# Pub. L. 98-21: changes to the Internal Revenue Code 1983-04-20, 97 Stat. 87. Source: . ## Legislative history - Bill: [H.R. 1900](https://www.congress.gov/bill/98th-congress/house-bill/1900) ## § 21: Expenses for household and dependent care services necessary for gainful employment - § 21(b)(2): Pub. L. 98–21 substituted “relating to credit for the elderly and the permanently and totally disabled” for “relating to credit for the elderly”. ## § 22: Credit for the elderly and the permanently and totally disabled - § 22: Pub. L. 98–21 inserted reference to permanently and totally disabled in section catchline. - § 22(a): Pub. L. 98–21 amended subsec. (a) generally, substituting reference to a qualified individual for reference to an individual who has attained the age of 65 before the close of the taxable year. - § 22(b): Pub. L. 98–21 in amending section generally added subsec. (b). Former subsec. (b) redesignated (c). - § 22(c): Pub. L. 98–21 in amending section generally, redesignated former subsec. (b) as (c) and, in (c) as so redesignated, added par. (2) and struck out former (2), which had provided that the initial amount was $2,500 in the case of a single individual, $2,500 in the case of a joint return where only one spouse was eligible for the credit under subsection (a), $3,750 in the case of a joint return where both spouses were eligible for the credit under subsection (a), or $1,875 in the case of a married individual filing a separate return, redesignated existing provisions as par. (3)(A), inserted “benefit” after “disability” therein, struck out former subpars. (A) to (C), which had specified sources of amounts received under title II of the Social Security Act, under the Railroad Retirement Act of 1935 or 1937, or otherwise excluded from gross income, added cls. (i) and (ii), substituted provision that no reduction would be made under cl. (i)(III) for any amount described in section 104(a)(4) for provision that no reduction would be made under former par. (3) for any amount excluded from gross income under section 72 (relating to annuities), 101 (relating to life insurance proceeds), 104 (relating to compensation for injuries or sickness), 105 (relating to amounts received under accident and health plans), 120 (relating to amounts received under qualified group legal services plans), 402 (relating to taxability of beneficiary of employees’ trust), 403 (relating to taxation of employee annuities), or 405 (relating to qualified bond purchase plans), and added subpar. (B). Former subsec. (c) redesignated (d). - § 22(d): Pub. L. 98–21 in amending section generally redesignated former subsec. (c) as (d). Former subsec. (d) redesignated (e). - § 22(e): Pub. L. 98–21 in amending section generally, redesignated former subsec. (d) as (e) and struck out provision that “joint return” meant the joint return of a husband and wife made under section 6013 and inserted provisions defining permanent and total disability. Former subsec. (e), which provided for an election of prior law with respect to public retirement system income, was struck out. - § 22(f): Pub. L. 98–21 reenacted subsec. (f) without change. ## § 32: Earned income - § 32(c)(2)(A)(ii): Pub. L. 98–21 inserted before period at end “, but such net earnings shall be determined with regard to the deduction allowed to the taxpayer by section 164(f)”. ## § 46: Amount of credit - § 46: Pub. L. 98–21 substituted “relating to credit for the elderly and the permanently and totally disabled” for “relating to credit for the elderly”. ## § 85: Unemployment compensation - § 85(a): Pub. L. 98–21, § 122(c)(2), struck out “, section 105(d),” after “section 86”. - § 85(a): Pub. L. 98–21, § 121(f)(1), inserted “section 86,” after “this section,”. ## § 86: Social security and tier 1 railroad retirement benefits - Enacted 26 U.S.C. § 86. - § 86(a): Pub. L. 98–21, § 335(b)(2)(A), inserted “(notwithstanding section 207 of the Social Security Act)”. ## § 87: Alcohol and biodiesel fuels credits ## § 105: Amounts received under accident and