Editor's Note:
Pub. L. 117-169 amended
Sec. 38 with delayed effective dates as indicated below.
I.R.C. § 38(a) Allowance Of Credit —
There shall be allowed as a credit against the tax imposed
by this chapter for the taxable year an amount equal to the sum of—
I.R.C. § 38(a)(1) —
the business credit carryforwards carried
to such taxable year,
I.R.C. § 38(a)(2) —
the amount of the current year business
credit, plus
I.R.C. § 38(a)(3) —
the business credit carrybacks carried
to such taxable year.
I.R.C. § 38(b) Current Year Business Credit —
For purposes of this subpart, the amount of the current
year business credit is the sum of the following credits determined
for the taxable year:
I.R.C. § 38(b)(1) —
the investment credit determined under
section 46,
I.R.C. § 38(b)(2) —
the work opportunity credit determined
under section 51(a),
I.R.C. § 38(b)(3) —
the alcohol fuels credit determined under
section 40(a),
I.R.C. § 38(b)(4) —
the research credit determined under
section 41(a),
I.R.C. § 38(b)(5) —
the low-income housing credit determined
under section 42(a),
I.R.C. § 38(b)(6) —
the enhanced oil recovery credit under
section 43(a),
I.R.C. § 38(b)(7) —
in the case of an eligible small business
(as defined in section 44(b)),
the disabled access credit determined under section 44(a),
I.R.C. § 38(b)(8) —
the renewable electricity production
credit under section 45(a),
I.R.C. § 38(b)(9) —
the empowerment zone employment credit
determined under section 1396(a),
I.R.C. § 38(b)(10) —
the Indian employment credit as determined
under section 45A(a),
I.R.C. § 38(b)(11) —
the employer social security credit
determined under section 45B(a),
I.R.C. § 38(b)(12) —
the orphan drug credit determined under
section 45C(a),
I.R.C. § 38(b)(13) —
the new markets tax credit determined
under section 45D(a),
I.R.C. § 38(b)(14) —
in the case of an eligible employer
(as defined in section 45E(c)),
the small employer pension plan startup cost credit determined under
section 45E(a),
I.R.C. § 38(b)(15) —
the employer-provided child care
credit determined under section 45F(a),
I.R.C. § 38(b)(16) —
the railroad track maintenance credit
determined under section 45G(a),
I.R.C. § 38(b)(17) —
the biodiesel fuels credit determined
under section 40A(a),
I.R.C. § 38(b)(18) —
the low sulfur diesel fuel production
credit determined under section 45H(a),
I.R.C. § 38(b)(19) —
the marginal oil and gas well production
credit determined under section 45I(a),
I.R.C. § 38(b)(20) —
the distilled spirits credit determined
under section 5011(a),
I.R.C. § 38(b)(21) —
the advanced nuclear power facility
production credit determined under section 45J(a),
I.R.C. § 38(b)(22) —
the nonconventional source production
credit determined under section 45K(a),
I.R.C. § 38(b)(23) —
the new energy efficient home credit
determined under section 45L(a),
I.R.C. § 38(b)(24) —
the portion of the alternative motor
vehicle credit to which section 30B(g)(1) applies,
I.R.C. § 38(b)(25) —
the portion of the alternative fuel
vehicle refueling property credit to which section 30C(d)(1) applies,
I.R.C. § 38(b)(26) —
the mine rescue team training credit
determined under section 45N(a),
I.R.C. § 38(b)(27) —
in the case of an eligible agricultural
business (as defined in section 45O(e)),
the agricultural chemicals security credit determined under section 45O(a),
I.R.C. § 38(b)(28) —
the differential wage payment credit
determined under section 45P(a),
I.R.C. § 38(b)(29) —
the carbon dioxide sequestration credit
determined under section 45Q(a),
Editor's Note: Sec. 38(b)(30), below, before amendment by Pub. L. 117-169, Sec. 13401(i)(3), is effective
for vehicles placed in service before January 1, 2023.
I.R.C. § 38(b)(30) —
the portion of the new qualified
plug-in electric drive motor vehicle credit to which section 30D(c)(1) applies,
Editor's Note: Sec. 38(b)(30), below, after amendment by Pub. L. 117-169, Sec. 13401(i)(3), is effective
for vehicles placed in service after December 31, 2022.
I.R.C. § 38(b)(30) —
the portion of the new clean vehicle
credit to which section 30D(c)(1) applies,
I.R.C. § 38(b)(31) —
the small employer health insurance
credit determined under section 45R,
I.R.C. § 38(b)(32) —
in the case of an eligible employer
(as defined in section 45S(c)),
the paid family and medical leave credit determined under section 45S(a),
I.R.C. § 38(b)(33) —
in the case of an eligible employer
(as defined in section 45T(c)),
the retirement auto-enrollment credit determined under section 45T(a)
Editor's Note: Sec. 38(b)(34), below, after being added by Pub. L. 117-169, Sec. 13105(b)(1)(A), is
effective for electricity produced and sold after December 31, 2023,
in taxable years beginning after such date.
I.R.C. § 38(b)(34) —
the zero-emission nuclear power production
credit determined under section 45U(a),
Editor's Note: Sec. 38(b)(35), below, after being added by Pub. L. 117-169, Sec. 13203(b), is effective
for fuel sold or used after December 31, 2022.
I.R.C. § 38(b)(35) —
the sustainable aviation fuel credit
determined under section 40B,
Editor's Note: Sec. 38(b)(36), below, after being added by Pub. L. 117-169, Sec. 13204(a)(4)(A), is
effective for hydrogen produced after December 31, 2022.
I.R.C. § 38(b)(36) —
the clean hydrogen production credit
determined under section 45V(a),
Editor's Note: Sec. 38(b)(37), below, after being added by Pub. L. 117-169, Sec. 13403(b), is effective
for vehicles acquired after December 31, 2022.
I.R.C. § 38(b)(37) —
the qualified commercial clean vehicle
credit determined under section 45W,
Editor's Note: Sec. 38(b)(38), below, after being added by Pub. L. 117-169, Sec. 13502(b)(1), is effective
for components produced and sold after December 31, 2022
I.R.C. § 38(b)(38) —
the advanced manufacturing production
credit determined under section 45X(a),
Editor's Note: Sec. 38(b)(39), below, after being added by Pub. L. 117-169, Sec. 13701(b)(1), is effective
for facilities placed in service after December 31, 2024.
I.R.C. § 38(b)(39) —
the clean electricity production
credit determined under section 45Y(a),
Editor's Note: Sec. 38(b)(40), below, after being added by Pub. L. 117-169, Sec. 13704(b)(3), is effective
for transportation fuel produced after December 31, 2024.
I.R.C. § 38(b)(40) —
the clean fuel production credit
determined under section 45Z(a),
plus
I.R.C. § 38(b)(41) —
in the case of an eligible small employer 5 (as defined
in section 45AA(c)),
the military spouse 6 retirement plan eligibility credit determined
under 7 section 45AA(a).
I.R.C. § 38(c) Limitation Based On Amount Of Tax
I.R.C. § 38(c)(1) In General —
The credit allowed under subsection (a) for any taxable
year shall not exceed the excess (if any) of the taxpayer's net income
tax over the greater of—
I.R.C. § 38(c)(1)(A) —
the tentative minimum tax for the taxable
year, or
I.R.C. § 38(c)(1)(B) —
25 percent of so much of the taxpayer's
net regular tax liability as exceeds $25,000.
For purposes of the preceding sentence,
the term “net income tax” means the sum of the regular
tax liability and the tax imposed by section 55, reduced by the credits allowable
under subparts A and B of this part, and the term “net regular
tax liability” means the regular tax liability reduced by the
sum of the credits allowable under subparts A and B of this part.
I.R.C. § 38(c)(2) Empowerment Zone Employment Credit May Offset 25 Percent Of
Minimum Tax
I.R.C. § 38(c)(2)(A) In General —
In the case of the empowerment zone employment credit—
I.R.C. § 38(c)(2)(A)(i) —
this section and section 39 shall be applied separately with
respect to such credit, and
I.R.C. § 38(c)(2)(A)(ii) —
for purposes of applying paragraph (1)
to such credit
I.R.C. § 38(c)(2)(A)(ii)(I) —
75 percent of the tentative minimum tax
shall be substituted for the tentative minimum tax under subparagraph
(A) thereof, and
I.R.C. § 38(c)(2)(A)(ii)(II) —
the limitation under paragraph (1) (as
modified by subclause (I)) shall be reduced by the credit allowed
under subsection (a) for the taxable year (other than the empowerment
zone employment credit and the specified credits).
I.R.C. § 38(c)(2)(B) Empowerment Zone Employment Credit —
For purposes of this paragraph, the term “empowerment
zone employment credit” means the portion of the credit under
subsection (a) which is attributable to the credit determined under
section 1396 (relating
to empowerment zone employment credit).
I.R.C. § 38(c)(4) Special Rules For Specified Credits
I.R.C. § 38(c)(4)(A) In General —
In the case of specified credits—
I.R.C. § 38(c)(4)(A)(i) —
this section and section 39 shall be applied separately with
respect to such credits, and
I.R.C. § 38(c)(4)(A)(ii) —
in applying paragraph (1) to such credits—
I.R.C. § 38(c)(4)(A)(ii)(I) —
the tentative minimum tax shall be treated
as being zero, and
I.R.C. § 38(c)(4)(A)(ii)(II) —
the limitation under paragraph (1)
(as modified by subclause (I)) shall be reduced by the credit allowed
under subsection (a) for the taxable year (other than the specified
credits).
I.R.C. § 38(c)(4)(B) Specified Credits —
For purposes of this subsection,
the term “specified credits” means—
I.R.C. § 38(c)(4)(B)(i) —
for taxable years beginning after December
31, 2004, the credit determined under section 40,
I.R.C. § 38(c)(4)(B)(ii) —
the credit determined under section 41 for the taxable year with respect
to an eligible small business (as defined in paragraph (5)(A) after
application of the rules of paragraph (5)(B)),
I.R.C. § 38(c)(4)(B)(iii) —
the credit determined under section 42 to the extent attributable to
buildings placed in service after December 31, 2007,
I.R.C. § 38(c)(4)(B)(iv) —
the credit determined under section 45 to the extent that such credit
is attributable to electricity or refined coal produced—
I.R.C. § 38(c)(4)(B)(iv)(I) —
at a facility which is originally placed
in service after the date of the enactment of this paragraph, and
I.R.C. § 38(c)(4)(B)(iv)(II) —
during the 4-year period beginning
on the date that such facility was originally placed in service,
I.R.C. § 38(c)(4)(B)(v) —
the credit determined under section 45 to the extent that such credit
is attributable to section 45(e)(10) (relating
to Indian coal production facilities),
I.R.C. § 38(c)(4)(B)(vi) —
the credit determined under section 45B,
I.R.C. § 38(c)(4)(B)(vii) —
the credit determined under section 45G,
I.R.C. § 38(c)(4)(B)(viii) —
the credit determined under section 45R,
I.R.C. § 38(c)(4)(B)(ix) —
the credit determined under section 45S,
I.R.C. § 38(c)(4)(B)(x) —
the credit determined under section 46 to the extent that such credit
is attributable to the energy credit determined under section 48,
I.R.C. § 38(c)(4)(B)(xi) —
the credit determined under section 46to the extent that such credit
is attributable to the rehabilitation credit under section 47, but only with respect to qualified
rehabilitation expenditures properly taken into account for periods
after December 31, 2007, and
I.R.C. § 38(c)(4)(B)(xii) —
the credit determined under section 51.
I.R.C. § 38(c)(5) Rules Related To Eligible Small Businesses
I.R.C. § 38(c)(5)(A) Eligible Small Business —
For purposes of this subsection, the term “eligible
small business” means, with respect to any taxable year—
I.R.C. § 38(c)(5)(A)(i) —
a corporation the stock of which is not
publicly traded,
I.R.C. § 38(c)(5)(A)(ii) —
a partnership, or
I.R.C. § 38(c)(5)(A)(iii) —
a sole proprietorship,
if the average annual gross receipts
of such corporation, partnership, or sole proprietorship for the 3-taxable-year
period preceding such taxable year does not exceed $50,000,000. For
purposes of applying the test under the preceding sentence, rules
similar to the rules of paragraphs (2) and (3) of section 448(c) shall apply.
I.R.C. § 38(c)(5)(B) Treatment Of Partners And S Corporation Shareholders —
For purposes of paragraph (4)(B)(ii), any credit determined
under section 41 with
respect to a partnership or S corporation shall not be treated as
a specified credit by any partner or shareholder unless such partner
or shareholder meets the gross receipts test under subparagraph (A)
for the taxable year in which such credit is treated as a current
year business credit.
I.R.C. § 38(c)(6) Special Rules —
I.R.C. § 38(c)(6)(A) Married Individuals —
In the case of a husband or wife who files a separate
return, the amount specified under subparagraph (B) of paragraph (1)
shall be $12,500 in lieu of $25,000. This subparagraph shall not apply
if the spouse of the taxpayer has no business credit carryforward
or carryback to, and has no current year business credit for, the
taxable year of such spouse which ends within or with the taxpayer's
taxable year.
I.R.C. § 38(c)(6)(B) Controlled Groups —
In the case of a controlled group, the $25,000 amount
specified under subparagraph (B) of paragraph (1) shall be reduced
for each component member of such group by apportioning $25,000 among
the component members of such group in such manner as the Secretary
shall by regulations prescribe. For purposes of the preceding sentence,
the term “controlled group” has the meaning given to such
term by section 1563(a).
I.R.C. § 38(c)(6)(C) Limitations With Respect To Certain Persons —
In the case of a person described in subparagraph (A)
or (B) of section 46(e)(1) (as
in effect on the day before the date of the enactment of the Revenue
Reconciliation Act of 1990), the $25,000 amount specified under subparagraph
(B) of paragraph (1) shall equal such person's ratable share (as determined
under section 46(e)(2) (as
so in effect) of such amount.
I.R.C. § 38(c)(6)(D) Estates And Trusts —
In the case of an estate or trust, the $25,000 amount
specified under subparagraph (B) of paragraph (1) shall be reduced
to an amount which bears the same ratio to $25,000 as the portion
of the income of the estate or trust which is not allocated to beneficiaries
bears to the total income of the estate or trust.
