Subtitle A, Chapter 1, Subchapter A, Part I.
 
IRC 1This section discusses the tax imposed on individuals.
IRC 1(a)Base tax of 15% of income within $36900 is imposed on taxable income of every—
IRC 1(a)(1)married individual (by §7703) co-filing a return with their spouse (§6013) and
IRC 1(a)(2)### surviving spouse (by §2(a)). Tax table is by ###.
IRC 1(b)### Head of household is liable for tax by ###. Base is 15% of income up to $29600.
IRC 1(c)### Single persons are liable for tax by ###. Base is 15% of income within $22100.
IRC 1(d)### MFS individuals are liable for tax by ###. Base is 15% of income within $18450.
IRC 1(e)Base tax of 15% of taxable income within $1500 is imposed on taxable income of—
IRC 1(e)(1)every estate, and
IRC 1(e)(2)### every trust. Tax table is by ###.
IRC 1(f)Phaseout of marriage penalty and table adjustments to account for inflation.
IRC 1(f)(1)By 19931215 & each year thereafter, Sec. adjusts tables by (a) - (e).
IRC 1(f)(2)Table by (1) in lieu of that by (a) - (e), for a TY in any year, is set—
IRC 1(f)(2)(A)by adjusting each rate bracket for the cost-of-living adjustment for such year,
IRC 1(f)(2)(B)by not changing the applicable tax rate to any amount described in (A), and
IRC 1(f)(2)(C)by adjusting the dollar amounts which set tax to reflect adjustments by (A).
IRC 1(f)(3)For (2), the cost-of-living adjustment for any year is any percentage which—
IRC 1(f)(3)(A)the CPI for the preceding calendar year, exceeds
IRC 1(f)(3)(B)the CPI for the calendar year 1992.
IRC 1(f)(4)CPI for a calendar year is CPI average in 12 month period ending August 31.
IRC 1(f)(5)For (4), "CPI" is last Consumer Price Index published by Department of Labor.
IRC 1(f)(6)This paragraph sets rules for rounding.
IRC 1(f)(6)(A)For (2)(A) and §§63(c)(4), 68(b)(2) & 151(d)(4), round down to $50 multiple.
IRC 1(f)(6)(B)MFS filers swap "$50" with "$25" in (A) (except §§63(c)(4) & §151(d)(4)(A)).
IRC 1(f)(7)This paragraph sets special rules for certain brackets.
IRC 1(f)(7)(A)Don't adjust 36% & 39.6% minimums for (a) - (e) tables for TYs starting in 1994.
IRC 1(f)(7)(B)For adjustment by (1) in TYs after 1994, for (A), swap "1993" for "1992" in (3).
IRC 1(f)(8)For TYs beginning after 20031231, in prescribing tables under (1)—
IRC 1(f)(8)(A)maximum income in 15% bracket of (a) is 200% of such amount in bracket of (c), &
IRC 1(f)(8)(B)comparable income amounts in table of (d) is ½ of amounts determined in (A).
IRC 1(g)Certain unearned income of minors are taxed as if it were the parent's income.
IRC 1(g)(1)For any child by (2), tax imposed by §1 is equal to the greater of—
IRC 1(g)(1)(A)the tax imposed by §1 without regard to (g), or
IRC 1(g)(1)(B)the sum of—
IRC 1(g)(1)(B)(i)tax which would be imposed by §1, reduced by child's net unearned income, plus
IRC 1(g)(1)(B)(ii)such child's share of the allocable parental tax.
IRC 1(g)(2)(g) applies to any child for any taxable year if—
IRC 1(g)(2)(A)such child—
IRC 1(g)(2)(A)(i)has not attained age 18 before the close of the taxable year, or
IRC 1(g)(2)(A)(ii)
IRC 1(g)(2)(A)(ii)(I)has attained age 18 before TY end and meets §152(c)(3) (except such (B)), and
IRC 1(g)(2)(A)(ii)(II)whose earned income (§911(d)(2)) is within ½ of his support for the TY,
IRC 1(g)(2)(B)either parent of such child is alive at the close of the taxable year, and
IRC 1(g)(2)(C)such child doesn't file a joint return for the taxable year.
IRC 1(g)(3)This paragraph defines the "allocable parental tax".
IRC 1(g)(3)(A)Such tax is any excess of—
IRC 1(g)(3)(A)(i)that which would be tax if income by (4) for all children were included, over
IRC 1(g)(3)(A)(ii)the tax imposed by §1 on the parent without regard to (g).
IRC 1(g)(3)(B)Child's share of tax has same ratio as his income by (4) bears to aggregate.
IRC 1(g)(3)(C)Figure tax by parent's TY ending within the child's year, if TYs are dissimilar.
IRC 1(g)(4)This paragraph defines "net unearned income".
IRC 1(g)(4)(A)Net unearned income is any excess of—
IRC 1(g)(4)(A)(i)the portion of AGI which is not earned income (§911(d)(2)), over
IRC 1(g)(4)(A)(ii)the sum of—
IRC 1(g)(4)(A)(ii)(I)amount by §63(c)(5)(A) (relating to standard deduction limitation), plus
IRC 1(g)(4)(A)(ii)(II)greater of (I) amount or child's itemized deductions for income by (i).
IRC 1(g)(4)(B)Net unearned income amount is limited to individual's taxable income of the TY.
IRC 1(g)(4)(C)Inclusion by §652 & §662 is earned income to beneficiaries of §642(b)(2)(C)(ii).
IRC 1(g)(5)For (g), account the taxable income of the parent who is—
IRC 1(g)(5)(A)the custodial parent (§152(e)) of the child if the parents are not married, and
IRC 1(g)(5)(B)the individual with greater taxable income for MFS individuals.
IRC 1(g)(6)The child's tax return must include the TIN of the parent determined by (g).
IRC 1(g)(7)An election for parents to claim certain unearned income of the child.
IRC 1(g)(7)(A)A child has no gross income as is not required to file a return by §6012 if—
IRC 1(g)(7)(A)(i)any child which meets (g) has income only from interest and dividends,
IRC 1(g)(7)(A)(ii)such income is more than that by (4)(A)(ii)(I) & less than 10 times such amount,
IRC 1(g)(7)(A)(iii)such child made no estimated tax payments nor withheld any income under §3406, &
IRC 1(g)(7)(A)(iv)the parent by (5) elects to apply (B).
IRC 1(g)(7)(B)For a parent making the election under (7)—
IRC 1(g)(7)(B)(i)include in gross income excess over twice the amount by (4)(A)(ii)(I) in the TY,
IRC 1(g)(7)(B)(ii)tax imposed by §1 for such TY for such parent is equal to the sum of—
IRC 1(g)(7)(B)(ii)(I)the amount determined under §1 after applying clause (i), plus
IRC 1(g)(7)(B)(ii)(II)10% of the lesser of (4)(A)(ii)(I) or excess of gross income over such amount, &
IRC 1(g)(7)(B)(iii)any interest by §57(a)(5) is an item of tax preference for the parent.
IRC 1(g)(7)(C)The Secretary prescribes necessary regulations to carry out (7).
IRC 1(h)This subsection sets the maximum capital gains rate.
IRC 1(h)(1)If taxpayer has net capital gain, §1 tax for such TY is limited to the sum of—
IRC 1(h)(1)(A)the tax figured as if (h) were not enacted on the greater of—
IRC 1(h)(1)(A)(i)taxable income reduced by net capital gain, or
IRC 1(h)(1)(A)(ii)the lesser of—
IRC 1(h)(1)(A)(ii)(I)the amount of taxable income taxed at a rate below 25%; or
IRC 1(h)(1)(A)(ii)(II)taxable income reduced by the adjusted net capital gain;
IRC 1(h)(1)(B)0% of net capital gain within any excess of—
IRC 1(h)(1)(B)(i)the amount of taxable income which would be taxed at a rate under 25%, over
IRC 1(h)(1)(B)(ii)the taxable income reduced by the adjusted net capital gain;
IRC 1(h)(1)(C)15% of the lesser of—
IRC 1(h)(1)(C)(i)adjusted net capital gain (or taxable income) exceeding amount taxed by (B), or
IRC 1(h)(1)(C)(ii)the excess of—
IRC 1(h)(1)(C)(ii)(I)the amount of taxable income which would be taxed below 39.6%, over
IRC 1(h)(1)(C)(ii)(II)the sum of amounts subject to tax under (A) and (B),
IRC 1(h)(1)(D)20% of net capital gain or taxable income exceeding amounts taxed by (B) & (C),
IRC 1(h)(1)(E)25% of any excess of—
IRC 1(h)(1)(E)(i)unrecaptured §1250 gain (or, if less, the net capital gain (ignore (11)) over
IRC 1(h)(1)(E)(ii)any excess of—
IRC 1(h)(1)(E)(ii)(I)The sum of the amount determined in (A) above plus the net capital gain.
IRC 1(h)(1)(E)(ii)(II)taxable income; and
IRC 1(h)(1)(F)28% of taxable income exceeding the sum of amounts from (A) - (D).
IRC 1(h)(2)For (h), net capital gain is reduced by income from §163(d)(4)(B)(iii).
IRC 1(h)(3)For (h), "adjusted net capital gain" is the sum of—
IRC 1(h)(3)(A)the net capital gain (without regard to (11)) reduced by the sum of—
IRC 1(h)(3)(A)(i)unrecaptured §1250 gain, and
IRC 1(h)(3)(A)(ii)28% rate gain, plus
IRC 1(h)(3)(B)qualified dividend income (as by (11)).
IRC 1(h)(4)For (h), "28% rate gain" is any excess of—
IRC 1(h)(4)(A)the sum of—
IRC 1(h)(4)(A)(i)collectibles gain; and
IRC 1(h)(4)(A)(ii)§1202 gain, over
IRC 1(h)(4)(B)the sum of—
IRC 1(h)(4)(B)(i)collectibles loss,
IRC 1(h)(4)(B)(ii)net short-term capital loss, and
IRC 1(h)(4)(B)(iii)long-term capital loss carried under §1212(b)(1)(B) to the TY.
IRC 1(h)(5)Definition of "collectibles gain" and "collectibles loss" for purposes of (h).
IRC 1(h)(5)(A)Such term is by a recognized sale of a collectible (§408(m), ignore such (3)).
IRC 1(h)(5)(B)Sale of certain interests with unrealized collectible appreciation meets (A).
IRC 1(h)(6)This paragraph defines "unrecaptured §1250 gain".
IRC 1(h)(6)(A)Such gain is any excess of—
IRC 1(h)(6)(A)(i)long-term capital gain which would be ordinary income if fully depreciated, over
IRC 1(h)(6)(A)(ii)any excess of—
IRC 1(h)(6)(A)(ii)(I)the amount described in (4)(B); over
IRC 1(h)(6)(A)(ii)(II)the amount described in (4)(A).
IRC 1(h)(6)(B)(A)(i) amount for §1231(a)(3)(A) exchanges is limited to net §1231 gain.
IRC 1(h)(7)For (h), "§1202 gain" is any excess of—
IRC 1(h)(7)(A)gain excludable by §1202 but for the percentage limitation in §1202(a), over
IRC 1(h)(7)(B)gain excludable from gross income under §1202.
IRC 1(h)(8)Allocate ordinary income by §1231(c) to separate categories of §1231 gain.
IRC 1(h)(9)Sec. may apply (h) to exchanges by pass-thru entities and of their interests.
IRC 1(h)(10)For (h), a "pass-thru entity" is—
IRC 1(h)(10)(A)a regulated investment company (RIC);
IRC 1(h)(10)(B)a real estate investment trust (REIT);
IRC 1(h)(10)(C)an S corporation (S-Corp);
IRC 1(h)(10)(D)a partnership;
IRC 1(h)(10)(E)an estate or trust;
IRC 1(h)(10)(F)a common trust fund; and
IRC 1(h)(10)(G)a qualified electing fund (as defined by §1295).
IRC 1(h)(11)This paragraph sets a treatment for dividends to be taxed as net capital gain.
IRC 1(h)(11)(A)For (h), "net capital gain" is net capital gain plus qualified dividend income.
IRC 1(h)(11)(B)This subparagraph defines "qualified dividend income" for purposes of (11).
IRC 1(h)(11)(B)(i)Such dividends are received during the taxable year from—
IRC 1(h)(11)(B)(i)(I)domestic corporations, and
IRC 1(h)(11)(B)(i)(II)qualified foreign corporations.
IRC 1(h)(11)(B)(ii)Qualified dividend income does not include—
IRC 1(h)(11)(B)(ii)(I)certain dividends from corporations exempt from tax under §501 or §521,
IRC 1(h)(11)(B)(ii)(II)any amount allowed as a deduction under §591, and
IRC 1(h)(11)(B)(ii)(III)any dividend described in §404(k).
IRC 1(h)(11)(B)(iii)Qualified dividend income doesn't include any dividend on any share of stock—
IRC 1(h)(11)(B)(iii)(I)that does not meet 75% of the days for holding requirements of §246(c), or
IRC 1(h)(11)(B)(iii)(II)to the extent the taxpayer is under obligation to make related payments.
IRC 1(h)(11)(C)This subparagraph defines "qualified foreign corporations".
IRC 1(h)(11)(C)(i)Except as provided otherwise, such term means any foreign corporation if—
IRC 1(h)(11)(C)(i)(I)the corporation is incorporated in a possession of the US, or
IRC 1(h)(11)(C)(i)(II)the corporation is eligible for benefits of an income tax treaty with the US.
IRC 1(h)(11)(C)(ii)Foreign corporation dividends qualify if stock is tradable in a US market.
IRC 1(h)(11)(C)(iii)Foreign investment companies are disqualified if §1297 applies in certain TYs.
IRC 1(h)(11)(C)(iv)Rules by §904(b)(2)(B) apply to the dividend rate differential of (11).
IRC 1(h)(11)(D)This subparagraph sets special rules.
IRC 1(h)(11)(D)(i)Such income does not include investment income accounted by §163(d)(4)(B).
IRC 1(h)(11)(D)(ii)Loss on extraordinary dividends (§1059(c)) of shares is long-term capital loss.
IRC 1(h)(11)(D)(iii)Dividends from REIT or RIC are subject to limitations from §854 and §857.
IRC 1(i)This subsection sets rate reductions after calendar year 2000.
IRC 1(i)(1)This paragraph sets rules for the 10% rate bracket.
IRC 1(i)(1)(A)For taxable years beginning after 20001231—
IRC 1(i)(1)(A)(i)the tax rate in (a) - (d) on income not exceeding the first bracket is 10%, and
IRC 1(i)(1)(A)(ii)the 15% rate applies only to taxable income within the initial bracket amount.
IRC 1(i)(1)(B)For (l), the "initial bracket amount" is—
IRC 1(i)(1)(B)(i)for (a), $14000,
IRC 1(i)(1)(B)(ii)for (b), $10000, and
IRC 1(i)(1)(B)(iii)½ of (i) (after any adjustment by (C)) for (c) and (d).
IRC 1(i)(1)(C)In adjusting tables of (f) which apply to tax years starting after 2003—
IRC 1(i)(1)(C)(i)for cost-of-living adjustment by (f)(3), swap "2002" for "1992" in such (B), and
IRC 1(i)(1)(C)(ii)adjustments by (i) don't apply to amount referred to in (B)(iii).
IRC 1(i)(1)(D)(1) does not apply to any taxable year to which §6428 applies.
IRC 1(i)(2)The tables under (a) - (e) are applied by substituting—
IRC 1(i)(2)(A)"25%" for "28%" each place it appears (before the application of (B))
IRC 1(i)(2)(B)"28%" for "31%" each place it appears, and
IRC 1(i)(2)(C)"33%" for "36%" each place it appears.
IRC 1(i)(3)Modifications to income tax brackets for high-income taxpayers.
IRC 1(i)(3)(A)In the case of taxable years beginning after 20121231—
IRC 1(i)(3)(A)(i)rate under (a) - (d) in highest bracket is 35% of income within excess of—
IRC 1(i)(3)(A)(i)(I)the applicable threshold under (B), over
IRC 1(i)(3)(A)(i)(II)the dollar amount at which such bracket begins, and
IRC 1(i)(3)(A)(ii)the 39.6% rate under (a) - (d) applies to income exceeding clause (i) amount.
IRC 1(i)(3)(B)For (3), the "applicable threshold" is—
IRC 1(i)(3)(B)(i)$450K in the case of (a),
IRC 1(i)(3)(B)(ii)$425K in the case of (b),
IRC 1(i)(3)(B)(iii)$400K in the case of (c), and
IRC 1(i)(3)(B)(iv)½ of amount under clause (i) (after applying (C)) in the case of (d).
IRC 1(i)(3)(C)Adjust (i) - (iii) of (B) as by (1)(C)(i); swap "2012" for "1992" in (f)(3)(B).
IRC 1(i)(4)The Secretary shall adjust all tables in (f) to carry out subsection (i).
 
