SEC. 21-Continued (d) (revised 1964)-Continued part IV of subchapter B (relating to standard deduction for individuals), as amended by the Revenue Act of 1964, applied to taxable years ending after December 31, 1963, and "(B) section 4 (relating to rules for optional tax), as amended by such Act, shall be applied to taxable years ending after December 31, 1963. In applying subsection (a) to a taxable year of an individual beginning in 1963 and ending in 1964, or beginning in 1964 and ending in 1965, the change in the tax imposed under section 3 shall be treated as a change in a rate of tax. "(2) CORPORATIONS.-In applying subsection (a) to a taxable year of a corporation beginning in 1963 and ending in 1964, if— "(A) the surtax exemption of such corporation for such taxable year is less than $25,000 by reason of the application of section 1561 (relating to surtax exemptions in case of certain controlled corporations), or "(B) an additional tax is imposed on the taxable income of such corporation for such taxable year by section 1562(b) (relating to additional tax in case of component members of controlled groups which elect multiple surtax exemptions), the change in the surtax exemption, or the imposition of such additional tax, shall be treated as a change in a rate of tax taking effect on January 1, 1964." CH. 1, SUBCH. A, PART IV-CREDITS AGAINST TAX (68A Stat. 12, ff.): Subpart A... Oct. 16, 1962, H.R. 10650, P.L. 87-834, § 2(g) (1), 76 Stat. 972: (created) Amended Part IV of Subchapter A of Chapter 1 by inserting after the heading and before the table of sections the following: "Subpart A. Credits allowable. "Subpart B. Rules for computing credit for investment in certain depreciable property. Applicability: "Subpart A-Credits Allowable" Taxable years ending after December 31, 1961. Footnote 10—Continued "(b) REPEAL OF TAX.-For purposes of subsection (a)– "(1) if a tax is repealed, the repeal shall be considered a change of rate; and "(2) the rate for the period after the repeal shall be zero. "(c) EFFECTIVE DATE OF CHANGE. For purposes of subsections (a) and (b)— (1) if the rate changes for taxable years 'beginning after' or 'ending after' a certain date, the following day shall be considered the effective date of the change; and "(2) if a rate changes for taxable years 'beginning on or after' a certain date, that date shall be considered the effective date of the change. "(d) TAXABLE YEARS BEGINNING BEFORE JANUARY 1, 1954, AND ENDING AFTER DECEMBER 31, 1953. In the case of a taxable year beginning before January 1, 1954, and ending after December 31, 1953 "(1) subsection (a) of this section does not apply; and "(2) in the application of subsection (j) of section 108 of the Internal Revenue Code of 1939, the provisions of such code referred to in such subsection shall be considered as continuing in effect as if this subtitle had not been enacted." CH. 1, SUBCH. A, PT. IV, SUBPART A-CREDITS ALLOWABLE (68A Stat. 12, ff., 76 Stat. 972): Table.... (item added) Do.... (item deleted) Do..... (item added) Oct. 16, 1962, H.R. 10650, P.L. 87-834, § 2(g) (2), 76 Stat. 972: Amended the table of sections for [Subpart A of] Part IV of Subchapter A of Chapter 1 11 by striking out "Sec. 38. Overpayments of tax.” and inserting in lieu thereof "Sec. 38. Investment in certain depreciable property. Applicability: Taxable years ending after December 31, 1961. Feb. 26, 1964, H.R. 8363, P.L. 88-272, § 201(d)(1), 78 Stat. 32: "Sec. 34. Dividends received by individuals." Applicability: Dividends received after December 31, 1964, in taxable years ending after such date. (Id., § 201 (e), 78 Stat. 32-33.) June 21, 1965, H.R. 8371, P.L. 89-44, § 809(d)(1), 79 Stat. 167: Amended the table of sections for Subpart A of Part IV of Subchapter A of Chapter 1 (as amended by P.L. 87-834, § 2(g)(2) and by P.L. 88-272, 201(d)(1)) by striking out the item relating to section 39 and inserting in lieu thereof the following: "Sec. 39. Certain uses of gasoline and lubricating oil. "Sec. 40. Overpayments of tax." SEC. 34. DIVIDENDS RECEIVED BY INDIVIDUALS (68A Stat. 13-14): Feb. 26, 1964, H.R. 8363, P.L. 88-272, § 201(a)(1), 78 Stat. 31: Amended Sec. 34(a) 12 by striking out (a).. (in part) "an amount equal to 4 percent of the dividends which are received after July 31, 1954, from domestic corporations and are included in gross income" "The table of sections for Subpart A of Part IV of Subchapter A of Chapter 1 (constituting the table of sections for such Part IV prior to the creation of such Subpart A by P.L. 87-834, § 2(g) (1)) originally read as follows (68A Stat. 12): "Sec. 31. Tax withheld on wages. "Sec. 32. Tax withheld at source on nonresident aliens and foreign corporations and on tax-free covenant bonds. "Sec. 33. Taxes of foreign countries and possessions of the United States. "Sec. 34. Dividends received by individuals. "Sec. 35. Partially tax-exempt interest received by individuals. "Sec. 36. Credits not allowed to individuals paying optional tax or taking standard deduction. "Sec. 37. Retirement income. "Sec. 38. Overpayments of tax." "Section 34 originally read as follows: “SEC. 34. DIVIDENDS RECEIVED BY INDIVIDUALS. "(a) GENERAL RULE.