Editor's Note: Sec. 38(c)(6)(E), below, before amendment by Pub. L. 117-169, Sec. 10101(d), is effective
for taxable years beginning before January 1, 2023.
I.R.C. § 38(c)(6)(E) Corporations —
In the case of a corporation, this
subsection shall be applied by treating the corporation as having
a tentative minimum tax of zero.
Editor's Note: Sec. 38(c)(6)(E), below, after amendment by Pub. L. 117-169, Sec. 10101(d), is effective
for taxable years beginning after December 31, 2022.
I.R.C. § 38(c)(6)(E) Corporations —
In the case of a corporation—
I.R.C. § 38(c)(6)(E)(i) —
the first sentence of paragraph (1) shall
be applied by substituting “25 percent of the taxpayer's
net income tax as exceeds $25,000” for “the greater of”
and all that follows,
I.R.C. § 38(c)(6)(E)(ii) —
paragraph (2)(A) shall be applied without
regard to clause (ii)(I) thereof, and
I.R.C. § 38(c)(6)(E)(iii) —
paragraph (4)(A) shall be applied without
regard to clause (ii)(I) thereof.
I.R.C. § 38(d) Ordering Rules —
For purposes of any other provision of this title where
it is necessary to ascertain the extent to which the credits determined
under any section referred to in subsection (b) are used in a taxable
year or as a carryback or carryforward—
I.R.C. § 38(d)(1) In General —
The order in which such credits are used shall be determined
on the basis of the order in which they are listed in subsection (b)
as of the close of the taxable year in which the credit is used.
I.R.C. § 38(d)(2) Components Of Investment Credit —
The order in which the credits listed in section 46 are used shall be determined
on the basis of the order in which such credits are listed in section 46 as of the close of the taxable
year in which the credit is used.
(Added and amended by Pub. L. 98-369, div. A, title IV,
Sec. 473, 474(m)(1), title VI, Sec. 612(e)(1), July 18, 1984, 98 Stat. 827, 912; Pub. L. 99-514, title II, Sec. 221(a),
231(d)(1), (3)(B), 252(b), title VII, Sec. 701(c)(4), title XI, Sec.
1171(b)(1), (2), Oct. 22, 1986, 100 Stat.
2173, 2178, 2179, 2205, 2341, 2513; Pub. L. 100-647, title I, Sec. 1002(e)(8)(A),
1007(g)(2), (8), Nov. 10, 1988, 102 Stat.
3368, 3434, 3435; Pub. L.
101-508, title XI, Sec. 11511(b)(1), 11611(b)(1),
11813(b)(2), Nov. 5, 1990, 104 Stat.
1388-485, 1388-503, 1388-551; Pub.
L. 102-486, title XIX, Sec. 1914(b), Oct. 24, 1992, 106 Stat. 2776; Pub. L. 103-66, title XIII, Sec.
13311, 13302(a)(1), 13322(a), 13443(b)(1), 13302(c)(1), Aug. 10, 1993, 107 Stat. 312; Pub. L. 104-188, title I, Sec. 1201(e)(1),
1205(a)(2), 1702(e)(4), 1703(n)(3); Pub.
L. 106-554, Sec. 121, Dec. 21, 2000, 114 Stat. 2763; Pub. L. 107-16, Sec. 205, 619, June
7, 2001, 115 Stat. 38; Pub. L. 107-147, title III, IV,
Sec. 301(b), 411(d)(2), Mar. 9, 2002, 116
Stat. 21; Pub. L. 108-357,
title II, III, VII, Sec. 245, 302, 339, 341, 711, Oct. 22, 2004, 118 Stat. 1418; Pub. L. 109-58, title XIII, Sec.
1306(b), 1322(a)(2), 1332(b), 1334(b), 1341(b)(1), 1342(b)(1), Aug.
8, 2005, 119 Stat. 594; Pub. L. 109-59, title XI, Sec. 11126(b),
Aug. 10, 2005, 119 Stat. 1144; Pub. L. 109-135, title I, II, IV,
Sec. 103(b)(1), 201(b)(1), 412(f), Dec. 21, 2005, 119 Stat. 2577; Pub. L. 109-432, div. A, title IV,
405(b), Dec. 20, 2006, 120 Stat. 2922; Pub. L. 110-28, title VIII, Sec.
8214, May 25, 2007, 121 Stat. 112; Pub. L. 110-172, Sec. 11(a)(6),
Dec. 29, 2007, 121 Stat. 2473; Pub. L. 110-245, Sec. 111(b),
June 17, 2008, 122 Stat. 1624; Pub. L. 110-246, title XV, Sec.
15343(b), June 18, 2008, 122 Stat. 1651; Pub. L. 110-289, div. C, title I,
Sec. 3022, July 30, 2008, 122 Stat. 2654; Pub. L. 110-343, Div. B, title I,
Sec. 103(b), 115(b), title II, Sec. 205(c), Div. C, Sec. 316(b), Oct.
3, 2008, 122 Stat. 3765; Pub. L. 111-5, div. B, title I, Sec.
1141(b)(2), Feb. 17, 2009, 123 Stat. 115; Pub. L. 111-148, Sec. 1421(b),
(c), Mar. 23, 2010, 124 Stat. 119; Pub. L. 111-240, title II, Sec.
2013, Sept. 27, 2010, 124 Stat. 2504; Pub. L. 113-295, Div. A, title II,
Sec. 209(f), 220(b), 221(a)(2)(B), 221(a)(6), Dec. 19, 2014, 128 Stat. 4010; Pub.
L. 114-113, Div. Q, title I, Sec. 121(b), 186(d); Pub. L. 115-97, title I, Sec. 12001(b)(1),
13403(b), (c), Dec. 22, 2017, 131 Stat.
2054; Pub. L. 115-141,
Div. U, title IV, Sec. 401(a)(8), (b)(5)(A)(i)–(iii), (5)(B)–(D),
(d)(2)(B), (d)(6)(B)(i)–(iii), Mar. 23, 2018, 132 Stat. 348; Pub.
L. 116-94, Div. O, title I, Sec. 105(b), Dec. 20, 2019; Pub. L. 117-169, title I, Secs. 10101(d),
13105(b)(1)(A)–(C), 13203(b), 13204(a)(4)(A)(i)–(iii),
13401(i)(3), 13403(b)(1)(A)–(C), 13502(b)(1)(A)–(C), 13701(b)(1)(A)–(C),
13704(b)(3)(A)–(C), Aug. 16, 2022, 136
Stat. 1818; Pub. L. 117-328,
Div. T, Sec. 112(b), December 29, 2022.)
BACKGROUND NOTES
AMENDMENTS
2022 —Subsec. (b)(39)-(41). Pub. L. 117-328, Div. T, Sec. 112(b), amended
subsec. (b)(39)-(41) by striking “plus” at the end of par. (39), by
striking the period at the end of par. (40) and inserting “, plus”,
and by adding at the end a new par. (41).
Subsec. (b)(30). Pub. L. 117-169, Sec. 13401(i)(3), amended
par (30) by striking “qualified plug-in electric drive motor”
and inserting “clean”.
Subsec. (b)(32)–(34). Pub.
L. 117-169, Sec. 13105(b), amended subsec. (b) by striking “plus”
at the end of par. (32), by striking the period at the end of par.
(33) and inserting “, plus”, and by adding new par. (34).
Subsec. (b)(33)–(35). Pub.
L. 117-169, Sec. 13203(b), amended subsec. (b) (as amended
by the preceding provision) by striking “plus” at the
end of par. (33), by striking the period at the end of par. (34) and
inserting “, plus”, and by adding new par. (35).
Subsec. (b)(34)–(36). Pub.
L. 117-169, Sec. 13204(a)(A), amended subsec. (b) (as amended
by the preceding provisions) by striking “plus” at the
end of par. (34), by striking the period at the end of par. (35) and
inserting “, plus”, and by adding new par. (36).
Subsec. (b)(35)–(37). Pub.
L. 117-169, Sec. 13403(b), amended subsec. (b) (as amended
by the preceding provision) by striking “plus” at the
end of par. (35), by striking the period at the end of par. (36) and
inserting “, plus”, and by adding new par. (37).
Subsec. (b)(36)–(38). Pub.
L. 117-169, Sec. 13502(b), amended subsec. (b) (as amended
by the preceding provision) by striking “plus” at the
end of par. (36), by striking the period at the end of par. (37) and
inserting “, plus”, and by adding new par. (38).
Subsec. (b)(37)–(39). Pub.
L. 117-169, Sec. 13701(b)(1), amended subsec. (b) by striking “plus”
at the end of par. (37), by striking the period at the end of par.
(38) and inserting “, plus”, and by adding new par. (39).
Subsec. (b)(38)–(40). Pub.
L. 117-169, Sec. 13704(b)(3), amended subsec. (b) (as amended
by the preceding provision) by striking “plus” at the
end of par. (38), by striking the period at the end of par. (39) and
inserting “, plus”, and by adding new par. (40).
Subsec. (c)(6)(E). Pub.
L. 117-169, Sec. 10101(d), amended subpar. (E). Before amendment,
it read as follows:
“(E) Corporations.—In the case of a
corporation, this subsection shall be applied by treating the corporation
as having a tentative minimum tax of zero.”
2019 — Subsec. (b). Pub. L. 116-94, Div. O, Sec. 105(b), amended
subsec. (b) by striking “plus” at the end of par. (31),
by substituting “, plus” for the period at the end of
par. (32), and by adding par. (33).
2018 — Subsec. (b). Pub. L. 115-141, Sec. 401(a)(8), amended
par. (34) by adding a comma at the end.
Subsec. (b). Pub. L.
115-141, Sec. 401(d)(2)(B), amended subsec. (b) by striking
par. (24) and redesignating pars. (25) through (37) as pars. (24)
through (36).
Subsec. (b). Pub. L.
115-141, Sec. 401(d)(6)(B)(i), amended subsec. (b) by striking
pars. (26) through (29), as redesignated, and by redesignating pars.
(30) through (36), as redesignated, as pars. (26) through (32).
Subsec. (c)(5). Pub.
L. 115-141, Sec. 401(b)(5)(A)(i), amended par. (5) by striking
all that precedes subpar. (C) and revising title of par. (5) to “(5)
Rules Related To Eligible Small Businesses.”
Subsec. (c)(5). Pub.
L. 115-141, Sec. 401(b)(5)(A)(ii), amended par. (5) by redesignating
subpars. (C) and (D) as subpars. (A) and (B). Before being struck,
prior subpars. (A) and (B) read as follows:
“(A) In General.—In the case of eligible
small business credits determined in taxable years beginning in 2010—
“(i) this section and section 39 shall be
applied separately with respect to such credits, and
“(ii) in applying par. (1) to such credits—
“(I) the tentative minimum tax shall be treated
as being zero, and
“(II) the limitation under par. (1) (as modified
by subclause (I)) shall be reduced by the credit allowed under subsec.
(A) for the taxable year (other than the eligible small business credits).
“(B) Eligible Small Business Credits.—For
purposes of this subsection, the term ‘eligible small business
credits' means the sum of the credits listed in subsection (b) which
are determined for the taxable year with respect to an eligible small
business. Such credits shall not be taken into account under paragraph
(2), (3), or (4).”
Subsec. (c)(5). Pub.
L. 115-141, Sec. 401(b)(5)(A)(iii), amended new subpar.
(B). Before amendment, prior subpar. (D) read as follows:
“(D) Treatment Of Partners And S Corporation
Shareholders.—Credits determined with respect to a partnership
or S corporation shall not be treated as eligible small business credits
by any partner or shareholder unless such partner or shareholder meets
the gross receipts test under subparagraph (C) for the taxable year
in which such credits are treated as current year business credits.”
Subsec. (c)(2)(A). Pub.
L. 115-141, Sec. 401(b)(5)(B), amended subsec. (c)(2)(A)(ii)(II),
by striking “the eligible small business credits,”.
Subsec. (c)(4)(A). Pub.
L. 115-141, Sec. 401(b)(5)(C), amended subsec. (c)(4)(A)(ii)(II),
by striking “the eligible small business credits and”.
Subsec. (c)(4)(B). Pub.
L. 115-141, Sec. 401(b)(5)(D), amended subsec. (c)(4)(B)(ii),
by substituting “(as defined in paragraph (5)(A) after application
of the rules of paragraph (5)(B))” for “(as defined in
paragraph (5)(C), after application of rules similar to the rules
of paragraph (5)(D))”.
Subsec. (c)(2)(A)(ii)(II). Pub.
L. 115-141, Sec. 401(d)(6)(B)(ii), amended subclause (II)
by striking “, the New York Liberty Zone business employee credit,”.
Subsec. (c). Pub. L.
115-141, Sec. 401(d)(6)(B)(iii), amended subsec. (c) by
striking par. (3). Before being struck it read as follows:
“(3) Special Rules For New York Liberty Zone
Business Employee Credit.—
“(A) In General.—In the case of the
New York Liberty Zone business employee credit—
“(i) this section and section 39 shall be
applied separately with respect to such credit, and
“(ii) in applying paragraph (1) to such credit—
“(I) the tentative minimum tax shall be treated
as being zero, and
“(II) the limitation under paragraph (1)
(as modified by subclause (I)) shall be reduced by the credit allowed
under subsection (a) for the taxable year (other than the New York
Liberty Zone business employee credit, the eligible small business
credits, and the specified credits).
“(B) New York Liberty Zone Business Employee
Credit.—For purposes of this subsection, the term ‘New
York Liberty Zone business employee credit' means the portion of work
opportunity credit under section 51 determined under section 1400L(a).”
2017 — Subsec. (b). Pub. L. 115-97, Sec. 13403(b), amended subsec.
(b) by striking “plus” at the end of paragraph (35), by
striking the period at the end of paragraph (36) and inserting “,
plus”, and by adding paragraph (37).
Subsec. (c)(4)(B)(ix)–(xi), Pub. L. 115-97, Sec. 13403(c), amended subpar.
(B) by redesignating clauses (ix) through (xi) as clauses (x) through
(xii), respectively, and by adding clause (ix).
Subsec. (c)(6), Pub. L.
115-97, Sec. 12001(b)(1), amended par. (6) by adding subpar.
(E).