health plans - § 105(d): Pub. L. 98–21 struck out subsec. (d) which provided that no deduction or credit would be allowed with respect to any expenditure which is properly associated with any amount excluded from gross income under subsec. (a). ## § 164: Taxes - § 164(f): Pub. L. 98–21 added subsec. (f). Former subsec. (f) redesignated (g). - § 164(g): Pub. L. 98–21 redesignated subsec. (f) as (g). ## § 275: Certain taxes - § 275(a): Pub. L. 98–21 inserted at end “Paragraph (1) shall not apply to any taxes to the extent such taxes are allowable as a deduction under section 164(f).” ## § 401: Qualified pension, profit-sharing, and stock bonus plans - § 401(c)(2)(A)(vi): Pub. L. 98–21 added cl. (vi). ## § 403: Taxation of employee annuities - § 403(b)(3): Pub. L. 98–21 substituted “section 911” for “sections 105(d) and 911”. ## § 406: Employees of foreign affiliates covered by section 3121(l) agreements - § 406: Pub. L. 98–21, § 321(e)(2)(D)(i), substituted “Employees of foreign affiliates covered by section 3121(l) agreements” for “Certain employees of foreign subsidiaries” in section catchline. - § 406(a): Pub. L. 98–21, § 321(c), amended subsec. (a) generally, substituting “American employer” for “domestic corporation” in heading and in text wherever appearing, inserting reference to section 3121(h) of this title, inserting “or resident” after “citizen” wherever appearing, substituting “foreign affiliate” for “foreign subsidiary” wherever appearing, and “foreign affiliates” for “foreign subsidiaries”. - § 406(b): Pub. L. 98–21, § 321(e)(2)(A), substituted reference to an American employer for reference to a domestic corporation, and reference to an affiliate for reference to a subsidiary, wherever appearing. - § 406(c): Pub. L. 98–21, § 321(e)(2)(A), substituted reference to an American employer for reference to a domestic corporation, and reference to an affiliate for reference to a subsidiary, wherever appearing in provisions preceding par. (1) and in pars. (1) and (2). - § 406(c): Pub. L. 98–21, § 321(e)(2)(A), (B), substituted “foreign affiliate by reason of which he is treated as an employee of such American employer, if he becomes an employee of another entity in which such American employer has not less than a 10-percent interest (within the meaning of section 3121(l)(8)(B)” for “foreign subsidiary by reason of which he is treated as an employee of such domestic corporation, if he becomes an employee of another corporation controlled by such domestic corporation”. - § 406(d): Pub. L. 98–21, § 321(e)(2)(A), (C), substituted references to an American employer for references to a domestic corporation and reference to an affiliate for a reference to a subsidiary wherever appearing, substituted “another taxpayer” for “another corporation” in provisions preceding par. (1), and substituted “any other taxpayer” for “any other corporation” in par. (1). - § 406(e): Pub. L. 98–21, § 321(e)(2)(A), substituted reference to an American employer for reference to a domestic corporation wherever appearing in provisions preceding par. (1). ## § 407: Certain employees of domestic subsidiaries engaged in business outside the United States - § 407(a)(1): Pub. L. 98–21 inserted “or resident” after “citizen”, and inserted “or residents” after “citizens” in subpar. (A). ## § 415: Limitations on benefits and contribution under qualified plans - § 415(c)(3)(C)(i): Pub. L. 98–21 substituted “section 37(e)(3)” for “section 105(d)(4)”. ## § 861: Income from sources within the United States - § 861(a)(8): Pub. L. 98–21 added par. (8). ## § 871: Tax on nonresident alien individuals - § 871(a)(3): Pub. L. 98–21, § 121(c)(1), added par. (3). - § 871(a)(3)(A): Pub. L. 98–21, § 335(b)(2)(B), inserted “(notwithstanding section 207 of the Social Security Act)” after “income”. ## § 904: Limitation on credit - § 904(g): Pub. L. 98–21 substituted “relating to credit for the elderly and the permanently and totally disabled” for “relating to credit for the elderly”. ## § 1401: Rate of tax - § 1401(a): Pub. L. 98–21, § 