II 110th CONGRESS 1st Session S. 516 IN THE SENATE OF THE UNITED STATES February 7, 2007 Mr. Pryor (for himself, Mr. Warner, and Mrs. Lincoln) introduced the following bill; which was read twice and referred to the Committee on Finance A BILL To amend the Internal Revenue Code of 1986 to make permanent the option of including combat pay when computing earned income.

1.

Short title

This Act may be cited as the Tax Relief for Americans in Combat Act or the TRAC Act.

2.

Earned income includes combat pay

(a)

Earned income credit

Clause (vi) of section 32(c)(2)(B) of the Internal Revenue Code of 1986 is amended to read as follows: (vi)a taxpayer may elect to treat amounts excluded from gross income by reason of section 112 as earned income. . (b)

Repeal of EGTRRA sunset applicability

Section 105 of the Working Families Tax Relief Act of 2004 shall not apply to the amendments made by section 104(b) of such Act. (c)

Effective date

The amendment made by subsection (a) shall apply to taxable years ending after December 31, 2006.