2015 — Subsec. (c)(4)(B)(ii)–(x). Pub. L. 114-113, Div. Q, Sec. 121(b), amended
subpar. (B) by redesignating clauses (ii)–(ix) as clauses (iii)–(x),
respectively, and by adding a new clause (ii).
Subsec. (c)(4)(B)(v)–(xi). Pub. L. 114-113, Div. Q, Sec. 186(d)(1),
amended subpar. (B) by redesignating clauses (v)–(x) as clauses
(vi)–(xi), respectively, and by adding a new clause (v).
2014 — Subsec. (b)(35)–(37). Pub. L. 113-295, Div. A, Sec. 209(f)(1),
amended subsec. (b) by striking “plus” at the end of par.
(35), by redesignating par. (36) as par. (37), and by adding a new
par. (36).
Subsec. (b)(35)–(37). Pub. L. 113-295, Div. A, Sec. 221(a)(2)(B),
amended subsec. (b) by inserting “plus” at the end of
par. (35), by striking par. (36), and by redesignating par. (37) as
par. (36). Before being struck, par. (36) read as follows:
“(36) the portion of the qualified plug-in
electric vehicle credit to which section 30(c)(1) applies, plus”.
Subsec. (c)(2)(A). Pub.
L. 113-295, Div. A, Sec. 220(b), amended subpar.
(A) by substituting “credit” for “credit credit”.
Subsec. (d)(3). Pub.
L. 113-295, Div. A, Sec. 221(a)(6), struck par. (3).
Before being struck, par. (3) read as follows:
“(3) Credits No Longer Listed.—For
purposes of this subsection—
“(A) the credit allowable by section 40,
as in effect on the day before the date of the enactment of the Tax
Reform Act of 1984, (relating to expenses of work incentive programs)
and the credit allowable by section 41(a), as in effect on the day
before the date of the enactment of the Tax Reform Act of 1986, (relating
to employee stock ownership credit) shall be treated as referred to
in that order after the last paragraph of subsection (b), and
“(B) the credit determined under section
46—
“(i) to the extent attributable to the employee
plan percentage (as defined in section 46(a)(2)(E) as in effect on
the day before the date of the enactment of the Tax Reform Act of
1984) shall be treated as a credit listed under paragraph (1) of section
46, and
“(ii) to the extent attributable to the regular
percentage (as defined in section 46(b)(1) as in effect on the day
before the date of the enactment of the Revenue Reconciliation Act
of 1990) shall be treated as the first credit listed in section 46.”
2010 — Subsec. (c)(2)(A)(ii)(II). Pub. L. 111-240, Sec. 2013(c)(1),
amended subclause (II) by inserting “the eligible small business
credits,” after “the New York Liberty Zone business employee
credit,”.
Subsec. (c)(3)(A)(ii)(II). Pub. L. 111-240, Sec. 2013(c)(2),
amended subclause (II) by inserting “, the eligible small business
credits,” after “the New York Liberty Zone business employee
credit”.
Subsec. (c)(4)(A)(ii)(II). Pub. L. 111-240, Sec. 2013(c)(3),
amended subclause (II) by inserting “the eligible small business
credits and” before “the specified credits”.
Subsec. (c)(5)–(6). Pub. L. 111-240, Sec. 2013(a), amended
subsec. (c) by redesignating par. (5) as par. (6) and by adding a
new par. (5).
Subsec. (b)(34)–(36). Pub. L. 111-148, Sec. 1421(b), amended
subsec. (b) by striking “plus” at the end of par. (34),
by substituting “, plus” for the period at the end of
par. (35), and by adding par. (36).
Subsec. (c)(4)(B)(vi)–(ix). Pub. L. 111-148, Sec. 1421(c), amended
subpar. (B) by redesignating clause (vi)–(viii) as clause (vii)–(ix),
respectively, and by adding clause (vi).
2009 — Subsec. (b)(35). Pub. L. 111-5, Div. B, Sec. 1141(b)(2),
amended par. (35) by substituting “30D(c)(1)” for “30D(d)(1)”.
2008 — Subsec. (b)(32)–(34). Pub. L. 110-343, Div. B, Sec. 115(b),
amended subsec. (b) by striking the “plus” at the end
of par. (32), by substituting “, plus” for the period
at the end of par. (33), and by adding par. (34).
Subsec. (b)(33)–(35). Pub. L. 110-343, Div. B, Sec. 205(c),
amended subsec. (b) by striking the “plus” at the end
of par. (33), by substituting “, plus” for the period
at the end of par. (34), and by adding par. (35).
Subsec. (c)(4)(B)(v)–(vii). Pub. L. 110-343, Div. B, Sec. 103(b)(1),
amended subpar. (B) by redesignating clauses (v) and (vi) as clauses
(vi) and (vii), respectively, and by adding clause (v). Note that
the Act language read that clause (vi) should be redesignated as clause
(vi) and (vii).
Subsec. (c)(4)(B)(vi). Pub. L. 110-343, Div. B, Sec. 103(b)(1),
amended clause (vi), as redesignated, by substituting “section
46 to the extent that such credit is attributable to the rehabilitation
credit under section 47, but only with respect to” for “section
47 to the extent attributable to”.
Subsec. (c)(4)(B)(v)–(viii). Pub. L. 110-343, Div. C, Sec. 316(b)(1),
amended subpar. (B) by redesignating clauses (v)–(vii) as clauses
(vi)–(viii), respectively, and by adding clause (vi).
Subsec. (c)(4)(B)(ii)–(iv). Pub. L. 110-289, Sec. 3022(b), amended
subpar. (B) by redesignating clauses (ii)–(iv) as clauses (iii)–(v),
respectively, and by adding clause (ii).
Subsec. (c)(4)(B)(iv)–(v). Pub. L. 110-289, Sec. 3022(c), amended
subpar. (B) by striking “and” at the end of clause (iv),
as redesignated, by redesignating clause (v) as clause (vi), and by
adding clause (v).
Subsec. (b). Pub.
L. 110-246, Sec. 15343(b), amended subsec. (b) by
striking “plus” at the end of par. (30); by striking the
period at the end of par. (31) and adding “, plus”; and
by adding par. (32).
Subsec. (b). Pub.
L. 110-245, Sec. 111(b), amended subsec. (b) by striking “plus”
at the end of par. (31); by striking the period at the end of par.
(32) and adding “, plus”; and by adding par. (33).
2007 — Subsec. (b). Pub. L. 110-172, Sec. 11(a)(6),
amended subsec. (b) by striking “and” each place it appeared
at the end of any paragraph; by striking “plus” each place
it appeared at the end of any paragraph; and by adding “plus”
at the end of par. (30).
Subsec. (c)(4)(B). Pub.
L. 110-28, Sec. 8214(a), amended subpar. (B) by striking “and”
at the end of clause (i); by substituting a comma for the period at
the end of clause (ii); and by adding clauses (iii) and (iv).
2006 — Subsec. (b)(29)–(31). Pub. L. 109-432, Sec. 405(b), amended
par. (29) by striking “and” at the end; amended par. (30)
by substituting “, plus” for the period at the end; and
added par. (31).
2005 — Subsec. (b)(25)–(27). Pub. L. 109-135, Sec. 103(b)(1),
amended par. (25) by striking “plus” at the end; amended
par. (26) by substituting “, and” for the period at the
end; and added par. (27).
Subsec. (b)(26)–(30). Pub. L. 109-135, Sec. 201(b)(1),
amended par. (26) by striking “and” at the end; amended
par. (27) by substituting a comma for the period at the end, and added
par. (28), (29), and (30).
Subsec. (c)(2)(A)(ii)(II). Pub. L. 109-135, Sec. 412(f)(1),
amended subclause (II) by substituting “, the New York Liberty
Zone business employee credit, and the specified credits” for “or
the New York Liberty Zone business employee credit or the specified
credits”.
Subsec. (c)(3)(A)(ii)(II). Pub. L. 109-135, Sec. 412(f)(2),
amended subclause (II) by substituting “and the specified credits”
for “or the specified credits”.
Subsec. (c)(4)(B). Pub.
L. 109-135, Sec. 412(f)(3), amended par. (3) by substituting “means”
for “includes” and by inserting “and” at the
end of clause (i).
Subsec. (b)(18)–(20). Pub. L. 109-59, Sec. 11126(b), amended
par. (18) by striking “plus” at the end; amended par.
(19) by substituting “, plus” for the period at the end;
and added par. (20).
Subsec. (b)(19)–(21). Pub. L. 109-58, Sec. 1306(b), amended
par. (19) by striking “plus” at the end; amended par.
(20) by substituting “, plus” for the period at the end;
and added par. (21).
Subsec. (b)(20)–(22). Pub. L. 109-58, Sec. 1322(a)(2),
amended par. (20) by striking “plus” at the end; amended
par. (21) by substituting “, plus” for the period at the
end; and added par. (22).
Subsec. (b)(21)–(23). Pub. L. 109-58, Sec. 1332(b), amended
par. (21) by striking “plus” at the end; amended par.
(22) by substituting “, plus” for the period at the end;
and added par. (23).
Subsec. (b)(22)–(24). Pub. L. 109-58, Sec. 1334(b), amended
par. (22) by striking “plus” at the end; amended par.
(23) by substituting “, plus” for the period at the end;
and added par. (24).
Subsec. (b)(23)–(25). Pub. L. 109-58, Sec. 1341(b)(1),
amended par. (23) by striking “plus” at the end; amended
par. (24) by substituting “, plus” for the period at the
end; and added par. (25).
Subsec. (b)(24)–(26). Pub. L. 109-58, Sec. 1342(b)(1),
amended par. (24) by striking “plus” at the end; amended
par. (24) by substituting “, plus” for the period at the
end; and added par. (26).
2004 — Subsec. (b)(14)–(16). Pub. L. 108-357, Sec. 245(c)(1),
amended par. (14) by striking “plus” at the end; amended
par. (15) by substituting “, plus” for the period at the
end; and added par. (16).
Subsec. (15)–(17). Pub. L. 108-357, Sec. 302(b), amended
par. (15) by striking “plus” at the end; amended par.
(16) by substituting “, plus” for the period at the end;
and added par. (17).
Subsec. (16)–(18). Pub. L. 108-357, Sec. 339(b), amended
par. (16) by striking “plus” at the end; amended par.
(17) by substituting “, plus” for the period at the end;
and added par. (18).
Subsec. (17)–(19). Pub. L. 108-357, Sec. 341(b), amended
par. (17) by striking “plus” at the end; amended par.
(18) by substituting “, plus” for the period at the end;
and added par. (19).
Subsec. (c)(2)(A)(ii)(II). Pub. L. 108-357, Sec. 711(b), amended
subclause (II) by inserting “or the specified credits”
after “employee credit”.
Subsec. (c)(3)(A)(ii)(II). Pub. L. 108-357, Sec. 711(b), amended
subclause (II) by inserting “or the specified credits”
after “employee credit”.
Subsec. (c)(4). Pub.
L. 108-357, Sec. 711(a), redesignated par. (4) as
par. (5) and added par. (4).
2002 — Subsec. (b)(15). Pub. L. 107-147, Sec. 411(d)(2),
amended par. (15) by substituting “45F(a)” for “45F”.
Subsec. (c)(2)(A)(ii)(II). Pub. L. 107-147, Sec. 301(b)(2),
amended subclause (II) by inserting “or the New York Liberty
Zone business employee credit” after “employment credit”.
Subsec. (c)(3)–(4). Pub. L. 107-147, Sec. 301(b)(1),
redesignated par. (3) as par. (4) and added new par. (3).
2001 — Subsec. (b)(12),
(13), (14). Pub. L. 107-16,
Sec. 619(b), amended par. (12) by striking “plus” at the
end; amended par. (13) by substituting “, plus” for “.”;
and added par. (14).
Subsec. (b)(13), (14), (15). Pub. L. 107-16, Sec. 205(b)(1), amended
par. (13) by striking “plus” at the end; amended par.
(14) by substituting “, plus” for “.”; and
added par. (15).
2000 — Subsec. (b)(11),
(12), (13). Pub. L. 106-554,
Sec. 121(b)(1), amended par. (11) by striking “plus” at
the end; amended par. (12) by substituting “, plus” for “.”;
and added par. (13).
1996 — Subsec. (b)(2). Pub. L. 104-188, Sec. 1201(e)(1),
substituted “work opportunity credit” for “targeted
jobs credit”.
Subsec. (b)(10), (11), (12). Pub. L. 104-188, Sec. 1205(a)(2),
struck “plus” at the end of par. (10); substituted “,
plus” for “.” at the end of par. (11); and added
par. (12).
Subsec. (c)(2)(C). Pub.
L. 104-188, Sec. 1702(e)(4), amended (c)(2)(C), as
in effect before the date of the enactment of the Revenue Reconciliation
Act of 1990, by adding “and without regard to the deduction
under section 56(h)” at the end of the first sentence.
1993 — Subsec. (b)(7),
(8), and (9). Pub. L. 103-66,
Section 13302(a)(1) amended subsection (b) by striking “plus”
at the end of paragraph (7), by striking the period at the end of
paragraph (8) and inserting “, and”, and by adding at
the end a new paragraph (9).
Subsec. (b)(8), (9), and (10). Pub. L. 103-66, Section 13322(a)
amended section 38(b) by striking “plus” at the end of
paragraph (8), by striking the period at the end of paragraph (9)
and inserting “, plus”, and by adding after paragraph
(9) a new paragraph (10).
Subsec. (b)(9), (10), and (11). Pub. L. 103-66, Section 13443(b)(1)
amended subsection (b) of section 38 by striking “plus”
at the end of paragraph (9), by striking the period at the end of
paragraph (10) and inserting “, plus”, and by adding at
the end a new paragraph (11).
Subsec. (c). Pub.
L. 103-66, Section 13302(c)(1) amended section 38(c)
by redesignating paragraph (2) as paragraph (3) and by inserting after
paragraph (1) a new paragraph (2).
1992 — Subsec. (b)(8). Pub. L. 102-486, Section 1914(b)
amended Subsection (b) by adding a new paragraph (8).
1990 — Subsec. (b)(1). Pub. L. 101-508, Sec. 11813(b)(2)(A),
substituted “section 46” for “section 46(a)”.