IRC 2This section sets definitions and special rules.
IRC 2(a)This subsection defines a "surviving spouse".
IRC 2(a)(1)For purposes of §1, a surviving spouse is a taxpayer—
IRC 2(a)(1)(A)whose spouse died during either of 2 TYs before the current TY, and
IRC 2(a)(1)(B)who maintains a household which is the principal home of a dependent
IRC 2(a)(1)(B)(i)who is their child or stepchild (§152, but such (b)(1), (b)(2), & (d)(1)(B)), &
IRC 2(a)(1)(B)(ii)for whom the taxpayer is entitled to a deduction under §151.
IRC 2(a)(2)For purposes of §1, a taxpayer is not a surviving spouse if—
IRC 2(a)(2)(A)the taxpayer has remarried before the end of the TY, or
IRC 2(a)(2)(B)a joint return could have been filed under §6013 (ignoring §6013(a)(3)).
IRC 2(a)(3)Date of death for missing individuals (§6013(f)(3)) from combat zone service is—
IRC 2(a)(3)(A)date of determination made under 37 USC §556 or 5 USC §5566, or, if earlier
IRC 2(a)(3)(B)2 years after date of termination of combat activity termination under §112.
IRC 2(b)This subsection defines a head of household.
IRC 2(b)(1)Such an individual is unmarried at end of year, doesn't meet (a), and either—
IRC 2(b)(1)(A)maintains a household (more than ½ of TY) which is the principal abode of—
IRC 2(b)(1)(A)(i)an individual's qualifying child ((c) of §152, without such (e)), unless—
IRC 2(b)(1)(A)(i)(I)such child is married at end of individual's taxable year, and
IRC 2(b)(1)(A)(i)(II)is not a dependent of such individual by (2) or (3) of §152(b), or
IRC 2(b)(1)(A)(ii)any other dependent of the taxpayer for which deduction by §151 is allowed, or
IRC 2(b)(1)(B)pays over half of cost to run household for parent who is dependent under §151.
IRC 2(b)(2)For (b)—
IRC 2(b)(2)(A)an individual legally separated from his spouse is not considered as married;
IRC 2(b)(2)(B)a taxpayer is not married if spouse is a nonresident alien any time in TY; &
IRC 2(b)(2)(C)a taxpayer is married at end of TY if spouse died during the TY.
IRC 2(b)(3)A taxpayer is not considered a head of household by subtitle A—
IRC 2(b)(3)(A)if he is a nonresident alien at any time in the taxable year, or
IRC 2(b)(3)(B)by reason that the individual would not be a dependent for the TY but for—
IRC 2(b)(3)(B)(i)§152(d)(2)(H), or
IRC 2(b)(3)(B)(ii)§152(d)(3).
IRC 2(c)A taxpayer is not considered married at end of TY if §7703(b) could apply.
IRC 2(d)For nonresident aliens, taxes set by §1 and §55 apply only by §§871 or 877.
IRC 2(e)See §63 for a definition of taxable income.
 
IRC 3This section sets tax tables for individuals.
IRC 3(a)This subsection sets imposition of tax table tax.
IRC 3(a)(1)In lieu of §1, tax is annually imposed on taxable income for each individual—
IRC 3(a)(1)(A)who does not itemize his deductions for the taxable year, and
IRC 3(a)(1)(B)whose income for year does not exceed ceiling amount. Table's basis is from §1.
IRC 3(a)(2)For (1), "ceiling amount" is amount (at least $20) which sets tax rate category.
IRC 3(a)(3)The Secretary may choose to apply §3 to individuals who itemize deductions.
IRC 3(b)§3 does not apply to—
IRC 3(b)(1)taxpayers filing a return under §443(a)(1) due to accounting period change, and
IRC 3(b)(2)an estate or trust.
IRC 3(c)For 26 USC, tax imposed by §3 is treated as imposed by §1.
IRC 3(d)Taxable income is determined under §63 when needed to determine taxable income.
IRC 3(e)See §6014 for computation of tax by Secretary.
 
IRC 4Repealed.
 
IRC 5This section sets cross references relating to tax on individuals.
IRC 5(a)For other rates of tax on individuals, &c., see:
IRC 5(a)(1)§871 for rates of tax on nonresident aliens.
IRC 5(a)(2)§891 for doubling of tax on certain foreign citizens.
IRC 5(a)(3)§1441 for rate of withholding in the case of nonresident aliens.
IRC 5(a)(4)§55 for alternative minimum tax.
IRC 5(b)For special limitations on tax, see:
IRC 5(b)(1)§692 for tax limitation of USAF members, victims of terrorist attacks, &c.
IRC 5(b)(2)§1341 for tax where taxpayer restores amount held under claim of right.
 
Subtitle A, Chapter 1, Subchapter A, Part II.
 
IRC 11This section sets the tax imposed on corporations.
IRC 11(a)A tax is imposed for each taxable year on taxable income of every corporation.
IRC 11(b)This subsection sets the amount of tax.
IRC 11(b)(1)The amount of tax imposed by (a) is the sum of the following—
IRC 11(b)(1)(A)15% of taxable income within $50000,
IRC 11(b)(1)(B)25% of taxable income exceeding $50000 and within $75000,
IRC 11(b)(1)(C)34% of taxable income exceeding $75000 and within $10000000, and
IRC 11(b)(1)(D)35% of taxable income exceeding $10000000. Special rules may otherwise apply.
IRC 11(b)(2)Tax imposed by (a) on a QPSC (§448(d)(2)) is 35% of taxable income.
IRC 11(c)(a) does not apply to corporations subject to tax imposed by—
IRC 11(c)(1)§594 (relating to mutual savings banks conducting life insurance business),
IRC 11(c)(2)subchapter L (§801 - 848 (relating to insurance companies)), or
IRC 11(c)(3)subchapter M (§851 - 860L (relating to RICs and REITs)).
IRC 11(d)For foreign corporations, (a) and §55 apply only as provided by §882.
 
IRC 12This section sets cross references relating to tax on corporations. See:
IRC 12(1)§511 for tax on unrelated business income of corporations exempt from this tax.
IRC 12(2)§531 for the accumulated earnings tax and personal holding company tax.
IRC 12(3)§891 for the doubling of tax on corporations of certain foreign countries.
IRC 12(4)§1201(a) for the alternative tax in case of capital gains.
IRC 12(5)§1442 for the rate of withholding in case of foreign corporations.
IRC 12(6)§1551 for limitation on benefits of graduated rate schedule of §11(b).
IRC 12(7)§55 for alternative minimum tax.
 
