A bill to provide that the changes made by the Tax Reform Act of 1976 to the exclusion for sick pay shall only apply to taxable years beginning after December 31, 1976.

(House disagreed to certain Senate amendments)

Amends the Tax Reform Act of 1976 to change the effective date of the sick pay exclusion from taxable years beginning after December 31, 1975, the taxable years beginning after December 31, 1976. Allows individuals who have elected to claim the section 72 annuity exclusion of the Internal Revenue Code to revoke their election or to benefit as if the Tax Reform Act disability exclusion still applied to 1976.

Establishes a withholding tax of 20 percent on proceeds of a wagering transaction if the proceeds are $1,000 or more and are at least 300 times as large as the amount of the wager.

Extends until January 1, 1977, the period during which a State legislator may treat his residence within his district as his tax home for purposes of computing deductions for living expenses.

Waives interest and penalty payments by taxpayers with regard to specified errors which may be made in tax returns for 1976 due to complexities of the 1976 Tax Reform Act.