124(a), amended subsec. (a) generally, substituting a table for former pars. (1) to (7) which had imposed a tax on the self-employment income of every individual (1) in the case of any taxable year beginning before Jan. 1, 1978, to be equal to 7.0 percent of the amount of the self-employment income for such taxable year; (2) in the case of any taxable year beginning after Dec. 31, 1977, and before Jan. 1, 1979, to be equal to 7.10 percent of the amount of the self-employment income for such taxable year; (3) in the case of any taxable year beginning after Dec. 31, 1978, and before Jan. 1, 1981, to be equal to 7.05 percent of the amount of the self-employment income for such taxable year; (4) in the case of any taxable year beginning after Dec. 31, 1980, and before Jan. 1, 1982, to be equal to 8.00 percent of the amount of the self-employment income for such taxable year; (5) in the case of any taxable year beginning after Dec. 31, 1981, and before Jan. 1, 1985, to be equal to 8.05 percent of the amount of the self-employment income for such taxable year; (6) in the case of any taxable year beginning after Dec. 31, 1984, and before Jan. 1, 1990, to be equal to 8.55 percent of the amount of the self-employment income for such taxable year; and (7) in the case of any taxable year beginning after Dec. 31, 1989, to be equal to 9.30 percent of the amount of the self-employment income for such taxable year. - § 1401(b): Pub. L. 98–21, § 124(a), amended subsec. (b) generally, substituting a table for former pars. (1) to (6) which had imposed a tax on the self-employment income of every individual (1) in the case of any taxable year beginning after Dec. 31, 1973, and before Jan. 1, 1978, to be equal to 0.90 percent of the amount of the self-employment income for such taxable year; (2) in the case of any taxable year beginning after Dec. 31, 1977, and before Jan. 1, 1979, to be equal to 1.00 percent of the amount of the self-employment income for such taxable year; (3) in the case of any taxable year beginning after Dec. 31, 1978, and before Jan. 1, 1981, to be equal to 1.05 percent of the amount of the self-employment income for such taxable year; (4) in the case of any taxable year beginning after Dec. 31, 1980, and before Jan. 1, 1985, to be equal to 1.30 percent of the amount of the self-employment income for such taxable year; (5) in the case of any taxable year beginning after Dec. 31, 1984, and before Jan. 1, 1986, to be equal to 1.35 percent of the amount of the self-employment income for such taxable year; and (6) in the case of any taxable year beginning after Dec. 31, 1985, to be equal to 1.45 percent of the amount of the self-employment income for such taxable year. - § 1401(c), § 1401: Pub. L. 98–21, § 124(b), added subsec. (c) and redesignated former subsec. (c) as (d). ## § 1402: Definitions - § 1402(a)(11): Pub. L. 98–21, § 323(b)(1), struck out “in the case of an individual described in section 911(d)(1)(B),” before “the exclusion”. - § 1402(a)(12), § 1402(a)(13): Pub. L. 98–21, § 124(c)(2), added par. (12) and redesignated former par. (12) as (13). - § 1402(b): Pub. L. 98–21, § 322(b)(2), as amended by Pub. L. 101–508, § 5130(a)(2), inserted “, except as provided by an agreement under section 233 of the Social Security Act” in text preceding par. (1). - § 1402(b): Pub. L. 98–21, § 321(e)(3), substituted “employees of foreign affiliates of American employers” for “employees of foreign subsidiaries of domestic corporations” in cl. (A) of provisions following par. (2). ## § 1441: Withholding of tax on nonresident aliens - § 1441(g): Pub. L. 98–21 added subsec. (g). ## § 3101: Rate of tax - § 3101(a): Pub. L. 98–21 substituted table of rates for former pars. (1) to (7) which had imposed a tax on the income of every individual (1) with respect to wages received during the calendar years 1974 through 1977 at the rate of 4.95 percent; (2) with respect to wages received during the calendar year 1978 at the rate of 5.05 percent; (3) with respect to wages received during the calendar