Subtitle A, Chapter 1, Subchapter A, Part III.
 
IRC 15This section describes the effect of changes.
IRC 15(a)If any chapter 1 tax rate changes & the TY includes the effective date—
IRC 15(a)(1)both rates before and after date of change will apply to taxable income, and
IRC 15(a)(2)the year's tax is sum of tax by (1) applied proportionally to their duration.
IRC 15(b)For purposes of (a)—
IRC 15(b)(1)any repeal of tax is considered a change of rate, and
IRC 15(b)(2)the rate for the period after the repeal is 0.
IRC 15(c)For purposes of (a) and (b), if a rate changes for taxable years—
IRC 15(c)(1)"beginning after" or "ending after" a date, the next day is date of change; and
IRC 15(c)(2)"beginning on or after" a date, that date is considered the date of change.
IRC 15(d)§15 doesn't apply to any change in rates under §1(f).
IRC 15(e)Reference to highest tax by (b) of §1 or §11 uses weighted average of rates.
IRC 15(f)§15 doesn't apply any change in rates under §1(i).
 
Subtitle A, Chapter 1, Subchapter A, Part IV, Subpart A.
 
IRC 21Household expenses and dependent care services necessary for gainful employment.
IRC 21(a)This subsection sets the allowance of credit.
IRC 21(a)(1)Rate by (2) of (b)(2) costs is credit if (b)(1) applies regarding an individual.
IRC 21(a)(2)Applicable percentage is 35%, less 1% (minimum 20%) each $2K AGI exceeds $15K.
IRC 21(b)Definition of "qualifying individual" and "employment-related expenses".
IRC 21(b)(1)A "qualifying individual" is—
IRC 21(b)(1)(A)a dependent (§152(a)(1)) who has not attained age 13,
IRC 21(b)(1)(B)a certain dependent who is physically or mentally deficient, or
IRC 21(b)(1)(C)taxpayer's spouse, if (B) is met and lives with taxpayer for at least ½ of year.
IRC 21(b)(2)This paragraph defines "employment-related expenses".
IRC 21(b)(2)(A)To provide employment while (1) applies regarding taxpayer, such costs are:
IRC 21(b)(2)(A)(i)expenses for household services.
IRC 21(b)(2)(A)(ii)expenses for the care of the dependent, unless paid for overnight camps.
IRC 21(b)(2)(B)Expenses by (A) are accounted only if incurred for the care of an individual—
IRC 21(b)(2)(B)(i)who is described in (1)(A), or
IRC 21(b)(2)(B)(ii)not by (1)(A) & usually spends 8 hours or more per day in taxpayer's household.
IRC 21(b)(2)(C)Expenses by (A) incurred from a care center by (D) is applicable if—
IRC 21(b)(2)(C)(i)the center complies with applicable laws of a State or local government, and
IRC 21(b)(2)(C)(ii)(B) is met.
IRC 21(b)(2)(D)A "dependent care center" is a facility that provides—
IRC 21(b)(2)(D)(i)care for more than six non-resident individuals, and
IRC 21(b)(2)(D)(ii)receives a form of payment or grant for providing services to such individuals.
IRC 21(c)Expenses by (b)(2) incurred during any TY and accounted by (a) is limited to—
IRC 21(c)(1)$3K if there is 1 qualifying individual regarding the taxpayer in such TY, or
IRC 21(c)(2)$6K if there are 2 or more such individuals. §129 exclusion reduces such limits.
IRC 21(d)This subsection sets an earned income limitation.
IRC 21(d)(1)Expenses by (b)(2) accounted by (a) is limited to—
IRC 21(d)(1)(A)for unmarried an individual, his earned income for the TY, or
IRC 21(d)(2)(B)for married individuals, the lesser of his income or his spouse's.
IRC 21(d)(2)Treat a spouse who is a student or meets (b)(1)(C) as having monthly income of—
IRC 21(d)(2)(A)$250 if (c)(1) applies, or
IRC 21(d)(2)(B)$500 if (c)(2) applies. (2) applies to only one spouse for a single month.
IRC 21(e)This subsection sets special rules for purposes of §21.
IRC 21(e)(1)If relationship violates law, individual and taxpayer don't live at same abode.
IRC 21(e)(2)Credit by (a) is given only if married taxpayers file a joint return.
IRC 21(e)(3)An individual separated from spouse by decree of divorce, &c., is not married.
IRC 21(e)(4)An individual is not considered as married if—
IRC 21(e)(4)(A)such individual is married and files a separate return, and—
IRC 21(e)(4)(A)(i)maintains a home for more than one half of the year for a dependent, and
IRC 21(e)(4)(A)(ii)furnishes more than half of maintaining such a household, and
IRC 21(e)(4)(B)his spouse is not a member of such household for the last 6 months of the TY.
IRC 21(e)(5)A child of a custodial parent (§152(e)(1)) is a qualifying individual if both—
IRC 21(e)(5)(A)§152(e) applies to such child respect to the taxable year, and
IRC 21(e)(5)(B)such child is under age 13 or is physically or mentally incapable of self care.
IRC 21(e)(6)No credit from (a) is allowed for any amount paid to an individual who—
IRC 21(e)(6)(A)is allowed a deduction to the taxpayer or spouse under §151(c), or
IRC 21(e)(6)(B)is a child (§152(f)(1)) under age 19 at the end of the taxpayer's taxable year.
IRC 21(e)(7)A "student" attends an educational organization for 5 calendar months full-time.
IRC 21(e)(8)An "educational organization" is described in §170(b)(1)(A)(ii).
IRC 21(e)(9)No credit by (a) is allowed for expenses unless the taxpayer's return has—
IRC 21(e)(9)(A)the name, address, and TIN of the recipient, or
IRC 21(e)(9)(B)the name and address of a receiving corporation subject to §501(c)(3).
IRC 21(e)(10)No credit by (a) is allowed unless return has TIN of each individual by (b)(1).
IRC 21(f)The Secretary prescribes regulations necessary to carry out §21 as needed.
 
IRC 22This section sets credit for the elderly and the permanently & totally disabled.
IRC 22(a)A qualified individual may claim a tax credit of 15% of §22 amount for the TY.
IRC 22(b)For §22, a "qualified individual" is any individual who—
IRC 22(b)(1)has attained age 65 before the end of the taxable year, or
IRC 22(b)(2)retired on disability by the end of the TY and was disabled before retirement.
IRC 22(c)This subsection defines the "§22 amount" for purposes of (a).
IRC 22(c)(1)Such amount is initial amount by (2), reduced under (3) and subsection (d).
IRC 22(c)(2)This paragraph sets the initial amount.
IRC 22(c)(2)(A)Except by (B), the initial amount is—
IRC 22(c)(2)(A)(i)$5000 for a single individual, or if only one spouse is a qualified individual,
IRC 22(c)(2)(A)(ii)$7500 for a joint return where both spouses are qualified individuals, or
IRC 22(c)(2)(A)(iii)$3750 for a married individual filing a separate return.
IRC 22(c)(2)(B)A limitation for qualifying individuals who are not age 65.
IRC 22(c)(2)(B)(i)Such individual's initial amount is limited to their disability income.
IRC 22(c)(2)(B)(ii)For a joint return of two qualified spouses, the initial amount is limited to—
IRC 22(c)(2)(B)(ii)(I)sum of their disability income, if both spouses haven't attained age 65, or
IRC 22(c)(2)(B)(ii)(II)$5000 plus the disability income of the spouse who hasn't attained age 65.
IRC 22(c)(2)(B)(iii)"Disability income" is amount included by §72 or §105(a) as disability wages.
IRC 22(c)(3)This paragraph sets a reduction.
IRC 22(c)(3)(A)Reduction by (3) is sum an individual or both spouses receive as pension, &c.,—
IRC 22(c)(3)(A)(i)which is excluded from gross income and payable under—
IRC 22(c)(3)(A)(i)(I)title II of the Social Security Act,
IRC 22(c)(3)(A)(i)(II)the Railroad Retirement Act of 1974 (PL 93-445), or
IRC 22(c)(3)(A)(i)(III)a law administered by Veterans' Administration, unless §104(a)(4) applies, or
IRC 22(c)(3)(A)(ii)is excluded from gross income under any law not contained within 26 USC.
IRC 22(c)(3)(B)For (A), treat SS benefit under §86(d)(3) as received by title II of SSA.
IRC 22(d)The §22 amount is reduced by one-half of excess of AGI over—
IRC 22(d)(1)$7500 in the case of a single individual, or
IRC 22(d)(2)$10000 in the case of a joint return, or
IRC 22(d)(3)$5000 in the case of a married individual filing a separate return.
IRC 22(e)This subsection sets definitions and special rules for purposes §22.
IRC 22(e)(1)Credit by (a) is only claimed on joint return unless spouses lived apart all TY.
IRC 22(e)(2)Marital status is determined under §7703.
IRC 22(e)(3)A person is disabled if unable to engage in gainful activity due to impairment.
IRC 22(f)No credit is allowed by §22 to any nonresident alien.
 
IRC 23This section discusses adoption expenses.
IRC 23(a)This subsection sets the allowance of credit.
IRC 23(a)(1)Qualified adoption expenses paid by taxpayer is credit against chapter 1 tax.
IRC 23(a)(2)Credit by (1) is allowed regarding any expense in allowed in the TY—
IRC 23(a)(2)(A)after TY such expenses are paid if occurring before adoption is final, and
IRC 23(a)(2)(B)when expenses are paid or incurred if within or after TY when adoption is final.
IRC 23(a)(3)Add $10000 to expenses in TY when adoption of child with special needs is final.
IRC 23(b)This subsection sets limitations.
IRC 23(b)(1)Total qualified expenses accounted under (a) for all TYs is limited to $10000.
IRC 23(b)(2)This paragraph sets an income limitation.
IRC 23(b)(2)(A)Credit by (a) is reduced by a ratio to total allowable credit as—
IRC 23(b)(2)(A)(i)the amount the taxpayer's AGI exceeds $150000, bears to
IRC 23(b)(2)(A)(ii)$40000.
IRC 23(b)(2)(B)For (A), AGI is determined without regard to §§911, 931, and 933.
IRC 23(b)(3)Denial of double benefits. No credit by (a) is allowed for any expense:
IRC 23(b)(3)(A)For which a credit or deduction is allowed anywhere else in chapter 1.
IRC 23(b)(3)(B)For which funds are received under any Federal, State, or local program.
IRC 23(c)This subsection sets carryforwards of unused credit.
IRC 23(c)(1)Excess of (a) over §26(a) limit (less certain credit) is carried to next TY.
IRC 23(c)(2)Credit by §23 isn't carried to any TY 5 years after TY when such credit arose.
IRC 23(d)This subsection sets definition for purposes of §23.
IRC 23(d)(1)"Qualified adoption expenses" are necessary adoption fees, &c., which are—
IRC 23(d)(1)(A)directly related to the taxpayer's legal adoption of an eligible child,
IRC 23(d)(1)(B)not in violation of any State law or under surrogate parenting agreement,
IRC 23(d)(1)(C)not related to the adoption of a child who is the taxpayer's spouse, and
IRC 23(d)(1)(D)not reimbursed under an employer program or otherwise.
IRC 23(d)(2)An "eligible child" is any individual who—
IRC 23(d)(2)(A)has not attained age 18, or
IRC 23(d)(2)(B)is physically or mentally incapable of caring for himself.
IRC 23(d)(3)A "child with special needs" means any child if—
IRC 23(d)(3)(A)a State has determined the child can't or shouldn't return to his parent's home,
IRC 23(d)(3)(B)the child can't be placed with adoptive parents without adoption assistance, and
IRC 23(d)(3)(C)the child is a citizen or resident of the US (§217(h)(3)).
IRC 23(e)For the adoption of a child who is not a US citizen or resident (§217(h)(3))—
IRC 23(e)(1)(a) doesn't apply to any expense by (d)(1) until the adoption is finalized, and
IRC 23(e)(2)treat such expenses paid in TY before finalization as paid in finalization year.
IRC 23(f)This subsection sets filing requirements.
IRC 23(f)(1)Rules similar to (2), (3), and (4) of §§21(e) apply for purposes of §23.
IRC 23(f)(2)This paragraph sets a requirement for taxpayer to include TIN.
IRC 23(f)(2)(A)Credit by §23 requires filing of name, age, and TIN of any qualifying children.
IRC 23(f)(2)(B)The Secretary, in lieu of (A), may require more information for purposes of (A).
IRC 23(g)For subtitle A, decrease basis of applicable property by credit allowed by §23.
IRC 23(h)For TYs beginning after 20021231, increase amounts in (a)(3) and (b) by—
IRC 23(h)(1)such dollar amount, multiplied by
IRC 23(h)(2)the cost-of-living adjustment by §1(f)(3); swap "2001" for "1992" in such (B).
IRC 23(i)Sec. sets rules for §23 & §137 and to treat unmarried persons as 1 taxpayer.
 
