[Congressional Bills 109th Congress]
[From the U.S. Government Publishing Office]
[S. 896 Introduced in Senate (IS)]







109th CONGRESS
  1st Session
                                 S. 896

   To modify the optional method of computing net earnings from self-
                              employment.


_______________________________________________________________________


                   IN THE SENATE OF THE UNITED STATES

                             April 25, 2005

 Mr. Feingold introduced the following bill; which was read twice and 
                  referred to the Committee on Finance

_______________________________________________________________________

                                 A BILL


 
   To modify the optional method of computing net earnings from self-
                              employment.

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

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Farmer Tax Fairness Act of 2005''.

SEC. 2. MODIFICATION TO OPTIONAL METHOD OF COMPUTING NET EARNINGS FROM 
              SELF-EMPLOYMENT.

    (a) Amendments to the Internal Revenue Code of 1986.--
            (1) In general.--The matter following paragraph (15) of 
        section 1402(a) of the Internal Revenue Code of 1986 is 
        amended--
                    (A) by striking ``$2,400'' each place it appears 
                and inserting ``the upper limit'', and
                    (B) by striking ``$1,600'' each place it appears 
                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 paragraph (15) of 
        section 211(a) of the Social Security Act is amended--
                    (A) by striking ``$2,400'' each place it appears 
                and inserting ``the upper limit'', and
                    (B) by striking ``$1,600'' each place it appears 
                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 section 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 the date of the enactment of 
this Act.
                                 <all>