years 1979 and 1980 at the rate of 5.08 percent; (4) with respect to wages received during the calendar year 1981 at the rate of 5.35 percent; (5) with respect to wages received during the calendar years 1982 through 1984 at the rate of 5.40 percent; (6) with respect to wages received during the calendar years 1985 through 1989 at the rate of 5.70 percent; and (7) with respect to wages received after Dec. 31, 1989, at the rate of 6.20 percent. ## § 3111: Rate of tax - § 3111(a): Pub. L. 98–21 substituted table of rates for pars. (1) to (7) which had imposed a tax on every employer (1) with respect to wages paid during the calendar years 1974 through 1977 at the rate of 4.95 percent, (2) with respect to wages paid during the calendar year 1978 at the rate of 5.05 percent, (3) with respect to wages paid during the calendar years 1979 and 1980 at the rate of 5.08 percent, (4) with respect to wages paid during the calendar year 1981 at the rate of 5.35 percent, (5) with respect to wages paid during the calendar years 1982 through 1984 at the rate of 5.40 percent, (6) with respect to wages paid during the calendar years 1985 through 1989 at the rate of 5.70 percent, and (7) with respect to wages paid after Dec. 31, 1989, at the rate of 6.20 percent. ## § 3121: Definitions - § 3121(a): Pub. L. 98–21, § 327(b)(1), inserted in text following last numbered paragraph a provision that nothing in the regulations prescribed for purposes of chapter 24 (relating to income tax withholding) which provides an exclusion from “wages” as used in such chapter shall be construed to require a similar exclusion from “wages” in regulations prescribed for purposes of this chapter. - § 3121(a): Pub. L. 98–21, § 324(a)(3)(D), substituted reference to subpar. (A) of par. (2) for reference to subpar. (B) thereof in text following last numbered paragraph. - § 3121(a)(2): Pub. L. 98–21, § 324(a)(3)(A), struck out “(A) retirement, or”, and redesignated subpars. (B) to (D) as (A) to (C), respectively. - § 3121(a)(3): Pub. L. 98–21, § 324(a)(3)(B), struck out par. (3) which related to any payment made to an employee (including any amount paid by an employer for insurance or annuities, or into a fund, to provide for any such payment) on account of retirement. - § 3121(a)(5)(D): Pub. L. 98–21, § 328(a), substituted “section 219(b)(2)” for “section 219”. - § 3121(a)(5)(E), § 3121(a)(5)(F), § 3121(a)(5)(G): Pub. L. 98–21, § 324(a)(2), added subpars. (E) to (G). - § 3121(a)(9): Pub. L. 98–21, § 324(a)(3)(B), struck out par. (9) which related to any payment (other than vacation or sick pay) made to an employee after the month in which he attained age 62, if such employee did not work for the employer in the period for which such payment was made. - § 3121(a)(13)(A): Pub. L. 98–21, § 324(a)(3)(C), struck out cl. (iii) which related to the case of retirement after attaining an age specified in the plan referred to in subparagraph (B) or in a pension plan of the employer. - § 3121(a)(19): Pub. L. 98–21, § 327(a)(1), added par. (19). - § 3121(b): Pub. L. 98–21, § 323(a)(1), substituted “a citizen or resident of the United States” for “a citizen of the United States” in text preceding par. (1). - § 3121(b): Pub. L. 98–21, § 322(a)(2), added cl. (C) in text preceding par. (1). - § 3121(b)(5): Pub. L. 98–21, § 101(b)(1), amended par. (5) generally. Prior to amendment par. (5) read as follows: “Service performed in the employ of any instrumentality of the United States, if such instrumentality is exempt from the tax imposed by section 3111 by virtue of any provision of law which specifically refers to such section (or the corresponding section of prior law) in granting such exemption;”. - § 3121(b)(6): Pub. L. 98–21, § 101(b)(1), amended par. (6) generally. Prior to amendment par. (6) read as follows: - § 3121(b)(8): Pub. L. 98–21, § 102(b)(1), struck out the subpar. (A) designation preceding “service performed”, struck out subpar. (B) which related to service performed by employees of nonprofit organizations, and in par. (8), as so