ESTIMATED TAX IN CASE OF INDIVIDUALS.

SEC. 102. ESTIMATED TAX IN CASE OF INDIVIDUALS. (a) Inclusion of Self-Employment Tax in Estimated Tax.— Section 6015(c) (relating to definition of estimated tax in the case of an individual) is amended to read as follows: “(c) Estimated Tax.—For purposes of this title, in the case of an individual, the term ‘estimated tax’ means— “(1) the amount which the individual estimates as the amount of the income tax imposed by chapter 1 for the taxable year, plus “(2) the amount which the individual estimates as the amount of the self-employment tax imposed by chapter 2 for the taxable year, minus “(3) the amount which the individual estimates as the sum of any credits against tax provided by part IV of subchapter A of chapter 1.” (b) addition to tax for underpayment of estimated tax. (1) Section 6054(a) (relating to addition to the tax for underpayment of estimated lax by an individual) is amended by inserting after “chapter 1” the following: “and the tax under chapter 2”. (2) Section 6654(d) is amended to read as follows: “(d) Exception.— Notwithstanding the provisions of the preceding subsections, the addition to the tax with respect to any underpayment of any installment shall not be imposed if the total amount of all pay-80 Stat. 63ments of estimated tax made on or before the last date prescribed for the payment of such installment equals or exceeds the amount which would have been required to be paid on or before such date if the estimated tax were whichever of the following is the least— “(1) The tax shown on the return of the individual for the preceding taxable year., if a return showing a liability for tax was tiled by the individual for the preceding taxable year and such proceding year was a taxable year of 12 months. “(2) An amount equal to 70 percent (66% percent in the case of individuals referred to in section 6073(b), relating to income from farming or fishing) of the tax for the taxable year computed by placing on an annualized basis the taxable income for the months in the taxable year ending before the month in which the installment is required to be paid and by taking into account the adjusted self-employment income (if the net earnings from self-employment (as defined in section 1402(a)) for the taxable year equal or exceed $400). For purposes of this paragraph— “(A) The taxable income shall be placed on an annualized basis by— “(i) multiplying by 12 (or, in the case of a taxable year of less than 12 months, the number of months in the taxable year) the taxable income (computed without deduction of personal exemptions) for the months in the taxable year ending before the month in which the installment is required to be paid, “(ii) dividing the resulting amount by the number of months in the taxable year ending before the month in which such installment date falls, and “(iii) deducting from such amount the deductions for personal exemptions allowable for the taxable year (such personal exemptions being determined as of the last date prescribed for payment of the installment). “(B) The term ‘adjusted sell employment income’ means— “(i) the net earnings from self-employment (as defined in section 1402(a)) for the months in the taxable year ending before the month in which the installment is required to be paid, but not more than “(ii) the excess of $6,600 over the amount determined by placing the wages (within the meaning of section 1402(b)) for the months in the taxable year ending before the month in which the installment is required to be paid on an annualized basis in a manner consistent with clauses (i) and (ii) of subparagraph (A). “(3) An amount equal to 90 percent of the tax computed, at the rates applicable to the taxable year, on the basis of the actual taxable income and the actual self-employment income for the months in the taxable year ending before the month in which the installment is required to be paid as if such months constituted the taxable year. “(4) An amount equal to the tax computed, at the rates applicable to the taxable year, on the basis of the taxpayer’s status with respect to personal exemptions under section 151 for the taxable year, but otherwise on the basis of the facts shown on his return for, and the law applicable to, the preceding taxable year.” 80 Stat. 64 (3) Section 6654(f) (relating to definition of tax for purposes of subsections (b) and (d) of section 6654) is amended to read as follows: “(f) Tax Computed After Application of Credits Against Tax.— For purposes of subsections (b) and (d), the term ‘tax’ means— “(1) the tax imposed by this chapter 1, plus “(2) the tax imposed by chapter 2, minus “(3) the credits against tax allowed by part IV of subchapter A of chapter 1, other than the credit against tax provided by section 31 (relating to tax withheld on wages).” (4) Section 6211(b)(1) (relating to definition of a deficiency) is amended by striking out “chapter 1” and inserting in lieu thereof “subtitle A”. (5) Section 7701(a) (relating to definitions) is amended by adding at the end thereof the following new paragraph: “(34) Estimated income tax.— The term ‘estimated income tax’ means— “(A) in the case of an individual, the estimated tax as defined in section 6015(c), or “(B) in the case of a corporation, the estimated tax as defined in section 6016 (b).” (6) Section 1403(b) (cross references) is amended by adding at the end thereof the following new paragraph: “(3) For provisions relating to declarations of estimated tax on self-employment income, see section 6015.” (c) Ministers, Members of Religious Orders, and Christian Science Practitioners.— Section 1402 (e)(3) (relating to effective date of waiver certificates) is amended by adding at the end thereof the following new subparagraph: “(E) For purposes of sections 6015 and 6654, a waiver certificate described in paragraph (1) shall be treated as taking effect on the first day of the first taxable year beginning after the date on which such certificate is filed.” (d) Effective Date.—The amendments made by subsections (a), (b), and (c) shall apply with respect to taxable years beginning after December 31, 1966.