EARNED INCOME INCLUDES COMBAT PAY.

SEC. 104. EARNED INCOME INCLUDES COMBAT PAY.(a) Child Tax Credit.—Section 24(d)(1) (relating to portion of credit refundable) is amended by adding at the end the following new sentence: “For purposes of subparagraph (B), any amount excluded from gross income by reason of section 112 shall be treated 118 STAT. 1169 as earned income which is taken into account in computing taxable income for the taxable year.”.(b) Earned Income Credit.—Subparagraph (B) of section 32(c)(2) (relating to earned income) is amended—(1) by striking “and” at the end of clause (iv),(2) by striking the period at the end of clause (v) and inserting “, and”, and(3) by adding at the end the following:“(vi) in the case of any taxable year ending—“(I) after the date of the enactment of this clause, and“(II) before January 1, 2006,a taxpayer may elect to treat amounts excluded from gross income by reason of section 112 as earned income.”.(c) Effective Date.—(1) Child tax credit.—The amendment made by subsection (a) shall apply to taxable years beginning after December 31, 2003.(2) Earned income credit.—The amendments made by subsection (b) shall apply to taxable years ending after the date of the enactment of this Act.