UIPL 17-95 Attachment I

UIPL 17-95 ATTACHMENT I

RELEVANT SECTIONS OF P.L. 103-465 -- AN ACT

To approve and implement the trade agreements concluded in the Uruguay Round of multilateral trade negotiations.

SECTION 1. SHORT TITLE AND TABLE OF CONTENTS.

(a) SHORT TITLE.--This Act may be cited as the "Uruguay Round Agreements Act".

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TITLE VII--REVENUE PROVISION SUBTITLE A--WITHHOLDING TAX PROVISIONS

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SEC. 702. VOLUNTARY WITHHOLDING ON CERTAIN FEDERAL PAYMENTS AND ON UNEMPLOYMENT COMPENSATION.

(a) IN GENERAL.--Subsection (p) of section 3402 (relating to voluntary withholding agreements) is amended to read as follows:

"(p) VOLUNTARY WITHHOLDING AGREEMENTS.--

"(1) CERTAIN FEDERAL PAYMENTS.--"(A) IN GENERAL.--If, at the time a specified Federal payment >is made to any person, a request by such person is in effect that such payment be subject to withholding under this chapter, then for purposes of this chapter and so much of subtitle F as relates to this chapter, such payment shall be treated as if it were a payment of wages by an employer to an employee.

"(B) AMOUNT WITHHELD.--The amount to be deducted and withheld under this chapter from any payment to which any request under subparagraph (A) applies shall be an amount equal to the percentage of such payment specified in such request. Such a request shall apply to any payment only if the percentage specified is 7, 15, 28, or 31 percent or such other percentage as is permitted under regulations prescribed by the Secretary.

"(C) SPECIFIED FEDERAL PAYMENTS.--For purposes of this paragraph, the term `specified Federal payment' means--

"(i) any payment of a social security benefit (as defined in section 86(d)), "(ii) any payment referred to in the second sentence of section 451(d) which is treated as insurance proceeds, "(iii) any amount which is includible in gross income under section 77(a), and "(iv) any other payment made pursuant to Federal law which is specified by the Secretary for purposes of this paragraph." "

(D) REQUESTS FOR WITHHOLDING.--Rules similar to the rules that apply to annuities under subsection (o)(4) shall apply to requests under this paragraph and paragraph (2).

"(2) VOLUNTARY WITHHOLDING ON UNEMPLOYMENT BENEFITS.--If, at the time a payment of unemployment compensation (as defined in section 85(b)) is made to any person, a request by such person is in effect that such payment be subject to withholding under this chapter, then for purposes of this chapter and so much of subtitle F as relates to this chapter, such payment shall be treated as if it were a payment of wages by an employer to an employee. The amount to be deducted and withheld under this chapter from any payment to which any request under this paragraph applies shall be an amount equal to 15 percent of such payment.

"(3) AUTHORITY FOR OTHER VOLUNTARY WITHHOLDING.--The Secretary is authorized by regulations to provide for withholding--

"(A) from remuneration for services performed by an employee for the employee's employer which (without regard to this paragraph) does not constitute wages, and

"(B) from any other type of payment with respect to which the Secretary finds that withholding would be appropriate under the provisions of this chapter, if the employer and employee, or the person making and the person receiving such other type of payment, agree to such withholding. Such agreement shall be in such form and manner as the Secretary may by regulations prescribe. For purposes of this chapter (and so much of subtitle F as relates to this chapter), remuneration or other payments with respect to which such agreement is made shall be treated as if they were wages paid by an employer to an employee to the extent that such remuneration is paid or other payments are made during the period for which the agreement is in effect."

(b) STATE LAW MUST PERMIT VOLUNTARY WITHHOLDING OF FEDERAL INCOME TAX FROM UNEMPLOYMENT COMPENSATION.--Section 3304(a) is amended by striking "and" at the end of paragraph (17), by redesignating paragraph (18) as paragraph (19), and by inserting after paragraph (17) the following new paragraph:

"(18) Federal individual income tax from unemployment compensation is to be deducted and withheld if an individual receiving such compensation voluntarily requests such deduction and withholding; and".

(1) Subparagraph (C) of section 3304(a)(4) is amended by inserting after "health insurance" the following: ", or the withholding of Federal, State, or local individual income tax,".

(2) Subsection (f) of section 3306 is amended by redesignating paragraphs (3) and (4) as paragraphs (4) and (5), respectively, and by inserting after paragraph (2) the following new paragraph:

"(3) nothing in this subsection shall be construed to prohibit deducting any amount from unemployment compensation otherwise payable to an individual and using the amount so deducted to pay for health insurance, or the withholding of Federal, State, or local individual income tax, if the individual elected to have such deduction made and such deduction was made under a program approved by the Secretary of Labor;".

(3) Paragraph (5) of section 303(a) of the Social Security Act is amended by inserting after "health insurance" the following: ", or the withholding of Federal, State, or local individual income tax,".

(d) EFFECTIVE DATE.--The amendments made by this section shall apply to payments made after December 31, 1996.