Sec. 162. Trade Or Business Expenses

I.R.C. § 162(a) In General —

There shall be allowed as a deduction all the ordinary and necessary expenses paid or incurred during the taxable year in carrying on any trade or business, including—

I.R.C. § 162(a)(1) —

a reasonable allowance for salaries or other compensation for personal services actually rendered;

I.R.C. § 162(a)(2) —

traveling expenses (including amounts expended for meals and lodging other than amounts which are lavish or extravagant under the circumstances) while away from home in the pursuit of a trade or business; and

I.R.C. § 162(a)(3) —

rentals or other payments required to be made as a condition to the continued use or possession, for purposes of the trade or business, of property to which the taxpayer has not taken or is not taking title or in which he has no equity.

For purposes of the preceding sentence, the place of residence of a Member of Congress (including any Delegate and Resident Commissioner) within the State, congressional district, or possession which he represents in Congress shall be considered his home, but amounts expended by such Members within each taxable year for living expenses shall not be deductible for income tax purposes. For purposes of paragraph (2), the taxpayer shall not be treated as being temporarily away from home during any period of employment if such period exceeds 1 year. The preceding sentence shall not apply to any Federal employee during any period for which such employee is certified by the Attorney General (or the designee thereof) as traveling on behalf of the United States in temporary duty status to investigate or prosecute, or provide support services for the investigation or prosecution of, a Federal crime.

I.R.C. § 162(b) Charitable Contributions And Gifts Excepted —

No deduction shall be allowed under subsection (a) for any contribution or gift which would be allowable as a deduction under section 170 were it not for the percentage limitations, the dollar limitations, or the requirements as to the time of payment, set forth in such section.

I.R.C. § 162(c) Illegal Bribes, Kickbacks, And Other Payments

I.R.C. § 162(c)(1) Illegal Payments To Government Officials Or Employees —

No deduction shall be allowed under subsection (a) for any payment made, directly or indirectly, to an official or employee of any government, or of any agency or instrumentality of any government, if the payment constitutes an illegal bribe or kickback or, if the payment is to an official or employee of a foreign government, the payment is unlawful under the Foreign Corrupt Practices Act of 1977. The burden of proof in respect of the issue, for the purposes of this paragraph, as to whether a payment constitutes an illegal bribe or kickback (or is unlawful under the Foreign Corrupt Practices Act of 1977) shall be upon the Secretary to the same extent as he bears the burden of proof under section 7454 (concerning the burden of proof when the issue relates to fraud).

I.R.C. § 162(c)(2) Other Illegal Payments —

No deduction shall be allowed under subsection (a) for any payment (other than a payment described in paragraph (1)) made, directly or indirectly, to any person, if the payment constitutes an illegal bribe, illegal kickback, or other illegal payment under any law of the United States, or under any law of a State (but only if such State law is generally enforced), which subjects the payor to a criminal penalty or the loss of license or privilege to engage in a trade or business. For purposes of this paragraph, a kickback includes a payment in consideration of the referral of a client, patient, or customer. The burden of proof in respect of the issue, for purposes of this paragraph, as to whether a payment constitutes an illegal bribe, illegal kickback, or other illegal payment shall be upon the Secretary to the same extent as he bears the burden of proof under section 7454 (concerning the burden of proof when the issue relates to fraud).

I.R.C. § 162(c)(3) Kickbacks, Rebates, And Bribes Under Medicare And Medicaid —

No deduction shall be allowed under subsection (a) for any kickback, rebate, or bribe made by any provider of services, supplier, physician, or other person who furnishes items or services for which payment is or may be made under the Social Security Act, or in whole or in part out of Federal funds under a State plan approved under such Act, if such kickback, rebate, or bribe is made in connection with the furnishing of such items or services or the making or receipt of such payments. For purposes of this paragraph, a kickback includes a payment in consideration of the referral of a client, patient, or customer.

I.R.C. § 162(d) Capital Contributions To Federal National Mortgage Association —

For purposes of this subtitle, whenever the amount of capital contributions evidenced by a share of stock issued pursuant to section 303(c) of the Federal National Mortgage Association Charter Act (12 U.S.C., sec. 1718) exceeds the fair market value of the stock as of the issue date of such stock, the initial holder of the stock shall treat the excess as ordinary and necessary expenses paid or incurred during the taxable year in carrying on a trade or business.

I.R.C. § 162(e) Denial Of Deduction For Certain Lobbying And Political Expenditures

I.R.C. § 162(e)(1) In General —

No deduction shall be allowed under subsection (a) for any amount paid or incurred in connection with—

I.R.C. § 162(e)(1)(A) —

influencing legislation,

I.R.C. § 162(e)(1)(B) —

participation in, or intervention in, any political campaign on behalf of (or in opposition to) any candidate for public office,

I.R.C. § 162(e)(1)(C) —

any attempt to influence the general public, or segments thereof, with respect to elections, legislative matters, or referendums, or

I.R.C. § 162(e)(1)(D) —

any direct communication with a covered executive branch official in an attempt to influence the official actions or positions of such official.

I.R.C. § 162(e)(2) Application To Dues Of Tax-Exempt Organizations —

No deduction shall be allowed under subsection (a) for the portion of dues or other similar amounts paid by the taxpayer to an organization which is exempt from tax under this subtitle which the organization notifies the taxpayer under section 6033(e)(1)(A)(ii) is allocable to expenditures to which paragraph (1) applies.

I.R.C. § 162(e)(3) Influencing Legislation —

For purposes of this subsection—

I.R.C. § 162(e)(3)(A) In General —

The term “influencing legislation” means any attempt to influence any legislation through communication with any member or employee of a legislative body, or with any government official or employee who may participate in the formulation of legislation.

I.R.C. § 162(e)(3)(B) Legislation —

The term “legislation” has the meaning given such term by section 4911(e)(2).

I.R.C. § 162(e)(4) Other Special Rules

I.R.C. § 162(e)(4)(A) Exception For Certain Taxpayers —

In the case of any taxpayer engaged in the trade or business of conducting activities described in paragraph (1), paragraph (1) shall not apply to expenditures of the taxpayer in conducting such activities directly on behalf of another person (but shall apply to payments by such other person to the taxpayer for conducting such activities).

I.R.C. § 162(e)(4)(B) De Minimis Exception

I.R.C. § 162(e)(4)(B)(i) In General —

Paragraph (1) shall not apply to any in-house expenditures for any taxable year if such expenditures do not exceed $2,000. In determining whether a taxpayer exceeds the $2,000 limit under this clause, there shall not be taken into account overhead costs otherwise allocable to activities described in paragraphs (1)(A) and (D).

I.R.C. § 162(e)(4)(B)(ii) In-House Expenditures —

For purposes of clause (i), the term “in-house expenditures” means expenditures described in paragraphs (1)(A) and (D) other than—

I.R.C. § 162(e)(4)(B)(ii)(I) —

payments by the taxpayer to a person engaged in the trade or business of conducting activities described in paragraph (1) for the conduct of such activities on behalf of the taxpayer, or

I.R.C. § 162(e)(4)(B)(ii)(II) —

dues or other similar amounts paid or incurred by the taxpayer which are allocable to activities described in paragraph (1).

I.R.C. § 162(e)(4)(C) Expenses Incurred In Connection With Lobbying And Political Activities —

Any amount paid or incurred for research for, or preparation, planning, or coordination of, any activity described in paragraph (1) shall be treated as paid or incurred in connection with such activity.

I.R.C. § 162(e)(5) Covered Executive Branch Official —

For purposes of this subsection, the term “covered executive branch official” means—

I.R.C. § 162(e)(5)(A) —

the President,

I.R.C. § 162(e)(5)(B) —

the Vice President,

I.R.C. § 162(e)(5)(C) —

any officer or employee of the White House Office of the Executive Office of the President, and the 2 most senior level officers of each of the other agencies in such Executive Office, and

I.R.C. § 162(e)(5)(D)

I.R.C. § 162(e)(5)(D)(i) —

any individual serving in a position in level I of the Executive Schedule under section 5312 of title 5, United States Code,

I.R.C. § 162(e)(5)(D)(ii) —

any other individual designated by the President as having Cabinet level status, and

I.R.C. § 162(e)(5)(D)(iii) —

any immediate deputy of an individual described in clause (i) or (ii).

I.R.C. § 162(e)(6) Cross Reference —

For reporting requirements and alternative taxes related to this subsection, see section 6033(e).

I.R.C. § 162(f) Fines, Penalties, And Other Amounts

I.R.C. § 162(f)(1) In General —

Except as provided in the following paragraphs of this subsection, no deduction otherwise allowable shall be allowed under this chapter for any amount paid or incurred (whether by suit, agreement, or otherwise) to, or at the direction of, a government or governmental entity in relation to the violation of any law or the investigation or inquiry by such government or entity into the potential violation of any law.

I.R.C. § 162(f)(2) Exception For Amounts Constituting Restitution Or Paid To Come Into Compliance With Law

I.R.C. § 162(f)(2)(A) In General —

Paragraph (1) shall not apply to any amount that—

I.R.C. § 162(f)(2)(A)(i) —

the taxpayer establishes—

I.R.C. § 162(f)(2)(A)(i)(I) —

constitutes restitution (including remediation of property) for damage or harm which was or may be caused by the violation of any law or the potential violation of any law, or

I.R.C. § 162(f)(2)(A)(i)(II) —

is paid to come into compliance with any law which was violated or otherwise involved in the investigation or inquiry described in paragraph (1),

I.R.C. § 162(f)(2)(A)(ii) —

is identified as restitution or as an amount paid to come into compliance with such law, as the case may be, in the court order or settlement agreement, and

I.R.C. § 162(f)(2)(A)(iii) —

in the case of any amount of restitution for failure to pay any tax imposed under this title in the same manner as if such amount were such tax, would have been allowed as a deduction under this chapter if it had been timely paid.

The identification under clause (ii) alone shall not be sufficient to make the establishment required under clause (i).

I.R.C. § 162(f)(2)(B) Limitation —

Subparagraph (A) shall not apply to any amount paid or incurred as reimbursement to the government or entity for the costs of any investigation or litigation.

I.R.C. § 162(f)(3) Exception For Amounts Paid Or Incurred As The Result Of Certain Court Orders —

Paragraph (1) shall not apply to any amount paid or incurred by reason of any order of a court in a suit in which no government or governmental entity is a party.

I.R.C. § 162(f)(4) Exception For Taxes Due —

Paragraph (1) shall not apply to any amount paid or incurred as taxes due.

I.R.C. § 162(f)(5) Treatment Of Certain Nongovernmental Regulatory Entities —

For purposes of this subsection, the following nongovernmental entities shall be treated as governmental entities:

I.R.C. § 162(f)(5)(A) —

Any nongovernmental entity which exercises self-regulatory powers (including imposing sanctions) in connection with a qualified board or exchange (as defined in section 1256(g)(7)).

I.R.C. § 162(f)(5)(B) —

To the extent provided in regulations, any nongovernmental entity which exercises self-regulatory powers (including imposing sanctions) as part of performing an essential governmental function.

I.R.C. § 162(g) Treble Damage Payments Under The Antitrust Laws —

If in a criminal proceeding a taxpayer is convicted of a violation of the antitrust laws, or his plea of guilty or nolo contendere to an indictment or information charging such a violation is entered or accepted in such a proceeding, no deduction shall be allowed under subsection (a) for two-thirds of any amount paid or incurred—

I.R.C. § 162(g)(1) —

on any judgment for damages entered against the taxpayer under section 4 of the Act entitled “An Act to supplement existing laws against unlawful restraints and monopolies, and for other purposes”, approved October 15, 1914 (commonly known as the Clayton Act), on account of such violation or any related violation of the antitrust laws which occurred prior to the date of the final judgment of such conviction, or

I.R.C. § 162(g)(2) —

in settlement of any action brought under such section 4 on account of such violation or related violation.

I.R.C. § 162(h) State Legislators' Travel Expenses Away From Home

I.R.C. § 162(h)(1) In General —

For purposes of subsection (a), in the case of any individual who is a State legislator at any time during the taxable year and who makes an election under this subsection for the taxable year—

I.R.C. § 162(h)(1)(A) —

the place of residence of such individual within the legislative district which he represented shall be considered his home,

I.R.C. § 162(h)(1)(B) —

he shall be deemed to have expended for living expenses (in connection with his trade or business as a legislator) an amount equal to the sum of the amounts determined by multiplying each legislative day of such individual during the taxable year by the greater of—

I.R.C. § 162(h)(1)(B)(i) —

the amount generally allowable with respect to such day to employees of the State of which he is a legislator for per diem while away from home, to the extent such amount does not exceed 110 percent of the amount described in clause (ii) with respect to such day, or

I.R.C. § 162(h)(1)(B)(ii) —

the amount generally allowable with respect to such day to employees of the executive branch of the Federal Government for per diem while away from home but serving in the United States, and

I.R.C. § 162(h)(1)(C) —

he shall be deemed to be away from home in the pursuit of a trade or business on each legislative day.

I.R.C. § 162(h)(2) Legislative Days —

For purposes of paragraph (1), a legislative day during any taxable year for any individual shall be any day during such year on which—

I.R.C. § 162(h)(2)(A) —

the legislature was in session (including any day in which the legislature was not in session for a period of 4 consecutive days or less), or

I.R.C. § 162(h)(2)(B) —

the legislature was not in session but the physical presence of the individual was formally recorded at a meeting of a committee of such legislature.

I.R.C. § 162(h)(3) Election —

An election under this subsection for any taxable year shall be made at such time and in such manner as the Secretary shall by regulations prescribe.

