Appendix III-Continued SEC. 1303. INCOME FROM BACK PAY. (a) LIMITATION ON TAX.-If the amount of the back pay received or accrued by an individual during the taxable year exceeds 15 percent of the gross income of the individual for such year, the part of the tax attributable to the inclusion of such back pay in gross income for the taxable year shall not be greater than the aggregate of the increases in the taxes which would have resulted from the inclusion of the respective portions of such back pay in gross income for the taxable years to which such portions are respectively attributable, as determined under regulations prescribed by the Secretary or his delegate. (b) DEFINITION OF BACK PAY.-For purposes of this section, the term "back pay" means amounts includible in gross income under this subtitle which are one of the following (1) Remuneration, including wages, salaries, retirement pay, and other similar compensation, which is received or accrued during the taxable year by an employee for services performed before the taxable year for his employer and which would have been paid before the taxable year except for the intervention of one of the following events: (A) bankruptcy or receivership of the employer; (B) dispute as to the liability of the employer to pay such remuneration, which is determined after the commencement of court proceedings; (C) if the employer is the United States, a State, a Territory, or any political subdivision thereof, or the District of Columbia, or any agency or instrumentality of any of the foregoing, lack of funds appropriated to pay such remuneration; or (D) any other event determined to be similar in nature under regulations prescribed by the Secretary or his delegate. (2) Wages or salaries which are received or accrued during the taxable year by an employee for services performed before the taxable year for his employer and which constitute retroactive wage or salary increases ordered, recommended, or approved by any Federal or State agency, and made retroactve to any period before the taxable year. (3) Payments which are received or accrued during the taxable year as the result of an alleged violation by an employer of any State or Federal law relating to labor standards or practices, and which are determined under regulations prescribed by the Secretary or his delegate to be attributable to a prior taxable year. SEC. 1304. RULES APPLICABLE TO THIS PART. (a) FRACTIONAL PARTS OF A MONTH.-For purposes of this part, a fractional part of a month shall be disregarded unless it amounts to more than half a month, in which case it should be considered as a month. (b) TAX ON SELF-EMPLOYMENT INCOME.-This part shall be applied without regard to, and shall not affect, the tax imposed by chapter 2 relating to self-employment income. (c) COMPUTATION OF TAX ATTRIBUTABLE TO INCOME ALLOCATED TO PRIOR PERIOD.-For the purpose of computing the tax attributable to the amount of an item of gross income allocable under this part to a particular taxable year, such amount shall be considered income only of the person who would be required to include the item of gross income in a separate return filed for the taxable year in which such item was received or accrued. (d) EFFECTIVE DATE OF CERTAIN SUBSECTIONS.-Subsection (c) of section 1301 and subsection (c) of this section shall apply only to amounts received or accrued after March 1, 1954. Notwithstanding any other provision of this title, section 107 of the Internal Revenue Code of 1939 shall apply to amounts received or accrued as a partner on or before March 1, 1954, under this section and to the computation of tax on amounts received or accrued on or before March 1, 1954. APPENDIX IV-WAGE BRACKET WITHHOLDING (ORIGINAL) (Sec. 3402(c)(1)—68A Stat. 458–465) The following withholding tables were enacted as a part of the Internal Revenue Code of 1954 and were in effect from January 1, 1954, to March 4, 1964, inclusive. For the new tables enacted by P.L. 88-272, § 302(b), effective March 5, 1964, see pages 662 and following in the text above. (1) At the election of the employer with respect to any employee, the employer shall deduct and withhold upon the wages paid to such employee a tax determined in accordance with the following tables, which shall be in lieu of the tax required to be deducted and withheld under subsection (a): |