Code is amended by adding at the end the following new paragraph: (3) Inflation amount For purposes of paragraph (1), the inflation amount with respect to any dollar amount for any taxable year is the amount equal to— (A) such dollar amount, multiplied by (B) the percentage (if any) by which— (i) the CPI (as defined in section 1(f)(4)) for the calendar year preceding the year in which the taxable year begins, exceeds (ii) the CPI (as so defined) for— (I) in the case of amounts in the third row of the table in subsection (b)(2)(A), 2023, (II) in the case of any other amount in subsection (b)(2)(A), 1995, (III) in the case of the $5,000 amount in subsection (b)(2)(B), 2008, and (IV) in the case of the $10,000 amount in subsection (i)(1), 2020. . (f) Conforming amendment Section 32 of the Internal Revenue Code of 1986 is amended by striking subsection (n). (g) Effective date The amendments made by this section shall apply to taxable years beginning after December 31, 2023. 102. Application of earned income credit to possessions of the United States (a) Puerto Rico Subparagraph (B) of section 7530(a)(1) of the Internal Revenue Code of 1986 is amended by striking in the case of calendar years 2021 through 2025, . (b) Possessions with mirror code tax systems Subparagraph (B) of section 7530(b)(1) of the Internal Revenue Code of 1986 is amended by striking in the case of calendar years 2021 through 2025, . (c) American Samoa Subparagraph (B) of section 7530(c)(1) of the Internal Revenue Code of 1986 is amended by striking in the case of calendar years 2021 through 2025, . 103. Election to use prior year earned income (a) In general Paragraph (2) of section 32(c) of the Internal Revenue Code of 1986 is amended by adding at the end the following new subparagraph: (C) Election to use prior year earned income (i) In general If the earned income of the taxpayer for any taxable year is less than the earned income of the taxpayer for the preceding taxable year, the credit allowed under subsection (a) may, at the election of