(a) In general In the case of an eligible individual, there shall be allowed as a credit against the tax imposed by chapter 1 for the taxpayers first taxable year beginning in 2001 an amount equal to 5 percent of so much of the taxpayers taxable income as does not exceed the initial bracket amount (as defined in section
1 (i)(1)(B)).
(c) Eligible individual For purposes of this section, the term eligible individual means any individual other than
(1) any estate or trust,
(2) any nonresident alien individual, and
(3) any individual with respect to whom a deduction under section
151 is allowable to another taxpayer for a taxable year beginning in the calendar year in which the individuals taxable year begins.
(d) Coordination with advance refunds of credit
(1) In general The amount of credit which would (but for this paragraph) be allowable under this section shall be reduced (but not below zero) by the aggregate refunds and credits made or allowed to the taxpayer under subsection (e). Any failure to so reduce the credit shall be treated as arising out of a mathematical or clerical error and assessed according to section
6213 (b)(1).
(2) Joint returns
In the case of a refund or credit made or allowed under subsection (e) with respect to a joint return, half of such refund or credit shall be treated as having been made or allowed to each individual filing such return.
(e) Advance refunds of credit based on prior year data
(1) In general
Each individual who was an eligible individual for such individuals first taxable year beginning in 2000 shall be treated as having made a payment against the tax imposed by chapter 1 for such first taxable year in an amount equal to the advance refund amount for such taxable year.
(2) Advance refund amount For purposes of paragraph (1), the advance refund amount is the amount that would have been allowed as a credit under this section for such first taxable year if
(A) this section (other than subsections (b) and (d) and this subsection) had applied to such taxable year, and
(B) the credit for such taxable year were not allowed to exceed the excess (if any) of
(i) the sum of the regular tax liability (as defined in section
26 (b)) plus the tax imposed by section
55, over
(ii) the sum of the credits allowable under part IV of subchapter A of chapter 1 (other than the credits allowable under subpart C thereof, relating to refundable credits).
(3) Timing of payments
In the case of any overpayment attributable to this subsection, the Secretary shall, subject to the provisions of this title, refund or credit such overpayment as rapidly as possible and, to the extent practicable, before October 1, 2001. No refund or credit shall be made or allowed under this subsection after December 31, 2001.
(4) No interest
No interest shall be allowed on any overpayment attributable to this subsection.