Combat Pay Tax Flexibility Act of 2007

Combat Pay Tax Flexibility Act of 2007 - Amends the Internal Revenue Code to make permanent the taxpayer election to include combat zone compensation as earned income for purposes of calculating the earned income tax credit.

[Congressional Bills 110th Congress]
[From the U.S. Government Publishing Office]
[H.R. 3736 Introduced in House (IH)]







110th CONGRESS
  1st Session
                                H. R. 3736

   To amend the Internal Revenue Code of 1986 to make permanent the 
   election to treat combat pay as earned income for purposes of the 
                       earned income tax credit.


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

                            October 3, 2007

Mr. Braley of Iowa introduced the following bill; which was referred to 
                    the Committee on Ways and Means

_______________________________________________________________________

                                 A BILL


 
   To amend the Internal Revenue Code of 1986 to make permanent the 
   election to treat combat pay as earned income for purposes of the 
                       earned income tax credit.

    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 ``Combat Pay Tax Flexibility Act of 
2007''.

SEC. 2. ELECTION TO TREAT COMBAT PAY AS EARNED INCOME FOR PURPOSES OF 
              THE EARNED INCOME TAX CREDIT MADE PERMANENT.

    (a) In General.--Clause (vi) of section 32(c)(2)(B) of the Internal 
Revenue Code of 1986 (defining earned income) 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) Sunset Not Applicable.--Section 105 of the Working Families Tax 
Relief Act of 2004 (relating to application of EGTRRA sunset to this 
title) shall not apply to section 104(b) of such Act.
    (c) Effective Date.--The amendment made by this section shall apply 
to taxable years ending after December 31, 2007.
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