpayer, and 
‘‘(B) a student, 
amounts received as scholarships for study at an educational 
organization described in section 170(b)(1)(A)(ii) shall not be 
taken into account. 
‘‘(6) TREATMENT OF MISSING CHILDREN.— 
‘‘(A) IN GENERAL.—Solely for the purposes referred to 
in subparagraph (B), a child of the taxpayer— 
‘‘(i) who is presumed by law enforcement authori-
ties to have been kidnapped by someone who is not 
a member of the family of such child or the taxpayer, 
and 
‘‘(ii) who had, for the taxable year in which the 
kidnapping occurred, the same principal place of abode 
as the taxpayer for more than one-half of the portion 
of such year before the date of the kidnapping, 
shall be treated as meeting the requirement of subsection 
(c)(1)(B) with respect to a taxpayer for all taxable years 
ending during the period that the child is kidnapped. 
‘‘(B) PURPOSES.—Subparagraph (A) shall apply solely 
for purposes of determining— 
‘‘(i) the deduction under section 151(c), 
‘‘(ii) the credit under section 24 (relating to child 
tax credit), 
‘‘(iii) whether an individual is a surviving spouse 
or a head of a household (as such terms are defined 
in section 2), and 
‘‘(iv) the earned income credit under section 32. 
‘‘(C) COMPARABLE TREATMENT OF CERTAIN QUALIFYING 
RELATIVES.—For purposes of this section, a child of the 
taxpayer— 
‘‘(i) who is presumed by law enforcement authori-
ties to have been kidnapped by someone who is not 
a member of the family of such child or the taxpayer, 
and
H. R. 1308—10 
‘‘(ii) who was (without regard to this paragraph) 
a qualifying relative of the taxpayer for the portion 
of the taxable year before the date of the kidnapping, 
shall be treated as a qualifying relative of the taxpayer 
for all taxable years ending during the period that the 
child is kidnapped. 
‘‘(D) TERMINATION OF TREATMENT.—Subparagraphs (A) 
and (C) shall cease to apply as of the first taxable year 
of the taxpayer beginning after the calendar year in which 
there is a determination that the child is dead (or, if 
earlier, in which the child would have attained age 18). 
‘‘(7) CROSS REFERENCES.— 
‘‘For provision treating child as dependent of both parents for pur-
poses of certain provisions, see sections 105(b), 132(h)(2)(B), and 
213(d)(5).’’. 
SEC. 202. MODIFICATIONS OF DEFINITION OF HEAD OF HOUSEHOLD. 
(a) HEAD OF HOUSEHOLD.—Clause (i) of section 2(b)(1)(A) is 
amended to read as follows: 
‘‘(i) a qualifying child of the individual (as defined 
in section 152(c), determined without regard to section 
152(e)), but not if such child— 
‘‘(I) is married at the close of the taxpayer’s 
taxable year, and 
‘‘(II) is not a dependent of such individual 
by reason of section 152(b)(2) or 152(b)(3), or both, 
or’’. 
(b) CONFORMING AMENDMENTS.— 
(1) Section 2(b)(2) is amended by striking subparagraph 
(A) and by redesignating subparagraphs (B), (C), and (D) as 
subparagraphs (A), (B), and (C), respectively. 
(2) Clauses (i) and (ii) of section 2(b)(3)(B) are amended 
to read as follows: 
‘‘(i) subparagraph (H) of section 152(d)(2), or 
‘‘(ii) paragraph (3) of section 152(d).’’. 
SEC. 203. MODIFICATIONS OF DEPENDENT CARE CREDIT. 
(a) IN GENERAL.—Section 21(a)(1) is amended by striking ‘‘In 
the case of an individual who maintains a household which includes 
as a member one or more qualifying individuals (as defined in 
subsection (b)(1))’’ and inserting ‘‘In the case of an individual for 
which there are 1 or more qualifying individuals (as defined in 
subsection (b)(1)) with respect to such individual’’. 
(b) QUALIFYING INDIVIDUAL.—Paragraph (1) of section 21(b) 
is amended to read as follows: 
‘‘(1) QUALIFYING INDIVIDUAL.—The term ‘qualifying indi-
vidual’ means— 
‘‘(A) a dependent of the taxpayer (as defined in section 
152(a)(1)) who has not attained age 13, 
‘‘(B) a dependent of the taxpayer who is physically 
or mentally incapable of caring for himself or herself and 
who has the same principal place of abode as the taxpayer 
for more than one-half of such taxable year, or 
‘‘(C) the spouse of the taxpayer, if the spouse is phys-
ically or mentally incapable of caring for himself or herself 
and who has the same principal place of abode as the 
taxpayer for more than one-half of such taxable year.’’.