IRC 24This section discusses the child tax credit.
IRC 24(a)$1K credit per qualifying child of taxpayer is allowed against chapter 1 tax.
IRC 24(b)This subsection sets limitations.
IRC 24(b)(1)(a) is reduced $50 each $1000 AGI & income by §§911, 931, & 933 exceeds (2).
IRC 24(b)(2)For (1), the "threshold amount" is—
IRC 24(b)(2)(A)$110000 in the case of a joint return,
IRC 24(b)(2)(B)$75000 in the case of an unmarried individual, and
IRC 24(b)(2)(C)$55000 for a married taxpayer (as by §7703) filing a separate return.
IRC 24(c)This subsection defines a "qualifying child".
IRC 24(c)(1)Such a child meets §152(c) regarding the taxpayer and hasn't attained age 17.
IRC 24(c)(2)A resident of a "contiguous country" by §152(b)(3)(A) isn't a qualified child.
IRC 24(d)This subsection sets rules to refund a portion of credit.
IRC 24(d)(1)The aggregate credits allowed under subpart C is increased by the lesser of—
IRC 24(d)(1)(A)credit allowed by §24, as if (d) and §26(a)(2) didn't apply, or
IRC 24(d)(1)(B)credit by subpart C as if limitation by (b)(3) were increased by greater of—
IRC 24(d)(1)(B)(i)15% of taxable earned income (§32) and exclusion by §112 in excess of $10000, or
IRC 24(d)(1)(B)(ii)in the case of a taxpayer with at least 3 qualifying children, the excess of—
IRC 24(d)(1)(B)(ii)(I)the taxpayer's social security taxes for the taxable year, over
IRC 24(d)(1)(B)(ii)(II)credit under §32 for such TY; (d) is not credit and reduces (a).
IRC 24(d)(2)This paragraph defines "social security taxes" for purposes of (1).
IRC 24(d)(2)(A)Such taxes are, with respect to any taxpayer for any taxable year—
IRC 24(d)(2)(A)(i)taxes by (a) of §3101 and §3201 on amounts received within year starting in TY,
IRC 24(d)(2)(A)(ii)50% of taxes imposed by §1401 on self-employment income for such TY, and
IRC 24(d)(2)(A)(iii)50% of taxes imposed by §3211(a) on amounts received during year by (i).
IRC 24(d)(2)(B)Amount of taxes subject to refund by §6413(c) are not "social security taxes".
IRC 24(d)(2)(C)For (A)(i), account equivalent amounts paid under §3121(l) agreement.
IRC 24(d)(3)For TYs starting after 2001, the $10000 amount by (1)(B) shall be increased by—
IRC 24(d)(3)(A)such dollar amount, multiplied by
IRC 24(d)(3)(B)the cost-of-living adjustment by §1(f)(3); swap "2000" for "1992" in such (B).
IRC 24(d)(4)For TYs starting in 2009 - 2017, the amount by (1)(B)(i) is $3000.
IRC 24(e)Credit by §24 requires filing of name and TIN of any qualifying children.
IRC 24(f)No credit by §24 is allowed for a TY of less than 12 months unless due to death.
 
IRC 25This section discusses interest of certain home mortgages.
IRC 25(a)This subsection sets the allowance of credit.
IRC 25(a)(1)Credit allowed against chapter 1 tax imposed is equal to the product of—
IRC 25(a)(1)(A)the certificate credit rate, and
IRC 25(a)(1)(B)the interest paid on the remaining principal of certified indebtedness.
IRC 25(a)(2)This paragraph sets a limitation where credit rate exceeds 20%.
IRC 25(a)(2)(A)Credit by (1) is limited to $2000 if rate by (1)(A) exceeds 20%.
IRC 25(a)(2)(B)(A) is allocated in proportion to all persons holding interest in the residence.
IRC 25(b)Definition of "certificate credit rate" and "certified indebtedness amount".
IRC 25(b)(1)The certificate credit rate is specified in the mortgage credit certificate.
IRC 25(b)(2)Certified indebtedness amount is the amount of indebtedness which is—
IRC 25(b)(2)(A)incurred by the taxpayer—
IRC 25(b)(2)(A)(i)to acquire the principal residence of the taxpayer,
IRC 25(b)(2)(A)(ii)as a qualified home improvement loan (§143(k)(4)) regarding such residence, or
IRC 25(b)(2)(A)(iii)as a qualified rehabilitation loan (§143(k)(5)) regarding such residence, and
IRC 25(b)(2)(B)specified in the mortgage credit certificate.
IRC 25(c)"Mortgage credit certificate" & "qualified mortgage credit certificate program".
IRC 25(c)(1)A mortgage credit certificate (MCC) is any certificate which—
IRC 25(c)(1)(A)is issued by a qualified State program, &c., authorized to issue mortgage bond,
IRC 25(c)(1)(B)is issued in connection with the acquisition, &c., of principal residence,
IRC 25(c)(1)(C)specifies—
IRC 25(c)(1)(C)(i)the certificate credit rate, and
IRC 25(c)(1)(C)(ii)the certified indebtedness amount, and
IRC 25(c)(1)(D)is in such form as the Secretary may prescribe.
IRC 25(c)(2)This paragraph defines a "qualified mortgage credit certificate program".
IRC 25(c)(2)(A)A qualified mortgage credit certificate program is any program—
IRC 25(c)(2)(A)(i)established by State, &c., for any year it may issue qualified mortgage bonds,
IRC 25(c)(2)(A)(ii)where the issuing authority elects not to issue private activity bonds,
IRC 25(c)(2)(A)(iii)from which debt certified by MCC meets, regarding §143 (as modified by (B)),:
IRC 25(c)(2)(A)(iii)(I)(c) (relating to residence requirements),
IRC 25(c)(2)(A)(iii)(II)(d) (relating to 3-year requirement),
IRC 25(c)(2)(A)(iii)(III)(e) (relating to purchase price requirement),
IRC 25(c)(2)(A)(iii)(IV)(f) (relating to income requirements),
IRC 25(c)(2)(A)(iii)(V)(h) (relating to required placement of portion of loans), and
IRC 25(c)(2)(A)(iii)(VI)(i)(1) (relating to other requirements),
IRC 25(c)(2)(A)(iv)under which no MCC is financed by a qualified mortgage bond, &c.,
IRC 25(c)(2)(A)(v)which is not limited to indebtedness incurred from particular lenders,
IRC 25(c)(2)(A)(vi)which provides that a mortgage credit certificate is not transferable, and
IRC 25(c)(2)(A)(vii)requiring certain developers to certify residence price as equal despite MCC.
IRC 25(c)(2)(B)For applying §143 for purposes of (II), (IV), and (V) of (A)(iii)—
IRC 25(c)(2)(B)(i)each qualified MCC program shall be treated as a separate issue,
IRC 25(c)(2)(B)(ii)the amount deemed the total proceeds of the issue is determined by multiplying—
IRC 25(c)(2)(B)(ii)(I)the certified indebtedness of each MCC issued under such program, by
IRC 25(c)(2)(B)(ii)(II)the certificate credit rate specified in such certificate, and
IRC 25(c)(2)(A)(iii)substitute "100%" for "95% or more" in §143(d)(1).
IRC 25(d)This subsection sets determination of certificate credit rate.
IRC 25(d)(1)Such rate specified in a MCC is no less than 10% and is limited to 50%.
IRC 25(d)(2)This paragraph sets an aggregate limit on credit certificate rates.
IRC 25(d)(2)(A)For each qualified program, limit of 25% of amount by (B) applies to product of—
IRC 25(d)(2)(A)(i)total certified indebtedness amount of each MCC issued by the program, by
IRC 25(d)(2)(A)(ii)the respective credit rate with respect to such MCC.
IRC 25(d)(2)(B)"Nonissued bond amount" is amount of unissued bonds by (c)(2)(A)(ii).
IRC 25(e)This subsection sets special rules and definitions for purposes of §25.
IRC 25(e)(1)This paragraph sets a carryforward of unused credit.
IRC 25(e)(1)(A)Credit by (a) which exceeds (C) is carried over to each of next 3 years.
IRC 25(e)(1)(B)Amount by (A) is limited to amount that applicable tax limit exceeds sum of—
IRC 25(e)(1)(B)(i)credit by (a) for the TY determined without (1), and
IRC 25(e)(1)(B)(ii)amounts carried to current TY from previous TYs by (1).
IRC 25(e)(1)(C)"Applicable tax limit" is §26(a) limit less credits under subpart A.
IRC 25(e)(2)(a) doesn't apply if debt doesn't meet certain rules by §143 and by (c)(2)(A).
IRC 25(e)(3)This paragraph sets the period for which the certificate is in effect.
IRC 25(e)(3)(A)Except by (B), a MCC is in effect regarding interest attributable to the period—
IRC 25(e)(3)(A)(i)beginning on the date such certificate is issued, and
IRC 25(e)(3)(A)(ii)ending on the earlier date on which—
IRC 25(e)(3)(A)(ii)(I)the certificate is revoked by the issuing authority, or
IRC 25(e)(3)(A)(ii)(II)the applicable residence ceases to be principal home of taxpayer.
IRC 25(e)(3)(B)MCC doesn't apply to debt incurred 2 years after (c)(2)(A)(ii) election is made.
IRC 25(e)(3)(C)Per regulations, issuing authority notifies the Sec. if any MCC is revoked.
IRC 25(e)(4)MCC may be reissued if credit by (a) is equal or less than credit by prior MCC.
IRC 25(e)(5)At least 90 days before issue, issuing authority will give public notice of—
IRC 25(e)(5)(A)the eligibility requirements of such certificates,
IRC 25(e)(5)(B)the methods by which such certificates are to be issued, and
IRC 25(e)(5)(C)any other information as the Secretary may require.
IRC 25(e)(6)No credit by (a) allowed for interest paid to a related person (§144(a)(3)(A)).
IRC 25(e)(7)A "principal residence" has the same meaning as used in §121.
IRC 25(e)(8)Definition of "qualified rehabilitation" and "qualified home improvement".
IRC 25(e)(8)(A)Qualified rehabilitation has the same meaning as under §143(k)(5)(B).
IRC 25(e)(8)(B)Qualified home improvement has the same meaning as under §143(k)(4).
IRC 25(e)(9)A "qualified mortgage bond" has the same meaning as under §143(a)(1).
IRC 25(e)(10)"Single family residence" is a home with minimum 400 ft² living space.
IRC 25(f)Reduction of total qualified bonds which may be issued due to noncompliance.
IRC 25(f)(1)If (d)(2) is unmet, §146(d) ceiling is reduced by 1.25 times amount by (2).
IRC 25(f)(2)This paragraph sets the "correction amount".
IRC 25(f)(2)(A)Such amount is equal to the excess credit amount divided by 0.25.
IRC 25(f)(2)(B)This subparagraph sets the "excess credit amount".
IRC 25(f)(2)(B)(i)For (A)(ii), the excess credit amount the excess of—
IRC 25(f)(2)(B)(i)(I)the credit amount for any mortgage credit certificate program, over
IRC 25(f)(2)(B)(i)(II)the credit amount which would be allowed if (d)(2) was met.
IRC 25(f)(2)(B)(ii)"Credit amount" is the sum of products by (i) and (ii) of (d)(2)(A).
IRC 25(f)(3)Reduction by (1) is allocated to cities by §146(d)(3)(C) within a State.
IRC 25(f)(4)(f) doesn't apply if a certification program in place to ensure compliance.
IRC 25(f)(5)Secretary may waive (1) if failure is determined as by reasonable cause.
IRC 25(g)Person who makes loan of certified indebtedness under MCC must file a report of—
IRC 25(g)(1)the name, address, and SSN of the individual to which certificate was issued,
IRC 25(g)(2)certificate's issuer, date of issue, debt amount, credit rate, and
IRC 25(g)(3)any other information the Secretary may require, as prescribed by regulations.
IRC 25(h)This subsection sets regulations and rules for contracts.
IRC 25(h)(1)Sec. sets rules for §25 and imposition of processing fees on MCC recipients.
IRC 25(h)(2)Sec. may enter contracts with any person regarding administration of §25.
IRC 25(i)See §143(m) for increase of chapter 1 tax due to recapture of Federal subsidy.
 
