TAXATION OF UNEMPLOYMENT COMPENSATION.

SEC. 611. TAXATION OF UNEMPLOYMENT COMPENSATION. (a) Lowering Base Amount From $20,000 to $12,000 (From $25,000 to $18,000 in Case of Joint Return).—Subsection (b) of section 85 of the Internal Revenue Code of 1954 (defining base amount) is amended— (1) by striking out “$20,000” and inserting in lieu thereof “$12,000”, and (2) by striking out “$25,000” and inserting in lieu thereof “$18,000”. (b) Effective Dates.— (1) Compensation paid after 1981.—The amendments made by this section shall apply to payments of unemployment compensation made after December 31, 1981, in taxable years ending after such date. (2) No addition to tax for underpayment of estimated tax attributable to application of amendments to compensation paid in 1982.—No additional to tax shall be made under section 6654 of the Internal Revenue Code of 1954 with respect to any underpayment to the extent such underpayment is attributable to unemployment compensation which is received during 1982 and which (but for the amendments made by subsection (a)) would not be includable in gross income. (3) Special rule for fiscal year taxpayers.—In the case of a taxable year (other than a calendar year) which includes January 1, 1982— (A) the amendments made by this section shall be applied by taking into account the entire amount of unemployment compensation received during such taxable year, but (B) the increase in gross income for such taxable year as a result of such amendments shall not exceed the amount of unemployment compensation paid after December 31, 1981. (4) Unemployment compensation defined.—For purposes of this subsection, the term “unemployment compensation” has the meaning given to such term by section 85(c) of the Internal Revenue Code of 1954.