designated substituted “except that this paragraph shall not apply” for “except that this subparagraph shall not apply”. - § 3121(i)(5): Pub. L. 98–21, § 101(c)(2), added par. (5). - § 3121(k): Pub. L. 98–21, § 102(b)(2), struck out subsec. (k) which related to exemption of religious, charitable and certain other organizations. - § 3121(l): Pub. L. 98–21, § 321(a)(1), substituted “Agreements entered into by American employers with respect to foreign affiliates” for “Agreements entered into by domestic corporations with respect to foreign subsidiaries” in heading. - § 3121(l)(1): Pub. L. 98–21, § 321(a)(1), substituted “affiliates” for “subsidiaries” in par. (1) heading, and in first sentence of provisions preceding subpar. (A), substituted “at the American employer’s request” for “at the request of any domestic corporation”, “any American employer (as defined in subsection (h)) who” for “any such corporation which”, “such manner and form” for “such form and manner”, and “affiliates” for “subsidiaries” after “such employer’s foreign”, and inserted “or residents” after “citizens”. - § 3121(l)(1): Pub. L. 98–21, § 321(e)(1), substituted “American employer” for “domestic corporation”, “affiliate” for “subsidiary” and “citizens or residents” for “citizens” wherever appearing in second and third sentences of provisions preceding subpar. (A) and substituted “American employer” for “domestic corporation” in subpars. (A) and (B). - § 3121(l)(2), § 3121(l)(3), § 3121(l)(4), § 3121(l)(5): Pub. L. 98–21, § 321(e)(1), substituted, wherever appearing, “American employer” for “domestic corporation”, “American employers” for “domestic corporations”, “affiliate” for “subsidiary”, “affiliates” for “subsidiaries”, “foreign entity” for “foreign corporation”, “foreign entities” for “foreign corporations”, and “citizens or residents” for “citizens”. - § 3121(l)(8): Pub. L. 98–21, § 321(a)(2), amended par. (8) generally, substituting provision defining a foreign affiliate for provision defining a foreign subsidiary of a domestic corporation which, for the purposes of this subsection and section 210(a) of the Social Security Act, had been defined as a foreign corporation not less than 20 percent of the voting stock of which was owned by such domestic corporation, or a foreign corporation more than 50 percent of the voting stock of which was owned by the foreign corporation described above. - § 3121(l): Pub. L. 98–21, § 321(e)(1), substituted, wherever appearing, “American employer” for “domestic corporation”, “American employers” for “domestic corporations”, and “foreign entities” for “foreign corporations”. - § 3121(r)(3)(A): Pub. L. 98–21, § 102(b)(3)(A), substituted “subsection (b)(8)” and “section 210(a)(8)” for “subsection (b)(8)(A)” and “section 210(a)(8)(A)”, respectively, in provisions preceding cl. (i). - § 3121(r)(4): Pub. L. 98–21, § 102(b)(3)(B), struck out par. (4) which related to coordination with coverage of lay employees. - § 3121(u)(1): Pub. L. 98–21, § 101(b)(2), substituted “sections 3101(b) and 3111(b), subsection (b) shall be applied without regard to paragraph (5) thereof” for “sections 3101(b) and 3111(b)— - § 3121(v): Pub. L. 98–21, § 324(a)(1), added subsec. (v). ## § 3302: Credits against tax - § 3302(c)(2)(B): Pub. L. 98–21, § 513(c), inserted “, multiplied by a fraction, the numerator of which is the State’s average annual wage in covered employment for the calendar year in which the determination is made and the determination of which is the wage base under this chapter,” in provisions preceding cl. (i). - § 3302(c)(2)(B)(i): Pub. L. 98–21, § 513(b), inserted “multiplied by a fraction, the numerator of which is the wage base under this chapter and the denominator of which is the estimated United States average annual wage in covered employment for the calendar year in which the determination is to be made” after “2.7”. - § 3302(d)(4)(B): Pub. L. 98–21, § 513(a), amended subpar. (B) generally, adding cl. (i), designating existing provisions as cl. (ii), and inserting reference to