IRC 25AThis section discusses the Hope Credit and Lifetime Learning Credit.
IRC 25A(a)For individuals, a credit is allowed against chapter 1 tax equal to the sum of—
IRC 25A(a)(1)the Hope Scholarship Credit, plus
IRC 25A(a)(2)the Lifetime Learning Credit.
IRC 25A(b)This subsection sets rules for the Hope Scholarship Credit.
IRC 25A(b)(1)For TY of any electing eligible student, the Hope Credit is the sum of—
IRC 25A(b)(1)(A)100% of qualified tuition and expenses paid in TY within $1000, plus
IRC 25A(b)(1)(B)50% of such expenses exceeding $1000 and within applicable limit.
IRC 25A(b)(2)This paragraph sets limitations applicable to the Hope Scholarship Credit.
IRC 25A(b)(2)(A)Election by §25A isn't allowed if such election is made for any 2 prior TYs.
IRC 25A(b)(2)(B)Credit is allowed only to eligible students for at least one academic period.
IRC 25A(b)(2)(C)Credit is allowed for the first 2 years of student's postsecondary education.
IRC 25A(b)(2)(D)Credit is disallowed if student is convicted of a drug-related felony.
IRC 25A(b)(3)An "eligible student" is, with respect to any academic period, a student who—
IRC 25A(b)(3)(A)meets §484(a)(1) of PL 89-329 in effect as of 19970805, and
IRC 25A(b)(3)(B)has at least ½ the normal full-time work load for his course of study.
IRC 25A(b)(4)For (1)(B), the applicable limit is 2 times the dollar amount under (1)(A).
IRC 25A(c)This subsection sets rules for the Lifetime Learning Credit.
IRC 25A(c)(1)Such Credit is 20% of qualified tuition and expenses within $10000.
IRC 25A(c)(2)This paragraph sets special rules for determining expenses.
IRC 25A(c)(2)(A)Qualified tuition and expenses accounted by (a)(1) are not accounted by (c).
IRC 25A(c)(2)(B)For (1), expenses by (f)(1) to acquire or improve job skills are qualified.
IRC 25A(d)This subsection sets a limitation based on modified gross adjusted income.
IRC 25A(d)(1)Amount determined by (a) is reduced (not less than zero) by amount by (2).
IRC 25A(d)(2)Reduction bears the same ratio to the amount which would be accounted as—
IRC 25A(d)(2)(A)the excess of—
IRC 25A(d)(2)(A)(i)the taxpayer's modified adjusted gross income for the taxable year, over
IRC 25A(d)(2)(A)(ii)$40000 ($80000 in the case of a joint return), bears to
IRC 25A(d)(2)(B)$10000 ($20000 in the case of a joint return).
IRC 25A(d)(3)"Modified AGI" is AGI increased by any exclusions under §§911, 931, or 933.
IRC 25A(e)A taxpayer may elect to not have §25A apply to qualified tuition and expenses.
IRC 25A(f)This subsection sets definitions for purposes of §25A.
IRC 25A(f)(1)This paragraph defines "qualified tuition and related expenses".
IRC 25A(f)(1)(A)Such expenses required for enrollment at an eligible educational institution by—
IRC 25A(f)(1)(A)(i)the taxpayer,
IRC 25A(f)(1)(A)(ii)the taxpayer's spouse, or
IRC 25A(f)(1)(A)(iii)any taxpayer's dependent for which the taxpayer may take deduction by §151.
IRC 25A(f)(1)(B)Such expenses are not for courses involving sports, &c., without degree program.
IRC 25A(f)(1)(C)Such expenses are not activity fees, &c., unrelated to course of instruction.
IRC 25A(f)(2)An "eligible educational institution" is an institution which is—
IRC 25A(f)(2)(A)described in §481 of PL 89-329, and
IRC 25A(f)(2)(B)eligible to participate in a program under title IV of such PL.
IRC 25A(g)This subsection sets special rules.
IRC 25A(g)(1)Credit by (a) requires reporting of name and TIN of student by (b)(3) on return.
IRC 25A(g)(2)Expenses accounted by (a) is reduced (before applying (b) - (d)) by the sum of—
IRC 25A(g)(2)(A)qualified scholarships which are excludable from gross income under §117,
IRC 25A(g)(2)(B)assistance allowances by chapters 30 - 35 of 38 USC or chapter 1606 of 10 USC, &
IRC 25A(g)(2)(C)any educational payments (other than gifts as by §102(a)) excluded from income.
IRC 25A(g)(3)If a deduction for a dependent by §151 is allowed to another taxpayer—
IRC 25A(g)(3)(A)no credit under (a) is allowed to such dependent for his taxable year, and
IRC 25A(g)(3)(B)expenses paid by the dependent are considered paid by the other taxpayer.
IRC 25A(g)(4)Expenses paid in 1st 3 months after TY are accounted for such prior TY.
IRC 25A(g)(5)No credit is allowed for costs deductible under any other chapter 1 provision.
IRC 25A(g)(6)§25A applies only to married individuals by §7703 who file a joint return.
IRC 25A(g)(7)§25A applies to nonresident aliens who make election by (g) or (h) of §6013.
IRC 25A(h)This subsection sets inflation adjustments.
IRC 25A(h)(1)This paragraph sets a dollar limitation on the amount of credit.
IRC 25A(h)(1)(A)For TYs after 2001, the $1000 amounts by (b)(1) are increased by—
IRC 25A(h)(1)(A)(i)such dollar amount, multiplied by
IRC 25A(h)(1)(A)(ii)the cost-of-living adjustment by §1(f)(3); swap "2000" for "1992" in such (B).
IRC 25A(h)(1)(B)Amounts under (A) shall be rounded to the next lowest multiple of $100.
IRC 25A(h)(2)This paragraph sets income limits.
IRC 25A(h)(2)(A)After 2001, the $40000 and $80000 amounts by (d)(2) are increased by—
IRC 25A(h)(2)(A)(i)such dollar amount, multiplied by
IRC 25A(h)(2)(A)(ii)the cost-of-living adjustment by §1(f)(3); swap "2000" for "1992" in such (B).
IRC 25A(h)(2)(B)Amounts under (A) are rounded to the next lowest multiple of $1000.
IRC 25A(i)Rules for the American Opportunity Tax Credit for TYs beginning in 2009 - 2017.
IRC 25A(i)(1)The Hope Scholarship Credit is equal to the sum of—
IRC 25A(i)(1)(A)100% of qualified tuition paid within $2000 for education of eligible student, &
IRC 25A(i)(1)(B)25% of such expenses paid as exceeds $2000 but is within $4000.
IRC 25A(i)(2)(A) and (C) of (b)(2) are applied by substituting "4" for "2".
IRC 25A(i)(3)(f)(1)(A) is applied by accounting "tuition, fees, and course materials".
IRC 25A(i)(4)For (d), such credit is reduced by amount bearing same ratio thereto as—
IRC 25A(i)(4)(A)the excess of—
IRC 25A(i)(4)(A)(i)taxpayers MAGI (as by (d)(3)) for such taxable year, over
IRC 25A(i)(4)(A)(ii)$80K ($160K in the case of a joint return), bears to
IRC 25A(i)(4)(B)$10K ($20K in the case of a joint return).
IRC 25A(i)(5)40% of credit by (b) is considered as under subpart C and not under (a).
IRC 25A(i)(6)Taxpayer subject to §702(a)(1)(B) of PL 110-343 may elect to not apply (i).
IRC 25A(j)Sec. sets rules for §25A & to recapture credit if cost is accounted in other TY.
 
IRC 25BElective deferrals and IRA contributions by certain individuals.
IRC 25B(a)Percentage of contributions by (d) within $2K is credit against chapter 1 tax.
IRC 25B(b)This subsection sets the applicable percentage for purposes of §25B.
IRC 25B(b)(1)For a joint return, the applicable percentage is, if taxpayer's AGI is—
IRC 25B(b)(1)(A)within $30000, 50%,
IRC 25B(b)(1)(B)over $30000 but not over $32500, 20%,
IRC 25B(b)(1)(C)over $32500 but not over $50000, 10%, and
IRC 25B(b)(1)(D)over $50000, 0%.
IRC 25B(b)(2)To figure the applicable percentage of a taxpayer who is—
IRC 25B(b)(2)(A)head of household, apply (1) by swapping each amount with 75% of such amount, &
IRC 25B(b)(2)(B)not by (1) or (A), apply (1) by swapping each amount with 50% of such amount.
IRC 25B(b)(3)After 2006, the dollar amounts by (1) are increased by—
IRC 25B(b)(3)(A)such dollar amount, multiplied by
IRC 25B(b)(3)(B)the cost-of-living adjustment by §1(f)(3); swap "2005" for "1992" in such (B).
IRC 25B(c)This subsection defines an "eligible individual".
IRC 25B(c)(1)An eligible individual has attained age of 18 at the end of the taxable year.
IRC 25B(c)(2)An eligible individual doesn't include any individual who—
IRC 25B(c)(2)(A)is claimed by another taxpayer regarding the deduction under §151, and
IRC 25B(c)(2)(B)is a student (§152(f)(2)).
IRC 25B(d)This subsection defines "qualified retirement savings contributions".
IRC 25B(d)(1)Such contributions are, with respect to any taxable year, the sum of—
IRC 25B(d)(1)(A)the amount of contributions by §219(e) made by the eligible individual,
IRC 25B(d)(1)(B)the amount of—
IRC 25B(d)(1)(B)(i)any elective deferrals (§402(g)(3)) of such individual, and
IRC 25B(d)(1)(B)(ii)deferrals under a plan by §457(b) of an employer by §457(e)(1)(A), and
IRC 25B(d)(1)(C)the amount of contributions to any qualified retirement plan (§4974(c)).
IRC 25B(d)(2)This paragraph sets a reduction for certain distributions.
IRC 25B(d)(2)(A)Contributions by (1) are reduced by distributions received in (B) period.
IRC 25B(d)(2)(B)For (A), the testing period for a taxable year includes—
IRC 25B(d)(2)(B)(i)such taxable year,
IRC 25B(d)(2)(B)(ii)the 2 preceding taxable years, and
IRC 25B(d)(2)(B)(iii)the period after such TY and before the due date of filing its return.
IRC 25B(d)(2)(C)(A) doesn't account any distribution—
IRC 25B(d)(2)(C)(i)by §§72(p), 401(k)(8), 401(m)(6), 402(g)(2), 404(k), 408(d)(4), and
IRC 25B(d)(2)(C)(ii)to which §408A(d)(3) applies.
IRC 25B(d)(2)(D)Distributions received by spouse are applicable if joint return is filed.
IRC 25B(e)For §25B, adjusted AGI is determined without regard to §§911, 931, and 933.
IRC 25B(f)Contributions must be included to figure investment in contract under §72.
 