H. R. 1308—11 
(c) CONFORMING AMENDMENT.—Paragraph (1) of section 21(e) 
is amended to read as follows: 
‘‘(1) PLACE OF ABODE.—An individual shall not be treated 
as having the same principal place of abode of the taxpayer 
if at any time during the taxable year of the taxpayer the 
relationship between the individual and the taxpayer is in 
violation of local law.’’. 
SEC. 204. MODIFICATIONS OF CHILD TAX CREDIT. 
(a) IN GENERAL.—Paragraph (1) of section 24(c) is amended 
to read as follows: 
‘‘(1) IN
GENERAL.—The term ‘qualifying child’ means a 
qualifying child of the taxpayer (as defined in section 152(c)) 
who has not attained age 17.’’. 
(b) CONFORMING AMENDMENT.—Section 24(c)(2) is amended by 
striking ‘‘the first sentence of section 152(b)(3)’’ and inserting 
‘‘subparagraph (A) of section 152(b)(3)’’. 
SEC. 205. MODIFICATIONS OF EARNED INCOME CREDIT. 
(a) QUALIFYING
CHILD.—Paragraph (3) of section 32(c) is 
amended to read as follows: 
‘‘(3) QUALIFYING CHILD.— 
‘‘(A) IN GENERAL.—The term ‘qualifying child’ means 
a qualifying child of the taxpayer (as defined in section 
152(c), determined without regard to paragraph (1)(D) 
thereof and section 152(e)). 
‘‘(B) MARRIED INDIVIDUAL.—The term ‘qualifying child’ 
shall not include an individual who is married as of the 
close of the taxpayer’s taxable year unless the taxpayer 
is entitled to a deduction under section 151 for such taxable 
year with respect to such individual (or would be so entitled 
but for section 152(e)). 
‘‘(C) PLACE OF ABODE.—For purposes of subparagraph 
(A), the requirements of section 152(c)(1)(B) shall be met 
only if the principal place of abode is in the United States. 
‘‘(D) IDENTIFICATION REQUIREMENTS.— 
‘‘(i) IN GENERAL.—A qualifying child shall not be 
taken into account under subsection (b) unless the 
taxpayer includes the name, age, and TIN of the quali-
fying child on the return of tax for the taxable year. 
‘‘(ii) OTHER
METHODS.—The Secretary may pre-
scribe other methods for providing the information 
described in clause (i).’’. 
(b) CONFORMING AMENDMENTS.— 
(1) Section 32(c)(1) is amended by striking subparagraph 
(C) and by redesignating subparagraphs (D), (E), (F), and (G) 
as subparagraphs (C), (D), (E), and (F), respectively. 
(2) Section 32(c)(4) is amended by striking ‘‘(3)(E)’’ and 
inserting ‘‘(3)(C)’’. 
(3) Section 32(m) is amended by striking ‘‘subsections 
(c)(1)(F)’’ and inserting ‘‘subsections (c)(1)(E)’’. 
SEC. 206. MODIFICATIONS OF DEDUCTION FOR PERSONAL EXEMPTION 
FOR DEPENDENTS. 
Subsection (c) of section 151 is amended to read as follows: 
‘‘(c) ADDITIONAL EXEMPTION FOR DEPENDENTS.—An exemption 
of the exemption amount for each individual who is a dependent 
(as defined in section 152) of the taxpayer for the taxable year.’’.
H. R. 1308—12 
SEC. 207. TECHNICAL AND CONFORMING AMENDMENTS. 
(1) Section 2(a)(1)(B)(i) is amended by inserting ‘‘, deter-
mined without regard to subsections (b)(1), (b)(2), and (d)(1)(B) 
thereof’’ after ‘‘section 152’’. 
(2) Section 21(e)(5) is amended— 
(A) by striking ‘‘paragraph (2) or (4) of’’ in subpara-
graph (A), and 
(B) by striking ‘‘within the meaning of section 152(e)(1)’’ 
and inserting ‘‘as defined in section 152(e)(3)(A)’’. 
