; and (ii) imposes a local income tax upon its residents. (B) Contributions required by a State from a political subdivision for administrative expenses if the State required such contributions from such subdivision without reimbursement from the State as of January 1, 2023. (3) Applicable percentage For purposes of paragraph (1), the applicable percentage described in this paragraph is— (A) with respect to fiscal year 2025, 25 percent; (B) with respect to fiscal year 2026, 50 percent; (C) with respect to fiscal year 2027, 75 percent; and (D) with respect to fiscal year 2028 and each subsequent fiscal year, 100 percent. .