-Effective with respect to taxable years ending after July 31, 1954, there shall be allowed to an individual, as a credit against the tax imposed by this subtitle for the taxable year, an amount equal to 4 percent of the dividends which are received after July 31, 1954, from domestic corporations and are included in gross income. [Footnote 12 continued on following page] SEC. 34-Continued (a) (amended 1964)-Continued and inserting in lieu thereof "an amount equal to the following percentage of the dividends which are received from domestic corporations and are included in gross income: "(1) 4 percent of the amount of such dividends which are received before January 1, 1964, and "(2) 2 percent of the amount of such dividends which are received during the calendar year 1964." Feb. 26, 1964, H.R. 8363, P.L. 88–272, § 201(a)(2)(A), (B), 78 Stat. 31: (A) by inserting at the end of subparagraph (A), after "1955", the following: ", or beginning after December 31, 1963", and (B) by inserting at the end of subparagraph (B), after "1954”, the following: ", and beginning before January 1, 1964". June 25, 1959, H.R. 4245, P.L. 86-69, § 3(a)(1), 73 Stat. 139: Amended Sec. 34(c) (no credit allowed for dividends from certain corporations) by striking out paragraph (1) which read: "(1) an insurance company subject to a tax imposed by part I or II of subchapter L (sec. 801 and following);", Footnote 12-Continued "(b) LIMITATION ON AMOUNT OF CREDIT.-The credit allowed by subsection (a) shall not exceed whichever of the following is the lesser: "(1) the amount of the tax imposed by this chapter for the taxable year, reduced by the credit allowable under section 33 (relating to foreign tax credit); or "(2) the following percent of the taxable income for the taxable year: (A) 2 percent, in the case of a taxable year ending before January 1, 1955. "(B) 4 percent, in the case of a taxable year ending after December 31, 1954. "(c) No CREDIT ALLOWED FOR DIVIDENDS FROM CERTAIN CORPORATIONS.-Subsection (a) shall not apply to any dividend from "(1) an insurance company subject to a tax imposed by part I or II of subchapter L (sec. 801 and following); "(2) a corporation organized under the China Trade Act, 1922 (see sec. 941); or "(3) a corporation which, for the taxable year of the corporation in which the distribution is made, or for the next preceding taxable year of the corporation, is "(Á) a corporation exempt from tax under section 501 (relating to certain charitable, etc., organizations) or section 521 (relating to farmers' cooperative associations); or "(B) a corporation to which section 931 (relating to income from sources within possessions of the United States) applies. "(d) SPECIAL RULES FOR CERTAIN DISTRIBUTIONS.-For purposes of subsection (a)— "(1) Any amount allowed as a deducation under section 591 (relating to deduction for dividends paid by mutual savings banks, etc.) shall not be treated as a dividend. "(2) A dividend received from a regulated investment company shall be subject to the limitations prescribed in section 854. "(e) CERTAIN NONRESIDENT ALIENS INELIGIBLE FOR CREDIT.-No credit shall be allowed under subsection (a) to a nonresident alien individual with respect to whom a tax is imposed for the taxable year under section 871(a). "(f) CROSS REFERENCES. "(1) For exclusion of certain dividends from gross income, see section 116. "(2) For special rules relating to the credit provided by subsection (a), see sections 642 (trusts and estates), 702 (partships), and 584 (common trust funds). (3) For disallowance of credit where tax is computed by Secretary or his delegate, see section 6014." SEC. 34-Continued (c) (1) (3) (deleted, renumbered 1959)-Continued (c)(3)_. (added) and renumbering former paragraphs (2) and (3) as (1) and (2), respectively. Applicability: Dividends received after December 31, 1958, in taxable years ending after such date. (Ïd., § 3(a)(3), 73 Stat. 139.) -- Sept. 14, 1960, H.R. 10960, P.L. 86-779, § 10(e), 74 Stat. 1009: Amended Sec. 34 (c) by inserting after paragraph (2) (as renumbered by P.L. 86–69, § 3(a)(1)) the following new paragraph (3): "(3) a real estate investment trust which, for the taxable year of the trust in which the dividend is paid, qualifies under part II of subchapter M (sec. 856 and following)." Applicability: Taxable years of real estate investment trusts beginning after December 31, 1960. (Id., § 10(k), 74 Stat. 1009.) Repealed... Feb. 26, 1964, H.R. 8363, P.L. 88-272, § 201(b), 78 Stat. 31-32: (in full) Repealed Sec. 34. Effective Date