(3) Section 21(e)(6)(B) is amended by striking ‘‘section 
151(c)(3)’’ and inserting ‘‘section 152(f)(1)’’. 
(4) Section 25B(c)(2)(B) is amended by striking ‘‘151(c)(4)’’ 
and inserting ‘‘152(f)(2)’’. 
(5)(A) Subparagraphs (A) and (B) of section 51(i)(1) are 
each amended by striking ‘‘paragraphs (1) through (8) of section 
152(a)’’ both places it appears and inserting ‘‘subparagraphs 
(A) through (G) of section 152(d)(2)’’. 
(B) Section 51(i)(1)(C) is amended by striking ‘‘152(a)(9)’’ 
and inserting ‘‘152(d)(2)(H)’’. 
(6) Section 72(t)(2)(D)(i)(III) is amended by inserting ‘‘, 
determined without regard to subsections (b)(1), (b)(2), and 
(d)(1)(B) thereof’’ after ‘‘section 152’’. 
(7) Section 72(t)(7)(A)(iii) is amended by striking ‘‘151(c)(3)’’ 
and inserting ‘‘152(f)(1)’’. 
(8) Section 42(i)(3)(D)(ii)(I) is amended by inserting ‘‘, deter-
mined without regard to subsections (b)(1), (b)(2), and (d)(1)(B) 
thereof’’ after ‘‘section 152’’. 
(9) Subsections (b) and (c)(1) of section 105 are amended 
by inserting ‘‘, determined without regard to subsections (b)(1), 
(b)(2), and (d)(1)(B) thereof’’ after ‘‘section 152’’. 
(10) Section 120(d)(4) is amended by inserting ‘‘(determined 
without regard to subsections (b)(1), (b)(2), and (d)(1)(B) 
thereof)’’ after ‘‘section 152’’. 
(11) Section 125(e)(1)(D) is amended by inserting ‘‘, deter-
mined without regard to subsections (b)(1), (b)(2), and (d)(1)(B) 
thereof’’ after ‘‘section 152’’. 
(12) Section 129(c)(2) is amended by striking ‘‘151(c)(3)’’ 
and inserting ‘‘152(f)(1)’’. 
(13) The first sentence of section 132(h)(2)(B) is amended 
by striking ‘‘151(c)(3)’’ and inserting ‘‘152(f)(1)’’. 
(14) Section 153 is amended by striking paragraph (1) 
and by redesignating paragraphs (2), (3), and (4) as paragraphs 
(1), (2), and (3), respectively. 
(15) Section 170(g)(1) is amended by inserting ‘‘(determined 
without regard to subsections (b)(1), (b)(2), and (d)(1)(B) 
thereof)’’ after ‘‘section 152’’. 
(16) Section 170(g)(3) is amended by striking ‘‘paragraphs 
(1) through (8) of section 152(a)’’ and inserting ‘‘subparagraphs 
(A) through (G) of section 152(d)(2)’’. 
(17) Section 213(a) is amended by inserting ‘‘, determined 
without regard to subsections (b)(1), (b)(2), and (d)(1)(B) thereof’’ 
after ‘‘section 152’’. 
(18) The second sentence of section 213(d)(11) is amended 
by striking ‘‘paragraphs (1) through (8) of section 152(a)’’ and 
inserting ‘‘subparagraphs (A) through (G) of section 152(d)(2)’’.
H. R. 1308—13 
(19) Section 220(d)(2)(A) is amended by inserting ‘‘, deter-
mined without regard to subsections (b)(1), (b)(2), and (d)(1)(B) 
thereof’’ after ‘‘section 152’’. 
(20) Section 221(d)(4) is amended by inserting ‘‘(determined 
without regard to subsections (b)(1), (b)(2), and (d)(1)(B) 
thereof)’’ after ‘‘section 152’’. 
(21) Section 529(e)(2)(B) is amended by striking ‘‘para-
graphs (1) through (8) of section 152(a)’’ and inserting ‘‘subpara-
graphs (A) through (G) of section 152(d)(2)’’. 
(22) Section 2032A(c)(7)(D) is amended by striking ‘‘section 
151(c)(4)’’ and inserting ‘‘section 152(f)(2)’’. 