I.R.C. § 162(h)(4) Section Not To Apply To Legislators Who Reside Near Capitol —

This subsection shall not apply to any legislator whose place of residence within the legislative district which he represents is 50 or fewer miles from the capitol building of the State.

I.R.C. § 162(i) Group Health Plans —

[Repealed]

I.R.C. § 162(j) Certain Foreign Advertising Expenses

I.R.C. § 162(j)(1) In General —

No deduction shall be allowed under subsection (a) for any expenses of an advertisement carried by a foreign broadcast undertaking and directed primarily to a market in the United States. This paragraph shall apply only to foreign broadcast undertakings located in a country which denies a similar deduction for the cost of advertising directed primarily to a market in the foreign country when placed with a United States broadcast undertaking.

I.R.C. § 162(j)(2) Broadcast Undertaking —

For purposes of paragraph (1), the term “broadcast undertaking” includes (but is not limited to) radio and television stations.

I.R.C. § 162(k) Stock Reacquisition Expenses

I.R.C. § 162(k)(1) In General —

Except as provided in paragraph (2), no deduction otherwise allowable shall be allowed under this chapter for any amount paid or incurred by a corporation in connection with the reacquisition of its stock or of the stock of any related person (as defined in section 465(b)(3)(C)).

I.R.C. § 162(k)(2) Exceptions —

Paragraph (1) shall not apply to—

I.R.C. § 162(k)(2)(A) Certain Specific Deductions —

Any—

I.R.C. § 162(k)(2)(A)(i) —

deduction allowable under section 163 (relating to interest),

I.R.C. § 162(k)(2)(A)(ii) —

deduction for amounts which are properly allocable to indebtedness and amortized over the term of such indebtedness, or

I.R.C. § 162(k)(2)(A)(iii) —

deduction for dividends paid (within the meaning of section 561).

I.R.C. § 162(k)(2)(B) Stock Of Certain Regulated Investment Companies —

Any amount paid or incurred in connection with the redemption of any stock in a regulated investment company which issues only stock which is redeemable upon the demand of the shareholder.

I.R.C. § 162(l) Special Rules For Health Insurance Costs Of Self-Employed Individuals

I.R.C. § 162(l)(1) Allowance Of Deduction —

In the case of a taxpayer who is an employee within the meaning of section 401(c)(1), there shall be allowed as a deduction under this section an amount equal to the amount paid during the taxable year for insurance which constitutes medical care for—

I.R.C. § 162(l)(1)(A) —

the taxpayer,

I.R.C. § 162(l)(1)(B) —

the taxpayer's spouse,

I.R.C. § 162(l)(1)(C) —

the taxpayer's dependents, and

I.R.C. § 162(l)(1)(D) —

any child (as defined in section 152(f)(1)) of the taxpayer who as of the end of the taxable year has not attained age 27.

I.R.C. § 162(l)(2) Limitations

I.R.C. § 162(l)(2)(A) Dollar Amount —

No deduction shall be allowed under paragraph (1) to the extent that the amount of such deduction exceeds the taxpayer's earned income (within the meaning of section 401(c)) derived by the taxpayer from the trade or business with respect to which the plan providing the medical care coverage is established.

I.R.C. § 162(l)(2)(B) Other Coverage —

Paragraph (1) shall not apply to any taxpayer for any calendar month for which the taxpayer is eligible to participate in any subsidized health plan maintained by any employer of the taxpayer or of the spouse of, or any dependent, or individual described in subparagraph (D) of paragraph (1) with respect to, the taxpayer. The preceding sentence shall be applied separately with respect to—

I.R.C. § 162(l)(2)(B)(i) —

plans which include coverage for qualified long-term care services (as defined in section 7702B(c)) or are qualified long-term care insurance contracts (as defined in section 7702B(b)), and

I.R.C. § 162(l)(2)(B)(ii) —

plans which do not include such coverage and are not such contracts.

I.R.C. § 162(l)(2)(C) Long-Term Care Premiums —

In the case of a qualified long-term care insurance contract (as defined in section 7702B(b)), only eligible long-term care premiums (as defined in section 213(d)(10)) shall be taken into account under paragraph (1).

I.R.C. § 162(l)(3) Coordination With Medical Deduction —

Any amount paid by a taxpayer for insurance to which paragraph (1) applies shall not be taken into account in computing the amount allowable to the taxpayer as a deduction under section 213(a).

I.R.C. § 162(l)(4) Deduction Not Allowed For Self-Employment Tax Purposes —

The deduction allowable by reason of this subsection shall not be taken into account in determining an individual's net earnings from self-employment (within the meaning of section 1402(a)) for purposes of chapter 2 for taxable years beginning before January 1, 2010, or after December 31, 2010.

I.R.C. § 162(l)(5) Treatment Of Certain S Corporation Shareholders —

This subsection shall apply in the case of any individual treated as a partner under section 1372(a), except that—

I.R.C. § 162(l)(5)(A) —

for purposes of this subsection, such individual's wages (as defined in section 3121) from the S corporation shall be treated as such individual's earned income (within the meaning of section 401(c)(1)), and

I.R.C. § 162(l)(5)(B) —

there shall be such adjustments in the application of this subsection as the Secretary may by regulations prescribe.

I.R.C. § 162(l)(6) Termination —

[Repealed by Pub. L. 104-7, effective for taxable years beginning after 1993.]

I.R.C. § 162(m) Certain Excessive Employee Remuneration

I.R.C. § 162(m)(1) In General —

In the case of any publicly held corporation, no deduction shall be allowed under this chapter for applicable employee remuneration with respect to any covered employee to the extent that the amount of such remuneration for the taxable year with respect to such employee exceeds $1,000,000.

I.R.C. § 162(m)(2) Publicly Held Corporation —

For purposes of this subsection, the term “publicly held corporation” means any corporation which is an issuer (as defined in section 3 of the Securities Exchange Act of 1934 (15 U.S.C. 78c))—

I.R.C. § 162(m)(2)(A) —

the securities of which are required to be registered under section 12 of such Act (15 U.S.C. 78l), or

I.R.C. § 162(m)(2)(B) —

that is required to file reports under section 15(d) of such Act (15 U.S.C. 78o(d)).

I.R.C. § 162(m)(3) Covered Employee —

For purposes of this subsection, the term “covered employee” means any employee of the taxpayer if—

I.R.C. § 162(m)(3)(A) —

such employee is the principal executive officer or principal financial officer of the taxpayer at any time during the taxable year, or was an individual acting in such a capacity,

I.R.C. § 162(m)(3)(B) —

the total compensation of such employee for the taxable year is required to be reported to shareholders under the Securities Exchange Act of 1934 by reason of such employee being among the 3 highest compensated officers for the taxable year (other than any individual described in subparagraph (A)),

I.R.C. § 162(m)(3)(C) —

in the case of taxable years beginning after December 31, 2026, such employee is among the 5 highest compensated employees for the taxable year other than any individual described in subparagraph (A) or (B), or

I.R.C. § 162(m)(3)(D) —

was a covered employee described in subparagraph (A) or (B) of the taxpayer (or any predecessor) for any preceding taxable year beginning after December 31, 2016.

Such term shall include any employee who would be described in subparagraph (B) if the reporting described in such subparagraph were required as so described.

I.R.C. § 162(m)(4) Applicable Employee Remuneration —

For purposes of this subsection—

I.R.C. § 162(m)(4)(A) In General —

Except as otherwise provided in this paragraph, the term “applicable employee remuneration” means, with respect to any covered employee for any taxable year, the aggregate amount allowable as a deduction under this chapter for such taxable year (determined without regard to this subsection) for remuneration for services performed by such employee (whether or not during the taxable year).

I.R.C. § 162(m)(4)(B) Exception For Existing Binding Contracts —

The term “applicable employee remuneration” shall not include any remuneration payable under a written binding contract which was in effect on February 17, 1993, and which was not modified thereafter in any material respect before such remuneration is paid.

I.R.C. § 162(m)(4)(C) Remuneration —

For purposes of this paragraph, the term “remuneration” includes any remuneration (including benefits) in any medium other than cash, but shall not include—

I.R.C. § 162(m)(4)(C)(i) —

any payment referred to in so much of section 3121(a)(5) as precedes subparagraph (E) thereof, and

I.R.C. § 162(m)(4)(C)(ii) —

any benefit provided to or on behalf of an employee if at the time such benefit is provided it is reasonable to believe that the employee will be able to exclude such benefit from gross income under this chapter.

For purposes of clause (i), section 3121(a)(5) shall be applied without regard to section 3121(v)(1).

I.R.C. § 162(m)(4)(D) Coordination With Disallowed Golden Parachute Payments —

The dollar limitation contained in paragraph (1) shall be reduced (but not below zero) by the amount (if any) which would have been included in the applicable employee remuneration of the covered employee for the taxable year but for being disallowed under section 280G.

I.R.C. § 162(m)(4)(E) Coordination With Excise Tax On Specified Stock Compensation —

The dollar limitation contained in paragraph (1) with respect to any covered employee shall be reduced (but not below zero) by the amount of any payment (with respect to such employee) of the tax imposed by section 4985 directly or indirectly by the expatriated corporation (as defined in such section) or by any member of the expanded affiliated group (as defined in such section) which includes such corporation.

I.R.C. § 162(m)(4)(F) Special Rule For Remuneration Paid To Beneficiaries, Etc. —

Remuneration shall not fail to be applicable employee remuneration merely because it is includible in the income of, or paid to, a person other than the covered employee, including after the death of the covered employee.

I.R.C. § 162(m)(5) Special Rule For Application To Employers Participating In The Troubled Assets Relief Program

I.R.C. § 162(m)(5)(A) In General —

In the case of an applicable employer, no deduction shall be allowed under this chapter—

I.R.C. § 162(m)(5)(A)(i) —

in the case of executive remuneration for any applicable taxable year which is attributable to services performed by a covered executive during such applicable taxable year, to the extent that the amount of such remuneration exceeds $500,000, or

I.R.C. § 162(m)(5)(A)(ii) —

in the case of deferred deduction executive remuneration for any taxable year for services performed during any applicable taxable year by a covered executive, to the extent that the amount of such remuneration exceeds $500,000 reduced (but not below zero) by the sum of—

I.R.C. § 162(m)(5)(A)(ii)(I) —

the executive remuneration for such applicable taxable year, plus

I.R.C. § 162(m)(5)(A)(ii)(II) —

the portion of the deferred deduction executive remuneration for such services which was taken into account under this clause in a preceding taxable year.

I.R.C. § 162(m)(5)(B) Applicable Employer —

For purposes of this paragraph—

I.R.C. § 162(m)(5)(B)(i) In General —

Except as provided in clause (ii), the term “applicable employer” means any employer from whom 1 or more troubled assets are acquired under a program established by the Secretary under section 101(a) of the Emergency Economic Stabilization Act of 2008 if the aggregate amount of the assets so acquired for all taxable years exceeds $300,000,000.

I.R.C. § 162(m)(5)(B)(ii) Disregard Of Certain Assets Sold Through Direct Purchase —

If the only sales of troubled assets by an employer under the program described in clause (i) are through 1 or more direct purchases (within the meaning of section 113(c) of the Emergency Economic Stabilization Act of 2008), such assets shall not be taken into account under clause (i) in determining whether the employer is an applicable employer for purposes of this paragraph.

I.R.C. § 162(m)(5)(B)(iii) Aggregation Rules —

Two or more persons who are treated as a single employer under subsection (b) or (c) of section 414 shall be treated as a single employer, except that in applying section 1563(a) for purposes of either such subsection, paragraphs (2) and (3) thereof shall be disregarded.

I.R.C. § 162(m)(5)(C) Applicable Taxable Year —

For purposes of this paragraph, the term “applicable taxable year” means, with respect to any employer—

I.R.C. § 162(m)(5)(C)(i) —

the first taxable year of the employer—

I.R.C. § 162(m)(5)(C)(i)(I) —

which includes any portion of the period during which the authorities under section 101(a) of the Emergency Economic Stabilization Act of 2008 are in effect (determined under section 120 thereof), and

I.R.C. § 162(m)(5)(C)(i)(II) —

in which the aggregate amount of troubled assets acquired from the employer during the taxable year pursuant to such authorities (other than assets to which subparagraph (B)(ii) applies), when added to the aggregate amount so acquired for all preceding taxable years, exceeds $300,000,000, and

I.R.C. § 162(m)(5)(C)(ii) —

any subsequent taxable year which includes any portion of such period.

I.R.C. § 162(m)(5)(D) Covered Executive —

For purposes of this paragraph—

I.R.C. § 162(m)(5)(D)(i) In General —

The term “covered executive” means, with respect to any applicable taxable year, any employee—

I.R.C. § 162(m)(5)(D)(i)(I) —

who, at any time during the portion of the taxable year during which the authorities under section 101(a) of the Emergency Economic Stabilization Act of 2008 are in effect (determined under section 120 thereof), is the chief executive officer of the applicable employer or the chief financial officer of the applicable employer, or an individual acting in either such capacity, or

I.R.C. § 162(m)(5)(D)(i)(II) —

who is described in clause (ii).

I.R.C. § 162(m)(5)(D)(ii) Highest Compensated Employees —

An employee is described in this clause if the employee is 1 of the 3 highest compensated officers of the applicable employer for the taxable year (other than an individual described in clause (i)(I)), determined—

I.R.C. § 162(m)(5)(D)(ii)(I) —

on the basis of the shareholder disclosure rules for compensation under the Securities Exchange Act of 1934 (without regard to whether those rules apply to the employer), and

I.R.C. § 162(m)(5)(D)(ii)(II) —

by only taking into account employees employed during the portion of the taxable year described in clause (i)(I).

