State Of New York et al v. Mnuchin et al

Filing 47

DECLARATION of Owen T. Conroy in Support re: 44 CROSS MOTION for Summary Judgment .. Document filed by State Of Connecticut, State Of New York, State of Maryland, State of New Jersey. (Attachments: # 1 Exhibit 1, # 2 Exhibit 2, # 3 Exhibit 3, # 4 Exhibit 4, # 5 Exhibit 5, # 6 Exhibit 6, # 7 Exhibit 7, # 8 Exhibit 8, # 9 Exhibit 9, # 10 Exhibit 10, # 11 Exhibit 11, # 12 Exhibit 12, # 13 Exhibit 13, # 14 Exhibit 14, # 15 Exhibit 15, # 16 Exhibit 16, # 17 Exhibit 17, # 18 Exhibit 18, # 19 Exhibit 19, # 20 Exhibit 20, # 21 Exhibit 21, # 22 Exhibit 22, # 23 Exhibit 23, # 24 Exhibit 24, # 25 Exhibit 25, # 26 Exhibit 26, # 27 Exhibit 27, # 28 Exhibit 28, # 29 Exhibit 29, # 30 Exhibit 30, # 31 Exhibit 31, # 32 Exhibit 32, # 33 Exhibit 33, # 34 Exhibit 34, # 35 Exhibit 35, # 36 Exhibit 36, # 37 Exhibit 37, # 38 Exhibit 38, # 39 Exhibit 39, # 40 Exhibit 40, # 41 Exhibit 41, # 42 Exhibit 42, # 43 Exhibit 43, # 44 Exhibit 44, # 45 Exhibit 45, # 46 Exhibit 46, # 47 Exhibit 47, # 48 Exhibit 48, # 49 Exhibit 49, # 50 Exhibit 50, # 51 Exhibit 51, # 52 Exhibit 52, # 53 Exhibit 53, # 54 Exhibit 54, # 55 Exhibit 55, # 56 Exhibit 56, # 57 Exhibit 57, # 58 Exhibit 58, # 59 Exhibit 59, # 60 Exhibit 60, # 61 Exhibit 61, # 62 Exhibit 62, # 63 Exhibit 63, # 64 Exhibit 64, # 65 Exhibit 65, # 66 Exhibit 66, # 67 Exhibit 67, # 68 Exhibit 68, # 69 Exhibit 69, # 70 Exhibit 70, # 71 Exhibit 71, # 72 Exhibit 72, # 73 Exhibit 73, # 74 Exhibit 74, # 75 Exhibit 75, # 76 Exhibit 76, # 77 Exhibit 77, # 78 Exhibit 78, # 79 Exhibit 79, # 80 Exhibit 80, # 81 Exhibit 81, # 82 Exhibit 82, # 83 Exhibit 83, # 84 Exhibit 84, # 85 Exhibit 85, # 86 Exhibit 86, # 87 Exhibit 87, # 88 Exhibit 88, # 89 Exhibit 89, # 90 Exhibit 90, # 91 Exhibit 91, # 92 Exhibit 92, # 93 Exhibit 93, # 94 Exhibit 94, # 95 Exhibit 95, # 96 Exhibit 96, # 97 Exhibit 97, # 98 Exhibit 98, # 99 Exhibit 99, # 100 Exhibit 100, # 101 Exhibit 101, # 102 Exhibit 102, # 103 Exhibit 103, # 104 Exhibit 104, # 105 Exhibit 105, # 106 Exhibit 106)(Conroy, Owen)