(23) Section 2057(d)(2)(B) is amended by inserting ‘‘, deter-
mined without regard to subsections (b)(1), (b)(2), and (d)(1)(B) 
thereof’’ after ‘‘section 152’’. 
(24) Section 7701(a)(17) is amended by striking ‘‘152(b)(4), 
682,’’ and inserting ‘‘682’’. 
(25) Section 7702B(f)(2)(C)(iii) is amended by striking 
‘‘paragraphs (1) through (8) of section 152(a)’’ and inserting 
‘‘subparagraphs (A) through (G) of section 152(d)(2)’’. 
(26) Section 7703(b)(1) is amended— 
(A) by striking ‘‘151(c)(3)’’ and inserting ‘‘152(f)(1)’’, 
and 
(B) by striking ‘‘paragraph (2) or (4) of’’. 
SEC. 208. EFFECTIVE DATE. 
The amendments made by this title shall apply to taxable 
years beginning after December 31, 2004. 
TITLE III—EXTENSIONS OF CERTAIN 
EXPIRING PROVISIONS 
SEC. 301. RESEARCH CREDIT. 
(a) EXTENSION.— 
(1) IN
GENERAL.—Section 41(h)(1)(B) (relating to termi-
nation) is amended by striking ‘‘June 30, 2004’’ and inserting 
‘‘December 31, 2005’’. 
(2) CONFORMING
AMENDMENT.—Section 45C(b)(1)(D) is 
amended by striking ‘‘June 30, 2004’’ and inserting ‘‘December 
31, 2005’’. 
(b) EFFECTIVE DATE.—The amendments made by this section 
shall apply to amounts paid or incurred after June 30, 2004. 
SEC. 302. PARITY IN THE APPLICATION OF CERTAIN LIMITS TO 
MENTAL HEALTH BENEFITS. 
(a) IN GENERAL.—Section 9812(f) is amended— 
(1) by striking ‘‘and’’ at the end of paragraph (1), and 
(2) by striking paragraph (2) and inserting the following 
new paragraphs: 
‘‘(2) on or after January 1, 2004, and before the date 
of the enactment of the Working Families Tax Relief Act of 
2004, and 
‘‘(3) after December 31, 2005.’’. 
(b) ERISA.—Section 712(f) of the Employee Retirement Income 
Security Act of 1974 (29 U.S.C. 1185a(f)) is amended by striking 
‘‘on or after December 31, 2004’’ and inserting ‘‘after December 
31, 2005’’.
H. R. 1308—14 
(c) PHSA.—Section 2705(f) of the Public Health Service Act 
(42 U.S.C. 300gg-5(f)) is amended by striking ‘‘on or after December 
31, 2004’’ and inserting ‘‘after December 31, 2005’’. 
(d) EFFECTIVE DATES.—The amendments made by this section 
shall take effect on the date of the enactment of this Act. 
SEC. 303. WORK OPPORTUNITY CREDIT AND WELFARE-TO-WORK 
CREDIT. 
(a) EXTENSION OF CREDIT.— 
(1) IN GENERAL.—Section 51(c)(4) is amended by striking 
‘‘December 31, 2003’’ and inserting ‘‘December 31, 2005’’. 
(2) LONG-TERM
FAMILY
ASSISTANCE
RECIPIENTS.—Section 
51A(f) is amended by striking ‘‘December 31, 2003’’ and 
inserting ‘‘December 31, 2005’’. 
(b) EFFECTIVE DATE.—The amendments made by this section 
shall apply to individuals who begin work for the employer after 
December 31, 2003. 
SEC. 304. QUALIFIED ZONE ACADEMY BONDS. 
(a) IN GENERAL.—Paragraph (1) of section 1397E(e) is amended 
by striking ‘‘and 2003’’ and inserting ‘‘2003, 2004, and 2005’’. 
(b) EFFECTIVE DATE.—The amendment made by this section 
shall apply to obligations issued after December 31, 2003. 
SEC. 305. COVER OVER OF TAX ON DISTILLED SPIRITS. 
(a) IN GENERAL.—Paragraph (1) of section 7652(f) is amended 
by striking ‘‘January 1, 2004’’ and inserting ‘‘January 1, 2006’’. 
(b) EFFECTIVE DATE.—The amendment made by this section 
shall apply to articles brought into the United States after December 
31, 2003. 