I.R.C. § 162(m)(5)(D)(iii) Employee Remains Covered Executive —

If an employee is a covered executive with respect to an applicable employer for any applicable taxable year, such employee shall be treated as a covered executive with respect to such employer for all subsequent applicable taxable years and for all subsequent taxable years in which deferred deduction executive remuneration with respect to services performed in all such applicable taxable years would (but for this paragraph) be deductible.

I.R.C. § 162(m)(5)(E) Executive Remuneration —

For purposes of this paragraph, the term “executive remuneration” means the applicable employee remuneration of the covered executive, as determined under paragraph (4) without regard to subparagraph (B) thereof. Such term shall not include any deferred deduction executive remuneration with respect to services performed in a prior applicable taxable year.

I.R.C. § 162(m)(5)(F) Deferred Deduction Executive Remuneration —

For purposes of this paragraph, the term “deferred deduction executive remuneration” means remuneration which would be executive remuneration for services performed in an applicable taxable year but for the fact that the deduction under this chapter (determined without regard to this paragraph) for such remuneration is allowable in a subsequent taxable year.

I.R.C. § 162(m)(5)(G) Coordination —

Rules similar to the rules of subparagraphs (D) and (E) of paragraph (4) shall apply for purposes of this paragraph.

I.R.C. § 162(m)(5)(H) Regulatory Authority —

The Secretary may prescribe such guidance, rules, or regulations as are necessary to carry out the purposes of this paragraph and the Emergency Economic Stabilization Act of 2008, including the extent to which this paragraph applies in the case of any acquisition, merger, or reorganization of an applicable employer.

I.R.C. § 162(m)(6) Special Rule For Application To Certain Health Insurance Providers

I.R.C. § 162(m)(6)(A) In General —

No deduction shall be allowed under this chapter—

I.R.C. § 162(m)(6)(A)(i) —

in the case of applicable individual remuneration which is for any disqualified taxable year beginning after December 31, 2012, and which is attributable to services performed by an applicable individual during such taxable year, to the extent that the amount of such remuneration exceeds $500,000, or

I.R.C. § 162(m)(6)(A)(ii) —

in the case of deferred deduction remuneration for any taxable year beginning after December 31, 2012, which is attributable to services performed by an applicable individual during any disqualified taxable year beginning after December 31, 2009, to the extent that the amount of such remuneration exceeds $500,000 reduced (but not below zero) by the sum of—

I.R.C. § 162(m)(6)(A)(ii)(I) —

the applicable individual remuneration for such disqualified taxable year, plus

I.R.C. § 162(m)(6)(A)(ii)(II) —

the portion of the deferred deduction remuneration for such services which was taken into account under this clause in a preceding taxable year (or which would have been taken into account under this clause in a preceding taxable year if this clause were applied by substituting “December 31, 2009” for “December 31, 2012” in the matter preceding subclause (I)).

I.R.C. § 162(m)(6)(B) Disqualified Taxable Year —

For purposes of this paragraph, the term “disqualified taxable year” means, with respect to any employer, any taxable year for which such employer is a covered health insurance provider.

I.R.C. § 162(m)(6)(C) Covered Health Insurance Provider —

For purposes of this paragraph—

I.R.C. § 162(m)(6)(C)(i) In General —

The term “covered health insurance provider” means—

I.R.C. § 162(m)(6)(C)(i)(I) —

with respect to taxable years beginning after December 31, 2009, and before January 1, 2013, any employer which is a health insurance issuer (as defined in section 9832(b)(2)) and which receives premiums from providing health insurance coverage (as defined in section 9832(b)(1)), and

I.R.C. § 162(m)(6)(C)(i)(II) —

with respect to taxable years beginning after December 31, 2012, any employer which is a health insurance issuer (as defined in section 9832(b)(2)) and with respect to which not less than 25 percent of the gross premiums received from providing health insurance coverage (as defined in section 9832(b)(1)) is from minimum essential coverage (as defined in section 5000A(f)).

I.R.C. § 162(m)(6)(C)(ii) Aggregation Rules —

Two or more persons who are treated as a single employer under subsection (b), (c), (m), or (o) of section 414 shall be treated as a single employer, except that in applying section 1563(a) for purposes of any such subsection, paragraphs (2) and (3) thereof shall be disregarded.

I.R.C. § 162(m)(6)(D) Applicable Individual Remuneration —

For purposes of this paragraph, the term “applicable individual remuneration” means, with respect to any applicable individual for any disqualified taxable year, the aggregate amount allowable as a deduction under this chapter for such taxable year (determined without regard to this subsection) for remuneration (as defined in paragraph (4) without regard to subparagraph (B) thereof) for services performed by such individual (whether or not during the taxable year). Such term shall not include any deferred deduction remuneration with respect to services performed during the disqualified taxable year.

I.R.C. § 162(m)(6)(E) Deferred Deduction Remuneration —

For purposes of this paragraph, the term “deferred deduction remuneration” means remuneration which would be applicable individual remuneration for services performed in a disqualified taxable year but for the fact that the deduction under this chapter (determined without regard to this paragraph) for such remuneration is allowable in a subsequent taxable year.

I.R.C. § 162(m)(6)(F) Applicable Individual —

For purposes of this paragraph, the term “applicable individual” means, with respect to any covered health insurance provider for any disqualified taxable year, any individual—

I.R.C. § 162(m)(6)(F)(i) —

who is an officer, director, or employee in such taxable year, or

I.R.C. § 162(m)(6)(F)(ii) —

who provides services for or on behalf of such covered health insurance provider during such taxable year.

I.R.C. § 162(m)(6)(G) Coordination —

Rules similar to the rules of subparagraphs (D) and (E) of paragraph (4) shall apply for purposes of this paragraph.

I.R.C. § 162(m)(6)(H) Regulatory Authority —

The Secretary may prescribe such guidance, rules, or regulations as are necessary to carry out the purposes of this paragraph.

I.R.C. § 162(n) Special Rule For Certain Group Health Plans

I.R.C. § 162(n)(1) In General —

No deduction shall be allowed under this chapter to an employer for any amount paid or incurred in connection with a group health plan if the plan does not reimburse for inpatient hospital care services provided in the State of New York—

I.R.C. § 162(n)(1)(A) —

except as provided in subparagraphs (B) and (C), at the same rate as licensed commercial insurers are required to reimburse hospitals for such services when such reimbursement is not through such a plan,

I.R.C. § 162(n)(1)(B) —

in the case of any reimbursement through a health maintenance organization, at the same rate as health maintenance organizations are required to reimburse hospitals for such services for individuals not covered by such a plan (determined without regard to any government-supported individuals exempt from such rate), or

I.R.C. § 162(n)(1)(C) —

in the case of any reimbursement through any corporation organized under Article 43 of the New York State Insurance Law, at the same rate as any such corporation is required to reimburse hospitals for such services for individuals not covered by such a plan.

I.R.C. § 162(n)(2) State Law Exception —

Paragraph (1) shall not apply to any group health plan which is not required under the laws of the State of New York (determined without regard to this subsection or other provisions of Federal law) to reimburse at the rates provided in paragraph (1).

I.R.C. § 162(n)(3) Group Health Plan —

For purposes of this subsection, the term “group health plan” means a plan of, or contributed to by, an employer or employee organization (including a self-insured plan) to provide health care (directly or otherwise) to any employee, any former employee, the employer, or any other individual associated or formerly associated with the employer in a business relationship, or any member of their family.

I.R.C. § 162(o) Treatment Of Certain Expenses Of Rural Mail Carriers

I.R.C. § 162(o)(1) General Rule —

In the case of any employee of the United States Postal Service who performs services involving the collection and delivery of mail on a rural route and who receives qualified reimbursements for the expenses incurred by such employee for the use of a vehicle in performing such services—

I.R.C. § 162(o)(1)(A) —

the amount allowable as a deduction under this chapter for the use of a vehicle in performing such services shall be equal to the amount of such qualified reimbursements; and

I.R.C. § 162(o)(1)(B) —

such qualified reimbursements shall be treated as paid under a reimbursement or other expense allowance arrangement for purposes of section 62(a)(2)(A) (and section 62(c) shall not apply to such qualified reimbursements).

I.R.C. § 162(o)(2) Special Rule Where Expenses Exceed Reimbursements —

Notwithstanding paragraph (1)(A), if the expenses incurred by an employee for the use of a vehicle in performing services described in paragraph (1) exceed the qualified reimbursements for such expenses, such excess shall be taken into account in computing the miscellaneous itemized deductions of the employee under section 67.

I.R.C. § 162(o)(3) Definition Of Qualified Reimbursements —

For purposes of this subsection, the term “qualified reimbursements” means the amounts paid by the United States Postal Service to employees as an equipment maintenance allowance under the 1991 collective bargaining agreement between the United States Postal Service and the National Rural Letter Carriers' Association. Amounts paid as an equipment maintenance allowance by such Postal Service under later collective bargaining agreements that supersede the 1991 agreement shall be considered qualified reimbursements if such amounts do not exceed the amounts that would have been paid under the 1991 agreement, adjusted by increasing any such amount under the 1991 agreement by an amount equal to—

I.R.C. § 162(o)(3)(A) —

such amount, multiplied by

I.R.C. § 162(o)(3)(B) —

the cost-of-living adjustment determined under section 1(f)(3) for the calendar year in which the taxable year begins, by substituting ‘calendar year 1990’ for ‘calendar year 2016’ in subparagraph (A)(ii) thereof’’.

I.R.C. § 162(p) Treatment Of Expenses Of Members Of Reserve Component Of Armed Forces Of The United States —

For purposes of subsection (a)(2), in the case of an individual who performs services as a member of a reserve component of the Armed Forces of the United States at any time during the taxable year, such individual shall be deemed to be away from home in the pursuit of a trade or business for any period during which such individual is away from home in connection with such service.

I.R.C. § 162(q) Payments Related To Sexual Harassment And Sexual Abuse —

No deduction shall be allowed under this chapter for—

I.R.C. § 162(q)(1) —

any settlement or payment related to sexual harassment or sexual abuse if such settlement or payment is subject to a nondisclosure agreement, or

I.R.C. § 162(q)(2) —

attorney's fees related to such a settlement or payment.

I.R.C. § 162(r) Disallowance Of FDIC Premiums Paid By Certain Large Financial Institutions

I.R.C. § 162(r)(1) In General —

No deduction shall be allowed for the applicable percentage of any FDIC premium paid or incurred by the taxpayer.

I.R.C. § 162(r)(2) Exception For Small Institutions —

Paragraph (1) shall not apply to any taxpayer for any taxable year if the total consolidated assets of such taxpayer (determined as of the close of such taxable year) do not exceed $10,000,000,000.

I.R.C. § 162(r)(3) Applicable Percentage —

For purposes of this subsection, the term “applicable percentage” means, with respect to any taxpayer for any taxable year, the ratio (expressed as a percentage but not greater than 100 percent) which—

I.R.C. § 162(r)(3)(A) —

the excess of—

I.R.C. § 162(r)(3)(A)(i) —

the total consolidated assets of such taxpayer (determined as of the close of such taxable year), over

I.R.C. § 162(r)(3)(A)(ii) —

$10,000,000,000, bears to

I.R.C. § 162(r)(3)(B) —

$40,000,000,000.

I.R.C. § 162(r)(4) FDIC Premiums —

For purposes of this subsection, the term “FDIC premium” means any assessment imposed under section 7(b) of the Federal Deposit Insurance Act (12 U.S.C. 1817(b)).

I.R.C. § 162(r)(5) Total Consolidated Assets —

For purposes of this subsection, the term “total consolidated assets” has the meaning given such term under section 165 of the Dodd-Frank Wall Street Reform and Consumer Protection Act (12 U.S.C. 5365).

I.R.C. § 162(r)(6) Aggregation Rule

I.R.C. § 162(r)(6)(A) In General —

Members of an expanded affiliated group shall be treated as a single taxpayer for purposes of applying this subsection.

I.R.C. § 162(r)(6)(B) Expanded Affiliated Group

I.R.C. § 162(r)(6)(B)(i) In General —

For purposes of this paragraph, the term “expanded affiliated group” means an affiliated group as defined in section 1504(a), determined—

I.R.C. § 162(r)(6)(B)(i)(I) —

by substituting “more than 50 percent” for “at least 80 percent” each place it appears, and

I.R.C. § 162(r)(6)(B)(i)(II) —

without regard to paragraphs (2) and (3) of section 1504(b).

I.R.C. § 162(r)(6)(B)(ii) Control Of Non-Corporate Entities —

partnership or any other entity (other than a corporation) shall be treated as a member of an expanded affiliated group if such entity is controlled (within the meaning of section 954(d)(3)) by members of such group (including any entity treated as a member of such group by reason of this clause).

I.R.C. § 162(s) Cross References

I.R.C. § 162(s)(1) —

For special rule relating to expenses in connection with subdividing real property for sale, see section 1237.

I.R.C. § 162(s)(2) —

For special rule relating to the treatment of payments by a transferee of a franchise, trademark, or trade name, see section 1253.

I.R.C. § 162(s)(3) —

For special rules relating to—

I.R.C. § 162(s)(3)(A) —

funded welfare benefit plans, see section 419, and

I.R.C. § 162(s)(3)(B) —

deferred compensation and other deferred benefits, see section 404.

