Upon the death of a dependent child, the first $60,000.00 
of one year's income shall be excluded from taxation for income 
tax and any and all other federal payroll taxes (including social 
security).  The exclusion shall be applied in either (a) the year 
of the child's death or (b) the calendar year immediately fol-
lowing the child's death or (c) the calendar year immediately fol-
lowing a similar exclusion, at the taxpayer's option.  The exclusion 
applies before all other provisions, including those relating to 
alternative minimum taxes and those excluding certain categories 
of income from taxation.  Following the year in which the exclusion 
is applied, the taxpayer shall be entitled to claim the standard
deduction for the child, as if the child had lived, for up to the 
next two years.  

     Should more than one child of a taxpayer die in a calendar 
year, the exclusion shall apply to that year and to the following 
year(s) (see option {c} above for deaths in excess of two).  Only 
one death exclusion shall apply per year.  No exclusion shall apply 
to the income of any parent found criminally liable for the death of 
the child.  In such a case, the exclusion applies to the income, if 
any, of the non-culpable parent, if any.

     Should a child die whose parents are not filing jointly with 
each other, each parent shall be entitled one half the exclusion 
and one year's deduction.  The exclusions and deductions may be
applied to separate years.  A child with only one parent shall exclude
the full amount of the income of that parent.  Posthumous legitimation
of a child shall not carry with it any exclusion or deduction

     This provision is retroactive to January 1, 1985.  However, no 
interest shall accrue as to any refund paid due to retroactive
application, although retroactive application may apply to reduce or
eliminate penalty and/or interest on taxes that would have otherwise 
been due.

Expected impact:

     Minimal.  The death of a child generally results in a 50% or 
greater loss in income for non-union workers and self-employed

Many of the deaths occur in low-tax income and a substantial portion 
result in difficulties resulting in non-payment of taxes.

Comparative sections:

     The hardship exclusion for persons living in foreign countries. 

     The tax credit of $5,000.00 for those adopting children.

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