purposes of subsec. (c)(2)(C). - § 3302(f)(1): Pub. L. 98–21, § 512(b), struck out “beginning before January 1, 1988,” after “any taxable year”. - § 3302(f)(8): Pub. L. 98–21, § 512(a)(1), added par. (8). ## § 3304: Approval of State laws - § 3304(a)(4)(C): Pub. L. 98–21, § 523(a), added subpar. (C). - § 3304(a)(6)(A)(ii)(I), § 3304(a)(6)(A)(iii), § 3304(a)(6)(A)(iv): Pub. L. 98–21, § 521(a)(2), substituted “shall be denied” for “may be denied”. - § 3304(a)(6)(A)(v): Pub. L. 98–21, § 521(a)(1), added cl. (v). - § 3304(a)(17), § 3304(a)(18): Pub. L. 98–21, § 515(b), added par. (17) and redesignated former par. (17) as (18). ## § 3306: Definitions - § 3306(b): Pub. L. 98–21, § 327(c)(4), added sentence at end providing that nothing in the regulations prescribed for purposes of chapter 24 (relating to income tax withholding) which provides an exclusion from “wages” as used in such chapter shall be construed to require a similar exclusion from “wages” in regulations prescribed for purposes of this chapter. - § 3306(b): Pub. L. 98–21, § 324(b)(4)(B), added sentence at end providing that, except as otherwise provided in regulations prescribed by the Secretary, any third party which makes a payment included in wages solely by reason of parenthetical text contained in subpar. (A) of par. (2) shall be treated for purposes of this chapter and chapter 22 as the employer with respect to such wages. - § 3306(b)(2): Pub. L. 98–21, § 324(b)(3)(A), (4)(A), struck out “(A) retirement or”, redesignated subpars. (B) to (D) as (A) to (C), respectively, and in subpar. (A), as so redesignated, substituted “sickness or accident disability (but, in the case of payments made to an employee or any of his dependents, this subparagraph shall exclude from the term ‘wages’ only payments which are received under a workman’s compensation law)” for “sickness or accident disability”. - § 3306(b)(3): Pub. L. 98–21, § 324(b)(3)(B), struck out par. (3) which related to any payment made to an employee (including any amount paid by an employer for insurance or annuities, or into a fund, to provide for any such payment) on account of retirement. - § 3306(b)(5)(D): Pub. L. 98–21, § 328(c), substituted “section 219(b)(2)” for “section 219”. - § 3306(b)(5)(E), § 3306(b)(5)(F), § 3306(b)(5)(G): Pub. L. 98–21, § 324(b)(2), added subpars. (E) to (G). - § 3306(b)(8): Pub. L. 98–21, § 324(b)(3)(B), struck out par. (8) which related to any payment (other than vacation or sick pay) made to an employee after the month in which he attained the age of 65, if he did not work for the employer in the period for which such payment was made. - § 3306(b)(10)(A): Pub. L. 98–21, § 324(b)(3)(C), struck out cl. (iii) which related to retirement after attaining an age specified in the plan referred to in subpar. (B) or in a pension plan of the employer. - § 3306(b)(14): Pub. L. 98–21, § 327(c)(1)–(3), added par. (14). - § 3306(r): Pub. L. 98–21, § 324(b)(1), added subsec. (r). ## § 6050F: Returns relating to social security benefits - Enacted 26 U.S.C. § 6050F. ## § 6103: Confidentiality and disclosure of returns and return information - § 6103(h)(6): Pub. L. 98–21, § 121(c)(3)(A), added par. (6). - § 6103(p)(4): Pub. L. 98–21, § 121(c)(3)(B), inserted “(h)(6),” after “(h)(2),” in introductory provisions. - § 6103(p)(4)(F)(ii): Pub. L. 98–21, § 121(c)(3)(B), inserted “(h)(6),” after “(h)(2),”. ## § 6413: Special rules applicable to certain employment taxes - § 6413(c)(2): Pub. L. 98–21, § 321(e)(4)(B), substituted “foreign affiliates” for “foreign corporations” in heading. - § 6413(c)(2)(C): Pub. L. 98–21, § 321(e)(4)(A), substituted “foreign affiliates” for “foreign corporations” in heading and, in text, substituted “American employer” for “domestic corporation”. ## § 7871: Indian tribal governments treated as States for certain purposes - § 7871(a)(6): Pub. L. 98–21 redesignated subpars. (B) to (D) as (A) to (C), respectively, and struck out former subpar. (A), which referred to section 37(e)(9)(A) (relating to certain public retirement systems).