(Aug. 16, 1954, ch. 736, 68A Stat. 45; Sept. 2, 1958, Pub. L. 85-866, title I, Sec. 5(a), 72 Stat. 1608; Sept. 14, 1960,Pub. L. 86-779, Sec. 7(b), 8(a), 74 Stat. 1002, 1003; Oct. 16, 1962,Pub. L. 87-834, Sec. 3(a), 4(b), 76 Stat. 973, 976; Dec. 30, 1969,Pub. L. 91-172, title V, Sec. 516(c)(2)(A), title IX, Sec. 902(a), (b), 83 Stat. 648, 710; Dec. 10, 1971, Pub. L. 92-178, title III, Sec. 310(a), 85 Stat. 525; Oct. 4, 1976, Pub. L. 94-455, title XIX, Sec. 1901(c)(4), 1906(b)(13)(A), 90 Stat. 1803, 1834; Aug. 13, 1981,Pub. L. 97-34, title I, Sec. 127(a), 95 Stat. 202; Aug. 13, 1981,Pub. L. 97-35, title XXI, Sec. 2146(b), 95 Stat. 801; Oct. 1, 1981,Pub. L. 97-51, Sec. 139(b)(1), 95 Stat. 967; July 18, 1982, Pub. L. 97-216, title II, Sec. 215(a), 96 Stat. 194; Sept. 3, 1982, Pub. L. 97-248, title I, Sec. 128(b), title II, Sec. 288(a), 96 Stat. 366, 571; July 18, 1984, Pub. L. 98-369, div. A, title V, Sec. 512(b), div. B, title III, Sec. 2354(d), 98 Stat. 863, 1102; Oct. 30, 1984,Pub. L. 98-573, title II, Sec. 232(a), 98 Stat. 2991; Apr. 7, 1986,Pub. L. 99-272, title X, Sec. 10001(a), (c), (d), 100 Stat. 222, 223, 227; Oct. 21, 1986, Pub. L. 99-509, title IX, Sec. 9307(c)(2)(B), 9501(a)(1), (b)(1)(A), (2)(A), (c)(1), (d)(1), 100 Stat. 1995, 2075-2077; Oct. 22, 1986, Pub. L. 99-514, title VI, Sec. 613(a), title XI, Sec. 1161(a), title XVIII, Sec. 1895(d)(1)(A), (2)(A), (3)(A), (4)(A), (5)(A), (6)(A), (7), 100 Stat. 2251, 2509, 2936-2940; Nov. 10, 1988,Pub. L. 100-647, title I, Sec. 1011B(b)(1)-(3), 1018(t)(7)(B), title III, Sec. 3011(b)(2), (3), 102 Stat. 3488, 3589, 3624, 3625; Nov. 8, 1989, Pub. L. 101-140, title II, Sec. 203(a)(4), 103 Stat. 830; Dec. 19, 1989, Pub. L. 101-239, title VI, Sec. 6202(b)(3)(A), title VII, Sec. 7107(a)(1), (b), 7862(c)(3)(A), 103 Stat. 2233, 2306, 2432; Nov. 5, 1990, Pub. L. 101-508, title XI, Sec. 11111(d)(2), 11410(a), 104 Stat. 1388-413, 1388-479; April 11, 1995, Pub. L. 104-7, Sec. 1; Aug. 20, 1996, Pub. L. 104-188, title I, Sec. 1704(p)(1), (2), (3), 110 Stat. 1755; Aug. 21, 1996, Pub. L. 104-191, title III, Sec. 311(a), 322(b)(2), 110 Stat. 1936; Pub. L. 105-34, title IX, XII, XVI, Sec. 934(a), 1203(a), 1204(a), 1602(c), Aug. 5, 1997, 111 Stat 788; Pub. L. 105-206, title VI, Sec. 6012(a), July 22, 1998, 112 Stat 685; Pub. L. 105-277, title II, Sec. 2002(a), Oct. 21, 1998, 112 Stat 2681; Pub. L. 108-121, title I, Sec. 109, Nov. 11, 2003, 117 Stat. 1335; Pub. L. 108-357, title III, Sec. 318, Oct. 22, 2004, 118 Stat. 1418; Pub. L. 110-343, div. A, title III, Sec. 302(a), Oct. 3, 2008, 122 Stat. 3765; Pub. L. 111-148, Sec. 9014(a), 10108(g)(1), Mar. 23, 2010, 124 Stat. 119; Pub. L. 111-152, Sec. 1004(d), Mar. 30, 2010, 124 Stat. 1029; Pub. L. 111-240, title II, Sec. 2042, Sept. 27, 2010, 124 Stat. 2504; Pub. L. 112-10, Sec. 1858(b)(3), Apr. 15, 2011, 125 Stat. 38; Pub. L. 113-295, Div. A, title II, Sec. 221(a)(23), 221(a)(24), Dec. 19, 2014, 128 Stat. 4010; Pub. L. 115-97, Sec. 11002(d)(6), 13306(a)(1), 13307(a), 13308(a), 13311(a), 13531(a), 13601, Dec. 22, 2017, 131 Stat. 2054; Pub. L. 117-2, title IX, Sec. 9708, Mar. 11, 2021, 135 Stat. 4.)

BACKGROUND NOTES

AMENDMENTS

2021 - Subsec. (m)(3)(B). Pub. L. 117-2, Sec. 9708(2), amended subpar. (B) by striking “or” at the end.

Subsec. (m)(3)(C)-(D). Pub. L. 117-2, Sec. 9708(1), amended par. (3) by redesignating subpar. (C) as subpar. (D).

Subsec. (m)(3)(C). Pub. L. 117-2, Sec. 9708(3), amended par. (3) by adding new subpar. (C).

Subsec. (m)(3)(D). Pub. L. 117-2, Sec. 9708(4), amended subpar. (D) by substituting “employee described in subparagraph (A) or (B)” for “employee”.

2017 - Subsec. (a). Pub. L. 115-97, Sec. 13311(a), amended subsec. (a) by striking “in excess of $3,000” in the flush language after par. (3).

Subsec. (e)(2)-(8). Pub. L. 115-97, Sec. 13308(a), amended subsec. (e) by striking par. (2) and (7) and by redesignating par. (3)-(6) and (8) as par. (2)-(5) and (6), respectively. Before being struck, par. (2) and (7) read as follows:

“(2) Exception For Local Legislation.—In the case of any legislation of any local council or similar governing body—

“(A) paragraph (1)(A) shall not apply, and

“(B) the deduction allowed by subsection (a) shall include all ordinary and necessary expenses (including, but not limited to, traveling expenses described in subsection (a)(2) and the cost of preparing testimony) paid or incurred during the taxable year in carrying on any trade or business—

“(i) in direct connection with appearances before, submission of statements to, or sending communications to the committees, or individual members, of such council or body with respect to legislation or proposed legislation of direct interest to the taxpayer, or

“(ii) in direct connection with communication of information between the taxpayer and an organization of which the taxpayer is a member with respect to any such legislation or proposed legislation which is of direct interest to the taxpayer and to such organization,

“and that portion of the dues so paid or incurred with respect to any organization of which the taxpayer is a member which is attributable to the expenses of the activities described in clauses (i) and (ii) carried on by such organization.”

“(7) Special Rule For Indian Tribal Governments.—For purposes of this subsection, an Indian tribal government shall be treated in the same manner as a local council or similar governing body.”

Subsec. (f). Pub. L. 115-97, Sec. 13306(a)(1), amended subsec. (f). Before amendment, it read as follows:

“(f) Fines And Penalties.—No deduction shall be allowed under subsection (a) for any fine or similar penalty paid to a government for the violation of any law.”

Subsec. (m)(2). Pub. L. 115-97, Sec. 13601(c)(1), amended par. (2). Before amendment, it read as follows:

“(2) Publicly Held Corporation.— For purposes of this subsection, the term “publicly held corporation” means any corporation issuing any class of common equity securities required to be registered under section 12 of the Securities Exchange Act of 1934.”

Subsec. (m)(3)(A). Pub. L. 115-97, Sec. 13601(b)(1), amended subpar. (A) by substituting “such employee is the principal executive officer or principal financial officer of the taxpayer at any time during the taxable year, or was” for “as of the close of the taxable year, such employee is the chief executive officer of the taxpayer or is”.

Subsec. (m)(3)(B). Pub. L. 115-97, Sec. 13601(b)(2), amended subpar. (B) by substituting “3” for “4” and by substituting “(other than any individual described in subparagraph (A))” for “(other than the chief executive officer)”.

Subsec. (m)(3)(A)-(C). Pub. L. 115-97, Sec. 13601(b)(3), amended par. (3) by striking “or” at the end of subpar. (A), by substituting “, or” for the period at the end of subpar. (B), and by adding subpar. (C).

Subsec. (m)(3). Pub. L. 115-97, Sec. 13601(c)(2), amended par. (3) by adding the flush sentence at the end.

Subsec. (m)(4)(B)-(E). Pub. L. 115-97, Sec. 13601(a)(1), amended par. (4) by striking subpar. (B) and (C) and by redesignating subpar. (D), (E), (F), and (G) as subpar. (B), (C), (D), and (E), respectively. Before being struck, subpar. (B) and (C) read as follows:

“(B) Exception For Remuneration Payable On Commission Bases.—The term “applicable employee remuneration” shall not include any remuneration payable on a commission basis solely on account of income generated directly by the individual performance of the individual to whom such remuneration is payable.”

“(C) Other Performance-Based Compensation.—The term “applicable employee remuneration” shall not include any remuneration payable solely on account of the attainment of one or more performance goals, but only if–

“(i) the performance goals are determined by a compensation committee of the board of directors of the taxpayer which is comprised solely of 2 or more outside directors,

“(ii) the material terms under which the remuneration is to be paid, including the performance goals, are disclosed to shareholders and approved by a majority of the vote in a separate shareholder vote before the payment of such remuneration, and

“(iii) before any payment of such remuneration, the compensation committee referred to in clause (i) certifies that the performance goals and any other material terms were in fact satisfied.”

Subsec. (m)(4)(F). Pub. L. 115-97, Sec. 13601(d), amended par. (4) by adding subpar. (F).

Subsec. (m)(5)(E). Pub. L. 115-97, Sec. 13601(a)(2)(A), amended subpar. (E) by substituting “subparagraph (B)” for “subparagraphs (B), (C), and (D)”.

Subsec. (m)(5)(G). Pub. L. 115-97, Sec. 13601(a)(2)(B), amended subpar. (G) by substituting “(D) and (E)” for “(F) and (G)”.

Subsec. (m)(6)(D). Pub. L. 115-97, Sec. 13601(a)(2)(A), amended subpar. (D) by substituting “subparagraph (B)” for “subparagraphs (B), (C), and (D)”.

Subsec. (m)(6)(G). Pub. L. 115-97, Sec. 13601(a)(2)(B), amended subpar. (G) by substituting “(D) and (E)” for “(F) and (G)”.

Subsec. (o)(3). Pub. L. 115-97, Sec. 11002(d)(6), amended par. (3) by substituting “adjusted by increasing any such amount under the 1991 agreement by an amount equal to—(A) such amount, multiplied by (B) the cost-of-living adjustment determined under section 1(f)(3) for the calendar year in which the taxable year begins, by substituting ‘calendar year 1990’ for ‘calendar year 2016’ in subparagraph (A)(ii) thereof’’ for “adjusted for changes in the Consumer Price Index (as defined in section 1(f)(5)) since 1991”.

Subsec. (q)-(r). Pub. L. 115-97, Sec. 13307(a), redesignated subsec. (q) as subsec. (r) and added a new subsec. (q).

Subsec. (r)-(s). Pub. L. 115-97, Sec. 13531(a), redesignated subsec. (r) as subsec. (s) and added a new subsec. (r).

2014 - Subsec. (g). Pub. L. 113-295, Div. A, Sec. 221(a)(23), amended subsec. (g) by striking the last sentence. Before being struck, it read as follows: “The preceding sentence shall not apply with respect to any conviction or plea before January 1, 1970, or to any conviction or plea on or after such date in a new trial following an appeal of a conviction before such date.”

Subsec. (h)(4). Pub. L. 113-295, Div. A, Sec. 221(a)(24), amended par. (4) by substituting “This” for “For taxable years beginning after December 31, 1980, this”.

2011 - Subsec. (a). Pub. L. 112-10, Sec. 1858(b)(3), amended subsec. (a) by striking the last sentence. Before being struck, it read as follows: “For purposes of paragraph (1), the amount of a free choice voucher provided under section 10108 of the Patient Protection and Affordable Care Act shall be treated as an amount for compensation for personal services actually rendered.”

2010 - Subsec. (l)(4). Pub. L. 111-240, Sec. 2042(a), amended par. (4) by inserting “for taxable years beginning before January 1, 2010, or after December 31, 2010” before the period.

Subsec. (l)(1). Pub. L. 111-152, Sec. 1004(d)(2), amended par. (1). Before being amended it read as follows:

“(1) Allowance Of Deduction.—

“(A) In General.— In the case of an individual who is an employee within the meaning of section 401(c)(1), there shall be allowed as a deduction under this section an amount equal to the applicable percentage of the amount paid during the taxable year for insurance which constitutes medical care for the taxpayer, his spouse, and dependents.

“(B) Applicable Percentage.— For purposes of subparagraph (A), the applicable percentage shall be determined under the following table:

 

For taxable years beginning            The applicable 
in calendar year--                     percentage is--

    1999 through 2001                    60 percent
    2002                                 70 percent
    2003  and thereafter                100 percent”

Subsec. (l)(2)(B). Pub. L. 111-152, Sec. 1004(d)(3), amended subpar. (B) by inserting “, or any dependent, or individual described in subparagraph (D) of paragraph (1) with respect to,” after “spouse of”.