Subsec. (b)(4)–(6). Pub. L. 101-508, Sec. 11511(b)(1),
amended subsec. (b) by striking “plus” at the end of par.
(4), by striking the period at the end of par. (5) and inserting “,
plus”, and by adding at the end thereof new par. (6).
Subsec. (b)(5)–(7). Pub. L. 101-508, Sec. 11611(b)(1),
amended subsec. (b) by striking “plus” at the end of par.
(5), by striking the period at the end of par. (6) and inserting “,
plus”, and by adding at the end thereof new par. (7).
Subsec. (c)(2)–(3). Pub. L. 101-508, Sec. 11813(b)(2)(B),
redesignated par. (3) as (2) and struck out former par. (2) which
read as follows:
“(2) Regular Investment Tax Credit May Offset
25 Percent Of Minimum Tax.—
“(A) In General.—In the case of a C
corporation, the amount determined under paragraph (1)(A) shall be
reduced by the lesser of—
“(i) the portion of the regular investment
tax credit not used against the normal limitation, or
“(ii) 25 percent of the taxpayer's tentative
minimum tax for the taxable year.
“(B) Portion Of Regular Investment Tax Credit
Not Used Against Normal Limit.—For purposes of subparagraph
(A), the portion of the regular investment tax credit for any taxable
year not used against the normal limitation is the excess (if any)
of—
“(i) the portion of the credit under subsection
(a) which is attributable to the application of the regular percentage
under section 46, over
“(ii) the limitation of paragraph (1) (without
regard to this paragraph) reduced by the portion of the credit under
subsection (a) which is not so attributable.
“(C) Limitation.—In no event shall
this paragraph permit the allowance of a credit which would result
in a net chapter 1 tax less than an amount equal to 10 percent of
the amount determined under section 55(b)(1)(A) without regard to
the alternative tax net operating loss deduction. For purposes of
the preceding sentence, the term ‘net chapter 1 tax' means the
sum of the regular tax liability for the taxable year and the tax
imposed by section 55 for the taxable year, reduced by the sum of
the credits allowable under this part for the taxable year (other
than under section 34).”
Subsec. (c)(2)(C). Pub.
L. 101-508, Sec. 11813(b)(2)(C), inserted “(as
in effect on the day before the date of the enactment of the Revenue
Reconciliation Act of 1990)” after “46(e)(1)” and “(as
so in effect)” after “46(e)(2)”.
Subsec. (d). Pub.
L. 101-508, Sec. 11813(b)(2)(D)(i), substituted “any
provision” for “sections 46(f), 47(a), 196(a), and any
other provision” in introductory provisions.
Subsec. (d)(2). Pub.
L. 101-508, Sec. 11813(b)(2)(D)(ii), amended par.
(2) generally. Prior to amendment, par. (2) read as follows: “The
order in which credits attributable to a percentage referred to in
section 46(a) are used shall be determined on the basis of the order
in which such percentages are listed in section 46(a) as of the close
of the taxable year in which the credit is used.”
Subsec. (d)(3)(B). Pub.
L. 101-508, Sec. 11813(b)(2)(D)(iii), amended subpar.
(B) generally. Prior to amendment, subpar. (B) read as follows: “the
employee plan percentage (as defined in section 46(a)(2)(E), as in
effect on the day before the date of the enactment of the Tax Reform
Act of 1984) shall be treated as referred to after section 46(a)(2).”
1988 — Subsec. (c). Pub. L. 100-647, Sec. 1007(g)(2),
amended pars. (1)–(3) generally by substituting pars. (1) and
(2) for former pars. (1), (2), and (3), redesignating par. (4) as
(3), and substituting “subparagraph (B) of paragraph (1)”
for “subparagraphs (A) and (B) of paragraph (1)” in subpars.
(A), (B), (C), and (D) of par. (3) as redesignated. Before amendment,
pars. (1)–(3) read as follows:
“(1) In General.—The credit allowed
under subsection (a) for any taxable year shall not exceed the lesser
of—
“(A) the allowable portion of the taxpayer's
net regular tax liability for the taxable year, or
“(B) the excess (if any) of the taxpayer's
net regular tax liability for the taxable year over the tentative
minimum tax for the taxable year.
“(2) Allowable Portion Of Net Regular Tax
Liability.—For purposes of this subsection, the allowable portion
of the taxpayer's net regular tax liability for the taxable year is
the sum of—
“(A) so much of the taxpayer's net regular
tax liability for the taxable year as does not exceed $25,000, plus
“(B) 75 percent of so much of the taxpayer's
net regular tax liability for the taxable year as exceeds $25,000.
For purposes of the preceding sentence, the term ‘net regular
tax liability' means the regular tax liability reduced by the sum
of the credits allowable under subparts A and B of this part.
“(3) Regular Investment Tax Credit May Offset
25 Percent Of Minimum Tax.—In the case of any C corporation,
to the extent the credit under subsection (a) is attributable to the
application of the regular percentage under section 46, the limitation
of paragraph (1) shall be the greater of—
“(A) the lesser of—
“(i) the allowable portion of the taxpayer's
net regular tax liability for the taxable year, or
“(ii) the excess (if any) of the taxpayer's
net regular tax liability for the taxable year over 75 percent of
the tentative minimum tax for the taxable year, or
“(B) 25 percent of the taxpayer's tentative
minimum tax for the year.
“In no event shall this paragraph permit
the allowance of a credit which (in combination with the alternative
tax net operating loss deduction and the alternative minimum tax foreign
tax credit) would reduce the tax payable under section 55 below an
amount equal to 10 percent of the amount which would be determined
under section 55(b) without regard to the alternative tax net operating
tax deduction and the alternative minimum tax foreign tax credit.”
Pub. L. 100-647,
Sec. 1007(g)(8), made technical correction to directory language of Pub. L. 99-514, Sec. 701(c)(4), see
1986 Amendment note below.
Subsec. (d). Pub.
L. 100-647, Sec. 1002(e)(8)(A), substituted “Ordering
Rules” for “Special Rules For Certain Regulated Companies”
in heading and amended text generally. Prior to amendment, text read
as follows: “In the case of any taxpayer to which section 46(f)
applies, for purposes of sections 46(f), 47(a), and 196(a) and any
other provision of this title where it is necessary to ascertain the
extent to which the credits determined under section 40(a), 41(a),
42(a), 46(a), or 51(a) are used in a taxable year or as a carryback
or carryforward, the order in which such credits are used shall be
determined on the basis of the order in which they are listed in subsection
(b).”
1986 — Pub. L. 99-514, title II, 231(d)(3)(K),
252(d), Oct. 22, 1986, 100 Stat. 2180,
2205, added item 41 relating to credit for increasing research activities
and item 42.
Subsec. (b)(4). Pub.
L. 99-514, Sec. 231(d)(1), added par. (4).
Pub. L. 99-514,
Sec. 1171(b)(1), struck out former par. (4) which read as follows: “the
employee stock ownership credit determined under section 41(a)”.
Subsec. (b)(5). Pub.
L. 99-514, Sec. 252(b)(1), added par. (5).
Subsec. (c). Pub.
L. 99-514, Sec. 701(c)(4), as amended by Pub. L. 100-647, Sec. 1007(g)(8),
added pars. (1) to (3), redesignated former par. (3) as (4), and struck
out former par. (1) “In General”, which provided: “The
credit allowed under subsection (a) for any taxable year shall not
exceed the sum of—(A) so much of the taxpayer's net tax liability
for the taxable year as does not exceed $25,000, plus (B) 75 percent
of so much of the taxpayer's net tax liability for the taxable year
as exceeds $25,000.” and former par. (2) “Net tax liability”,
which provided: “For purposes of paragraph (1), the term ‘net
tax liability’ means the tax liability (as defined in section 26(b)),
reduced by the sum of the credits allowable under subparts A and B
of this part.”
Subsec. (c)(1)(B). Pub.
L. 99-514, Sec. 221(a), substituted “75 percent”
for “85 percent”.
Subsec. (d). Pub.
L. 99-514, Sec. 252(b)(2), inserted “42(a),”.
Pub. L. 99-514,
Sec. 1171(b)(2), substituted “and 196(a)” for “196(a),
and 404(i)” and struck out “41(a),” after “40(a)”.
Pub. L. 99-514,
Sec. 231(d)(3)(B), inserted “41(a),” after “40(a),”.
1984 — Pub. L. 98-369, div. A, title IV,
471(b), July 18, 1984, 98 Stat. 826,
added subpart D heading and analysis of sections for subpart D, consisting
of items 38 (new), 39 (new), 40 (formerly 44E), and 41 (formerly 44G).
Former subpart D was redesignated F.
Subsec. (c)(2). Pub.
L. 98-369, Sec. 612(e)(1), substituted “section
26(b)” for “section 25(b)”.
EFFECTIVE DATE OF 2022 AMENDMENTS
Amendments by Pub. L. 117-328, Div. T, Sec. 112(b), effective
for taxable years beginning after the date of enactment of this Act
[enacted: December 29, 2022].
Amendments by Pub. L.
117-169, Sec. 10101(d), effective for taxable years beginning
after December 31, 2022.
Amendments by Pub. L.
117-169, Sec. 13105(b)(1)(A)–(C), effective for electricity
produced and sold after December 31, 2023, in taxable years beginning
after such date.
Amendments by Pub. L.
117-169, Sec. 13203(b), effective for fuel sold or used
after December 31, 2022.
Amendments by Pub. L.
117-169, Sec. 13204(a)(4)(A)(i)–(iii), effective for
hydrogen produced after December 31, 2022.
Amendments by Pub. L.
117-169, Sec. 13401(i)(3), effective for vehicles placed
in service after December 31, 2022, except as provided in paragraphs
(2), (3), (4), and (5).
Amendments by Pub. L.
117-169, Sec. 13403(b)(1)(A)–(C), effective for vehicles
acquired after December 31, 2022.
Amendments by Pub. L.
117-169, Sec. 13502(b)(1)(A)–(C), effective for components
produced and sold after December 31, 2022.
Amendments by Pub. L.
117-169, Sec. 13701(b)(1)(A)–(C), effective for facilities
placed in service after December 31, 2024.
Amendments by Pub. L.
117-169, Sec. 13704(b)(3)(A)–(C), effective for transportation
fuel produced after December 31, 2024.
EFFECTIVE DATE OF 2019 AMENDMENTS
Amendments by Pub. L.
116-94, Div. O, Sec. 105(b), effective for taxable years
beginning after December 31, 2019.
EFFECTIVE DATE OF 2018 AMENDMENTS
Amendments by Pub.
L. 115-141, Sec. 401(a)(8), (b)(5)(A)(i)–(ii), (5)–(D),
(d)(2)(B), (d)(6)(B)(i)–(iii), effective March 23, 2018.
Sec. 401(d)(6)(C) of Pub.
L. 115-141, Div. U, provided the following savings provision:
“(C) Savings Provisions.—The amendments
made by this paragraph shall not apply to—
“(i) in the case of the repeal of section 1400L(a) of the Internal Revenue Code of
1986, qualified wages (as defined in such section, as in effect before
its repeal) which were paid or incurred before January 1, 2004,
“(ii) in the case of the repeal of subsections
(b) and (f) of section 1400L of such Code, qualified New York Liberty
Zone property (as defined in section 1400L(b) of such Code, as in
effect before its repeal) placed in service before January 1, 2010,
“(iii) in the case of the repeal of section
1400L(c) of such Code, qualified New York Liberty Zone leasehold improvement
property (as defined in such section, as in effect before its repeal)
placed in service before January 1, 2007,
“(iv) in the case of the repeal of section
1400L(d) of such Code, qualified New York Liberty bonds (as defined
in such section, as in effect before its repeal) issued before January
1, 2014,
“(v) in the case of the repeal of section
1400L(e) of such Code, advanced refundings before January 1, 2006,
“(vi) in the case of the repeal of section
1400L(g) of such Code, property which is compulsorily or involuntarily
converted as a result of the terrorist attacks on September 11, 2001,
“(vii) in the case of the repeal of section
1400N(a) of such Code, obligations issued before January 1, 2012,
“(viii) in the case of the repeal of section
1400N(b) of such Code, advanced refundings before January 1, 2011,
“(ix) in the case of the repeal of section
1400N(d) of such Code, property placed in service before January 1,
2012,
“(x) in the case of the repeal of section
1400N(e) of such Code, property placed in service before January 1,
2009,
“(xi) in the case of the repeal of subsections
(f) and (g) of section 1400N of such Code, amounts paid or incurred
before January 1, 2008,
“(xii) in the case of the repeal of section
1400N(h) of such Code, amounts paid or incurred before January 1,
2012,
“(xiii) in the case of the repeal of section
1400N(k)(1)(B) of such Code, losses arising in taxable years beginning
before January 1, 2008,
“(xiv) in the case of the repeal of section
1400N(l) of such Code, bonds issued before January 1, 2007,
“(xv) in the case of the repeal of section
1400Q(a) of such Code, distributions before January 1, 2007,
“(xvi) in the case of the repeal of section
1400Q(b) of such Code, contributions before March 1, 2006,
“(xvii) in the case of the repeal of section
1400Q(c) of such Code, loans made before January 1, 2007,
“(xviii) in the case of the repeal of section
1400R of such Code, wages paid or incurred before January 1, 2006,
“(xix) in the case of the repeal of section
1400S(a) of such Code, contributions paid before January 1, 2006,
“(xx) in the case of the repeal of section
1400T of such Code, financing provided before January 1, 2011, and
“(xxi) in the case of the repeal of part
III of subchapter Y of chapter 1 of such Code, obligations issued
before January 1, 2011.”
Sec. 401(e) of Pub. L.
115-141, Div. U, provided the following savings provision:
“(e) General Savings Provision With Respect
To Deadwood Provisions.—If—
“(1) any provision amended or repealed by
the amendments made by subsection (b) or (d) applied to—
“(A) any transaction occurring before the
date of the enactment of this Act,
“(B) any property acquired before such date
of enactment, or
“(C) any item of income, loss, deduction,
or credit taken into account before such date of enactment, and
“(2) the treatment of such transaction, property,
or item under such provision would (without regard to the amendments
or repeals made by such subsection) affect the liability for tax for
periods ending after such 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 2017 AMENDMENTS
Amendments by Pub. L.
