PUBLIC LAW 97-34—AUG. 13, 1981
95 STAT. 187
(F) a common trust fund. SEC. 103. DEDUCTION FOR TWO-EARNER MARRIED COUPLES.
(a) IN GENERAL.—Part VII of subchapter B of chapter 1 (relating to additional itemized deductions for individuals) is amended by redesignating section 221 as section 222 and by inserting after section 220 the Post, p. 201. following new section: "SEC. 221. DEDUCTION FOR TWO-EARNER MARRIED COUPLES.
26 USC 221.
"(a) DEDUCTION ALLOWED.—
"(1) IN GENERAL.—In the case of a joint return under section 6013 for the taxable year, there shall be allowed as a deduction an amount equal to 10 percent of the lesser of— "(A) $30,000, or "(B) the qualified earned income of the spouse with the lower qualified earned income for such taxable year. "(2) SPECIAL RULE FOR 1982.—In the case of a taxable year beginning during 1982, paragraph (1) shall be applied by substituting '5 percent for '10 percent. "(b) QUALIFIED EARNED INCOME DEFINED.—
(1) IN GENERAL.—For purposes of this section, the term 'qualified earned income' means an amount equal to the excess of— "(A) the earned income of the spouse for the taxable year, over "(B) an amount equal to the sum of the deductions described in paragraphs (1), (2), (7), (9), (10), and (15) of section 62 to the extent such deductions are properly allocable to or chargeable against earned income described in subparagraph (A). The amount of qualified earned income shall be determined without regard to any community property laws. "(2) EARNED INCOME.—For purposes of paragraph (1), the term 'earned income' means income which is earned income within the meaning of section 911(d)(2) or 401(c)(2)(C), except that— Post, p. 190. "(A) such term shall not include any amount— "(i) not includible in gross income, "(ii) received as a pension or annuity, "(iii) paid or distributed out of an individual retirement plan (within the meaning of section 7701(a)(37)), "(iv) received as deferred compensation, or "(v) received for services performed by an individual in the employ of his spouse (within the meaning of section 3121(b)(3)(A)), and "(B) section 911(d)(2)(B) shall be applied without regard to the phrase 'not in excess of 30 percent of his share of net profits of such trade or business'. "(c) DEDUCTION DISALLOWED FOR INDIVIDUAL CLAIMING BENEFITS OF SECTION 911 OR 931.—NO deduction shall be allowed under this
section for any taxable year if either spouse claims the benefits of section 911 or 931 for such taxable year.". (b) DEDUCTION ALLOWED IN COMPUTING ADJUSTED GROSS INCOME.—
Section 62 (defining adjusted gross income), as amended by section 26 USC 62. 112(b)(2) of this Act, is amended by inserting after paragraph (15) the Post, p. 194. following new paragraph: "(16) DEDUCTION FOR TWO-EARNER MARRIED COUPLES.—The de-
duction allowed by section 221." (c) OTHER CONFORMING AMENDMENTS.—
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