Subsec. (a). Pub. L. 111-148, Sec. 10108(g)(1), amended subsec. (a) by the sentence at the end.

Subsec. (m)(6). Pub. L. 111-148, Sec. 9014(a), amended subsec. (m) by adding par. (6).

2008 - Subsec. (m)(5). Pub. L. 110-343, Div. A, Sec. 302(a), amended subsec. (m) by adding par. (5).

2004 - Subsec. (m)(4)(G).Pub. L. 108-357, Sec. 802(b)(2), amended par. (4) by adding subpar. (G).

Subsec. (o). Pub. L. 108-357, Sec. 318(b), amended the heading of subsec. (o) by striking “REIMBURSED”.

Subsec. (o)(2)-(3). Pub. L. 108-357, Sec. 318(a), amended subsec. (o) by redesignating par. (2) as par. (3) and adding par. (3).

2003 - Subsec. (p)-(q). Pub. L. 108-121, Sec. 109(a), redesignated subsec. (p) as subsec. (q) and added a new subsec. (p).

1998 - Subsec. (l)(1). Pub. L. 105-277, Sec. 2002(a), amended the table in par. (1). Prior to amendment it read as follows:

 

“For taxable years beginning in calendar year--   The applicable percentage is--
                  
                  1997                                      40 percent 
                  1998 and 1999                             45 percent
                  2000 and 2001                             50 percent
                  2002                                      60 percent
                  2003 through 2005                         80 percent
                  2006                                      90 percent  
                  2007 or thereafter                       100 percent.”

Subsec. (a). Pub. L. 105-206, Sec. 6012(a), amended the last sentence of subsec. (a) by substituting “investigate or prosecute, or provide support services for the investigation or prosecution of, a Federal crime.” for “investigate, or provide support services for the investigation of, a Federal crime.”

1997 - Subsec. (a). Pub. L. 105-34, Sec. 1204(a), added a new sentence at the end.

Subsec. (l)(1)(B). Pub. L. 105-34, Sec. 934(a), amended the table in subpar. (B). Prior to amendment it read as follows:

 

For taxable years beginning in calendar year--   The applicable percentage is--

                  1997                                   40 percent 
                  1998 through 2002                      45 percent
                  2003                                   50 percent
                  2004                                   60 percent
                  2005                                   70 percent  
                  2006 or thereafter                     80 percent.

Subsec. (l)(2)(B). Pub. L. 105-34, Sec. 1602(c), added a new sentence at the end of subpar. (B).

Subsec. (o). Pub. L. 105-34, Sec. 1203(a), redesignated subsec. (o) as subsec. (p) and added a new subsec. (o).

1996 - Subsec. (k). Pub. L. 104-188, Sec. 1704(p)(3) substituted “reacquisition” for “redemption” in the subsection heading.

Subsec. (k)(1). Pub. L. 104-188, Sec. 1704(p)(1) substituted “the reacquisition of its stock or of the stock of any related person (as defined in section 465(b)(3)(C))” for “the redemption of its stock”.

Subsec. (k)(2)(A). Pub. L. 104-188, Sec. 1704(p)(2) struck “or” at the end of clause (i), redesignated clause (ii) as clause (iii), and added a new clause (ii).

1996 - Subsec. (l)(1). Pub. L. 104-191, Sec. 311(a), amended par. (1). Before amendment par. (1) read as follows:

“(1) In general

“In the case of an individual who is an employee within the meaning of section 401(c)(1), there shall be allowed as a deduction under this section an amount equal to 30 percent of the amount paid during the taxable year for insurance which constitutes medical care for the taxpayer, his spouse, and dependents.

Subsec. (l)(2). Pub. L. 104-191, Sec. 322(b)(2)(B), added subpar. (C).

1995 - Subsec. (l)(1). Pub. L. 104-7, Sec. 1(b), substituted “30 percent” for “25 percent”, effective for taxable years beginning after 1994.

Subsec. (l)(6). Pub. L. 104-7, Sec. 1(a), amended (l) by striking paragraph (6), effective for taxable years beginning after 1993. Prior to amendment, (l)(6) read as follows: “This subsection shall not apply to any taxable year beginning after December 31, 1993.

1993 - Subsec. (e). Pub. L. 103-66, Sec. 13222(a), amended subsection (e). Prior to amendment subsection (e) read as follows:

“(e) Appearances, etc., with respect to legislation

(1) In general

The deduction allowed by subsection (a) shall include all the ordinary and necessary expenses (including, but not limited to, traveling expenses described in subsection (a)(2) and the cost of preparing testimony) paid or incurred during the taxable year in carrying on any trade or business--

(A) in direct connection with appearances before, submission of statements to, or sending communications to, the committees, or individual members, of Congress or of any legislative body of a State, a possession of the United States, or a political subdivision of any of the foregoing with respect to legislation or proposed legislation of direct interest to the taxpayer, or

(B) in direct connection with communication of information between the taxpayer and an organization of which he is a member with respect to legislation or proposed legislation of direct interest to the taxpayer and to such organization,

and that portion of the dues so paid or incurred with respect to any organization of which the taxpayer is a member which is attributable to the expenses of the activities described in subparagraphs (A) and (B) carried on by such organization.

(2) Limitation

The provisions of paragraph (1) shall not be construed as allowing the deduction of any amount paid or incurred (whether by way of contribution, gift, or otherwise)--

(A) for participation in, or intervention in, any political campaign on behalf of any candidate for public office, or

(B) in connection with any attempt to influence the general public, or segments thereof, with respect to legislative matters, elections, or referendums.”

Subsec. (l)(2). Pub. L. 103-66, Sec. 13174(b)(1), amended subparagraph (B). Before amendment subparagraph (B) read as follows:

“(B) Other coverage

Paragraph (1) shall not apply to any taxpayer who is eligible to participate in any subsidized health plan maintained by any employer of the taxpayer or of the spouse of the taxpayer.”

Subsec. (l)(3). Pub. L. 103-66, Sec. 13131(d)(2) amended para. (3). Before amendment, para. (3) read as follows:

“(3) Coordination with medical deduction, etc.

(A) Medical deduction--

Any amount paid by a taxpayer for insurance to which paragraph (1) applies shall not be taken into account in computing the amount allowable to the taxpayer as a deduction under section 213(a).

(B) Health insurance credit--

The amount otherwise taken into account under paragraph (1) as paid for insurance which constitutes medical care shall be reduced by the amount (if any) of the health insurance credit allowable to the taxpayer for the taxable year under section 32.”

Subsec. (l)(6). Pub. L. 103-66, Sec. 13174(a), amended paragraph (6) by substituting “December 31, 1993” for “June 30, 1992”.

Subsec. (m). Pub. L. 103-66, Sec. 13211(a), redesignated subsec. (m) as subsec. (n) and inserted new subsec. (m).

Subsec. (n). Pub. L. 103-66, Sec. 13442(a), redesignated subsec. (n) [as redesignated by Sec. 13211(a)] as subsec. (o) and inserted a new subsec. (n).

1992 - Subsec. (a). Pub. L. 102-485, Sec. 1938, amended subsection (a) by adding a new sentence at the end.

1991 - Subsec. (l)(6). Pub. L. 102-227, Sec. 110, amended paragraph (6) by substituting “June 30, 1992” for “December 31, 1991”.

1990 - Subsec. (l)(3). Pub. L. 101-508, Sec. 11111(d)(2), substituted heading for one which read: ‘Coordination with medical deduction’ and amended text generally. Prior to amendment, text read as follows: ‘Any amount paid by a taxpayer for insurance to which paragraph (1) applies shall not be taken into account in computing the amount allowable to the taxpayer as a deduction under section 213(a).’

Subsec. (l)(6). Pub. L. 101-508, Sec. 11410(a), substituted ‘December 31, 1991’ for ‘September 30, 1990’.

1989 - Subsec. (i). Pub. L. 101-239, Sec. 6202(b)(3)(A), struck out subsec. (i) which read as follows:

‘(1) Coverage relating to end stage renal disease. - The expenses paid or incurred by an employer for a group health plan shall not be allowed as a deduction under this section if the plan differentiates in the benefits it provides between individuals having end stage renal disease and other individuals covered by such plan on the basis of the existence of end stage renal disease, the need for renal dialysis, or in any other manner.

‘(2) Group health plan. - For purposes of this subsection the term ‘group health plan’ means any plan of, or contributed to by, an employer to provide medical care (as defined in section 213(d) to his employees, former employees, or the families of such employees or former employees, directly or through insurance, reimbursement, or otherwise.'

Subsec. (k)(2)(B)(iv). Pub. L. 101-239, Sec. 7862(c)(3)(A), amended cl. (iv) as it existed prior to repeal of subsec. (k) by Pub. L. 100-647, by substituting ‘entitlement’ for ‘eligibility’ in heading and inserting ‘which does not contain any exclusion or limitation with respect to any preexisting condition of such beneficiary’ after ‘or otherwise)’ in subclause (I).

Subsec. (l)(2). Pub. L. 101-140 redesignated subpar. (C) as (B) and struck out former subpar. (B) which read as follows: ‘Required coverage. - Paragraph (1) shall not apply to any taxpayer for any taxable year unless coverage is provided under 1 or more plans meeting the requirements of section 89, treating such coverage as an employer-provided benefit.’

Subsec. (l)(5). Pub. L. 101-239, Sec. 7107(b), added par. (5). Former par. (5) redesignated (6).

Pub. L. 101-239, Sec. 7107(a)(1), substituted ‘September 30, 1990’ for ‘December 31, 1989’.

Subsec. (l)(6). Pub. L. 101-239, Sec. 7107(b), redesignated former par. (5) as (6).

1988 - Subsec. (i)(2), (3).Pub. L. 100-647, Sec. 3011(b)(2), redesignated par. (3) as (2) and struck out former par. (2) which required plans to provide continuation coverage to certain individuals.

Subsec. (k). Pub. L. 100-647, Sec. 3011(b)(3), redesignated subsec. (l), relating to stock redemption expenses, as (k) and struck out former subsec. (k) which related to continuation coverage requirements of group health plans.

Subsec. (k)(5)(B). Pub. L. 100-647, Sec. 1018(t)(7)(B), made amendment identical to Pub. L. 99-509, Sec. 9307(c)(2)(B), which amended directory language of Pub. L. 99-514, Sec. 1895(d)(5)(A), by substituting ‘section 162(k)(5)’ for ‘section 162(k)(2)’. See 1986 Amendment note below.

Subsec . (l). Pub. L. 100-647, Sec. 3011(b)(3)(A), (B), redesignated subsec. (m), relating to special rules for health insurance costs of self-employed individuals, as (l). Former subsec. (l), relating to stock redemption expenses, redesignated (k).

Subsec. (m). Pub. L. 100-647, Sec. 3011(b)(3)(B), (C), redesignated subsec. (n), relating to cross references, as (m). Former subsec. (m), relating to special rules for health insurance costs of self-employed individuals, redesignated (l).

Pub. L. 100-647, Sec. 1011B(b)(2), redesignated subsec. (m), relating to cross references, as (n).

Subsec. (m)(2)(A). Pub. L. 100-647, Sec. 1011B(b)(3), inserted ‘derived by the taxpayer from the trade or business with respect to which the plan providing the medical care coverage is established’ after ‘401(c))’.

Subsec. (m)(4), (5). Pub. L. 100-647, Sec. 1011B(b)(1), added par. (4) and redesignated former par. (4) as (5).

Subsec. (n). Pub. L. 100-647, Sec. 3011(b)(3)(C), redesignated subsec. (n) as (m).

Pub. L. 100-647, Sec. 1011B(b)(2), redesignated subsec. (m), relating to cross references, as (n).

1986 - Subsec. (i)(1). Pub. L. 99-272, Sec. 10001(d), substituted ‘Coverage relating to end stage renal disease’ for ‘General rule’ in heading.

Subsec. (i)(2), (3). Pub. L. 99-272, Sec. 10001(a), added par. (2) and redesignated former par. (2) as (3).

Subsec. (k). Pub. L. 99-272, Sec. 10001(c), added subsec. (k). Former subsec. (k) redesignated (l).

Subsec. (k)(2)(A). Pub. L. 99-514, Sec. 1895(d)(1)(A), inserted ‘If coverage under the plan is modified for any group of similarly situated beneficiaries, the coverage shall also be modified in the same manner for all individuals who are qualified beneficiaries under the plan pursuant to this subsection in connection with such group.’

Subsec. (k)(2)(B)(i). Pub. L. 99-514, Sec. 1895(d)(2)(A), substituted ‘Maximum required period’ for ‘Maximum period’ in heading and amended text generally. Prior to amendment, text read as follows: ‘In the case of -

‘(I) a qualifying event described in paragraph (3)(B) (relating to terminations and reduced hours), the date which is 18 months after the date of the qualifying event, and

‘(II) any qualifying event not described in subclause (I), the date which is 36 months after the date of the qualifying event.’

Subsec. (k)(2)(B)(i)(II). Pub. L. 99-509, Sec. 9501(b)(1)(A)(i), inserted ‘(other than a qualifying event described in paragraph (3)(F))’.

Subsec. (k)(2)(B)(i)(III), (IV). Pub. L. 99-509, Sec. 9501(b)(1)(A)(ii)-(iv), added subcl. (III), redesignated former subcl. (III) as (IV), and inserted ‘or (3)(F)’.