Exhibit 66

104 STAT. 1388-408

26 USC l note.

PUBLIC LAW 101-508—NOV. 5, 1990

after 1989, the dollar amount contained in paragraph (1)
shall be increased by an amount equal to—
"(i) such dollar amount, multiplied by
"(ii) the cost-of-living adjustment determined under
section 1(0(3) for the calendar year in which the taxable year begins, by substituting 'calendar year 1988'
for 'calendar year 1989' in subparagraph (B) thereof.
"(B) ADJUSTMENT TO THRESHOLD AMOUNTS FOR YEARS
AFTER 1991.—In the case of any taxable year beginning in a
calendar year after 1991, each dollar amount contained in
paragraph (3XC) shall be increased by an amount equal to—
"(i) such dollar amount, multiplied by
"(ii) the cost-of-living adjustment determined under
section KfK3) for the calendar year in which the taxable year begins, by substituting 'calendar year 1990'
for 'calendar year 1989' in subparagraph (B) thereof."
0)) CONFORMING AMENDMENT.—Paragraph (6) of section 1(0 is
amended—
(1) by striking "section 151(dX3)" in subparagraph (A) and
inserting "section 151(dX4)", and
(2) by striking "section 151(dX3)" in subparagraph (B) and
inserting "section 151(dX4XA)".
(c) EFFECTIVE DATE.—The amendments made by this section shall
apply to taxable years beginning after December 31,1990.

PART II—MODIFICATIONS OF EARNED INCOME
CREDIT
SEC. 11111. MODIFICATIONS OF EARNED INCOME TAX CREDIT.

(a) IN GENERAL.—So much of section 32 (relating to earned income
credit) as precedes subsection (d) thereof is amended to read as
follows:
"SEC. 32. EARNED INCOME.

"(a) ALLOWANCE OF CREDIT.—In the case of an eligible individual,
there shall be allowed as a credit against the tax imposed by this
subtitle for the taxable year an amount equal to the sum of—
"(1) the basic earned income credit, and
"(2) the health insurance credit.
"(b) COMPUTATION OF CREDIT.—For purposes of this section—
"(1) BASIC EARNED INCOME CREDIT.—
"(A) IN GENERAL.—The term 'basic earned income credit'
means an amount equal to the credit percentage of so much
of the taxpayer's earned income for the taxable year as does
not exceed $5,714.
"(B) LIMITATION.—The amount of the basic earned
income credit allowable to a taxpayer for any taxable year
shall not exceed the excess (if any) of—
"(i) the credit percentage of $5,714, over
"(ii) the phaseout percentage of so much of the adjusted gross income (or, if greater the earned income) of
the taxpayer for the taxable year as exceeds $9,000.
"(C) PERCENTAGES.—For purposes of this paragraph—
"(i) IN GENERAL.—Except as provided in clause (ii),
the percentages shall be determined as follows:

PUBLIC LAW 101-508—NOV. 5,1990
"Inthecsseofaneligibleindiv^with:
1 qualifying child
2 or more qualifying children

„££*.
23
25

104 STAT. 1388-409
£&££
16.43
17.86

"(ii) TRANSITION PERCENTAGES.—
"(I) For taxable years beginning in 1991, the
percentages are:
"Inthecaaeofaneligibleindividualwith:
1 qualifying child
2 or more qualifying children

^^
16.7
17.3

]%££££
11.93
12.36

"(II) For taxable years beginning in 1992, the
percentages are:
"in^ca.eofaneligiblaindividua.with:
1 qualifying child
2 or more qualifying children

^^
17.6
18.4

*jSS
12.57
13.14

"(III) For taxable years beginning in 1993, the
percentages are:
"In the caae of an eligible individual with:
1 qualifying child
2 or more qualifying children

p^SSSta
18.5
19.5

mta£fc
13.21
13.93

"(D) SUPPLEMENTAL YOUNG CHILD CREDIT.—In the case of
a taxpayer with a qualifying child who has not attained age
1 as of the close of the calendar year in which or with which
the taxable year of the taxpayer ends—
"(i) the credit percentage shall be increased by 5
percentage points, and
"(ii) the phaseout percentage shall be increased by
3.57 percentage points.
If the taxpayer elects to take a child into account under this
Bubparagraph, such child shall not be treated as a qualifying individual under section 21.
"(2) HEALTH INSURANCE CREDIT.—
"(A) IN GENERAL.—The term 'health insurance credit'
means an amount determined in the same manner as the
basic earned income credit except that—
"(i) the credit percentage shall be equal to 6 percent,
and
"(ii) the phaseout percentage shall be equal to 4.285
percent.
"(B) LIMITATION BASED ON HEALTH INSURANCE COSTS.—The
amount of the health insurance credit determined under
subparagraph (A) for any taxable year shall not exceed the
amounts paid by the taxpayer during the taxable year for
insurance coverage—
"(i) which constitutes medical care (within the meaning of section 213(dXlXC))> and
'(ii) which includes at least 1 qualifying child.
For purposes of this subparagraph, the rules of section
213(dX6) shall apply.
"(C) SUBSIDIZED EXPENSES.—A taxpayer may not take into
account under subparagraph (B) any amount to the extent
that—