SEC. 306. DEDUCTION FOR CORPORATE DONATIONS OF SCIENTIFIC 
PROPERTY AND COMPUTER TECHNOLOGY. 
(a) IN GENERAL.—Section 170(e)(6)(G) is amended by striking 
‘‘2003’’ and inserting ‘‘2005’’. 
(b) EFFECTIVE DATE.—The amendment made by this section 
shall apply to contributions made in taxable years beginning after 
December 31, 2003. 
SEC. 307. DEDUCTION FOR CERTAIN EXPENSES OF SCHOOL TEACHERS. 
(a) IN GENERAL.—Subparagraph (D) of section 62(a)(2) is 
amended by striking ‘‘or 2003’’ and inserting ‘‘, 2003, 2004, or 
2005’’. 
(b) EFFECTIVE DATE.—The amendment made by subsection (a) 
shall apply to expenses paid or incurred in taxable years beginning 
after December 31, 2003. 
SEC. 308. EXPENSING OF ENVIRONMENTAL REMEDIATION COSTS. 
(a) EXTENSION OF TERMINATION DATE.—Subsection (h) of sec-
tion 198 is amended by striking ‘‘December 31, 2003’’ and inserting 
‘‘December 31, 2005’’. 
(b) EFFECTIVE DATE.—The amendment made by subsection (a) 
shall apply to expenditures paid or incurred after December 31, 
2003. 
SEC. 309. CERTAIN NEW YORK LIBERTY ZONE BENEFITS. 
(a) EXTENSION
OF TAX-EXEMPT BOND FINANCING.—Subpara-
graph (D) of section 1400L(d)(2) is amended by striking ‘‘2005’’ 
and inserting ‘‘2010’’.
H. R. 1308—15 
(b) EXTENSION OF ADVANCE REFUNDINGS.—Section 1400L(e)(1) 
is amended by striking ‘‘2005’’ and inserting ‘‘2006’’. 
(c) 
CLARIFICATION
OF
BONDS
ELIGIBLE
FOR
ADVANCE 
REFUNDING.—Section 1400L(e)(2)(B) (relating to bonds described) 
is amended by striking ‘‘, or’’ and inserting ‘‘or the Municipal 
Assistance Corporation, or’’. 
(d) EFFECTIVE DATE.—The amendment made by subsection (c) 
shall take effect as if included in the amendments made by section 
301 of the Job Creation and Worker Assistance Act of 2002. 
SEC. 310. TAX INCENTIVES FOR INVESTMENT IN THE DISTRICT OF 
COLUMBIA. 
(a) DESIGNATION OF ZONE.—Subsection (f) of section 1400 is 
amended by striking ‘‘December 31, 2003’’ both places it appears 
and inserting ‘‘December 31, 2005’’. 
(b) TAX-EXEMPT ECONOMIC DEVELOPMENT BONDS.—Subsection 
(b) of section 1400A is amended by striking ‘‘December 31, 2003’’ 
and inserting ‘‘December 31, 2005’’. 
(c) ZERO PERCENT CAPITAL GAINS RATE.— 
(1) IN
GENERAL.—Subsection (b) of section 1400B is 
amended by striking ‘‘January 1, 2004’’ each place it appears 
and inserting ‘‘January 1, 2006’’. 
(2) CONFORMING AMENDMENTS.— 
(A) Section 1400B(e)(2) is amended— 
(i) by striking ‘‘December 31, 2008’’ and inserting 
‘‘December 31, 2010’’, and 
(ii) by striking ‘‘2008’’ in the heading and inserting 
‘‘2010’’. 
(B) Section 1400B(g)(2) is amended by striking 
‘‘December 31, 2008’’ and inserting ‘‘December 31, 2010’’. 
(C) Section 1400F(d) is amended by striking ‘‘December 
31, 2008’’ and inserting ‘‘December 31, 2010’’. 
(d) FIRST-TIME HOMEBUYER CREDIT.—Subsection (i) of section 
1400C is amended by striking ‘‘January 1, 2004’’ and inserting 
‘‘January 1, 2006’’. 
(e) EFFECTIVE DATES.— 
(1) IN GENERAL.—Except as provided in paragraph (2), the 
amendments made by this section shall take effect on January 
1, 2004. 
(2) TAX-EXEMPT
ECONOMIC
DEVELOPMENT
BONDS.—The 
amendment made by subsection (b) shall apply to obligations 
issued after the date of the enactment of this Act. 
