which public comment is accepted for a period of at least thirty days, and then prepared by the agency designated pursuant to section 2003(d) (1) (C), approved by the chief executive officer of the State unless the laws of the State provide otherwise, and published by the chief executive officer of the State, or such other official as the laws of the State provide, as a final amendment, together with an explanation of the differences between the proposed and final amendment and the reasons therefor.

Effective Date Of Regulations Published By The Secretary

Sec. 2005. No final regulation published by the Secretary under this title shall be effective with respect to payments under section 2002 for expenditures during any quarter commencing before the beginning of the first services program year established by the State under the requirements of section 2002 (a) (3) which begins at least sixty days after the publication of the final regulation.

Evaluation; Program Assistance

Sec. 2006. (a) The Secretary shall provide for the continuing evaluation of State programs for the provision of the services described in section 2002 (a) (1).

(b) The Secretary shall make available to the States assistance with respect to the content of their services program, and their services program planning, reporting, administration, and evaluation.

(c) Within six months after the close of each fiscal year, the Secretary shall submit to the Congress a report on the operation of the program established by this title during that year, including—

(1) the evaluations carried out under subsection (a) and the results obtained therefrom, and

(2) the assistance provided under subsection (b) during that year.

Definitions

Sec. 2007. For purposes of this title

(1) the term "State supplementary payment" means any cash payment made by a State on a regular basis to an individual who is receiving supplemental security income benefits under title XVI or who would but for his income be eligible to receive such benefits, as assistance based on need in supplementation of such benefits, as determined by the Secretary, and

(2) the term "State" means the fifty States and the District of Columbia.

SELECTED PROVISIONS OF THE INTERNAL

REVENUE CODE OF 1954

26 U.S.C. 1—

Subtitle A-Income Taxes

CHAPTER 1-NORMAL TAXES AND SURTAXES

SUBCHAPTER A-DETERMINATION OF TAX LIABILITY

Part IV-Credits Against Tax

Subpart A-Credits Allowable

SEC. 40. EXPENSES OF WORK INCENTIVE PROGRAMS. (a) GENERAL RULE.-There shall be allowed, as a credit against the tax imposed by this chapter, the amount determined under subpart C of this part.

(b) REGULATIONS.-The Secretary shall prescribe such regulations as may be necessary to carry out the purposes of this section and subpart C.

SEC. 43. EARNED INCOME. 1

(a) ALLOWANCE OF CREDIT.-In the case of an eligible individual, there shall be allowed as a credit against the tax imposed by this chapter for the taxable year an amount equal to 10 percent of so much of the earned income for the taxable year as does not exceed $4,000.

1 Section 43 was added by section 204 of Public Law 94-12 and amended by section 2 of Public Law 94-164 and section 401(c) of Public Law 94-455. It is effective for taxable years beginning after December 31, 1974, and before January 1, 1978. Section 2(d) of Public Law 94-164 governs the treatment of refunds under this section in determining benefits under assistance programs. This section is reprinted in this document on page 767. (557)

(b) LIMITATION.-The amount of the credit allowable to a taxpayer under subsection (a) for any taxable year shall be reduced (but not below zero) by an amount equal to 10 percent of so much of the adjusted gross income (or, if greater, the earned income) of the taxpayer for the taxable year as exceeds $4,000.

(c) DEFINITION.-For purposes of this section

(1) ELIGIBLE INDIVIDUAL.—The term "eligible individual” means an individual who, for the taxable year

(A) maintains a household (within the meaning of section 44A (f) (1)) in the United States which is the principal place of abode of that individual and--

(i) a child of that individual if such child meets the requirements of section 151 (e) (1) (B) (relating to additional exemptions for dependents), or

(ii) a child of that individual who is disabled (within the meaning of section 72 (m) (7)) and with respect to whom that individual is entitled to claim a deduction under section 151; and

(B) is not entitled to exclude any amount from gross income under section 911 (relating to earned income from sources without the United States) or section 931 (relating to income from sources within the possessions of the United States).

(2) EARNED INCOME.—

(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)).

(B) For purposes of subparagraph (A)

(i) except as provided in clause (ii), any amount shall be taken into account only if such amount is includible in the gross income of the taxpayer for the taxable year,

(ii) the earned income of an individual shall be computed without regard to any community property laws, (iii) no amount received as a pension or annuity shall be taken into account, and

(iv) no amount to which section 871 (a) applies (relating to income of nonresident alien individuals not connected with United States business) shall be taken into account.

(d) MARRIED INDIVIDUALS.-In the case of an individual who is married (within the meaning of section 143), this section shall apply only if a joint return is filed for the taxable year under section 6013.

(e) TAXABLE YEAR MUST BE FULL TAXABLE YEAR.-Except in the case of a taxable year closed by reason of the death of the taxpayer, no credit shall be allowable under this section in the case of a taxable year covering a period of less than 12 months.

SEC. 44A. EXPENSES FOR HOUSEHOLD AND DEPENDENT CARE SERVICES NECESSARY FOR GAINFUL EMPLOYMENT.

(a) ALLOWANCE OF CREDIT.-In the case of an individual who maintains a household which includes as a member one or more qualifying individuals (as defined in subsection (c) (1)), there shall be allowed as a credit against the tax imposed by this chapter for the taxable year an amount equal to 20 percent of the employment-related expenses (as defined in subsection (c)(2)) paid by such individual during the taxable year.

(b) APPLICATION WITH OTHER CREDITS.-The credit allowed by subsection (a) shall not exceed the amount of the tax imposed by this chapter for the taxable year reduced by the sum of the credits allowable under

(1) section 33 (relating to foreign tax credit),

(2) section 37 (relating to credit for the elderly),

(3) section 38 (relating to investment in certain depreciable property),

(4) section 40 (relating to expenses of work incentive programs),

(5) section 41 (relating to contributions to candidates for public office),

(6) section 42 (relating to general tax credit), and

(7) section 44 (relating to purchase of new principal residence).

(c) DEFINITIONS OF QUALIFYING INDIVIDUAL AND EMPLOYMENTRELATED EXPENSES.-For purposes of this section

(1) QUALIFYING INDIVIDUAL.-The term "qualifying individual" means

(A) a dependent of the taxpayer who is under the age of 15 and with respect to whom the taxpayer is entitled to a deduction under section 151 (e),

(B) a dependent of the taxpayer who is physically or mentally incapable of caring for himself, or

(C) the spouse of the taxpayer, if he is physically or mentally incapable of caring for himself.