; and (2) reduce any penalties for underpayments calculated under subsection (f)(1) and refund any overpayments on such annual repayment amount, accordingly. (i) Determination of income-Based repayment obligation (1) In general The income-based repayment obligation with respect to an individual for any taxable year is an amount equal to 10 percent of the excess of— (A) the sum of— (i) the wages, salaries, tips, and other employee compensation of the individual, but only if such amounts are includible in gross income for the taxable year (determined without regard to sections 911, 931, and 933 of the Internal Revenue Code of 1986) and are readily attributable to the individual, plus (ii) any other amount included in total income of the taxpayer for the taxable year but not described in clause (i), except that such amount shall be divided by 2 in the case of an individual who is married and filing a joint tax return, over (B) the sum of— (i) the exemption amount with respect to such individual, plus (ii) the lesser of the amount determined with respect to the taxpayer under subparagraph (A)(ii), or $3,000. (2) Exclusion of certain amounts paid on behalf of individual Any amount paid on the borrower's behalf under section 499E(a)(5) shall not be taken into account in determining such borrower's income-based repayment obligation. (3) Exemption amount For purposes of this subpart, the exemption amount with respect to an individual shall be $10,000 (adjusted each year to reflect changes in the Consumer Price Index for All Urban Consumers published by the Bureau of Labor Statistics of the Department of Labor for the most recent 12-month period for which such data are available). (4) Individuals not filing a return The income-based repayment obligation with respect to an individual not required to file a return under section 6012(a)(1) of the Internal Revenue Code of 1986 shall be treated as zero. . 4. Conforming changes to the Higher Education Act of 1965 (a) Loan forgiveness and cancellation for teachers (1) Loan