Subsec. (k)(2)(B)(iii). Pub. L. 99-514, Sec. 1895(d)(3)(A), inserted ‘The payment of any premium (other than any payment referred to in the last sentence of subparagraph (C)) shall be considered to be timely if made within 30 days after the date due or within such longer period as applies to or under the plan.’

Subsec. (k)(2)(B)(iv). Pub. L. 99-514, Sec. 1895(d)(4)(A)(iii), substituted ‘Group health plan coverage’ for ‘Reemployment’ in heading.

Subsec. (k)(2)(B)(iv)(I). Pub. L. 99-514, Sec. 1895(d)(4)(A)(ii), substituted ‘covered under any other group health plan (as an employee or otherwise)’ for ‘a covered employee under any other group health plan’.

Subsec. (k)(2)(B)(iv)(II). Pub. L. 99-509, Sec. 9501(b)(2)(A), inserted ‘in the case of a qualified beneficiary other than a qualified beneficiary described in paragraph (7)(B)(iv),’.

Subsec. (k)(2)(B)(v). Pub. L. 99-514, Sec. 1895(d)(4)(A)(i), struck out cl. (v), remarriage of spouse, which read as follows: ‘In the case of an individual who is a qualified beneficiary by reason of being the spouse of a covered employee, the date on which the beneficiary remarries and becomes covered under a group health plan.’

Subsec. (k)(3). Pub. L. 99-509, Sec. 9501(a)(1), added subpar. (F) and concluding provisions.

Subsec. (k)(5)(B). Pub. L. 99-514, Sec. 1895(d)(5)(A), as amended by Pub. L. 99-509, Sec. 9307(c)(2)(B), and Pub. L. 100-647, Sec. 1018(t)(7)(B), inserted ‘of continuation coverage’ and ‘If there is a choice among types of coverage under the plan, each qualified beneficiary is entitled to make a separate selection among such types of coverage.’ See 1988 Amendment note above.

Subsec. (k)(6)(B). Pub. L. 99-509, Sec. 9501(d)(1), substituted ‘(D), or (F)’ for ‘or (D)’.

Subsec. (k)(6)(C). Pub. L. 99-514, Sec. 1895(d)(6)(A), inserted ‘within 60 days after the date of the qualifying event’.

Subsec. (k)(6)(D)(i). Pub. L. 99-509, Sec. 9501(d)(1), substituted ‘(D), or (F)’ for ‘or (D)’.

Subsec. (k)(7)(B)(iii). Pub. L. 99-514, Sec. 1895(d)(7), added cl. (iii).

Subsec. (k)(7)(B)(iv). Pub. L. 99-509, Sec. 9501(c)(1), added cl. (iv).

Subsec. (l). Pub. L. 99-514, Sec. 613(a), added subsec. (l). Former subsec. (l) redesignated (m).

Pub. L. 99-272, Sec. 10001(c), redesignated former subsec. (k), relating to cross references, as (l).

Subsec. (m). Pub. L. 99-514, Sec. 1161(a), added subsec. (m) relating to special rules for health insurance costs of self-employed individuals, and further directed that this section be amended ‘by redesignating subsection (n) as subsection (m)’, which directory language could not be executed because this section does not contain a subsec. (n).

Pub. L. 99-514, Sec. 613(a), redesignated subsec. (l), relating to cross references, as (m).

1984 - Subsec. (i)(2). Pub. L. 98-369, Sec. 2354(d), substituted ‘section 213(d)’ for ‘section 213(e)’.

Subsec. (j). Pub. L. 98-573 added subsec. (j). Former subsec. (j) redesignated (k).

Subsec. (j)(3). Pub. L. 98-369, Sec. 512(b), added par. (3).

Subsec. (k). Pub. L. 98-573 redesignated former subsec. (j) as (k).

1982 - Subsec. (a). Pub. L. 97-216 inserted provisions under which amounts expended by Members of Congress within each taxable year for living expenses shall not be deductable for income tax purposes in excess of $3,000.

Subsec. (c)(1). Pub. L. 97-248, Sec. 288(a), substituted ‘is unlawful under the Foreign Corrupt Practices Act of 1977’ for ‘would be unlawful under the laws of the United States if such laws were applicable to such payment and to such official or employee’ after ‘government, the payment’, and ‘(or is unlawful under the Foreign Corrupt Practices Act of 1977)’ for ‘(or would be unlawful under the laws of the United States)’ before ‘shall be upon the Secretary’.

Subsec. (h). Pub. L. 97-248, Sec. 128(b)(2), redesignated subsec. (i), relating to State legislators' travel expenses away from home, as (h). Former subsec. (h), relating to group health plans, redesignated (i).

Subsec. (i). Pub. L. 97-248, Sec. 128(b)(2), redesignated former subsec. (h), relating to group health plans, as (i). Former subsec. (i), relating to State legislators' travel expenses away from home, redesignated (h). Former subsec. (i), relating to cross references, redesignated (j).

Subsec. (j). Pub. L. 97-248, Sec. 128(b)(1), redesignated former subsec. (i), relating to cross references, as (j).

1981 - Subsec. (a). Pub L. 97-51 struck out provisions under which amounts expended by Members of Congress within each taxable year for living expenses could not be deductible for income tax purposes in excess of $3,000.

Subsec. (h). Pub. L. 97-35 added subsec. (h) relating to group health plans. Former subsec. (h), as added by Pub. L. 97-34 and relating to State legislators' travel expenses away from home, redesignated (i). See 1982 Amendment note above.

Pub. L. 97-34 added subsec. (h) relating to State legislators' travel expenses away from home. Former subsec. (h), relating to cross references, redesignated (i). See 1982 Amendment note above.

Subsec. (i). Pub. L. 97-35 redesignated former subsec. (h), as added by Pub. L. 97-34 and relating to State legislators' travel expenses away from home, as (i). See 1982 Amendment note above.

Pub. L. 97-34 redesignated former subsec. (h), relating to cross references, as (i). See 1982 Amendment note above.

1976 - Subsec. (a). Pub. L. 94-455, Sec. 1901(c)(4), struck out reference to Territory in provisions following par. (3).

Subsec. (c). Pub. L. 94-455, Sec. 1906(b)(13)(A), struck out in pars. (1) and (2) ‘or his delegate’ after ‘Secretary’.

1971 - Subsec. (c). Pub. L. 92-178, Sec. 310(a)(2), substituted ‘Illegal bribes, kickbacks, and other payments’ for ‘Bribes and illegal kickbacks’ in heading.

Subsec. (c)(2). Pub. L. 92-178, Sec. 310(a)(1), substituted provisions respecting ‘Other illegal payments’ for former provisions on ‘Other bribes or kickbacks’ reading ‘If in a criminal proceeding a taxpayer is convicted of making a payment (other than a payment described in paragraph (1) which is an illegal bribe or kickback, or his plea of guilty or nolo contendere to an indictment or information charging the making of such a payment is entered or accepted in such a proceeding, no deduction shall be allowed under subsection (a) on account of such payment or any related payment made prior to the date of the final judgment in such proceeding.’

Subsec. (c)(3). Pub. L. 92-178, Sec. 310(a)(1), substituted provisions respecting kickbacks, rebates, and bribes under medicare and medicaid for former statute of limitations provisions.

1969 - Subsec. (c). Pub. L. 91-172, Sec. 902(b), designated existing provisions as par. (1), extended the applicability of nondeductible expenses for payments to any official or employee of any government, or of any agency or instrumentality of any government, and added pars. (2) and (3).

Subsecs. (f), (g). Pub. L. 91-172, Sec. 902(a), added subsecs. (f) and (g). Former subsec. (f) redesignated (h).

Subsec. (h). Pub. L. 91-172, Sec. 516(c)(2)(A), 902(a), redesignated former subsec. (f) as (h), substituted ‘ (1) For’ for ‘For’, and inserted reference to section 1253 for special rule relating to the treatment of payments by a transferee of a franchise, trademark, or trade name.

1962 - Subsec. (a)(2). Pub. L. 87-834, Sec. 4(b), substituted ‘(including amounts expended for meals and lodging other than amounts which are lavish or extravagant under the circumstances)’ for ‘including the entire amount expended for meals and lodging)’.

Subsecs. (e), (f). Pub. L. 87-834, Sec. 3(a), added subsec. (e) and redesignated former subsec. (e) as (f).

1960 - Subsec. (b). Pub. L. 86-779, Sec. 7(b), inserted ‘the dollar limitations,’ after ‘the percentage limitations,’.

Subsecs. (d), (e). Pub. L. 86-779, Sec. 8(a), added subsec. (d) and redesignated former subsec. (d) as (e).

1958 - Subsecs. (c), (d).Pub. L. 85-866, Sec. 5(a), added subsec. (c) and redesignated former subsec. (c) as (d).

EFFECTIVE DATE OF 2021 AMENDMENTS

Amendments by Pub. L. 117-2, Sec. 9708, effective on the date of the enactment of this Act [Enacted: Mar. 11, 2021].

EFFECTIVE DATE OF 2017 AMENDMENTS

Amendments by Pub. L. 115-97, Sec. 11002(d)(6), effective for taxable years beginning after December 31, 2017.

Amendments by Pub. L. 115-97, Sec. 13306(a)(1), effective for amounts paid or incurred on or after the date of the enactment of this Act [Enacted: Dec. 22, 2017]. Pub. L. 115-97, Sec. 13306(a)(2) provided that the “amendments shall not apply to amounts paid or incurred under any binding order or agreement entered into before such date. Such exception shall not apply to an order or agreement requiring court approval unless the approval was obtained before such date.”

Amendments by Pub. L. 115-97, Sec. 13307(a), effective for amounts paid or incurred after the date of the enactment of this Act [Enacted: Dec. 22, 2017].

Amendments by Pub. L. 115-97, Sec. 13308(a), effective for amounts paid or incurred on or after the date of the enactment of this Act [Enacted: Dec. 22, 2017].

Amendments by Pub. L. 115-97, Sec. 13311(a), effective for taxable years beginning after the date of the enactment of this Act [Enacted: Dec. 22, 2017].

Amendments by Pub. L. 115-97, Sec. 13531(a), effective for taxable years beginning after December 31, 2017.

Amendments by Pub. L. 115-97, Sec. 13601, effective for taxable years beginning after December 31, 2017. Section 13601(e)(2) of Pub. L. 115-97 provided the following exception:

“(2) EXCEPTION FOR BINDING CONTRACTS.—The amendments made by this section shall not apply to remuneration which is provided pursuant to a written binding contract which was in effect on November 2, 2017, and which was not modified in any material respect on or after such date.”

EFFECTIVE DATE OF 2014 AMENDMENTS

Amendments by Pub. L. 113-295, Div. A, Sec. 221(a), effective on the date of the enactment of this Act [Enacted: Dec. 19, 2014].

Section 221(b)(2) of Pub. L. 113-295, Div. A, provided the following Savings Provision:

“(2) SAVINGS PROVISION.—If—

“(A) any provision amended or repealed by the amendments made by this section applied to—

“(i) any transaction occurring before the date of the enactment of this Act [Enacted: Dec. 19, 2014],

“(ii) any property acquired before such date of enactment, or

“(iii) any item of income, loss, deduction, or credit taken into account before such date of enactment, and

“(B) the treatment of such transaction, property, or item under such provision would (without regard to the amendments or repeals made by this section) affect the liability for tax for periods ending after date of enactment, nothing in the amendments or repeals made by this section shall be construed to affect the treatment of such transaction, property, or item for purposes of determining liability for tax for periods ending after such date of enactment.”

EFFECTIVE DATE OF 2011 AMENDMENT

Amendments by Sec. 1858(b) of Pub. L. 112-10 effective as if included in the provisions of, and the amendments made by, the provisions of the Patient Protection and Affordable Care Act [Pub. L. 111-148] to which they relate [Effective Date: Vouchers provided after December 31, 2013].

EFFECTIVE DATE OF 2010 AMENDMENTS

Amendments by section 2042 of Pub. L. 111-240 effective for taxable years beginning after December 31, 2009.

Amendments by section 1004(d) of Pub. L. 111-152 effective on the date of the enactment of this Act [Enacted: Mar. 30, 2010].

Amendments by section 9014(a) of Pub. L. 111-148 effective for taxable years beginning after December 31, 2009 with respect to services performed after such date.

Amendments by section 10105(g) of Pub. L. 111-148 effective for vouchers provided after December 31, 2013.

EFFECTIVE DATE OF 2008 AMENDMENT

Amendments by Div. A, section 302(a) of Pub. L. 110-343 effective for taxable years ending on or after the date of the enactment of this Act [Enacted: Oct. 3, 2008].

EFFECTIVE DATE OF 2004 AMENDMENTS

Amendments by section 318 of Pub. L. 108-357 applicable to taxable years beginning after December 31, 2003.

Amendments by section 802(b)(2) of Pub. L. 108-357 applicable on March 4, 2003, except that periods before such date shall not be taken into account in applying the periods in subsections (a) and (e)(1) of section 4985 of the Internal Revenue Code of 1986, as added by this section.

EFFECTIVE DATE OF 2003 AMENDMENTS

Amendments by Sec. 109(a) of Pub. L. 108-121 effective for amounts paid or incurred in taxable years beginning after December 31, 2002.

EFFECTIVE DATE OF 1998 AMENDMENTS

Amendments by Sec. 2002(a) of Pub. L. 105-277 effective for taxable years beginning after December 31, 1998.