115-97, Sec. 13403(b), (c), effective for wages paid in
taxable years beginning after December 31, 2017.
Amendments by Pub. L.
115-97, Sec. 12001(b)(1), effective for wages paid in taxable
years beginning after December 31, 2017.
EFFECTIVE DATE OF 2015 AMENDMENTS
Amendments by Pub. L.
114-113, Div. Q, Sec. 121(b), effective for credits determined
for taxable years beginning after December 31, 2015.
Amendments by Pub. L.
114-113, Div. Q, Sec. 186(d)(1), effective for credits determined
for taxable years beginning after December 31, 2015.
EFFECTIVE DATE OF 2014 AMENDMENTS
Amendments by Pub.
L. 113-295, Div. A, Sec. 209(f)(1), effective as
if included in the provisions of the American Recovery and Reinvestment
Tax Act of 2009 [Pub. L. 111-5,
Sec. 1142] to which they relate [Effective for vehicles
acquired after Dec. 31, 2009].
Amendment by Pub.
L. 113-295, Div. A, Sec. 220(b), effective on the
date of the enactment of this Act [Enacted: Dec. 19, 2014].
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 2010 AMENDMENTS
Amendments by Sec. 2013(a) of Pub. L. 111-240 effective for credits
determined in taxable years beginning after December 31, 2009, and
to carrybacks of such credits.
Amendments by Sec. 2013(c) of Pub. L. 111-240 effective on the
date of the enactment of this Act [Enacted: Sept. 27, 2010].
Amendments by Sec. 1421(b) of Pub. L. 111-148 effective for amounts
paid or incurred in taxable years beginning after December 31, 2009.
Amendments by Sec. 1421(c) of Pub. L. 111-148 effective for credits
determined under section 45R of the Internal
Revenue Code of 1986 in taxable years beginning after December
31, 2009, and to carrybacks of such credits.
EFFECTIVE DATE OF 2009 AMENDMENT
Amendment by Sec. 1141(b)(2) of Div. B of Pub. L. 111-5 effective for vehicles
acquired after December 31, 2009.
EFFECTIVE DATE OF 2008 AMENDMENTS
Amendments by Sec. 103(b) of Div. B of Pub. L. 110-343 effective for credits
determined under Section 46 of the Internal
Revenue Code of 1986 in taxable years beginning after the
date of the enactment of this Act [Enacted: Oct. 3, 2008] and to carrybacks
of such credits.
Amendments by Sec. 115(b) of Div. B of Pub. L. 110-343 effective for carbon
dioxide captures after the date of the enactment of this Act [Enacted:
Oct. 3, 2008].
Amendments by Sec. 205(c) of Div. B of Pub. L. 110-343 effective for taxable
years beginning after December 31, 2008.
Amendments by Sec. 316(b) of Div. C of Pub. L. 110-343 effective for credits
determined under Section 45G of the Internal
Revenue Code of 1986 in taxable years beginning after December
31, 2007 and to carrybacks of such credits.
Amendments by Sec. 3022(b) of Pub. L. 110-289 effective for credits
determined under section 42 of the Internal
Revenue Code of 1986 to the extent attributable to buildings
placed in service after December 31, 2007.
Amendments by Sec. 3022(c) of Pub. L. 110-289 effective for credits
determined under section 47 of the Internal
Revenue Code of 1986 to the extent attributable to qualified
rehabilitation expenditures properly taken into account for periods
after December 31, 2007.
Amendments by Sec. 111(b) of Pub. L. 110-245 effective for amounts
paid or incurred after the date of the enactment of this Act [Enacted:
June 17, 2008].
Amendments by Sec. 15343(b) of Pub. L. 110-246 effective for amounts
paid or incurred after the date of the enactment of this Act [Effective:
May 22, 2008]. Note that the original provisions of Pub. L. 110-246 were enacted as Pub. L. 110-234 on May 22, 2008,
but were repealed by Pub. L. 110-246,
Sec. 4, effective May 22, 2008. Sec. 4 of Pub. L. 110-246 provided that:
“Sec. 4. Repeal of Duplicative Enactment.
“(a) In General.—The Act entitled ‘An
Act to provide for the continuation of agricultural programs through
fiscal year 2012, and for other purposes’ (H.R. 2419 of the 110th
Congress), and the amendments made by that Act, are repealed, effective
on the date of the enactment of that Act.
“(b) Effective Date.—Except as otherwise
provided in this Act, this Act and the amendments made by this Act
shall take effect on the earlier of—
“(1) the date of enactment of this Act [Enacted:
June 18, 2008]; or
“(2) the date of the enactment of the Act
entitled ‘An Act to provide for the continuation of agricultural programs
through fiscal year 2012, and for other purposes’ (H.R. 2419 of the
110th Congress) [Enacted: May 22, 2008].”
EFFECTIVE DATE OF 2007 AMENDMENTS
Amendments by Sec. 11(a)(6) of Pub. L. 110-172 effective on the
date of the enactment of this Act [Enacted: Dec. 29, 2007].
Amendments by Sec. 8214(a) of Pub. L. 110-28 effective for credits
determined under sections 45B and 51 of
the Internal Revenue Codeof 1986 in taxable years beginning
after December 31, 2006, and to carrybacks of such credit.
EFFECTIVE DATE OF 2006 AMENDMENTS
Amendments by Sec. 405(a) of Pub. L. 109-432 effective for taxable
years beginning after December 31, 2005.
EFFECTIVE DATE OF 2005 AMENDMENTS
Amendments by Sec. 103(b)(1), 201(b)(1), and 412(f)
of Pub. L. 109-135 effective
on the date of the enactment of this Act [Enacted: Dec. 21, 2005].
Section 11126(d) of Pub.
L. 109-59 provided that: “the amendments made
by this section shall apply to taxable years beginning after September
30, 2005.” Section 1151(d)(2) of Pub.
L. 109-59 provided that: “If the Energy Policy
Act of 2005 [Pub. L. 109-58]
is enacted before the date of the enactment of this Act, for purposes
of executing any amendments made by the Energy Policy Act of 2005
to section 38(b) of the Internal Revenue
Code of 1986, the amendments made by section 1126(b) of
this Act shall be treated as having been executed before such amendments
made by the Energy Policy Act of 2005.
Section 1306(d) of Pub.
L. 109-58 provided that: “the amendments made
by this section shall aply to production in taxable years beginning
after the date of the enactment of this Act [Enacted: Aug. 8, 2005].
Section 1322(c)(1) of Pub.
L. 109-58 provided that: “the amendments made
by this section shall apply to credits determined under the Internal
Revenue Code of 1986 for taxable years ending after December 31, 2005.
Section 1332(f) of Pub.
L. 109-58 provided that: “the amendments made
by this section shall apply to qualified new energy efficient homes
acquired after December 31, 2005, in taxable years ending after such
date.
Section 1334(d) of Pub.
L. 109-58 provided that: “the amendments made
by this section shall apply to appliances produced after December
31, 2005.
Section 1341(c) of Pub.
L. 109-58 provided that: “the amendments made
by this section shall apply to property placed in service after December
31, 2005, in taxable years ending after such date.
Section 1342(c) of Pub.
L. 109-58 provided that: “the amendments made
by this section shall apply to property placed in service after December
31, 2005, in taxable years ending after such date.
EFFECTIVE DATE OF 2004 AMENDMENTS
Section 245(e) of Pub.
L. 108-357 provided that: “the amendments made
by this section shall apply to taxable years beginning after December
31, 2004.
Section 339(f) provided that: “the amendments
made by this section shall apply to expenses paid or incurred after
December 31 2002, in taxable years ending after such date.
Section 341(e) provided that: “the amendments
made by this section shall apply to production in taxable years beginning
after December 31, 2004.
Section 711(c) provided that: “the amendments
made by this section shall apply to taxable years ending after the
date of the enactment of this Act [Enacted: Oct. 22, 2004].
EFFECTIVE DATE OF 2002 AMENDMENTS
Section 411(x) of Pub.
L. 107-147 provided that: “the amendments made
by this section shall take effect as if included in the provisions
of the Economic Growth and Tax Relief Reconciliation Act of 2001 [Pub. L. 107-16, Sec. 205] to which
they relate.”
Section 301(b)(3) of Pub.
L. 107-147 provided that: “The amendments made
by this subsection shall apply to taxable years ending after December
31, 2001.”
EFFECTIVE DATE OF 2001 AMENDMENTS
Section 205(c) of Pub.
L. 107-16 provided that: “The amendments made
by this section shall apply to taxable years beginning after December
31, 2001.”
Section 619(d) of Pub.
L. 107-16, as amended by Pub. L. 107-147, Sec. 411(n)(2)
provided that: “The amendments made by this section shall apply
to costs paid or incurred in taxable years beginning after December
31, 2001, with respect to qualified employer plans first effective
after such date.”
Section 901 (Sunset of Provisions of Act) of Pub. L. 107-16, as amended by Pub. L. 107-358 and Pub. L. 111-312, Sec. 101(a),
and struck by Pub. L. 112-240,
Sec. 101(a)(1) (effective for taxable, plan, or limitation
years beginning after Dec. 31, 2012, and estates of decedents dying,
gifts made, or generation skipping transfers after Dec. 31, 2012),
provided that:
“(a) IN GENERAL.—All provisions of,
and amendments made by, this Act shall not apply—
“(1) to taxable, plan,
or limitation years beginning after December 31, 2012, or
“(2) in the case of title
V, to estates of decedents dying, gifts made, or generation skipping
transfers, after December 31, 2012.
“(b) APPLICATION OF CERTAIN LAWS.—The
Internal Revenue Code of 1986 and the Employee Retirement Income Security
Act of 1974 shall be applied and administered to years, estates, gifts,
and transfers described in subsection (a) as if the provisions and
amendments described in subsection (a) had never been enacted.
“(c) EXCEPTION.—Subsection (a) shall
not apply to section 803 (relating to no federal income tax on restitution
received by victims of the Nazi regime or their heirs or estates).”
PENSIONS AND INDIVIDUAL RETIREMENT ARRANGEMENT
PROVISIONS OF ECONOMIC GROWTH AND TAX RELIEF RECONCILIATION ACT OF
2001 MADE PERMANENT
Section 811 of Pub.
L. 109-280 provided that:
“Title IX of the Economic Growth and Tax
Relief Reconciliation Act of 2001 [Pub.
L. 107-16] shall not apply to the provisions of,
and amendments made by, subtitles A through F [Sections 601-666] of
title VI of such Act (relating to pension and individual retirement
arrangement provisions).”
EFFECTIVE DATE OF 2000 AMENDMENTS
Section 121(e) of Pub.
L. 106-554 provided that: “The amendments made
by this section shall apply to investments made after December 31,
2000.”
EFFECTIVE DATE OF 1996 AMENDMENT
Section 1201(g) of Pub.
L. 104-188 provided that: “The amendments made
by this section shall apply to individuals who begin work for the
employer after September 30, 1996.”
Section 1205(e) of Pub.
L. 104-188 provided that: “The amendments made
by this section shall apply to amounts paid or incurred in taxable
years ending after June 30, 1996.”
Section 1702(i) of Pub.
L. 104-188 provided that: “Except as otherwise
expressly provided, any amendment by this section shall take effect
as if included in the provision of the Revenue Reconciliation Act
of 1990 to which such amendment relates.”
EFFECTIVE DATE OF 1993 AMENDMENT
Amendment by section 13302 of Pub. L. 103-66 effective as of the
date of enactment [enacted: Aug. 10, 1993].
Amendment by section 13322(a) of Pub. L. 103-66 applicable to wages
paid or incurred after Dec. 31, 1993.
Amendment by section 13443 of Pub. L. 103-66 applicable with respect
to taxes paid after Dec. 31, 1993, with respect to services performed
before, on, or after such date [as amended by Pub. L. 104-188, Sec. 1112(a)(2)].
EFFECTIVE DATE OF 1992 AMENDMENT
Amendment by section 1914(b) of Pub. L. 102-486 applicable to tax
years ending after December 31, 1992.
EFFECTIVE DATE OF 1990 AMENDMENT
Amendment by section 11511(b)(1) of Pub. L. 101-508 applicable to costs
paid or incurred in taxable years beginning after Dec. 31, 1990, see
section 11511(d)(1) of Pub. L. 101-508,
set out as an Effective Date note under section 43 of this title.
Section 11611(e) of Pub.
L. 101-508 provided that:
“(1) In General.—Except as provided
in paragraph (2), the amendments made by this section (enacting section
44 of this title and amending this section and sections 39 and 190
of this title) shall apply to expenditures paid or incurred after
the date of the enactment of this Act (Nov. 5, 1990).
“(2) Subsection (c).—The amendment
made by subsection (c) (amending section 190 of this title) shall
apply to taxable years beginning after the date of the enactment of
this Act.”
Amendment by section 11813(b)(2) of Pub. L. 101-508 applicable to property
placed in service after Dec. 31, 1990, but not applicable to any transition
property (as defined in section 49(e) of this title), any property
with respect to which qualified progress expenditures were previously
taken into account under section 46(d) of this title, and any property
described in section 46(b)(2)(C) of this title, as such sections were
in effect on Nov. 4, 1990, see section 11813(c) of Pub. L. 101-508, set out as a note
under section 29 of this title.
EFFECTIVE DATE OF 1988 AMENDMENT
Section 1002(e)(8)(C) of Pub. L. 100-647 provided that: “The
amendments made by this paragraph (amending this section and section
49 of this title) shall apply to taxable years beginning after December
31, 1983, and to carrybacks from such years.”
Amendment by section 1007(g)(2), (8) 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.
EFFECTIVE DATE OF 1986 AMENDMENT
Section 221(b) of Pub.
L. 99-514 provided that: “The amendment made
by subsection (a) (amending this section) shall apply to taxable years
beginning after December 31, 1985.”
Amendment by section 231(d)(1), (3)(B) of Pub. L. 99-514 applicable to taxable
years beginning after Dec. 31, 1985, see section 231(g) of Pub. L. 99-514, set out as a note
under section 41 of this title.
Amendment by section 252(b) of Pub. L. 99-514 applicable to buildings
placed in service after Dec. 31, 1986, in taxable years ending after
such date, see section 252(e) of Pub.
L. 99-514, set out as an Effective Date note under
section 42 of this title.