104 STAT. 1388-410

PUBLIC LAW 101-508—NOV. 5,1990

"(i) such amount is paid, reimbursed, or subsidized by
the Federal Government, a State or local government,
or any agency or instrumentality thereof; and
"(ii) the payment, reimbursement, or subsidy of such
amount is not includible in the gross income of the
recipient.
"(c) DEFINITIONS AND SPECIAL RULES.—For purposes of this
section—
"(1) ELIGIBLE INDIVIDUAL.—
"(A) IN GENERAL.—The term 'eligible individual' means
any individual who has a qualifying child for the taxable
year.
"(B) QUALIFYING CHILD INELIGIBLE—If an individual is
the qualifying child of a taxpayer for any taxable year of
such taxpayer beginning in a calendar year, such individual
shall not be treated as an eligible individual for any taxable
year of such individual beginning in such calendar year.
"(C) 2 OB MORE ELIGDJLE INDIVTDUALS.—If 2 or more
individuals would (but for this subparagraph and after
application of subparagraph (B)) be treated as eligible
individuals with respect to the same qualifying child for
taxable years beginning in the same calendar year, only the
individual with the highest adjusted gross income for such
taxable years shall be treated as an eligible individual with
respect to such qualifying child.
CD) EXCEPTION FOR INDIVIDUAL CLAIMING BENEFITS UNDER
SECTION 9ii.—The term 'eligible individual' does not include any individual who claims the benefits of section 911
(relating to citizens or residents living abroad) for the taxable year.
"(2) EARNED TOCOME.—
"(A) The term 'earned income' means—
"(i) wages, salaries, tips, and other employee compensation, plus
"(ii) the amount of the taxpayer's net earnings from
self-employment for the taxable year (within the meaning of section 1402(a)), but such net earnings shall be
determined with regard to the deduction allowed to the
taxpayer by section 164(f).
"(B) For purposes of subparagraph (A)—
"(i) the earned income of an individual shall be computed without regard to any community property laws,
"(ii) no amount received as a pension or annuity shall
be taken into account, and
"(iii) no amount to which section 871(a) applies (relate
ing to income of nonresident alien individuals not connected with United States business) shall be taken into
account.
"(3) QUALIFYING CHILD.—
(A) IN GENERAL.—The term 'qualifying child' means,
with respect to any taxpayer for any taxable year, an
individual—
"(i) who bears a relationship to the taxpayer described in subparagraph (B),
"(ii) except as provided in subparagraph (BXiii), who
has the same principal place of abode as the taxpayer
for more than one-half of such taxable year,