Amendments by Sec. 6012(a) of Pub. L. 105-206 effective as if included in the provisions of the Taxpayer Relief Act of 1997 to which it relates [Effective Date of Pub. L. 105-34, Sec. 1204: Taxable years ending after Aug. 5, 1997].

EFFECTIVE DATE OF 1997 AMENDMENTS

Amendment by Sec. 934(a) of Pub. L. 105-34 effective for taxable years beginning after December 31, 1996.

Amendment by Sec. 1203(a) of Pub. L. 105-34 effective for taxable years beginning after December 31, 1997.

Amendment by Sec. 1204(a) of Pub. L. 105-34 effective for amounts paid or incurred with respect to taxable years ending after the date of the enactment of this Act [Aug. 5, 1997].

Amendment by Sec. 1602(c) of Pub. L. 105-34 effective as if included in the provisions of the Health Insurance Portability and Accountability Act of 1996 to which such amendments relate.

EFFECTIVE DATE OF 1996 AMENDMENTS

Section 1704(p)(4) of Pub. L. 104-188 provided that:

‘(A) In general.--Except as provided in subparagraph (B), the amendments made by this subsection shall apply to amounts paid or incurred after September 13, 1995, in taxable years ending after such date.

‘(B) Paragraph (2).--The amendment made by paragraph (2) shall take effect as if included in the amendment made by section 613 of the Tax Reform Act of 1986.’

Amendment by section 311(a)(1) of Pub. L. 104-191 applicable to taxable years beginning after Dec. 31, 1996.

Amendment by section 322(b)(2)(B) of Pub. L.104-191 applicable to taxable years beginning after Dec. 31, 1996.

EFFECTIVE DATE OF 1993 AMENDMENTS

Amendment by section 13131(d)(2) of Pub. L. 103-66 applicable to tax years beginning after December 31, 1993.

Amendment made by section 13174(a)(1) of Pub. L. 103-66 applicable to taxable years ending after June 30, 1992.

Amendment by section 13174(b)(1) of Pub. L. 103-66 applicable to taxable years beginning after December 31, 1992.

Amendment by section 13222(a) of Pub. L. 103-66 applicable to amounts paid or incurred after December 31, 1993.

Amendment made by section 13211(a) of Pub. L. 103-66 applicable to amounts which would otherwise be deductible for taxable years beginning on or after January 1, 1994.

Amendment made by section 13442(a) of Pub. L. 103-66 applicable to services provided after February 2, 1993, and on or before December 31, 1995 (as amended by Pub. L. 104-7, Section 5).

EFFECTIVE DATE OF 1992 AMENDMENT

Amendment by section 1938 of Pub. L. 102-486 applicable to costs paid or incurred after December 31, 1992.

EFFECTIVE DATE OF 1991 AMENDMENT

Amendment by section 110 of Pub. L. 102-227 applicable to tax years beginning after December 31, 1991. Section 110(a)(2) of Pub. L. 102-227 provides the following special rule: “

(2) Special rule--In the case of any taxable year beginning in 1992-- “

(A) only amounts paid before July 1, 1992, by the individual for insurance coverage for periods before July 1, 1992, shall be taken into account in determining the amount deductible under section 162(l) of the Internal Revenue Code of 1986 with respect to such individual for such taxable year, and “

(B) for purposes of subparagraph (A) of section 162(l)(2) of such Code, the amount of the earned income described in such subparagraph taken into account for such taxable year shall be the amount which bears the same ratio to the total amount of such earned income as the number of months in such taxable year ending before July 1, 1992, bears to the number of months in such taxable year.”

EFFECTIVE DATE OF 1990 AMENDMENT

Amendment by section 11111(d)(2) of Pub. L. 101-508 applicable to taxable years beginning after Dec. 31, 1990, see section 11111(f) of Pub. L. 101-508, set out as a note under section 32 of this title.

Section 11410(c) of Pub. L. 101-508 provided that: ‘The amendments made by this section (amending this section and repealing provisions set out below) shall apply to taxable years beginning after December 31, 1989.’

EFFECTIVE DATE OF 1989 AMENDMENTS

Section 6202(b)(5) of Pub. L. 101-239 provided that: ‘The amendments made by this subsection (amending this section, sections 4980B and 5000 of this title, sections 623 and 631 of Title 29, Labor, and sections 1395p, 1395r, and 1395y of Title 42, The Public Health and Welfare) shall apply to items and services furnished after the date of the enactment of this Act (Dec. 19, 1989).’

Section 7107(c) of Pub. L. 101-239 provided that: ‘The amendments made by this section (amending this section) shall apply to taxable years beginning after December 31, 1989.’

Section 7862(c)(3)(D) of Pub. L. 101-239 provided that: ‘The amendments made by this paragraph (amending this section, section 4980B of this title, and section 1162 of Title 29, Labor) shall apply to -

‘(i) qualifying events occurring after December 31, 1989, and

‘(ii) in the case of qualified beneficiaries who elected continuation coverage after December 31, 1988, the period for which the required premium was paid (or was attempted to be paid but was rejected as such).’

Amendment by Pub. L. 101-140 effective as if included in section 1151 of Pub. L. 99-514, see section 203(c) of Pub. L. 101-140, set out as a note under section 79 of this title.

EFFECTIVE DATE OF 1988 AMENDMENT

Amendment by sections 1011B(b)(1)-(3) and 1018(t)(7)(B) of Pub. L. 100-647 effective, except as otherwise provided, as if included in the provision of the Tax Reform Act of 1986, Pub. L. 99-514, to which such amendment relates, see section 1019(a) of Pub. L. 100-647, set out as a note under section 1 of this title.

Section 3011(d) of Pub. L. 100-647 provided that: ‘The amendments made by this section (enacting section 4980B of this title, and amending this section, sections 106 and 414 of this title, section 1167 of Title 29, Labor, and section 300bb-8 of Title 42, The Public Health and Welfare) shall apply to taxable years beginning after December 31, 1988, but shall not apply to any plan for any plan year to which section 162(k) of the Internal Revenue Code of 1986 (as in effect on the day before the date of the enactment of this Act (Nov. 10, 1988)) did not apply by reason of section 10001(e)(2) of the Consolidated Omnibus Budget Reconciliation Act of 1985 (section 10001(e)(2) of Pub. L. 99-272, set out as an Effective Date of 1986 Amendment note under section 106 of this title).'

EFFECTIVE DATE OF 1986 AMENDMENTS

Section 613(b) of Pub. L. 99-514 provided that: ‘The amendments made by subsection (a) (amending this section) shall apply to any amount paid or incurred after February 28, 1986, in taxable years ending after such date.’

Section 1161(b) of Pub. L. 99-514 provided that:

‘(1) In general. - The amendment made by this section (amending this section) shall apply to taxable years beginning after December 31, 1986.

‘(2) Transitional rule. - In the case of any year to which section 89 of the Internal Revenue Code of 1986 does not apply, section 162(m)(2)(B) of such Code shall be applied by substituting any nondiscrimination requirements otherwise applicable for the requirements of section 89 of such Code.

‘(3) Assistance. - The Secretary of the Treasury or his delegate shall provide guidance to self-employed individuals to assist them in meeting the requirements of section 89 of the Internal Revenue Code of 1986 with respect to coverage required by the amendments made by this section (amending this section).'

Section 1895(d)(6)(D) of Pub. L. 99-514 provided that: ‘The amendments made by this paragraph (amending this section, section 1166 of Title 29, Labor, and section 300bb-6 of Title 42, The Public Health and Welfare) shall only apply with respect to qualifying events occurring after the date of the enactment of this Act (Oct. 22, 1986).’

Section 1895(e) of Pub. L. 99-514 provided that: ‘Except as otherwise provided in this section, the amendments made by this section (amending this section, section 3121 of this title, sections 1162 and 1165 to 1167 of Title 29, sections 300bb-2, 300bb-5, 300bb-6, 410, 1301, 1320c-13, 1395p, 1395u, 1395cc, 1395dd, 1395mm, 1395ww, 1395yy, 1396a, 1396b, 1396d, and 1396s of Title 42, enacting provisions set out as notes under this section, section 3121 of this title, section 1167 of Title 29, and sections 1395u, 1395y, 1395ww, and 1395yy of Title 42, and amending provisions set out as notes under sections 403, 1395u, 1395cc, 1395mm, 1395ww, 1395yy, and 1396b of Title 42) shall be effective as if included in the enactment of the Consolidated Omnibus Budget Reconciliation Act of 1985 (Pub. L. 99-272).'

Amendment by section 9307(c)(2)(B) of Pub. L. 99-509 effective as if included in the enactment of Tax Reform Act of 1986,Pub. L. 99-514, see section 9307(c)(2) of Pub. L. 99-509, set out as a note under section 1395u of Title 42.

Section 9501(e) of Pub. L. 99-509 provided that:

‘(1) In general. - The amendments made by this section (amending this section and sections 1162, 1163, 1166, and 1167 of Title 29, Labor) shall take effect as if included in title X of the Consolidated Omnibus Budget Reconciliation Act of 1985 (sections 10001 to 10003 of Pub. L. 99-272).

‘(2) Treatment of certain bankruptcy proceedings. - Notwithstanding paragraph (1), section 10001(e) of the Consolidated Omnibus Budget Reconciliation Act of 1985 (set out as a note under section 106 of this title), and section 10002(d) of such Act (set out as a note under section 1161 of Title 29), the amendments made by this section (amending this section and sections 1162, 1163, 1166, and 1167 of Title 29) and by sections 10001 and 10002 of such Act (enacting sections 1161 to 1168 of Title 29, amending this section, section 106 of this title, and section 1132 of Title 29, and enacting provisions set out as notes under section 106 of this title and sections 1161 and 1166 of Title 29) shall apply in the case of plan years ending during the 12-month period beginning July 1, 1986, but only with respect to -

‘(A) a qualifying event described in section 162(k)(3)(F) of the Internal Revenue Code of 1986 or section 603(6) of the Employee Retirement Income Security Act of 1974 (29 U.S.C. 1163(6)), and

‘(B) a qualifying event described in section 162(k)(3)(A) of the Internal Revenue Code of 1986 or section 603(1) of the Employee Retirement Income Security Act of 1974 (29 U.S.C. 1163(1)) relating to the death of a retired employee occurring after the date of the qualifying event described in subparagraph (A).

‘(3) Treatment of current retirees. - Section 162(k)(3)(F) of the Internal Revenue Code of 1986 and section 603(6) of the Employee Retirement Income Security Act of 1974 (29 U.S.C. 1163(6)) apply to covered employees who retired before, on, or after the date of the enactment of this Act (Oct. 21, 1986).

‘(4) Notice. - In the case of a qualifying event described in section 603(6) of the Employee Retirement Income Security Act of 1974 (29 U.S.C. 1163(6)) that occurred before the date of the enactment of this Act (Oct. 21, 1986), the notice required under section 606(2) of such Act (29 U.S.C. 1166(2)) (and under section 162(k)(6)(B) of the Internal Revenue Code of 1986) with respect to such event shall be provided no later than 30 days after the date of the enactment of this Act (Oct. 21, 1986).'

Amendment by Pub. L. 99-272 applicable to plan years beginning on or after July 1, 1986, with special rule for collective bargaining agreements, see section 10001(e) of Pub. L. 99-272, set out as a note under section 106 of this title.

EFFECTIVE DATE OF 1984 AMENDMENTS

Section 232(b) of Pub. L. 98-573 provided that: ‘The amendment made by subsection (a) (amending this section) shall apply to taxable years beginning after the date of the enactment of this Act (Oct. 30, 1984).’

Amendment by section 512(b) of Pub. L. 98-369 applicable to amounts paid or incurred after July 18, 1984, in taxable years ending after such date, subject to an exception for certain extended vacation pay plans, see section 512(c) of Pub. L. 98-369, set out as a note under section 404 of this title.

Amendment by section 2354(d) of Pub. L. 98-369 effective July 18, 1984, but not to be construed as changing or affecting any right, liability, status, or interpretation which existed (under the provisions of law involved) before that date, see section 2354(e) of Pub. L. 98-369, set out as a note under section 1320a-1 of Title 42, The Public Health and Welfare.

EFFECTIVE DATE OF 1982 AMENDMENTS

Section 288(c) of Pub. L. 97-248 provided that: ‘The amendments made by this section (amending this section and sections 952 and 964 of this title) shall apply to payments made after the date of the enactment of this Act (Sept. 3, 1982).’

Amendment by section 128(b) of Pub. L. 97-248 effective as if such amendment had been originally included as part of this section as this section was amended by the Omnibus Budget Reconciliation Act of 1981, Pub. L. 97-35, see section 128(e)(2) of Pub. L. 97-248, set out as a note under section 1395x of Title 42, The Public Health and Welfare.

Section 215(d) of Pub. L. 97-216 provided that: ‘The amendments made by this section (amending this section and section 280A of this title and repealing provisions set out as a note under this section) shall apply to taxable years beginning after December 31, 1981.’

EFFECTIVE DATE OF 1981 AMENDMENTS

Section 139(b)(3) of Pub. L. 97-51, as amended by Pub. L. 97-92, Sec. 133a, Dec. 15, 1981, 95 Stat. 1199, provided that: ‘The amendments made by this subsection (amending this section and repealing section 31c of Title 2, The Congress) shall apply to taxable years beginning after December 31, 1980.’

Section 2146(c)(2) of Pub. L. 97-35 provided that: ‘The amendments made by subsection (b) (amending this section) shall be effective with respect to taxable years beginning on or after January 1, 1982.’