Amendment by section 701(c)(4) of Pub. L. 99-514 applicable to taxable
years beginning after Dec. 31, 1986, with certain exceptions and qualifications,
see section 701(f) of Pub. L. 99-514,
set out as an Effective Date note under section 55 of this title.
Section 1171(c) of Pub.
L. 99-514 provided that:
“(1) In General.—Except as provided
in paragraph (2), the amendments made by this section (amending this
section and sections 56, 108, 401, and 404 of this title and repealing
sections 41 and 6699 of this title) shall apply to compensation paid
or accrued after December 31, 1986, in taxable years ending after
such date.
“(2) Sections 404(i) And 6699 To Continue
To Apply To Pre-1987 Credits.—The provisions of sections 404(i)
and6699 of the Internal Revenue Code of
1986 shall continue to apply with respect to credits under section
41 of such Code attributable to compensation paid or accrued before
January 1, 1987 (or under section 38 of such Code with respect to
qualified investment before January 1, 1983).”
EFFECTIVE DATE OF 1984 AMENDMENT
Amendment by Pub.
L. 98-369 applicable to interest paid or accrued
after December 31, 1984, on indebtedness incurred after December 31,
1984, see section 612(g) of Pub. L.
98-369, set out as an Effective Date note under section
25 of this title.
EFFECTIVE DATE
Section applicable to taxable years beginning after
Dec. 31, 1983, and to carrybacks from such years, see section 475(a)
of Pub. L. 98-369,
set out as an Effective Date of 1984 Amendment note under section
21 of this title.
EMPLOYEE RETENTION CREDIT FOR EMPLOYERS AFFECTED
BY QUALIFIED DISASTERS.
Section 303 of Pub. L.
116-260, Div. EE, provided:
“(a) IN GENERAL.—For purposes of section 38 of the Internal Revenue Code of
1986, in the case of an eligible employer, the 2020 qualified disaster
employee retention credit shall be treated as a credit listed at the
end of subsection (b) of such section. For purposes of this subsection,
the 2020 qualified disaster employee retention credit for any taxable
year is an amount equal to 40 percent of the qualified wages with
respect to each eligible employee of such employer for such taxable
year. The amount of qualified wages with respect to any employee which
may be taken into account under this subsection by the employer for
any taxable year shall not exceed $6,000 (reduced by the amount of
qualified wages with respect to such employee taken into account for
any prior taxable year).
“(b) DEFINITIONS.—For purposes of this
section—
“(1) ELIGIBLE EMPLOYER.—The term ‘eligible
employer’ means any employer—
“(A) which conducted an active trade or business
in a qualified disaster zone at any time during the incident period
of the qualified disaster with respect to such qualified disaster
zone, and
“(B) with respect to whom the trade or business
described in subparagraph (A) is inoperable at any time during the
period beginning on the first day of the incident period of such qualified
disaster and ending on the date of the enactment of this Act, as a
result of damage sustained by reason of such qualified disaster.
“(2) ELIGIBLE EMPLOYEE.—The term ‘eligible
employee’ means with respect to an eligible employer an employee
whose principal place of employment with such eligible employer (determined
immediately before the qualified disaster referred to in paragraph
(1)) was in the qualified disaster zone referred to in such paragraph.
“(3) QUALIFIED WAGES.—The term ‘qualified
wages’ means wages (as defined in section
51(c)(1) of the Internal Revenue Code of 1986, but without
regard to section 3306(b)(2)(B) of such Code) paid or incurred by
an eligible employer with respect to an eligible employee at any time
on or after the date on which the trade or business described in paragraph
(1) first became inoperable at the principal place of employment of
the employee (determined immediately before the qualified disaster
referred to in such paragraph) and before the earlier of—
“(A) the date on which such trade or business
has resumed significant operations at such principal place of employment,
or
“(B) the date which is 150 days after the
last day of the incident period of the qualified disaster referred
to in paragraph (1).
“Such term shall include wages paid without
regard to whether the employee performs no services, performs services
at a different place of employment than such principal place of employment,
or performs services at such principal place of employment before
significant operations have resumed. Such term shall not include any
wages taken into account under section 2301 of the CARES Act.
“(c) SPECIAL RULES.—
“(1) DENIAL OF DOUBLE BENEFIT.—Any
wages taken into account in determining any credit allowed under this
section shall not be taken into account as wages for purposes of sections 41, 45A, 45P, 45S, 51, and 1396
of the Internal Revenue Codeof 1986.
“(2) CERTAIN OTHER RULES TO APPLY.—For
purposes of this section, rules similar to the rules of sections 51(i)(1), 52,
and 280C(a) of the Internal
Revenue Code of 1986 shall apply.
“(d) PAYROLL TAX CREDIT FOR CERTAIN TAX-EXEMPT
ORGANIZATIONS.—
“(1) IN GENERAL.—In the case of any
qualified tax-exempt organization, there shall be allowed as a credit
against the tax imposed by section
3111(a) of the Internal Revenue Code of 1986 on wages paid
with respect to employment of all employees of the organization during
the calendar quarter an amount equal to 40 percent of the qualified
wages paid to eligible employees of such organization during such
calendar quarter.
“(2) APPLICATION OF AGGREGATE DOLLAR LIMITATION
PER EMPLOYEE.—The amount of qualified wages with respect to
any employee which may be taken into account under this subsection
by the employer for any calendar quarter shall not exceed $6,000 (reduced
by the amount of qualified wages with respect to which credit was
allowed under this subsection for any prior calendar quarter with
respect to such employee).
“(3) OVERALL LIMITATION.—
“(A) IN GENERAL.—The aggregate amount
allowed as a credit under this subsection for all eligible employees
of any employer for any calendar quarter shall not exceed the amount
of the tax imposed by section 3111(a)
of the Internal Revenue Code of 1986 on wages paid with
respect to employment of all employees of such employer during such
calendar quarter (reduced by any credits allowed under subsections
(e) and (f) of section 3111 of such Code for such quarter).
“(B) CARRYFORWARD.—If the amount of
the credit under paragraph (1) exceeds the limitation of subparagraph
(A) for any calendar quarter, such excess shall be carried to the
succeeding calendar quarter and allowed as a credit under paragraph
(1) for such quarter.”
EMPLOYEE RETENTION CREDIT FOR EMPLOYERS AFFECTED
BY QUALIFIED DISASTERS
Section 203 of Pub. L.
116-94, Div. Q, provided:
“(a) IN GENERAL.—For purposes of section 38 of the Internal Revenue Code of
1986, in the case of an eligible employer, the 2018 through 2019 qualified
disaster employee retention credit shall be treated as a credit listed
at the end of subsection (b) of such section. For purposes of this
subsection, the 2018 through 2019 qualified disaster employee retention
credit for any taxable year is an amount equal to 40 percent of the
qualified wages with respect to each eligible employee of such employer
for such taxable year. The amount of qualified wages with respect
to any employee which may be taken into account under this subsection
by the employer for any taxable year shall not exceed $6,000 (reduced
by the amount of qualified wages with respect to such employee which
may be so taken into account for any prior taxable year).
“(b) DEFINITIONS.—For purposes of this
section—
“(1) ELIGIBLE EMPLOYER.—The term ‘eligible
employer' means any employer—
“(A) which conducted an active trade or business
in a qualified disaster zone at any time during the incident period
of the qualified disaster with respect to such qualified disaster
zone, and
“(B) with respect to whom the trade or business
described in subparagraph (A) is inoperable at any time during the
period beginning on the first day of the incident period of such qualified
disaster and ending on the date of the enactment of this Act, as a
result of damage sustained by reason of such qualified disaster.
“(2) ELIGIBLE EMPLOYEE.—The term ‘eligible
employee' means with respect to an eligible employer an employee whose
principal place of employment with such eligible employer (determined
immediately before the qualified disaster referred to in paragraph
(1)) was in the qualified disaster zone referred to in such paragraph.
“(3) QUALIFIED WAGES.—The term ‘qualified
wages' means wages (as defined in section
51(c)(1) of the Internal Revenue Code of 1986, but without
regard to section 3306(b)(2)(B) of such Code) paid or incurred by
an eligible employer with respect to an eligible employee at any time
on or after the date on which the trade or business described in paragraph
(1) first became inoperable at the principal place of employment of
the employee (determined immediately before the qualified disaster
referred to in such paragraph) and before the earlier of—
“(A) the date on which such trade or business
has resumed significant operations at such principal place of employment,
or
“(B) the date which 150 days after the last
day of the incident period of the qualified disaster referred to in
paragraph (1).
Such term shall include wages paid without regard
to whether the employee performs no services, performs services at
a different place of employment than such principal place of employment,
or performs services at such principal place of employment before
significant operations have resumed.
“(c) CERTAIN RULES TO APPLY.—For purposes
of this section, rules similar to the rules of sections 51(i)(1),
52, and 280C(a), of the Internal Revenue Code of 1986, shall apply.
“(d) EMPLOYEE NOT TAKEN INTO ACCOUNT MORE
THAN ONCE.—An employee shall not be treated as an eligible employee
for purposes of this section for any period with respect to any employer
if such employer is allowed a credit under section
51 of the Internal Revenue Code of 1986 with respect to
such employee for such period.”
DISASTER-RELATED EMPLOYMENT RELIEF
Section 503 of Pub.
L. 115-63 provided:
“(a) EMPLOYEE RETENTION CREDIT FOR EMPLOYERS
AFFECTED BY HURRICANE HARVEY.—
“(1) IN GENERAL.—For purposes of section 38 of the Internal Revenue Code of
1986, in the case of an eligible employer, the Hurricane Harvey employee
retention credit shall be treated as a credit listed in subsection
(b) of such section. For purposes of this subsection, the Hurricane
Harvey employee retention credit for any taxable year is an amount
equal to 40 percent of the qualified wages with respect to each eligible
employee of such employer for such taxable year. For purposes of the
preceding sentence, the amount of qualified wages which may be taken
into account with respect to any individual shall not exceed $6,000.
“(2) DEFINITIONS.—For purposes of this
subsection—
“(A) ELIGIBLE EMPLOYER.—The term ‘eligible
employer' means any employer—
“(i) which conducted an active trade or business
on August 23, 2017, in the Hurricane Harvey disaster zone, and
“(ii) with respect to whom the trade or business
described in clause (i) is inoperable on any day after August 23,
2017, and before January 1, 2018, as a result of damage sustained
by reason of Hurricane Harvey.
“(B) ELIGIBLE EMPLOYEE.—The term ‘eligible
employee' means with respect to an eligible employer an employee whose
principal place of employment on August 23, 2017, with such eligible
employer was in the Hurricane Harvey disaster zone.
“(C) QUALIFIED WAGES.—The term ‘qualified
wages' means wages (as defined in section
51(c)(1) of the Internal Revenue Code of 1986, but without
regard to section 3306(b)(2)(B) of such Code) paid or incurred by
an eligible employer with respect to an eligible employee on any day
after August 23, 2017, and before January 1, 2018, which occurs during
the period—
“(i) beginning on the date on which the trade
or business described in subparagraph (A) first became inoperable
at the principal place of employment of the employee immediately before
Hurricane Harvey, and
“(ii) ending on the date on which such trade
or business has resumed significant operations at such principal place
of employment.
“Such term shall include wages paid without
regard to whether the employee performs no services, performs services
at a different place of employment than such principal place of employment,
or performs services at such principal place of employment before
significant operations have resumed.
“(3) CERTAIN RULES TO APPLY.—For purposes
of this subsection, rules similar to the rules of sections 51(i)(1)
and 52, of the Internal Revenue Code of 1986, shall apply.
“(4) EMPLOYEE NOT TAKEN INTO ACCOUNT MORE
THAN ONCE.—An employee shall not be treat as an eligible employee
for purposes of this subsection for any period with respect to any
employer if such employer is allowed a credit under section 51 of the Internal Revenue Code of
1986 with respect to such employee for such period.
“(b) EMPLOYEE RETENTION CREDIT FOR EMPLOYERS
AFFECTED BY HURRICANE IRMA.—
“(1) IN GENERAL.—For purposes of section 38 of the Internal Revenue Code of
1986, in the case of an eligible employer, the Hurricane Irma employee
retention credit shall be treated as a credit listed in subsection
(b) of such section. For purposes of this subsection, the Hurricane
Irma employee retention credit for any taxable year is an amount equal
to 40 percent of the qualified wages with respect to each eligible
employee of such employer for such taxable year. For purposes of the
preceding sentence, the amount of qualified wages which may be taken
into account with respect to any individual shall not exceed $6,000.
“(2) DEFINITIONS.—For purposes of this
subsection—
“(A) ELIGIBLE EMPLOYER.—The term ‘eligible
employer' means any employer—
“(i) which conducted an active trade or business
on September 4, 2017, in the Hurricane Irma disaster zone, and
“(ii) with respect to whom the trade or business
described in clause (i) is inoperable on any day after September 4,
2017, and before January 1, 2018, as a result of damage sustained
by reason of Hurricane Irma.
“(B) ELIGIBLE EMPLOYEE.—The term ‘eligible
employee' means with respect to an eligible employer an employee whose
principal place of employment on September 4, 2017, with such eligible
employer was in the Hurricane Irma disaster zone.
“(C) QUALIFIED WAGES.—The term ‘qualified
wages' means wages (as defined in section
51(c)(1) of the Internal Revenue Code of 1986, but without
regard to section 3306(b)(2)(B) of such Code) paid or incurred by
an eligible employer with respect to an eligible employee on any day
after September 4, 2017, and before January 1, 2018, which occurs
during the period—
“(i) beginning on the date on which the trade
or business described in subparagraph (A) first became inoperable
at the 6 principal place of employment of the employee immediately
before Hurricane Irma, and
“(ii) ending on the date on which such trade
or business has resumed significant operations at such principal place
of employment.
“Such term shall include wages paid without
regard to whether the employee performs no services, performs services
at a different place of employment than such principal place of employment,
or performs services at such principal place of employment before
significant operations have resumed.
“(3) CERTAIN RULES TO APPLY.—For purposes
of this subsection, rules similar to the rules of sections 51(i)(1)
and 52, of the Internal Revenue Code of 1986, shall apply.
