An Act to amend the Internal Revenue Code of 1954 with respect to the limitation on retirement income, and with respect to the taxable year for which the deduction for interest paid will be allowable to certain building and loan associations, mutual savings banks, and cooperative banks
PL 87-876 (H.R.6371), enacted 10/24/1962

76 STAT.] 
PUBLIC LAW 87-876-OCT. 24, 1962 
1199 
Public Law 87-876 
AN ACT 
To amend the Internal Revenue Code of 1954 with respect to the limitation on 
retirement income, and with respect to the taxable year for which the deduc-
tion for interest paid will be allowable to certain building and loan associ-
ations, mutual savings banks, and cooperative banks. 
Be it enacted hy the Senate and House of Representatives 
of the 
United States of America in Congress assembled^ That section 37(d) 
of the Internal Eevenue Code of 1954 (relating to limitation on retire-
ment income) is amended to read as follows: 
"(d) LIMITATION ON EETIREMENT INCOME.—For purposes of sub-
section (a), the amount of retirement income shall not exceed $1,524 
less— 
"(1) in the case of any individual, any amount received by 
: 
the individual as a pension or annuity— 
"(A) under title II of the Social Security Act, 
"(B) under the Kailroad Retirement Acts of 1935 or 
1937, or 
"(C) otherwise excluded from gross income, and 
"(2) in the case of any individual who has not attained age 72 
before the close of the taxable year— 
"(A) if such individual has not attained age 62 before 
4 
the close of the taxable year, any amount of earned income (as 
defined in subsection (g)) in excess of $900 received by such 
individual in the taxable year, or 
\r 
"(B) if such individual has attained age 62 before the 
close of the taxable year, the sum of (i) one-half the amount 
of earned income received by such individual in the taxable 
year in excess of $1,200 but not in excess of $1,700, and (ii) the 
amount of earned income so received,in excess of $1,700." 
SEC. 2. The amendment made by the first section of this Act shall 
apply only to taxable years ending after the date of the enactment of 
this Act, 
SEC. 3. (a) Section 461 of the Internal Revenue Code of 1954 
(relating to general rule for taxable year of deduction) is amended.by 
adding at the end thereof the following new subsection: 
"(e) 
DIVIDENDS OR INTEREST PAID ON CERTAIN DEPOSITS OR W I T H -
DRAWABLE ACCOUNTS.—Except as provided in regulations prescribed 
by the Secretary or his delegate, amounts paid to, or credited to the 
accounts of, depositors or holders of accounts as dividends or interest 
on their deposits or withdrawable accounts (if such amounts paid or 
credited are withdrawable on demand subject only to customary notice 
to withdraw) by a mutual savings bank not having capital stock 
represented by shares, a domestic building and loan association, or a 
cooperative bank shall not be allowed as a deduction for the taxable 
year to the extent such amounts are paid or credited for periods 
representing more than 12 months. Any such amount not allowed as 
a deduction as the result of the application of the preceding sentence 
shall be allowed as a deduction for such other taxable year as the 
Secretary or his delegate determines to be consistent with the 
preceding sentence." 
(b) The amendment made by subsection (a) shall apply only with 
respect to taxable years ending after December 31, 1962. 
Approved October 24, 1962. 
October 24, 1962 
[H. R. 6371] 
Internal Revenue. 
Retirement in-
come, limitations. 
26 u s e 37. 
42 u s e 
425. 
49 Stat. 
45 u s e 
50 Stat. 
45 u s e 
228S-1. 
401-
967. 
215-228, 
307. 
228a-
Effective date. 
Deductions. 
Dividends or 
interest paid. 
26 u s e 461. 
Effective 
date.