IRC 25CThis section discusses the nonbusiness energy property credit.
IRC 25C(a)Credit against chapter 1 tax is allowed to an individual equal to the sum of—
IRC 25C(a)(1)10% of payments for energy efficiency improvements installed during the TY, and
IRC 25C(a)(2)residential energy property expenditures paid by the taxpayer during such TY.
IRC 25C(b)This subsection sets limitations.
IRC 25C(b)(1)Credit is limited to excess of $500 over total §25C credit for TYs after 2005.
IRC 25C(b)(2)For credit in respect of windows by (c)(2)(B), swap "$200" for "$500" in (1).
IRC 25C(b)(3)Credit allowed by §25C under (a)(2) is limited to—
IRC 25C(b)(3)(A)$50 for any advanced main air circulating fan,
IRC 25C(b)(3)(B)$150 for any qualified boiler (as by (d)(4)), and
IRC 25C(b)(3)(B)$300 for any item of energy-efficient building property.
IRC 25C(c)This subsection defines "qualified energy efficiency improvements".
IRC 25C(c)(1)Such improvements meet the 2009 International Energy Conversation Code, if—
IRC 25C(c)(1)(A)such component is installed in the US for taxpayer's principal residence (§121),
IRC 25C(c)(1)(B)the original use of such component starts with the taxpayer, and
IRC 25C(c)(1)(C)such component is reasonably expected to remain in use for at least 5 years.
IRC 25C(c)(2)A "building envelope component" is—
IRC 25C(c)(2)(A)an insulation material or system designed to reduce heat loss or gain in a unit,
IRC 25C(c)(2)(B)exterior windows (including skylights),
IRC 25C(c)(2)(C)exterior doors, and
IRC 25C(c)(2)(D)a metal roof with pigmented coating made for reduction of heat gain in the unit.
IRC 25C(c)(3)A "dwelling unit" includes a home conforming to standards by 24 CFR part 3280.
IRC 25C(d)This subsection defines "residential energy property expenditures".
IRC 25C(d)(1)Such expenditures are incurred by the taxpayer for qualified energy property—
IRC 25C(d)(1)(A)installed on or in a US dwelling unit used as a principal residence (§121), and
IRC 25C(d)(1)(B)originally placed in service by the taxpayer. Include allocable labor costs.
IRC 25C(d)(2)This paragraph defines "qualified energy property".
IRC 25C(d)(2)(A)Qualified energy property is—
IRC 25C(d)(2)(A)(i)energy-efficient building property,
IRC 25C(d)(2)(A)(ii)a natural gas, propane, or oil furnace or hot water blower (as by (d)(4)), or
IRC 25C(d)(2)(A)(iii)an advanced main air circulating fan.
IRC 25C(d)(2)(B)Property of (A) meets the performance standards and certifications, which—
IRC 25C(d)(2)(B)(i)the Sec. sets after consultation with Sec. of Energy or EPA Administrator, and
IRC 25C(d)(2)(B)(ii)are in effect at time of property's acquisition, completion, erection, &c.
IRC 25C(d)(2)(C)The standards and requirements prescribed by the Secretary in (B)—
IRC 25C(d)(2)(C)(i)for energy efficiency ratio (EER) of central air conditioners and heat pumps—
IRC 25C(d)(2)(C)(i)(I)are based on published data which is tested by manufacturers at 95°F, and
IRC 25C(d)(2)(C)(i)(II)is based on certified data of Air Conditioning and Refrigeration Institute, and
IRC 25C(d)(2)(C)(ii)in the case of geothermal heat pumps—
IRC 25C(d)(2)(C)(ii)(I)is based on testing under ARI/ISO Standard 13256-1 for Water Pumps, &c., and
IRC 25C(d)(2)(C)(ii)(II)has evidence that water heating services were through a desuperheater, &c.
IRC 25C(d)(3)"Energy-efficient building property" is—
IRC 25C(d)(3)(A)an electric heat pump water heater yielding energy factor of at least 2.0,
IRC 25C(d)(3)(B)an electric pump with HSPF of 9 or more, SEER of 15 or more, EER of 13 or more,
IRC 25C(d)(3)(C)a central air conditioner which achieves at highest energy tier as of 20090101,
IRC 25C(d)(3)(D)property by (4) with at least energy factor of 0.82 or efficiency of 90%, and
IRC 25C(d)(3)(E)a stove using biomass fuel to heat a (c)(3) unit with efficiency of 75% or more.
IRC 25C(d)(4)A "qualified boiler", &c., has annual fuel utilization efficiency of 95 or more.
IRC 25C(d)(5)An "advanced main air circulating fan" has no more than 2% annual furnace use.
IRC 25C(d)(6)"Biomass fuel" is any plant-derived fuel available on a renewable basis.
IRC 25C(e)This subsection sets special rules for purposes of §25C.
IRC 25C(e)(1)Rules similar to those of (4) - (8) of §25D(e) apply for §25C.
IRC 25C(e)(2)This paragraph sets rules for joint ownership of energy items.
IRC 25C(e)(2)(A)Expenditures do not fail to qualify because they were made for multiple units.
IRC 25C(e)(2)(B)For (A), figure credit separately for each expenditure made for each unit.
IRC 25C(e)(3)Do not account costs made from subsidized energy financing as by §48(a)(4)(C).
IRC 25C(f)For subtitle A, decrease the basis of property by credit allowed under §25C.
IRC 25C(g)§25C doesn't apply with respect to property placed in service—
IRC 25C(g)(1)after 20071231 and before 20091010, or
IRC 25C(g)(2)after 20131231.
 
IRC 25DThis section discusses the residential energy efficient property credit.
IRC 25D(a)Individual is allowed credit against chapter 1 tax for a TY equal to the sum of—
IRC 25D(a)(1)30% of qualified solar electric property expenditures,
IRC 25D(a)(2)30% of qualified solar water heating property expenditures,
IRC 25D(a)(3)30% of qualified fuel cell property expenditures,
IRC 25D(a)(4)30% of qualified small wind energy property expenditures, and
IRC 25D(a)(5)30% of qualified geothermal heat pump property expenditures.
IRC 25D(b)This subsection sets limitations.
IRC 25D(b)(1)Credit by (a) for expenditures by such (3) is limited to $500 per ½KW capacity.
IRC 25D(b)(2)Property by (d)(1) requires Solar Rating Certification Corporation approval.
IRC 25D(c)(a) credit exceeding §26(a) limit (reduced by credits) is carried to next TY.
IRC 25D(d)Definitions for §25D. Regarding a dwelling unit in the US used as a residence:
IRC 25D(d)(1)Cost by (a)(1) is for property where half of energy use is from the sun.
IRC 25D(d)(2)Cost by (a)(2) is for property which generates electricity from solar energy.
IRC 25D(d)(3)Cost by (a)(3) is for property by §48(c)(1) where such residence meets §121.
IRC 25D(d)(4)Cost by (a)(4) is for property which generates electricity from a wind turbine.
IRC 25D(d)(5)Rules for "qualified geothermal heat pump property expenditures".
IRC 25D(d)(5)(A)Such costs are for property by (B) installed on such a residential unit.
IRC 25D(d)(5)(B)"Qualified geothermal heat pump property" is any equipment which—
IRC 25D(d)(5)(B)(i)uses the ground or ground water as an energy source to heat unit by (A), and
IRC 25D(d)(5)(B)(ii)meets the Energy Star requirements which are in effect when cost is incurred.
IRC 25D(e)This subsection sets special rules for purposes of §25D.
IRC 25D(e)(1)Labor costs allocable to preparation, assembly, &c., of property is accounted.
IRC 25D(e)(2)(1) & (2) of (d) applies to roof installations which are structural components.
IRC 25D(e)(3)Costs allocable to pools, &c., which don't store energy don't apply.
IRC 25D(e)(4)For units jointly occupied by 2 or more individuals, the following rules apply:
IRC 25D(e)(4)(A)Maximum costs accounted by (a) is $1667 per ½KW of property for costs by (a)(3).
IRC 25D(e)(4)(B)Expenditures allocated to any individual for TY is equal to the lesser of—
IRC 25D(e)(4)(B)(i)the amount of expenditures made by such individual for the unit in TY, or
IRC 25D(e)(4)(B)(ii)the maximum amount of expenditures set by (A) multiplied by a fraction with a—
IRC 25D(e)(4)(B)(ii)(I)numerator of expenditure amount for such unit by such individual, and
IRC 25D(e)(4)(B)(ii)(II)denominator of total expenditures made by all individuals for such unit.
IRC 25D(e)(5)Tenant-stockholders (§216) have proportional share (§216(b)(3)) of expenditures.
IRC 25D(e)(6)This paragraph sets rules for condominiums.
IRC 25D(e)(6)(A)Members of management association make proportionate share of expenditures.
IRC 25D(e)(6)(B)A "condominium management association" is by §528(c)(1) (except such (E)).
IRC 25D(e)(7)If less than 80% of item use is for nonbusiness, only such portion is accounted.
IRC 25D(e)(8)This paragraph determines when expenditures are made and their amount.
IRC 25D(e)(8)(A)An expenditure for an item is made when original installation is completed.
IRC 25D(e)(8)(B)An expenditure for structure construction is made when original use begins.
IRC 25D(e)(9)To figure expenditures for a unit, exclude costs from financing by §48(a)(4)(C).
IRC 25D(f)For subtitle A, decrease the basis of property by credit allowed under §25D.
IRC 25D(g)§25D does not apply to property placed in service after 20161231.
 