“(4) EMPLOYEE NOT TAKEN INTO ACCOUNT MORE
THAN ONCE.—An employee shall not be treated as an eligible employee
for purposes of this subsection for any period with respect to any
employer if such employer is allowed a credit under subsection (a),
or section 51 of the Internal Revenue Code of
1986, with respect to such employee for such period.
“(c) EMPLOYEE RETENTION CREDIT FOR EMPLOYERS
AFFECTED BY HURRICANE MARIA.—
“(1) IN GENERAL.—For purposes of section 38 of the Internal Revenue Code of
1986, in the case of an eligible employer, the Hurricane Maria employee
retention credit shall be treated as a credit listed in subsection
(b) of such section. For purposes of this subsection, the Hurricane
Maria employee retention credit for any taxable year is an amount
equal to 40 percent of the qualified wages with respect to each eligible
employee of such employer for such taxable year. For purposes of the
preceding sentence, the amount of qualified wages which may be taken
into account with respect to any individual shall not exceed $6,000.
“(2) DEFINITIONS.—For purposes of this
subsection—
“(A) ELIGIBLE EMPLOYER.—The term ‘eligible
employer' means any employer—
“(i) which conducted an active trade or business
on September 16, 2017, in the Hurricane Maria disaster zone, and
“(ii) with respect to whom the trade or business
described in clause (i) is inoperable on any day after September 16,
2017, and before January 1, 2018, as a result of damage sustained
by reason of Hurricane Maria.
“(B) ELIGIBLE EMPLOYEE.—The term ‘eligible
employee' means with respect to an eligible employer an employee whose
principal place of employment on September 16, 2017, with such eligible
employer was in the Hurricane Maria disaster zone. 1
“(C) QUALIFIED WAGES.—The term ‘qualified
wages' means wages (as defined in section
51(c)(1) of the Internal Revenue Code of 1986, but without
regard to section 3306(b)(2)(B) of such Code) paid or incurred by
an eligible employer with respect to an eligible employee on any day
after September 16, 2017, and before January 1, 2018, which occurs
during the period—
“(i) beginning on the date on which the trade
or business described in subparagraph (A) first became inoperable
at the principal place of employment of the employee immediately before
Hurricane Maria, and
“(ii) ending on the date on which such trade
or business has resumed significant operations at such principal place
of employment.
“Such term shall include wages paid without
regard to whether the employee performs no services, performs services
at a different place of employment than such principal place of employment,
or performs services at such principal place of employment before
significant operations have resumed.
“(3) CERTAIN RULES TO APPLY.—For purposes
of this subsection, rules similar to the rules of sections 51(i)(1)
and 52, of the Internal Revenue Code of 1986, shall apply.
“(4) EMPLOYEE NOT TAKEN INTO ACCOUNT MORE
THAN ONCE.—An employee shall not be treated as an eligible employee
for purposes of this subsection for any period with respect to any
employer if such employer is allowed a credit under subsection (a)
or (b), or section 51 of the Internal Revenue
Code of 1986, with respect to such employee for such period.”
BUSINESS CREDIT FOR RETENTION OF CERTAIN NEWLY
HIRED INDIVIDUALS IN 2010
Section 102 of Pub.
L. 111-147 provided that:
“(a) IN GENERAL.—In the case of any
taxable year ending after the date of the enactment of this Act, the
current year business credit determined under section 38(b) of the Internal Revenue Code of
1986 for such taxable year shall be increased, with respect to each
retained worker with respect to which subsection (b)(2) is first satisfied
during such taxable year, by the lesser of—
“(1) $1,000, or
“(2) 6.2 percent of the wages (as defined
in section 3401(a)) paid by the taxpayer to such retained worker during
the 52 consecutive week period referred to in subsection (b)(2).
“(b) RETAINED WORKER.—For purposes
of this section, the term ‘retained worker' means any qualified
individual (as defined in section 3111(d)(3) or section 3221(c)(3) of the Internal Revenue
Code of 1986)—
“(1) who was employed by the taxpayer on
any date during the taxable year,
“(2) who was so employed by the taxpayer
for a period of not less than 52 consecutive weeks, and
“(3) whose wages (as defined in section 3401(a))
for such employment during the last 26 weeks of such period equaled
at least 80 percent of such wages for the first 26 weeks of such period.
“(c) LIMITATION ON CARRYBACKS.—No portion
of the unused business credit under section
38 of the Internal Revenue Code of 1986 for any taxable
year which is attributable to the increase in the current year business
credit under this section may be carried to a taxable year beginning
before the date of the enactment of this section.
“ (d) TREATMENT OF POSSESSIONS.—
“(1) PAYMENTS TO POSSESSIONS.—
“(A) MIRROR CODE POSSESSIONS.—The Secretary
of the Treasury shall pay to each possession of the United States
with a mirror code tax system amounts equal to the loss to that possession
by reason of the application of this section (other than this subsection).
Such amounts shall be determined by the Secretary of the Treasury
based on information provided by the government of the respective
possession.
“(B) OTHER POSSESSIONS.—The Secretary
of the Treasury shall pay to each possession of the United States
which does not have a mirror code tax system amounts estimated by
the Secretary of the Treasury as being equal to the aggregate benefits
that would have been provided to residents of such possession by reason
of the application of this section (other than this subsection) if
a mirror code tax system had been in effect in such possession. The
preceding sentence shall not apply with respect to any possession
of the United States unless such possession has a plan, which has
been approved by the Secretary of the Treasury, under which such possession
will promptly distribute such payments to the residents of such possession.
“(2) COORDINATION WITH CREDIT ALLOWED AGAINST
UNITED STATES INCOME TAXES.—No increase in the credit determined
under section 38(b) of the Internal Revenue
Code of 1986 against United States income taxes for any
taxable year determined under subsection (a) shall be taken into account
with respect to any person—
“(A) to whom a credit is allowed against
taxes imposed by the possession by reason of this section for such
taxable year, or
“(B) who is eligible for a payment under
a plan described in paragraph (1)(B) with respect to such taxable
year.
“(3) DEFINITIONS AND SPECIAL RULES.—
“(A) POSSESSION OF THE UNITED STATES.—For
purposes of this subsection, the term ‘possession of the United
States' includes the Commonwealth of Puerto Rico and the Commonwealth
of the Northern Mariana Islands.
“(B) MIRROR CODE TAX SYSTEM.—For purposes
of this subsection, the term ‘mirror code tax system' means,
with respect to any possession of the United States, the income tax
system of such possession if the income tax liability of the residents
of such possession under such system is determined by reference to
the income tax laws of the United States as if such possession were
the United States.
“(C) TREATMENT OF PAYMENTS.—For purposes
of section 1324(b)(2) of title 31, United States Code, rules similar
to the rules of section 1001(b)(3)(C) of the American Recovery and
Reinvestment Tax Act of 2009 shall apply.”
EMPLOYEE RETENTION CREDIT FOR EMPLOYERS AFFECTED
BY HURRICANE KATRINA
Section 202 of Pub.
L. 109-73, before repeal by Pub. L. 109-135, Sec. 201(b)(4)
(effective Dec. 21, 2005), provided that:
“(a) IN GENERAL.—In the case of an
eligible employer, there shall be allowed as a credit against the
tax imposed by chapter 1 of the Internal
Revenue Code of 1986 for the taxable year an amount equal
to 40 percent of the qualified wages with respect to each eligible
employee of such employer for such taxable year. For purposes of the
preceding sentence, the amount of qualified wages which may be taken
into account with respect to any individual shall not exceed $6,000.
“(b) DEFINITIONS.—For purposes of this
section—
“(1) ELIGIBLE EMPLOYER.—The term ‘eligible
employer' means any employer—
“(A) which conducted an active trade or business
on August 28, 2005, in a core disaster area, and
“(B) with respect to whom the trade or business
described in subparagraph (A) is inoperable on any day after August
28, 2005, and before January 1, 2006, as a result of damage sustained
by reason of Hurricane Katrina.
“(2) ELIGIBLE EMPLOYEE.—The term ‘eligible
employee' means with respect to an eligible employer an employee whose
principal place of employment on August 28, 2005, with such eligible
employer was in a core disaster area.
“(3) QUALIFIED WAGES.—The term ‘qualified
wages' means wages (as defined in section 51(c)(1) of such Code, but
without regard to section 3306(b)(2)(B) of such Code) paid or incurred
by an eligible employer with respect to an eligible employee on any
day after August 28, 2005, and before January 1, 2006, which occurs
during the period—
“(A) beginning on the date on which the trade
or business described in paragraph (1) first became inoperable at
the principal place of employment of the employee immediately before
Hurricane Katrina, and
“(B) ending on the date on which such trade
or business has resumed significant operations at such principal place
of employment.
“Such term shall include wages paid without
regard to whether the employee performs no services, performs services
at a different place of employment than such principal place of employment,
or performs services at such principal place of employment before
significant operations have resumed.
“(c) CREDIT NOT ALLOWED FOR LARGE BUSINESSES.—The
term ‘eligible employer' shall not include any trade or business
for any taxable year if such trade or business employed an average
of more than 200 employees on business days during the taxable year.
“(d) CERTAIN RULES TO APPLY.—For purposes
of this section, rules similar to the rules of sections 51(i)(1),
52, and 280C(a) of such Code shall apply.
“(e) EMPLOYEE NOT TAKEN INTO ACCOUNT MORE
THAN ONCE.—An employee shall not be treated as an eligible employee
for purposes of this section for any period with respect to any employer
if such employer is allowed a credit under section 51 of such Code
with respect to such employee for such period.
“(f) CREDIT TO BE PART OF GENERAL BUSINESS
CREDIT.—The credit allowed under this section shall be added
to the current year business credit under section 38(b) of such Code
and shall be treated as a credit allowed under subpart D of part IV
of subchapter A of chapter 1 of such Code.”
CREDIT FOR CONTRIBUTIONS TO CERTAIN COMMUNITY
DEVELOPMENT CORPORATIONS
Section 13311 of Pub.
L. 103-66 provides:
“(a) IN GENERAL.—For purposes of section 38 of the Internal Revenue Code of
1986, the current year business credit shall include the credit determined
under this section.
“(b) DETERMINATION OF CREDIT.—The credit
determined under this section for each taxable year in the credit
period with respect to any qualified CDC contribution made by the
taxpayer is an amount equal to 5 percent of such contribution.
“(c) CREDIT PERIOD.—For purposes of
this section, the credit period with respect to any qualified CDC
contribution is the period of 10 taxable years beginning with the
taxable year during which such contribution was made.
“(d) QUALIFIED CDC CONTRIBUTION.—For
purposes of this section —
“(1) IN GENERAL.—The term ‘qualified
CDC contribution' means any transfer of cash —
“(A) which is made to a selected community
development corporation during the 5-year period beginning on the
date such corporation was selected for purposes of this section,
“(B) the amount of which is available for
use by such corporation for at least 10 years,
“(C) which is to be used by such corporation
for qualified low-income assistance within its operational area, and
“(D) which is designated by such corporation
for purposes of this section.
“(2) LIMITATIONS ON AMOUNT DESIGNATED.—The
aggregate amount of contributions to a selected community development
corporation which may be designated by such corporation shall not
exceed $2,000,000.
“(e) SELECTED COMMUNITY DEVELOPMENT CORPORATIONS. —
“(1) IN GENERAL.—For purposes of this
section, the term ‘selected community development corporation'
means any corporation —
“(A) which is described in section 501(c)(3)
of such Code and exempt from tax under section 501(a) of such Code,
“(B) the principal purposes of which include
promoting employment of, and business opportunities for, low-income
individuals who are residents of the operational area, and
“(C) which is selected by the Secretary of
Housing and Urban Development for purposes of this section.
“(2) ONLY 20 CORPORATIONS MAY BE SELECTED.—The
Secretary of Housing and Urban Development may select 20 corporations
for purposes of this section, subject to the availability of eligible
corporations. Such selections may be made only before July 1, 1994.
At least 8 of the operational areas of the corporations selected must
be rural areas (as defined by section 1393(a)(3) of such Code).
“(3) OPERATIONAL AREAS MUST HAVE CERTAIN
CHARACTERISTICS.—A corporation may be selected for purposes
of this section only if its operational area meets the following criteria:
“(A) The area meets the size requirements
under section 1392(a)(3).
“(B) The unemployment rate (as determined
by the appropriate available data) is not less than the national unemployment
rate.
“(C) The median family income of residents
of such area does not exceed 80 percent of the median gross income
of residents of the jurisdiction of the local government which includes
such area.
“(f) QUALIFIED LOW-INCOME ASSISTANCE.—For
purposes of this section, the term ‘qualified low-income assistance'
means assistance —
“(1) which is designed to provide employment
of, and business opportunities for, low-income individuals who are
residents of the operational area of the community development corporation,
and
“(2) which is approved by the Secretary of
Housing and Urban Development.”
SAVINGS PROVISION
For provisions that nothing in amendment by section
11813(b)(2) of Pub. L. 101-508 be
construed to affect treatment of certain transactions occurring, property
acquired, or items of income, loss, deduction, or credit taken into
account prior to Nov. 5, 1990, for purposes of determining liability
for tax for periods ending after Nov. 5, 1990, see section 11821(b)
of Pub. L. 101-508,
set out as a note under section 29 of this title.
APPLICABILITY OF CERTAIN AMENDMENTS BY PUBLIC
LAW 99-514 IN RELATION TO TREATY OBLIGATIONS OF UNITED STATES
For applicability of amendment by section 701(c)(4)
of Pub. L. 99-514 notwithstanding
any treaty obligation of the United States in effect on Oct. 22, 1986,
with provision that for such purposes any amendment by title I of Pub. L. 100-647 be treated as if
it had been included in the provision of Pub.
L. 99-514 to which such amendment relates, see section
1012(aa)(2), (4) of Pub. L. 100-647,
set out as a note under section 861 of this title.
EFFECTIVE 15-YEAR CARRYBACK OF EXISTING CARRYFORWARDS
OF STEEL COMPANIES
Section 212 of Pub.
L. 99-514, as amended by Pub. L. 100-647, title I, Sec. 1002(f),
Nov. 10, 1988, 102 Stat. 3369,
provided that:
“(a) General Rule.—If a qualified corporation
makes an election under this section for its 1st taxable year beginning
after December 31, 1986, with respect to any portion of its existing
carryforwards, the amount determined under subsection (b) shall be
treated as a payment against the tax imposed by chapter 1 of the Internal Revenue Code of 1986
made by such corporation on the last day prescribed by law (without
regard to extensions) for filing its return of tax under chapter 1
of such Code for such 1st taxable year.