Section 127(b) of Pub. L. 97-34 provided that: ‘The amendment made by subsection (a) (amending this section) shall apply to taxable years beginning on or after January 1, 1976.’

EFFECTIVE DATE OF 1976 AMENDMENT

Amendment by section 1901(c)(4) of Pub. L. 94-455 applicable with respect to taxable years beginning after Dec. 31, 1976, see section 1901(d) of Pub. L. 94-455, set out as a note under section 2 of this title.

EFFECTIVE DATE OF 1971 AMENDMENT

Section 310(b) of Pub. L. 92-178 provided that: ‘The amendments made by subsection (a) (amending this section) shall apply with respect to payments after December 30, 1969, except that section 162(c)(3) of the Internal Revenue Act of 1954 (as added by subsection (a)) shall apply only with respect to kickbacks, rebates, and bribes payment of which is made on or after the date of the enactment of this Act (Dec. 10, 1971).’

EFFECTIVE DATE OF 1969 AMENDMENT

Section 902(c) of Pub. L. 91-172, as amended byPub. L. 99-514, Sec. 2, Oct. 22, 1986, 100 Stat. 2095, provided that: ‘Section 162(f) of the Internal Revenue Code of 1986 (formerly I.R.C. 1954) (as added by subsection (a)) shall apply to all taxable years to which such Code applies. Section 162(g) of such Code (as added by subsection (a)) shall apply with respect to amounts paid or incurred after December 31, 1969. Section 162(c)(1) of such Code (as amended by subsection (b)) shall apply to all taxable years to which such Code applies. Sections 162(c)(2) and (3) of such Code (as amended by subsection (b)) shall apply with respect to payments made after the date of the enactment of this Act (Dec. 30, 1969).'

Amendment by section 516(c)(2)(A) of Pub. L. 91-172 applicable to transfers after Dec. 31, 1969, see section 516(d)(3) of Pub. L. 91-172, set out as a note under section 1001 of this title.

EFFECTIVE DATE OF 1962 AMENDMENT

Section 4(c) of Pub. L. 87-834 provided that: ‘The amendments made by this section (amending this section and enacting section 274 of this title) shall apply with respect to taxable years ending after December 31, 1962, but only in respect of periods after such date.’

Section 3(b) of Pub. L. 87-834 provided that: ‘The amendments made by this section (amending this section) shall apply to taxable years beginning after December 31, 1962.’

EFFECTIVE DATE OF 1960 AMENDMENT

Section 7(c) of Pub. L. 86-779 provided that: ‘The amendments made by subsections (a) and (b) (amending this section and section 170 of this title) shall apply with respect to taxable years beginning after December 31, 1959.’

Section 8(d) of Pub. L. 86-779 provided that: ‘The amendments made by subsections (a), (b), and (c) (amending this section and section 1054 of this title and amending table of sections for Part IV by adding item 1054 and numbering former item 1054 as 1055) shall apply with respect to taxable years beginning after December 31, 1959.’

EFFECTIVE DATE OF 1958 AMENDMENT

Section 5(b) of Pub. L. 85-866 provided that: ‘The amendment made by subsection (a) (amending this section) shall apply only with respect to expenses paid or incurred after the date of the enactment of this Act (Sept. 2, 1958). The determination as to whether any expense paid or incurred on or before the date of the enactment of this Act shall be allowed as a deduction shall be made as if this section had not been enacted and without inference drawn from the fact that this section is not made applicable with respect to expenses paid or incurred on or before the date of the enactment of this Act.’

INCREASE IN STANDARD MILEAGE RATE FOR CHARITABLE USE OF VEHICLES

Section 303 of Pub. L. 109-73 provided that:

“Notwithstanding section 170(i) of the Internal Revenue Code of 1986, for purposes of computing the deduction under section 170 of such Code for use of a vehicle described in subsection (f)(12)(E)(i) of such section for provision of relief related to Hurricane Katrina during the period beginning on August 25, 2005, and ending on December 31, 2006, the standard mileage rate shall be 70 percent of the standard mileage rate in effect under section 162(a) of such Code at the time of such use. Any increase under this section shall be rounded to the next highest cent.”

MILEAGE REIMBURSEMENTS TO CHARITABLE VOLUNTEERS EXCLUDED FROM GROSS INCOME

Section 304 of Pub. L. 109-73 provided that:

“(a) IN GENERAL.--For purposes of the Internal Revenue Code of 1986, gross income of an individual for taxable years ending on or after August 25, 2005, does not include amounts received, from an organization described in section 170(c) of such Code, as reimbursement of operating expenses with respect to use of a passenger automobile for the benefit of such organization in connection with providing relief relating to Hurricane Katrina during the period beginning on August 25, 2005, and ending on December 31, 2006. The preceding sentence shall apply only to the extent that the expenses which are reimbursed would be deductible under chapter 1 of such Code if section 274(d) of such Code were applied--

“(1) by using the standard business mileage rate in effect under section 162(a) at the time of such use, and

“(2) as if the individual were an employee of an organization not described in section 170(c) of such Code.

“(b) APPLICATION TO VOLUNTEER SERVICES ONLY.--Subsection (a) shall not apply with respect to any expenses relating to the performance of services for compensation.

“(c) NO DOUBLE BENEFIT.--No deduction or credit shall be allowed under any other provision of such Code with respect to the expenses excludable from gross income under subsection (a).”

DEDUCTION FOR SPECIAL ASSESSMENTS

Section 2711 of Pub. L. 104-208 provided that:

‘(1) the amount allowed as a deduction under section 162 of such Code for a taxable year shall include any amount paid during such year by reason of an assessment under section 2702 of this subtitle, and

‘(2) section 172(f) of such Code shall not apply to any deduction described in paragraph (1).’

SPECIAL RULE FOR DEDUCTIONS UNDER SUBSECTION (L) FOR TAXABLE YEARS BEGINNING IN 1990

Section 7107(a)(2) of Pub. L. 101-239, which provided that in the case of any taxable year beginning in 1990 only amounts paid before Oct. 1, 1990, by the individual for insurance coverage for periods before Oct. 1, 1990, would be taken into account in determining the amount deductible under subsec. (l) of this section with respect to such individual for such taxable year, and that for purposes of subsec. (l)(2)(A) of this section, the amount of the earned income described in such paragraph taken into account for such taxable year would be the amount which bears the same ratio to the total amount of such earned income as the number of months in such taxable year ending before Oct. 1, 1990, bears to the number of months in such taxable year, was repealed by Pub. L. 101-508, title XI, Sec. 11410(b), Nov. 5, 1990, 104 Stat. 1388-479.

BUSINESS USE OF AUTOMOBILES BY RURAL MAIL CARRIERS

Section 6008 of Pub. L. 100-647, before being repealed by Pub. L. 105-34, Sec. 1203(b), effective for taxable years beginning after December 31, 1997, provided that:

‘(a) General Rule. - In the case of any employee of the United States Postal Service who performs services involving the collection and delivery of mail on a rural route, such employee shall be permitted to compute the amount allowable as a deduction under chapter 1 of the Internal Revenue Code of 1986 for the use of an automobile in performing such services by using a standard mileage rate for all miles of such use equal to 150 percent of the basic standard rate.

‘(b) Subsection (a) Not To Apply if Employee Claims Depreciation Deductions for Automobile. - Subsection (a) shall not apply with respect to any automobile if, for any taxable year beginning after December 31, 1987, the taxpayer claimed depreciation deductions for such automobile.

‘(c) Basic Standard Rate. - For purposes of this section, the term ‘basic standard rate’ means the standard mileage rate which is prescribed by the Secretary of the Treasury or his delegate for computing the amount of the deduction for the business use of an automobile and which -

‘(1) is in effect at the time of the use referred to in subsection (a),

‘(2) applies to an automobile which is not fully depreciated, and

‘(3) applies to the first 15,000 miles (or such other number as the Secretary of the Treasury or his delegate may hereafter prescribe) of business use during the taxable year.

‘(d) Effective Date. - The provisions of this section shall apply to taxable years beginning after December 31, 1987.’

PLAN AMENDMENTS NOT REQUIRED UNTIL JANUARY 1, 1989

For provisions directing that if any amendments made by subtitle A or subtitle C of title XI (Sec. 1101-1147 and 1171-1177) or title XVIII (Sec. 1800-1899A) of Pub. L. 99-514 require an amendment to any plan, such plan amendment shall not be required to be made before the first plan year beginning on or after Jan. 1, 1989, see section 1140 of Pub. L. 99-514, as amended, set out as a note under section 401 of this title.

LIVING EXPENSES OF MEMBERS OF CONGRESS WHILE AWAY FROM HOME; SENSE OF CONGRESS

Section 139(a) of Pub. L. 97-51, which expressed the sense of Congress that the dollar limits on tax deductions for living expenses of Members of Congress while away from home be the same as such limits for businessmen and other private citizens, was repealed by Pub. L. 97-216, title II, Sec. 215(c), July 18, 1982, 96 Stat. 194.

STATE LEGISLATORS' TRAVEL EXPENSES AWAY FROM HOME

Section 604 of Pub. L. 94-455, as amended by Pub. L. 95-30, title III, Sec. 307, May 23, 1977, 91 Stat. 153; Pub. L. 95-258, Sec. 2, Apr. 7, 1978, 92 Stat. 195; Pub. L. 96-167, Sec. 3, Dec. 29, 1979, 93 Stat. 1275; Pub. L. 96-178, Sec. 1, Jan. 2, 1980, 93 Stat. 1295; Pub. L. 99-514, Sec. 2, Oct. 22, 1986, 100 Stat. 2095, provided that:

‘(a) In General. - For purposes of section 162(a) of the Internal Revenue Code of 1986 (formerly I.R.C. 1954), in the case of any individual who was a State legislator at any time during any taxable year beginning before January 1, 1981, and who, for the taxable year, elects the application of this section, for any period during such a taxable year in which he was a State legislator -

‘(1) the place of residence of such individual within the legislative district which he represented shall be considered his home, and

‘(2) he shall be deemed to have expended for living expenses (in connection with his trade or business as a legislator) an amount equal to the sum of the amounts determined by multiplying each legislative day of such individual during the taxable year by the amount generally allowable with respect to such day to employees of the executive branch of the Federal Government for per diem while away from home but serving in the United States.

‘(b) Legislative Days. - For purposes of subsection (a), a legislative day during any taxable year for any individual shall be any day during such year on which (1) the legislature was in session (including any day in which the legislature was not in session for a period of 4 consecutive days or less), or (2) the legislature was not in session but the physical presence of the individual was formally recorded at a meeting of a committee of such legislature.

‘(c) Limitation. - The amount taken into account as living expenses attributable to a trade or business as a State legislator for any taxable year beginning before January 1, 1976, under an election made under this section shall not exceed the amount claimed for such purpose under a return (or amended return) filed before May 21, 1976.

‘(d) Making and Effect of Election. - An election under this section shall be made at such time and in such manner as the Secretary of the Treasury or his delegate shall by regulations prescribe.’

(Amendment by section 604 of Pub. L. 94-455 by section 1 of Pub. L. 96-178, which purported to substitute ‘January 1, 1979’ for ‘January 1, 1978’, was not executed because of the prior amendment by section 3(a)(2), (b) of Pub. L. 96-167 which substituted ‘January 1, 1981’ for ‘January 1, 1978’ in subsec. (a) and which struck out the last sentence of subsec. (d).)

DENIAL OF DEDUCTION FOR AMOUNTS PAID OR INCURRED ON JUDGMENTS IN SUITS BROUGHT TO RECOVER PRICE INCREASES IN PURCHASE OF NEW PRINCIPAL RESIDENCE

No deductions to be allowed in computing taxable income for two-thirds of any amount paid or incurred on a judgment entered against any person in a suit brought under section 208(b) of Pub. L. 94-12, see section 208(c) of Pub. L. 94-12, title II, Mar. 29, 1975, 89 Stat. 35, set out as a note under section 44 of this title.

DEDUCTIBILITY OF ACCRUED VACATION PAY

Section 97 of Pub. L. 85-866, as amended by Pub. L. 86-496, Sec. 2, June 8, 1960, 74 Stat. 164; Pub. L. 88-153, Oct. 17, 1963, 77 Stat. 272; Pub. L. 88-554, Sec. 1, Aug. 31, 1964, 78 Stat. 761; Pub. L. 89-692, Oct. 15, 1966, 80 Stat. 1025; Pub. L. 91-172, title IX, Sec. 903, Dec. 30, 1969, 83 Stat. 711; Pub. L. 92-580, Sec. 3, Oct. 27, 1972, 86 Stat. 1276, provided that deductions for accrued vacation pay under this section would not be denied for any taxable year ending before Jan. 1, 1973, so long as the employee at the time of accrual of pay has performed the necessary qualifying service under an appropriate plan.

INVESTIGATION OF, AND REPORTS ON, TREATMENT OF ENTERTAINMENT AND CERTAIN OTHER EXPENSES

Pub. L. 86-564, title III, Sec. 301, June 30, 1960, 74 Stat. 291, authorized the Joint Committee on Internal Revenue Taxation to investigate and report on the use of entertainment and certain other expense deductions to the 87th Congress and authorized the Secretary of the Treasury to report to the 87th Congress on the enforcement program of the Internal Revenue Service relating to such deductions.

FILING OF CLAIMS FOR REFUNDS OF OVERPAYMENTS

Extension of time for filing of claims for refunds or credit of overpayments of income tax resulting from application of this section, see section 96 of Pub. L. 85-866, set out as a note under section 6511 of this title.

Sec. 162. Trade Or Business Expenses

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