[Congressional Bills 109th Congress]
[From the U.S. Government Publishing Office]
[H.R. 4019 Enrolled Bill (ENR)]


        H.R.4019

                       One Hundred Ninth Congress

                                 of the

                        United States of America


                          AT THE SECOND SESSION

          Begun and held at the City of Washington on Tuesday,
             the third day of January, two thousand and six


                                 An Act


 
 To amend title 4 of the United States Code to clarify the treatment of 
  self-employment for purposes of the limitation on State taxation of 
                           retirement income.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. CLARIFICATION OF TREATMENT OF SELF-EMPLOYMENT FOR PURPOSES 
              OF THE LIMITATION ON STATE TAXATION OF RETIREMENT INCOME.

    (a) In General.--Section 114(b)(1)(I) of title 4, United States 
Code, is amended--
        (1) by inserting ``(or any plan, program, or arrangement that 
    is in writing, that provides for retirement payments in recognition 
    of prior service to be made to a retired partner, and that is in 
    effect immediately before retirement begins)'' after ``section 
    3121(v)(2)(C) of such Code'',
        (2) by inserting ``which may include income described in 
    subparagraphs (A) through (H)'' after ``(not less frequently than 
    annually'',
        (3) by adding at the end the following:
        ``The fact that payments may be adjusted from time to time 
        pursuant to such plan, program, or arrangement to limit total 
        disbursements under a predetermined formula, or to provide cost 
        of living or similar adjustments, will not cause the periodic 
        payments provided under such plan, program, or arrangement to 
        fail the `substantially equal periodic payments' test.'', and
        (4) by adding at the end the following:
        ``(4) For purposes of this section, the term `retired partner' 
    is an individual who is described as a partner in section 
    7701(a)(2) of the Internal Revenue Code of 1986 and who is retired 
    under such individual's partnership agreement.''.
    (b) Application.--The amendments made by this section apply to 
amounts received after December 31, 1995.

                               Speaker of the House of Representatives.

                            Vice President of the United States and    
                                               President of the Senate.