IRC 26This section defines tax liability and limitations based upon tax liability.
IRC 26(a)Credit allowed by subpart A for the TY is limited to sum of—
IRC 26(a)(1)regular tax liability for such TY, reduced by foreign tax credit under §27(a), &
IRC 26(a)(2)the tax imposed by §55(a) for the taxable year.
IRC 26(b)This subsection defines "regular tax liability".
IRC 26(b)(1)Regular tax liability is the tax imposed by chapter 1 for the taxable year.
IRC 26(b)(2)Tax imposed by any of these provisions is not considered imposed by chapter 1:
IRC 26(b)(2)(A)§55 (minimum tax),
IRC 26(b)(2)(B)§59A (environmental tax),
IRC 26(b)(2)(C)(m)(5)(B), (q), (t), or (v) of §72 (additional taxes on certain distributions),
IRC 26(b)(2)(D)§143(m) (recapture of Federal subsidy from use of mortgage bonds, &c.),
IRC 26(b)(2)(E)§530(d)(4) (additional tax on Coverdell account distribution),
IRC 26(b)(2)(F)§531 (accumulated earnings tax),
IRC 26(b)(2)(G)§541 (personal holding company tax),
IRC 26(b)(2)(H)§1351(d)(1) (recoveries of foreign expropriation losses),
IRC 26(b)(2)(I)§1374 (tax on certain built-in gains of S corporations),
IRC 26(b)(2)(J)§1375 (certain passive investment income of corporation subchapter C earnings),
IRC 26(b)(2)(K)§7518(g)(6)(A) (nonqualified withdrawals from capital construction funds),
IRC 26(b)(2)(L)§§871(a), 881 (certain income of nonresident aliens and foreign corporations),
IRC 26(b)(2)(M)§860E(e) (taxes with respect to certain residual interests),
IRC 26(b)(2)(N)§884 (branch profits tax),
IRC 26(b)(2)(O)§§453(l)(3), 453A(c) (interest on certain deferred tax liabilities),
IRC 26(b)(2)(P)§860K (treatment of transfers of high-yield interests to disqualified holders),
IRC 26(b)(2)(Q)§220(f)(4) (tax on Archer MSA distributions not used for medical purposes),
IRC 26(b)(2)(R)§138(c)(2) (penalty for certain distributions from Medicare Advantage MSA),
IRC 26(b)(2)(S)§§106(e)(3)(A)(ii), 223(b)(8)(B)(i)(II), and 408(d)(9)(D)(i)(II),
IRC 26(b)(2)(T)§170(o)(3)(B) (recapture of certain deductions for fractional gifts),
IRC 26(b)(2)(U)§223(f)(4) (additional tax on HSA distributions not used for medical costs), and
IRC 26(b)(2)(V)(a)(1)(B)(i) and (b)(4)(A) of §409A (additional tax on deferred compensation).
IRC 26(c)The "tentative minimum tax" means the amount determined under §55(b)(1).
 
Subtitle A, Chapter 1, Subchapter A, Part IV, Subpart B.
 
IRC 27Taxes of foreign countries and possessions of the US; possession tax credit.
IRC 27(a)Per §901, taxes imposed by such countries is a credit against chapter 1 tax.
IRC 27(b)For domestic corporations, amount by §936 is a credit against chapter 1 tax.
 
IRC 28Renumbered §45C.
 
IRC 29Renumbered §45K.
 
IRC 30This section discusses a credit for certain plug-in electric vehicles.
IRC 30(a)10% of cost of (d) vehicle put in service in TY is credit against chapter 1 tax.
IRC 30(b)Amount of credit allowed under (a) for any vehicle is limited to $2500.
IRC 30(c)This subsection sets application with other credits.
IRC 30(c)(1)Credit by (a) for depreciable property is considered as given under §38(b).
IRC 30(c)(2)For 26 USC, credit by (a) is a credit allowable under subpart A for the TY.
IRC 30(d)This subsection defines a "qualified plug-in electric vehicle" for §30.
IRC 30(d)(1)A qualified plug-in electric vehicle is a specified vehicle—
IRC 30(d)(1)(A)the original use of which commences with the taxpayer,
IRC 30(d)(1)(B)which is acquired for use or lease by the taxpayer and not for resale,
IRC 30(d)(1)(C)which is made by a manufacturer,
IRC 30(d)(1)(D)which is manufactured primarily for use on public roads, streets, and highways,
IRC 30(d)(1)(E)which has a gross vehicle weight rating of less than 14000 pounds, and
IRC 30(d)(1)(F)which is significantly propelled by a electric motor from using a battery which—
IRC 30(d)(1)(F)(i)has a capacity of at least 4 kilowatt hours, and
IRC 30(d)(1)(F)(ii)is capable of being recharged from an external source of electricity.
IRC 30(d)(2)A "specified vehicle" is any vehicle which—
IRC 30(d)(2)(A)is a low speed vehicle as by §517.3 of 49 CFR (as in effect on 20090217), or
IRC 30(d)(2)(B)has 2 or 3 wheels.
IRC 30(d)(3)A "manufacturer" is set by the Administrator of EPA for title II of PL 88-206.
IRC 30(d)(4)A battery's "capacity" is the quantity of energy it stores at 100% charge state.
IRC 30(e)This subsection sets special rules.
IRC 30(e)(1)For subtitle A, the adjusted basis of such property is reduced by credit by (a).
IRC 30(e)(2)Any other chapter 1 credit, &c., for such property is reduced by credit by (a).
IRC 30(e)(3)If use meets (3) or (4) of §50(b), vehicle's seller has put vehicle in service.
IRC 30(e)(4)No credit by (a) is allowed to property subject to §50(b)(1).
IRC 30(e)(5)Sec. sets recapture for any property which ceases to be eligible for credit.
IRC 30(e)(6)Credit by (a) is not allowed if taxpayer elects to not have §30 apply.
IRC 30(f)§30 does not apply to any vehicle acquired after 20111231.
 
IRC 30AThis section discusses the Puerto Rico economic activity credit.
IRC 30A(a)This subsection sets the allowance of credit.
IRC 30A(a)(1)If (1) & (2) of (b) are met, credit is allowed against attributable income from—
IRC 30A(a)(1)(A)the active conduct of a trade or business within Puerto Rico, or
IRC 30A(a)(1)(B)the sale of mostly all related assets. After 2001 TY, §936(j) limit applies.
IRC 30A(a)(2)A "qualified domestic corporation" means a corporation—
IRC 30A(a)(2)(A)which is an existing credit claimant with respect to Puerto Rico, and
IRC 30A(a)(2)(B)in respect to which §936(a)(4)(B) does not apply for the taxable year.
IRC 30A(a)(3)In respect to Puerto Rico, §30A and §936 are applied separately in figuring—
IRC 30A(a)(3)(A)if taxpayer is an existing credit claimant, and
IRC 30A(a)(3)(B)the amount of credit allowed by §30A.
IRC 30A(b)Conditions which must be satisfied by a qualified domestic corporation.
IRC 30A(b)(1)80% or more of income comes from possession sources in 3 years before end of TY.
IRC 30A(b)(2)75% or more of corporate income within such period is derived within possession.
IRC 30A(c)Credit by (a) is not allowed against tax imposed by—
IRC 30A(c)(1)§59A (relating to environmental tax),
IRC 30A(c)(2)§531 (relating to tax on accumulated earnings),
IRC 30A(c)(3)§541 (relating to personal holding company tax), or
IRC 30A(c)(4)§1351 (relating to recoveries of foreign expropriation losses).
IRC 30A(d)Credit by (a) for any TY is limited to the sum of the following amounts:
IRC 30A(d)(1)60% the sum of—
IRC 30A(d)(1)(A)aggregate amount of qualified domestic corporation's wages for the TY, plus
IRC 30A(d)(1)(B)allocable fringe benefit expenses of the corporation for such TY.
IRC 30A(d)(2)The sum of—
IRC 30A(d)(2)(A)15% of depreciation allowances for short-life qualified tangible property,
IRC 30A(d)(2)(B)40% of depreciation allowances for medium-life qualified tangible property, and
IRC 30A(d)(2)(C)65% of depreciation allowances for long-life qualified tangible property.
IRC 30A(d)(3)If §936(h)(5)(C)(ii) is waived, taxes allocable to nonsheltered income.
IRC 30A(e)This subsection sets administrative provisions for purposes of 26 USC.
IRC 30A(e)(1)§936 applies in the same manner as if §30A credit were under §936(a)(1)(A).
IRC 30A(e)(2)Credit under §30A is treated the same manner as credit under §936.
IRC 30A(e)(3)A corporation to which §30A applies is treated similarly as if applying §936.
IRC 30A(f)Expenses and wages taken into account for §30A are not accounted by §41.
IRC 30A(g)Any term used in §30A and §936 has the same meaning as given in §936.
IRC 30A(h)§30A applies to taxable years starting after 19951231 and before 20060101.
 
