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Internal Revenue Code, § 38. General Business Credit

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),
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,
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, plus
I.R.C. § 38(b)(31)
the small employer health insurance credit determined under section 45R, plus
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(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)(3) Repealed
[Repealed. Pub. L. 115-141, div. U, Section 401(d)(6)(B)(iii).]
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.
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.
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.)
BACKGROUND NOTES
AMENDMENTS
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 subcaluse (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)(5). 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)(5). 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)(5). 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. Before being struck it read as follows:
“(3).38(c)(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). Pub. L. 101-508, Sec. 11511(b)(1), struck out ‘plus’ at end.
Subsec. (b)(5). Pub. L. 101-508, Sec. 11611(b)(1), struck out ‘plus’ at end.
Pub. L. 101-508, Sec. 11511(b)(1), substituted ‘, plus’ for period at end.
Subsec. (b)(6). Pub. L. 101-508, Sec. 11611(b)(1), substituted ‘, plus’ for period at end.
Pub. L. 101-508, Sec. 11511(b)(1), added par. (6).
Subsec. (b)(7). Pub. L. 101-508, Sec. 11611(b)(1), added par. (7).
Subsec. (c)(2). Pub. L. 101-508, Sec. 11813(b)(2)(B), redesignated par. (3) as (2) and struck out former par. (2) which permitted an offset of regular investment tax credit against 25 percent of minimum tax.
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. (c)(3). Pub. L. 101-508, Sec. 11813(b)(2)(B), redesignated par. (3) as (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) to (3) generally, substituting pars. (1) and (2) for former pars. (1) to (3), redesignating former 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).
Sec. 1007(g)(2)(B)(i)-(ii) of Pub. L. 100-647, redesignated paragraph (4) as paragraph (3), struck out subparagraphs (A) and (B) of paragraph (1) each place it appeared and inserted subparagraph (B) of paragraph (1).
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).’
1986Pub. 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.
1986 — 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),’.
1984Pub. 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.
1984 — Subsec. (c)(2). Pub. L. 98-369, Sec. 612(e)(1), substituted ‘section 26(b)’ for ‘section 25(b)’.
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.
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 CO59UNITY 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 Codeof 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.