“(b) Amount.—For purposes of subsection
(a), the amount determined under this subsection shall be the lesser
of—
“(1) 50 percent of the portion of the corporation's
existing carryforwards to which the election under subsection (a)
applies, or
“(2) the corporation's net tax liability
for the carryback period.
“(c) Corporation Making Election May Not
Use Same Amounts Under Section 38.—In the case of a qualified
corporation which makes an election under subsection (a), the portion
of such corporation's existing carryforwards to which such an election
applies shall not be taken into account under section
38 of the Internal Revenue Code of 1986 for any taxable
year beginning after December 31, 1986.
“(d) Net Tax Liability for Carryback Period.—For
purposes of this section—
“(1) In General.—A corporation's net
tax liability for the carryback period is the aggregate of such corporation's
net tax liability for taxable years in the carryback period.
“(2) Net Tax Liability.—The term ‘net
tax liability’ means, with respect to any taxable year, the amount
of the tax imposed by chapter 1 of the Internal
Revenue Code of 1954 (now 1986) for such taxable year,
reduced by the sum of the credits allowable under part IV of subchapter
A of such chapter 1 (other than section 34 thereof). For purposes
of the preceding sentence, any tax treated as not imposed by chapter
1 of such Code under section 26(b)(2) of such Code shall not be treated
as tax imposed by such chapter 1.
“(3) Carryback Period.—The term ‘carryback
period’ means the period —
“(A) which begins with the corporation's
15th taxable year preceding the 1st taxable year from which there
is an unused credit included in such corporation's existing carryforwards
(but in no event shall such period begin before the corporation's
1st taxable year ending after December 31, 1961), and
“(B) which ends with the corporation's last
taxable year beginning before January 1, 1986.
“(e) No Recomputation of Minimum Tax, Etc.—Nothing
in this section shall be construed to affect —
“(1) the amount of the tax imposed by section 56 of the Internal Revenue Code of
1986, or
“(2) the amount of any credit allowable under
such Code, for any taxable year in the carryback period.
“(f) Reinvestment Requirement.—
“(1) In General.—Any amount determined
under this section must be committed to reinvestment in, and modernization
of the steel industry through investment in modern plant and equipment,
research and development, and other appropriate projects, such as
working capital for steel operations and programs for the retraining
of steel workers.
“(2) Special Rule.—In the case of the
LTV Corporation, in lieu of the requirements of paragraph (1) —
“(A) such corporation shall place such refund
in a separate account; and
“(B) amounts in such separate account —
“(i) shall only be used by the corporation —
“(I) to purchase an insurance policy which
provides that, in the event the corporation becomes involved in a
title 11 or similar case (as defined in section 368(a)(3)(A) of the Internal Revenue
Code of 1954 (now 1986)), the insurer will provide life
and health insurance coverage during the 1-year period beginning on
the date when the corporation receives the refund to any individual
with respect to whom the corporation would (but for such involvement)
have been obligated to provide such coverage the coverage provided
by the insurer will be identical to the coverage which the corporation
would (but for such involvement) have been obligated to provide, and
provides that the payment of insurance premiums will not be required
during such 1-year period to keep such policy in force, or
“(II) directly in connection with the trade
or business of the corporation in the manufacturer or production of
steel; and
“(ii) shall be used (or obligated) for purposes
described in clause (i) not later than 3 months after the corporation
receives the refund.
“(3) In the case of a qualified corporation,
no offset to any refund under this section may be made by reason of
any tax imposed by section 4971 of the
Internal Revenue Code of 1986 (or any interest or penalty
attributable to any such tax), and the date on which any such refund
is to be paid shall be determined without regard to such corporation's
status under title 11, United States Code.
“(g) Definitions.—For purposes of this
section —
“(1) Qualified Corporation.—
“(A) In General.—The term ‘qualified
corporation’ means any corporation which is described in section 806(b)
of the Steel Import Stabilization Act (19
U.S.C. 2253 note) and a company which was incorporated
on February 11, 1983, in Michigan.
“(B) Certain Predecessors Included.—In
the case of any qualified corporation which has carryforward attributable
to a predecessor corporation described in such section 806(b), the
qualified corporation and the predecessor corporation shall be treated
as 1 corporation for purposes of subsections (d) and (e).
“(2) Existing Carryforwards.—The term
‘existing carryforward’ means the aggregate of the amounts which —
“(A) are unused business credit carryforwards
to the taxpayer's 1st taxable year beginning after December 31, 1986
(determined without regard to the limitations of section 38(c) and
any reduction under section 49 of the Internal
Revenue Code of 1986), and
“(B) are attributable to the amount of the
regular investment credit determined for periods before January 1,
1986, under section 46(a)(1) of such Code (relating to regular percentage),
or any corresponding provision of prior law, determined on the basis
that the regular investment credit was used first.
“(3) Special Rule For Restructuring.—In
the case of any corporation, any restructuring shall not limit, increase,
or otherwise affect the benefits which would have been available under
this section but for such restructuring.
“(h) Tentative Refunds.—Rules similar
to the rules of section 6425 of the Internal
Revenue Code of 1986 shall apply to any overpayment resulting
from the application of this section.”
EFFECTIVE 15-YEAR CARRYBACK OF EXISTING CARRYFORWARDS
OF QUALIFIED FARMERS
Section 213 of Pub.
L. 99-514, as amended by Pub. L. 100-647, title I, Sec. 1002(g),
Nov. 10, 1988, 102 Stat. 3369,
provided that:
“(a) General Rule.—If a taxpayer who
is a qualified farmer makes an election under this section for its
1st taxable year beginning after December 31, 1986, with respect to
any portion of its existing carryforwards, the amount determined under
subsection (b) shall be treated as a payment against the tax imposed
by chapter 1 of the Internal Revenue Code of
1986 made by such taxpayer on the last day prescribed by law (without
regard to extensions) for filing its return of tax under chapter 1
of such Code for such 1st taxable year.
“(b) Amount.—For purposes of subsection
(a), the amount determined under this subsection shall be equal to
the smallest of —
“(1) 50 percent of the portion of the taxpayer's
existing carryforwards to which the election under subsection (a)
applies,
“(2) the taxpayer's net tax liability for
the carryback period (within the meaning of section 212(d) of this
Act (set out as a note above)), or
“(3) $750.
“(c) Taxpayer Making Election May Not Use
Same Amounts Under Section 38.—In the case of a qualified farmer
who makes an election under subsection (a), the portion of such farmer's
existing carryforwards to which such an election applies shall not
be taken into account under section 38 of
the Internal Revenue Codeof 1986 for any taxable year beginning
after December 31, 1986.
“(d) No Recomputation Of Minimum Tax, Etc.—Nothing
in this section shall be construed to affect —
“(1) the amount of the tax imposed by section 56 of the Internal Revenue Code of
1954 (now 1986), or
“(2) the amount of any credit allowable under
such Code, for any taxable year in the carryback period (within the
meaning of section 212(d)(3) of this Act (set out as a note above)).
“(e) Definitions And Special Rules.—For
purposes of this section—
“(1) Qualified Farmer.—The term ‘qualified
farmer’ means any taxpayer who, during the 3-taxable year period preceding
the taxable year for which an election is made under subsection (a),
derived 50 percent or more of the taxpayer's gross income from the
trade or business of farming.
“(2) Existing Carryforward.—The term
‘existing carryforward’ means the aggregate of the amounts which —
“(A) are unused business credit carryforwards
to the taxpayer's 1st taxable year beginning after December 31, 1986
(determined without regard to the limitations of section 38(c) of the Internal Revenue Code of
1986), and
“(B) are attributable to the amount of the
investment credit determined for periods before January 1, 1986, under
section 46(a) of such Code (or any corresponding provision of prior
law) with respect to section 38 property which was used by the taxpayer
in the trade or business of farming, determined on the basis that
such credit was used first.
“(3) Farming.—The term ‘farming’ has
the meaning given such term by section 2032A(e)(4) and (5) of such
Code.”
TREATMENT OF INVESTMENT TAX CREDITS WITH RESPECT
TO CERTAIN PUBLIC UTILITIES
For provisions requiring different applications
of subsec. (c) of this section to certain public utilities by making
substitutions in the percentages of the tentative minimum tax referred
to in subsec. (c)(3)(A)(ii), (B), under certain circumstances, see
section 701(f)(6) of Pub. L. 99-514,
set out as an Effective Date note under section 55 of this title.
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.
TRANSITION RULES
Section 1177 of subtitle C (Sec. 1171-1177) of
title XI of Pub. L. 99-514,
as amended by Pub. L. 100-647,
title I, Sec. 1011B(l)(1), (2), Nov. 10, 1988, 102 Stat. 3493, provided that:
“(a) Section 1171.—The amendments made
by section 1171 (amending this section and sections 56, 108, 401,
and 404 of this title and repealing sections 41 and 6699 of this title)
shall not apply in the case of a tax credit employee stock ownership
plan if —
“(1) such plan was favorably approved on
September 23, 1983, by employees, and
“(2) not later than January 11, 1984, the
employer of such employees was 100 percent owned by such plan.
“(b) Subtitle Not To Apply To Certain Newspaper.—The
amendments made by section 1175 (amending section 401 of this title)
shall not apply to any daily newspaper —
“(1) which was first published on December
17, 1855, and which began publication under its current name in 1954,
and
“(2) which is published in a constitutional
home rule city (within the meaning of section 146(d)(3)(C) of the Internal Revenue
Code of 1986) which has a population of less than 2,500,000.”
Section 1011B(l)(3) of Pub. L. 100-647 provided that: “If
any newspaper corporation described in section 1177(b) of the Reform
Act (section 1177(b) of Pub. L. 99-514,
set out above), as amended by this subsection, pays in cash a dividend
within 60 days after the date of the enactment of this Act (Nov. 10,
1988) to the corporation's employee stock ownership plans and if a
corporate resolution declaring such dividend was adopted before November
30, 1987, and such resolution specifies that such dividend shall be
contingent upon passage by the Congress of technical corrections,
then such dividend (to the extent the aggregate amount so paid does
not exceed $3,500,000) shall be treated as if it had been declared
and paid in 1987 for all purposes of the Internal Revenue Code of
1986.”
ACCOUNTING FOR INVESTMENT CREDIT IN CERTAIN
FINANCIAL REPORTS AND REPORTS TO FEDERAL AGENCIES
Pub. L. 92-178,
title I, Sec. 101(c), Dec. 10, 1971, 85
Stat. 499, as amended by Pub.
L. 98-369, div. A, title IV, Sec. 450(a), July 18,
1984, 98 Stat. 818; Pub. L. 99-514, Sec. 2, Oct. 22,
1986, 100 Stat. 2095, provided
that:
“(1) In General.—It was the intent
of Congress in enacting, in the Revenue Act of 1962 (see Short Title
of 1962 Amendment note set out under section 1 of this title), the
investment credit allowed by section 38
of the Internal Revenue Code of 1986 (formerly I.R.C. 1954), and it is the intent
of the Congress in restoring that credit in this Act (section 50 of
this title), to provide an incentive for modernization and growth
of private industry. Accordingly, notwithstanding any other provision
of law, on and after the date of the enactment of this Act (Dec. 10,
1971)—
“(A) no taxpayer shall be required to use,
for purposes of financial reports subject to the jurisdiction of any
Federal agency or reports made to any Federal agency, any particular
method of accounting for the credit allowed by such section 38 (this
section), and
“(B) a taxpayer shall disclose, in any such
report, the method of accounting for such credit used by him for purposes
of such report.
“(2) Exceptions.—Paragraph (1) shall
not apply to taxpayers who are subject to the provisions of section 46(e) of the Internal Revenue Code of
1986 (as added by section 105(c) of this Act) or to section 203(e)
of the Revenue Act of 1964 (as modified by section 105(e) of this
Act) (set out as note below).”
(Section 450(b) of Pub.
L. 98-369 provided that: “The amendments made
by this section (amending this note) shall take effect as if included
in the Revenue Act of 1971.”)
TREATMENT OF INVESTMENT CREDIT BY FEDERAL REGULATORY
AGENCIES
Pub. L. 88-272,
title II, Sec. 203(e), Feb. 26, 1964, 78
Stat. 35, as amended by Pub.
L. 99-514, Sec. 2, Oct. 22, 1986, 100 Stat. 2095, provided that: “It
was the intent of the Congress in providing an investment credit under section 38 of the Internal Revenue Code of
1986 (formerly I.R.C. 1954)
and it is the intent of the Congress in repealing the reduction in
basis required by section 48(g) of such Code to provide an incentive
for modernization and growth of private industry (including that portion
thereof which is regulated). Accordingly, Congress does not intend
that any agency or instrumentality of the United States having jurisdiction
with respect to a taxpayer shall, without the consent of the taxpayer,
use —
“(1) in the case of public utility property
(as defined in section 46(c)(3)(B)
of the Internal Revenue Code of 1986, more than a proportionate
part (determined with reference to the average useful life of the
property with respect to which the credit was allowed) of the credit
against tax allowed for any taxable year by section 38 of such Code,
or
“(2) in the case of any other property, any
credit against tax allowed by section 38 of such Code, to reduce such
taxpayer's Federal income taxes for the purpose of establishing the
cost of service of the taxpayer or to accomplish a similar result
by any other method.”
Section 203(e) of Pub.
L. 88-272, not applicable to public utility property
to which section 46(e) of this title applies, see section 105(e) of Pub. L. 92-178, set out as a note
under section 46 of this title.
PRIOR PROVISIONS
A prior section 38, added Pub. L. 87-834, Sec. 2(a), Oct. 16,
1962, 76 Stat. 962, and amended Pub. L. 94-455, title XIX, Sec. 1906(b)(13)(A),
Oct. 4, 1976, 90 Stat. 1834,
which related to investment in certain depreciable property, was repealed
by Pub. L. 98-369,
div. A, title IV, Sec. 474(m)(1), July 18, 1984, 98 Stat. 833.
Another prior section 38 was renumbered section
35 of this title.