PUBLIC LAW 101-508—NOV. 5, 1990
"(iii) who meets the age requirements of subparagraph (C), and
"(iv) with respect to whom the taxpayer meets the
identification requirements of subparagraph (D).
"(B) RELATIONSHIP TEST —
"(i) IN GENERAL.—An individual bears a relationship
to the taxpayer described in this subparagraph if such
individual is—
"(I) a son or daughter of the taxpayer, or a
descendant of either,
"(II) a stepson or stepdaughter of the taxpayer,
or
"CUD an eligible foster child of the taxpayer.
"(ii) MARRIED CHILDREN.—Clause (i) shall not apply to
any individual who is married as of the close of the
taxpayer's taxable year unless the taxpayer is entitled
to a deduction under section 151 for such taxable year
with respect to such individual (or would be so entitled
but for paragraph (2) or (4) of section 152(e)).
"(iii) ELIGIBLE FOSTER CHILD.—For purposes of clause
(iXni), the term 'eligible foster child' means an individual not described in clause (i) CO or (ID who—
"(I) the taxpayer cares for as the taxpayer's own
child, and
"(II) has the same principal place of abode as the
taxpayer for the taxpayer's entire taxable year.
"(iv) ADOPTION.—For purposes of this subparagraph,
a child who is legally adopted, or who is placed with the
taxpayer by an authorized placement agency for adoption by the taxpayer, shall be treated as a child by
blood.
"(C) AGE REQUIREMENTS.—An individual meets the
requirements of this subparagraph if such individual—
"(i) has not attained the age of 19 as of the close of
the calendar year in which the taxable year of the
taxpayer begins,
"(ii) is a student (as defined in section 151(cX4)) who
has not attained the age of 24 as of the close of such
calendar year, or
"(iii) is permanently and totally disabled (as defined
in section 22(e)(3)) at any time during the taxable year.
"(D) IDENTIFICATION REQUIREMENTS.—
"(i) IN GENERAL.—The requirements of this subparagraph are met if—
"(I) the taxpayer includes the name and age of
each qualifying child (without regard to this
subparagraph) on the return of tax for the taxable
year, and
"(II) in the case of an individual who has attained the age of 1 year before the close of the
taxpayer's taxable year, the taxpayer includes the
taxpayer identification number of such individual
on such return of tax for such taxable year.
"(ii) INSURANCE POLICY NUMBER.—In the case of any
taxpayer with respect to which the health insurance
credit is allowed under subsection (aX2), the Secretary
may require a taxpayer to include an insurance policy

104 STAT. 1388-411

104 STAT. 1888-412

PUBLIC LAW 101-508—NOV. 5, 1990

number or other adequate evidence of insurance in
addition to any information required to be included in
clause (i).
"(iii) OTHER METHODS.—The Secretary may prescribe
other methods for providing the information described
in clause (i) or (ii).
"(E) ABODE MUST BE IN THE UNITED STATES.—The requirements of subparagraphB (AXii) and (BXiiiXID shall be met
only if the principal place of abode is in the United States."
(b) COORDINATION WITH CERTAIN MEANS-TESTED PROGRAMS.—Section 32 is amended by adding at the end thereof the following new
subsection:
"(j) COORDINATION WITH CERTAIN MEANB-TBSTED PROGRAMS.—For
purposes of—
"(1) the United States Housing Act of 1937,
"(2) title V of the Housing Act of 1949,
"(3) section 101 of the Housing and Urban Development Act of
1965,
"(4) sections 221(dX3), 235, and 236 of the National Housing
Act, and
"(5) the Food Stamp Act of 1977,
any refund made to an individual (or the spouse of an individual) by
reason of this section, and any payment made to such individual (or
such spouse) by an employer under section 3507, shall not be treated
as income (and shall not be taken into account in determining
resources for the month of its receipt and the following month).'
(c) ADVANCE PAYMENT OF CREDIT.—SubparagraphB (B) and (© of
section 3507(cX2) are amended to read as follows:
"(B) if the employee is not married, or if no earned
income eligibility certificate is in effect with respect to the
spouse of the employee, shall treat the credit provided by
section 32 as if it were a credit—
"(i) of not more than the credit percentage under
section 32(bXD (without regard to subparagraph (D)
thereof) for an eligible individual with 1 qualifying
child and with earned income not in excess of the
amount of earned income taken into account under
section 32(aXD, which
"(ii) phases out between the amount of earned
income at which the phaseout begins under section
32(bXlXBXii) and the amount of income at which the
credit under section 32(aXD phases out for an eligible
individual with 1 qualifying child, or
"(C) if an earned income eligibility certificate is in effect
with respect to the spouse of the employee, shall treat the
credit as if it were a credit determined under subparagraph
(B) by substituting Vi of the amounts of earned income
described in such subparagraph for such amounts."
(d) COORDINATION WITH DEDUCTIONS.—
(1) MEDICAL DEDUCTION.—Section 213 is amended by adding at
the end thereof the following new subsection:
"(f) COORDINATION WITH HEALTH INSURANCE CREDIT UNDER SECTION 32.—The amount otherwise taken into account under subsection (a) as expenses paid for medical care shall be reduced by the
amount (if any) of the health insurance credit allowable to the
taxpayer for the taxable year under section 82."