and Applicability: With respect to dividends received after December 31, 1964; taxable years ending after December 31, 1964. (Id., § 201 (b), (e), 78 Stat. 31, 32–33.) SEC. 35. PARTIALLY TAX-EXEMPT INTEREST RECEIVED BY INDIVIDUALS (68A Stat. 14): (b)(1) ------ Feb. 26, 1964, H.R. 8363, P.L. 88-272, § 201(d)(2), 78 Stat. 32: (in part) (c)___ Amended Sec. 35(b)(1) 13 by striking out "the sum of the credits allowable under sections 33 and 34" and inserting in lieu thereof "the credit allowable under section 33". Applicability: Dividends received after December 31, 1964, in taxable years ending after such date. (Id. § 201(e), 78 Stat. 32-33.) Sept. 2, 1958, H.R. 8381, P.L. 85-866, § 41(b), 72 Stat. 1639: Amended Sec. 35 by redesignating subsection (c) as subsection (d) and by inserting after subsection (b) the following new subsection (c): "(c) CERTAIN NONRESIDENT ALIENS INELIGIBLE FOR CREDIT.— No credit shall be allowed under subsection (a) to a nonresident 13 Section 35 originally read as follows (68A Stat. 14): "SEC. 35. PARTIALLY TAX-EXEMPT INTEREST RECEIVED BY INDIVIDUALS. "(a) IN GENERAL.-There shall be allowed to an individual, as a credit against the tax imposed by this subtitle for the taxable year, an amount equal to 3 percent of the amount received as interest on obligations of the United States or on obligations of corporations organized under Act of Congress which are instrumentalities of the United States, but only if— "(1) such interest is included in gross income; and "(2) such interest is exempt from normal tax under the Act authorizing the issuance of such obligations. "(b) LIMITATION ON AMOUNT OF CREDIT.-The credit allowed by subsection (a) shall not exceed whichever of the following is the lesser: "(1) the amount of the tax imposed by this chapter for the taxable year, reduced by the sum of the credits allowable under sections 33 and 34; or "(2) 3 percent of the taxable income for the taxable year. "(c) CROSS REFERENCE. "For reduction of credit under this section on account of amortizable bond premium, see section 171." SEC. 35-Continued (c) (added 1958)—Continued alien individual with respect to whom a tax is imposed for the taxable year under section 871 (a).” Applicability: Only with respect to taxable years beginning after December 31, 1957. (Id., § 41(c), 72 Stat. 1639.) SEC. 37. RETIREMENT INCOME (68A Stat. 15-16): (a)_. Do.... (in part) (c)(1)____ (in part) Feb. 26, 1964, H.R. 8363, P.L. 88-272, § 113(a), 78 Stat. 24: 14 "an amount equal to the amount received by such individual as retirement income (as defined in subsection (c) and as limited by subsection (d)), multiplied by the rate provided in section 1 for the first $2,000 of taxable income;" and inserting in lieu thereof "an amount equal to 17 percent, in the case of a taxable year beginning in 1964, or 15 percent, in the case of a taxable year beginning after December 31, 1964, of the amount received by such individual as retirement income (as defined in subsection (c) and as limited by subsection (d));". Feb. 26, 1964, H.R. 8363, P.L. 88-272, § 201(d) (3), 78 Stat. 32: Amended Sec. 37(a) (as amended by P.L. 88-272, §113(a)) by striking out "section 34 (relating to credit for dividends received by individuals),". Applicability: Dividends received after December 31, 1964, in taxable years ending after such date. (Id., § 201(e), 78 Stat. 32-33.) Oct. 10, 1962, H.R. 10, P.L. 87–792, § 7(a)(1), (2), 76 Stat. 828: (1) by striking out subparagraph (A) and inserting in lieu thereof the following: "(A) pensions and annuities (including, in the case of an individual who is, or has been, an employee within the meaning of 14 Subsection (a) of section 37 originally read as follows (68A Stat. 15): "(a) GENERAL RULE.-In the case of an individual who has received earned income before the beginning of the taxable year, there shall be allowed as a credit against the tax imposed by this chapter for the taxable year an amount equal to the amount received by such individual as retirement income (as defined in subsection (c) and as limited by subsection (d)), multiplied by the rate provided in section 1 for the first $2,000 of taxable income; but this credit shall not exceed such tax reduced by the credits allowable under section 32(2) (relating to tax withheld at source on tax-free covenant bonds), section 33 (relating to foreign tax credit), section 34 (relating to credit for dividends received by individuals), and section 35 (relating to partially tax exempt interest)." 15 Subsection (c) of section 37 originally read as follows (68A Stat. 15): "(c) RETIREMENT INCOME.-For purposes of subsection (a), the term 'retirement income' means "(1) in the case of an individual who has attained the age of 65 before the close of the taxable year, income from "(A) pensions and annuities, "(B) interest, [Footnote 15 continued on following page] |