SEC. 311. DISCLOSURE OF TAX INFORMATION TO FACILITATE COM-
BINED EMPLOYMENT TAX REPORTING. 
(a) IN GENERAL.—Paragraph (5) of section 6103(d) (relating 
to disclosure to State tax officials and State and local law enforce-
ment agencies) is amended to read as follows: 
‘‘(5) 
DISCLOSURE
FOR
COMBINED
EMPLOYMENT
TAX 
REPORTING.— 
‘‘(A) IN GENERAL.—The Secretary may disclose taxpayer 
identity information and signatures to any agency, body, 
or commission of any State for the purpose of carrying 
out with such agency, body, or commission a combined 
Federal and State employment tax reporting program 
approved by the Secretary. Subsections (a)(2) and (p)(4) 
and sections 7213 and 7213A shall not apply with respect
H. R. 1308—26 
(3) Subclause (I) of section 42(d)(2)(D)(iii) is amended by 
striking ‘‘section 179(b)(7)’’ and inserting ‘‘section 179(d)(7)’’. 
(4) Subsection (f) of section 72 is amended by striking 
‘‘Economic Growth and Tax Relief Reconciliation Act of 2001’’ 
and inserting ‘‘Economic Growth and Tax Relief Reconciliation 
Act of 2001)’’. 
(5)(A) Section 138 and paragraph (2) of section 26(b) are 
each amended by striking ‘‘Medicare+Choice MSA’’ each place 
it appears in the text and inserting ‘‘Medicare Advantage MSA’’. 
(B) The heading for section 138 is amended to read as 
follows: 
‘‘SEC. 138. MEDICARE ADVANTAGE MSA.’’. 
(C) The heading for subsection (b) of section 138 is amended 
by striking ‘‘MEDICARE+CHOICE MSA’’ and inserting ‘‘MEDICARE 
ADVANTAGE MSA’’. 
(D) The heading for paragraph (2) of section 138(c) is 
amended by striking ‘‘MEDICARE+CHOICE MSA’’ and inserting 
‘‘MEDICARE ADVANTAGE MSA’’. 
(E) Clause (i) of section 138(c)(2)(C) is amended by striking 
‘‘Medicare+Choice MSAs’’ and inserting ‘‘Medicare Advantage 
MSAs’’. 
(F) Subsection (f) of section 138 is amended by striking 
‘‘Medicare+Choice MSA’s’’ and inserting ‘‘Medicare Advantage 
MSAs’’. 
(G) The item relating to section 138 in the table of sections 
for part III of subchapter B of chapter 1 is amended to read 
as follows: 
‘‘Sec. 138. Medicare Advantage MSA.’’. 
(6) Clause (ii) of section 168(k)(2)(D) is amended— 
(A) by inserting ‘‘is’’ after ‘‘if property’’, and 
(B) by striking ‘‘is’’ in subclause (I). 
(7) Each of the following provisions is amended by inserting 
‘‘Robert T. Stafford’’ before ‘‘Disaster Relief and Emergency 
Assistance Act’’: 
(A) Section 165(i)(1). 
(B) Section 165(k). 
(C) Section 1033(h)(3). 
(D) Section 5064(b)(3). 
(E) Section 5708(a). 
(8) The heading for subparagraph (F) of section 168(k)(2) 
is amended by striking ‘‘MINIUMUM’’ and inserting ‘‘MINIMUM’’. 
(9) Paragraph (1) of section 246A(b) is amended by striking 
‘‘section 243(c)(4)’’ and inserting ‘‘section 243(d)(4)’’. 
(10) Clause (ii) of section 263(g)(2)(B) is amended by 
striking ‘‘1278’’ and inserting ‘‘1276’’. 
(11) Clause (ii) of section 403(b)(7)(A) is amended by 
striking 
‘‘section 
3121(a)(1)(D)’’ 
and 
inserting 
‘‘section 
3121(a)(5)(D)’’. 
(12) Paragraph (1) of section 408(a) is amended by striking 
‘‘457(e)(16)’’ and inserting ‘‘457(e)(16),’’. 
(13) Paragraph (2) of section 408(n) is amended by striking 
‘‘section 101(6)’’ and inserting ‘‘paragraph (6) or (7) of section 
101’’.