HR 924 IH

To amend the Internal Revenue Code of 1986 to exclude from gross income certain stipends paid as part of a State program under which individuals who have attained age 60 perform essentially volunteer services specified by the program.

March 7, 2001

Mr. NEAL of Massachusetts (for himself, Mr. TIERNEY, Mr. MCGOVERN, Mr. CAPUANO, and Mr. MARKEY) introduced the following bill; which was referred to the Committee on Ways and Means

To amend the Internal Revenue Code of 1986 to exclude from gross income certain stipends paid as part of a State program under which individuals who have attained age 60 perform essentially volunteer services specified by the program.

Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled,

SECTION 1. EXCLUSION FROM GROSS INCOME FOR STIPENDS RECEIVED FOR ESSENTIALLY VOLUNTEER SERVICES PERFORMED UNDER A STATE PROGRAM.

(a) IN GENERAL- Part III of subchapter B of chapter 1 of the Internal Revenue Code of 1986 (relating to items specifically excluded from gross income) is amended by inserting after section 138 the following new section:

`SEC. 138A. CERTAIN STIPENDS RECEIVED UNDER STATE PROGRAMS BY INDIVIDUALS WHO HAVE ATTAINED AGE 60.

`(a) IN GENERAL- Gross income shall not include amounts received by an individual who has attained age 60 from a qualified State program for services performed under such program.

`(b) QUALIFIED STATE PROGRAM- For purposes of this section, the term `qualified State program' means any program established by State law if--

`(1) the program consists of assigning individuals who have attained age 60 to perform volunteer services for nonprofit and nonsectarian entities,

`(2) the individuals participating in the program must commit to performing volunteer services under the program for at least 48 hours a month,

`(3) the individuals receive no compensation other than from such program for such services,

`(4) State law limits the maximum compensation that an individual may receive under the program to the earnings limitation under section 203 of the Social Security Act, and

`(5) substantially all of the funds for such program are provided by the State.

`(c) DENIAL OF CERTAIN DEDUCTIONS- Unless the taxpayer elects not to have this section apply for any taxable year, no deduction shall be allowed under this chapter for any amount which is otherwise allowable as a deduction by reason of performing services under a qualified State program.'

(b) EXCLUSION FROM EMPLOYMENT TAXES-

(1)(A) Paragraph (18) of section 3121(a) of such Code is amended by striking `or 129' and inserting `, 129, or 138A'.

(B) Paragraph (15) of section 209(a) of the Social Security Act is amended by striking `or 129' and inserting `, 129, or 138A'.

(2) Paragraph (13) of section 3306(b) of such Code is amended by striking `or 129' and inserting `, 129, or 138A'.

(3) Paragraph (18) of section 3401(a) of such Code is amended by striking `or 129' and inserting `, 129, or 138A'.

(c) CLERICAL AMENDMENT- The table of sections for part III of subchapter B of chapter 1 of such Code is amended by inserting after the item relating to section 138 the following new item:

`Sec. 138A. Certain stipends received under State programs by individuals who have attained age 60.'

(d) EFFECTIVE DATE- The amendments made by this section shall apply to taxable years beginning after December 31, 2001.

END