IRC 30BThis section discusses the alternative motor vehicle credit.
IRC 30B(a)Credit allowed against chapter 1 tax for the taxable year is the sum of—
IRC 30B(a)(1)the new qualified fuel cell motor vehicle credit determined by (b),
IRC 30B(a)(2)the new advanced burn technology motor vehicle credit determined by (c),
IRC 30B(a)(3)the new qualified hybrid motor vehicle credit determined by (d),
IRC 30B(a)(4)the new qualified alternative fuel motor vehicle credit determined by (e), and
IRC 30B(a)(5)the plug-in conversion credit determined by (i).
IRC 30B(b)This subsection sets the new qualified fuel cell motor vehicle credit.
IRC 30B(b)(1)For (a), credit for such a qualified vehicle placed in service during the TY is—
IRC 30B(b)(1)(A)$8000 ($4K if after 20091231) if it has gross vehicle weight under 8500 pounds,
IRC 30B(b)(1)(B)$10000 if it has a gross vehicle weight between 8500 and 14000 pounds,
IRC 30B(b)(1)(C)$20000 if it has a gross vehicle weight between 14000 and 26000 pounds, and
IRC 30B(b)(1)(D)$40000 if it has a gross vehicle weight over 26000 pounds.
IRC 30B(b)(2)This paragraph sets an increase for fuel efficiency.
IRC 30B(b)(2)(A)Amount by (1)(A) for passenger automobiles or light trucks is increased by—
IRC 30B(b)(2)(A)(i)$1000, if it has at least 150% & up to 175% of the 2002 model city fuel economy,
IRC 30B(b)(2)(A)(ii)$1500, if it has at least 175% & up to 200% of the 2002 model city fuel economy,
IRC 30B(b)(2)(A)(iii)$2000, if it has at least 200% & up to 225% of the 2002 model city fuel economy,
IRC 30B(b)(2)(A)(iv)$2500, if it has at least 225% & up to 250% of the 2002 model city fuel economy,
IRC 30B(b)(2)(A)(v)$3000, if it has at least 250% & up to 275% of the 2002 model city fuel economy,
IRC 30B(b)(2)(A)(vi)$3500, if it has at least 275% & up to 300% of the 2002 model city fuel economy,
IRC 30B(b)(2)(A)(vii)$4000, if it achieves at least 300% of the 2002 model city fuel economy.
IRC 30B(b)(2)(B)For (A), the 2002 model year city fuel economy is determined by these tables:
IRC 30B(b)(2)(B)(i)For passenger automobiles, base weight is 1500 lbs. with 45.2 mpg.
IRC 30B(b)(2)(B)(ii)For light trucks, base weight is 1500 lbs. with 39.4 mpg.
IRC 30B(b)(2)(C)The "vehicle inertia weight class" (base weight) is defined by 42 USC §7521.
IRC 30B(b)(3)A "new qualified fuel cell motor vehicle" is a motor vehicle which—
IRC 30B(b)(3)(A)derives power from 1 or more cells which makes chemical energy into electricity,
IRC 30B(b)(3)(B)is certified as meeting the Bin 5 Tier II standard by §202(i) of PL 84-159,
IRC 30B(b)(3)(C)has its original use commenced by the taxpayer,
IRC 30B(b)(3)(D)is acquired for use or lease by the taxpayer and not for resale, and
IRC 30B(b)(3)(E)is made by a manufacturer.
IRC 30B(c)Rules for the new advanced lean burn technology motor vehicle credit.
IRC 30B(c)(1)Such credit is amount by (2) for such a vehicle placed in service in TY.
IRC 30B(c)(2)This paragraph sets the credit amount.
IRC 30B(c)(2)(A)This subparagraph sets rules for fuel economy.
IRC 30B(c)(2)(A)(i)### Credit is by ###. Base amount is $400 for between 125% - 150% fuel economy.
IRC 30B(c)(2)(A)(ii)Administrator of EPA uses tables of (b)(2)(A) to determine fuel economy.
IRC 30B(c)(2)(B)### Credit by (A) is increased for conservation credit figured by ###.
IRC 30B(c)(3)A "new advanced lean burn technology motor vehicle" is a car or light truck—
IRC 30B(c)(3)(A)with an internal combustion engine which—
IRC 30B(c)(3)(A)(i)is designed to operate using more air than needed for complete fuel combustion,
IRC 30B(c)(3)(A)(ii)incorporates direct injection,
IRC 30B(c)(3)(A)(iii)achieves at least 125% of the 2002 model year city fuel economy,
IRC 30B(c)(3)(A)(iv)is certified that vehicles with model years as of 2004 meets or exceeds—
IRC 30B(c)(3)(A)(iv)(I)standards by (b)(3)(B) for a vehicle weighing 6000 pounds or less, and
IRC 30B(c)(3)(A)(iv)(II)the Bin 8 Tier II standard for vehicle weights between 6000 and 8500 pounds,
IRC 30B(c)(3)(B)which has its original use commenced by the taxpayer,
IRC 30B(c)(3)(C)which is acquired for use or lease by the taxpayer and not for resale, and
IRC 30B(c)(3)(D)which is made by a manufacturer.
IRC 30B(c)(4)For (c), "lifetime fuel savings" for such a vehicle is any excess of—
IRC 30B(c)(4)(A)120000 divided by 2002 model year city fuel economy for its weight class, over
IRC 30B(c)(4)(B)120000 divided by the city fuel economy for such vehicle.
IRC 30B(d)This subsection sets the new qualified hybrid motor vehicle credit.
IRC 30B(d)(1)Such credit is amount by (2) for such a vehicle placed in service in TY.
IRC 30B(d)(2)This paragraph sets the credit amount.
IRC 30B(d)(2)(A)For cars or trucks weighing up to 8500 lbs., credit is sum of (i) and (ii).
IRC 30B(d)(2)(A)(i)This amount is figured in same manner as under (c)(2)(A).
IRC 30B(d)(2)(A)(ii)This amount is figured in same manner as under (c)(2)(B).
IRC 30B(d)(2)(B)This subparagraph sets the credit for other motor vehicles.
IRC 30B(d)(2)(B)(i)Credit amount is applicable percentage of qualified cost as certified by (v).
IRC 30B(d)(2)(B)(ii)The applicable percentage is, in respect of an increase of fuel economy—
IRC 30B(d)(2)(B)(ii)(I)20% if such increase is at least 30% but less than 40%,
IRC 30B(d)(2)(B)(ii)(II)30% if such increase is at least 40% but less than 50%,
IRC 30B(d)(2)(B)(ii)(III)40% if such increase is at least 50%.
IRC 30B(d)(2)(B)(iii)The qualified incremental hybrid cost is excess of price over comparable car, &
IRC 30B(d)(2)(B)(iii)(I)is no more than $7500 for cars with a weight rating under 14000 pounds,
IRC 30B(d)(2)(B)(iii)(II)is no more than $15000 for cars between weights of 14000 and 26000 lbs., and
IRC 30B(d)(2)(B)(iii)(III)is no more than $30000 for cars with a weight rating over 26000 pounds.
IRC 30B(d)(2)(B)(iv)A "comparable vehicle" is a car powered solely by gas and equal in dimension.
IRC 30B(d)(2)(B)(v)Certification is made by manufacturer and is determined by Secretary's guidance.
IRC 30B(d)(3)This paragraph defines a "new qualified hybrid motor vehicle".
IRC 30B(d)(3)(A)A new qualified hybrid motor vehicle is a motor vehicle—
IRC 30B(d)(3)(A)(i)which draws propulsion energy from onboard sources of energy which are both—
IRC 30B(d)(3)(A)(i)(I)an internal combustion or heat engine using consumable fuel, and
IRC 30B(d)(3)(A)(i)(II)a rechargeable energy storage system,
IRC 30B(d)(3)(A)(ii)which, if (2)(A) applies, meets standard by §246(e)(2) of PL 84-159, and
IRC 30B(d)(3)(A)(ii)(I)the Bin 5 Tier II standard by §202(i) of such PL for weights under 6000 lbs., &
IRC 30B(d)(3)(A)(ii)(II)the Bin 8 Tier II standard so established for weights within 6000 and 8500 lbs.,
IRC 30B(d)(3)(A)(iii)which has a maximum available power of at least—
IRC 30B(d)(3)(A)(iii)(I)4% for vehicles to which (2)(A) applies,
IRC 30B(d)(3)(A)(iii)(II)10% for vehicles with weight rating between 8500 and 14000 pounds, and
IRC 30B(d)(3)(A)(iii)(III)15% for vehicles with weight rating exceeding 14000 pounds,
IRC 30B(d)(3)(A)(iv)which, if (2)(B) applies, meets emission standards set by EPA for 2004 to 2007,
IRC 30B(d)(3)(A)(v)the original use of which commences with the taxpayer,
IRC 30B(d)(3)(A)(vi)which is acquired for use or lease by the taxpayer and not for resale, and
IRC 30B(d)(3)(A)(vii)which is made by a manufacturer.
IRC 30B(d)(3)(B)For (A)(i)(I), "consumable fuel" is any matter which releases energy when used.
IRC 30B(d)(3)(C)This subparagraph defines "maximum available power". For vehicles by:
IRC 30B(d)(3)(C)(i)(2)(A), it is maximum power available from energy storage system in power test.
IRC 30B(d)(3)(C)(ii)(2)(B), it is amount of (i) divided by vehicle's total traction power.
IRC 30B(d)(3)(D)Any vehicle subject to §30D (except by such (c)) isn't accounted by §30B.
IRC 30B(e)This subsection sets the new qualified alternative fuel motor vehicle credit.
IRC 30B(e)(1)Credit is applicable percentage of incremental cost of qualified vehicle.
IRC 30B(e)(2)For (1), the applicable percentage is—
IRC 30B(e)(2)(A)50%, plus
IRC 30B(e)(2)(B)30%, if such vehicle—
IRC 30B(e)(2)(B)(i)is certifies as conforming to most stringent standards under PL 84-159, or
IRC 30B(e)(2)(B)(ii)conforms to same requirements as vehicles that are sold or leased in California.
IRC 30B(e)(3)The "incremental cost" is excess of price over a similar gas model, limited to—
IRC 30B(e)(3)(A)$5000 if the vehicle weighs under 8500 pounds,
IRC 30B(e)(3)(B)$10000 if the vehicle weighs between 8500 and 14000 pounds,
IRC 30B(e)(3)(C)$25000 if the vehicle weighs between 14000 and 26000 pounds, and
IRC 30B(e)(3)(D)$40000 if the vehicle weighs more than 26000 pounds.
IRC 30B(e)(4)This paragraph defines a "new qualified alternative fuel motor vehicle".
IRC 30B(e)(4)(A)A new qualified alternative fuel motor vehicle is any motor vehicle which—
IRC 30B(e)(4)(A)(i)is only capable of operating on alternative fuel,
IRC 30B(e)(4)(A)(ii)the original use of which commences with the taxpayer,
IRC 30B(e)(4)(A)(iii)is acquired by the taxpayer for use or lease, and not for resale, and
IRC 30B(e)(4)(A)(iv)which is made by a manufacturer.
IRC 30B(e)(4)(B)"Alternative fuel" is compressed natural gas, &c., & liquids with 85% methanol.
IRC 30B(e)(5)This paragraph sets the credit for mixed-fuel vehicles.
IRC 30B(e)(5)(A)For a mixed-fuel vehicle placed in service during TY, credit it equal to—
IRC 30B(e)(5)(A)(i)70% of credit by (e) if vehicle met (4) (for 75/25 mixed-fuel vehicles), &
IRC 30B(e)(5)(A)(ii)90% of credit by (e) if vehicle met (4) (for 90/10 mixed-fuel vehicles).
IRC 30B(e)(5)(B)A "mixed-fuel vehicle" is any vehicle described by (C) or (D) of (3), which—
IRC 30B(e)(5)(B)(i)is certified as able to use a combination of alternative & petroleum-based fuel,
IRC 30B(e)(5)(B)(ii)either—
IRC 30B(e)(5)(B)(ii)(I)has a certificate of conformity under PL 84-159, or
IRC 30B(e)(5)(B)(ii)(II)conforms to same requirements as vehicles that are sold or leased in California,
IRC 30B(e)(5)(B)(iii)the original use of which commences with the taxpayer,
IRC 30B(e)(5)(B)(iv)which is acquired by the taxpayer for use or lease, and not for resale, and
IRC 30B(e)(5)(B)(v)which is made by a manufacturer.
IRC 30B(e)(5)(C)A "75/25 mixed-fuel vehicle" uses at least 75% alternative fuel.
IRC 30B(e)(5)(D)A "90/10 mixed-fuel vehicle" uses at least 90% alternative fuel.
IRC 30B(f)Limitations on number of hybrid and lean-burn vehicles eligible for credit.
IRC 30B(f)(1)For cars sold in phaseout period, applicable percentage of credit is given.
IRC 30B(f)(2)Such period starts 2 quarters after 2005 when manufacturer makes 60000 vehicles.
IRC 30B(f)(3)For (1), the applicable percentage is—
IRC 30B(f)(3)(A)50% for the first 2 calendar quarters of the phaseout period,
IRC 30B(f)(3)(B)25% for the 3rd and 4th calendar quarters of the phaseout period, and
IRC 30B(f)(3)(C)0% for each calendar quarter thereafter.
IRC 30B(f)(4)This paragraph sets rules for controlled groups.
IRC 30B(f)(4)(A)Persons subject to (a) or (b) of §52 or (m) or (o) of §414 is 1 manufacturer.
IRC 30B(f)(4)(B)In applying (a) and (b) of §52, apply §1563 without regard to such (b)(2)(C).
IRC 30B(f)(5)A "qualified vehicle" are cars by (d)(2)(A) or advanced lean-burn technology.
IRC 30B(g)This subsection sets application with other credits.
IRC 30B(g)(1)Credit by (a) for depreciable property is considered as credit by §38(b).
IRC 30B(g)(2)For 26 USC, credit by (a) is a credit allowable under subpart A for the TY.
IRC 30B(h)This subsection sets other definitions and special rules.
IRC 30B(h)(1)A "motor vehicle" is manufactured mainly for use on public roads & has 4 wheels.
IRC 30B(h)(2)City fuel economy is set by part 600, subchapter Q, chapter I of 40 CFR.
IRC 30B(h)(3)"Automobile", "light truck", "manufacturer", &c., are set by 42 USC §7251.
IRC 30B(h)(4)Reduce basis of any applicable property by credit allowed by (a) (ignoring (g)).
IRC 30B(h)(5)The amount of credit allowable under chapter 1—
IRC 30B(h)(5)(A)for any incremental cost accounted for (e) is reduced by attributable credit, &
IRC 30B(h)(5)(B)for cars by (b) or (c) is reduced by credit allowed by (a).
IRC 30B(h)(6)Taxpayer selling car can claim (a) for depreciation if disclosed to recipient.
IRC 30B(h)(7)No credit is allowed to property by §50(b)(1) or cost accounted by §179.
IRC 30B(h)(8)Secretary provides for recapture of (a) if property ceases to be eligible.
IRC 30B(h)(9)No credit by (a) is allowed if taxpayer elects for §30B to not apply.
IRC 30B(h)(10)A vehicle is not eligible for credit unless in compliance with—
IRC 30B(h)(10)(A)applicable provisions of the PL 84-159 (or applicable State laws), and
IRC 30B(h)(10)(B)the motor vehicle safety provisions by §30101 - §30169 of 49 USC.
IRC 30B(i)This subsection sets the "plug-in conversion credit".
IRC 30B(i)(1)Such credit is 10% of cost within $40K of converting vehicle by (2).
IRC 30B(i)(2)A "qualified plug-in electric drive motor vehicle" is any vehicle by §30D.
IRC 30B(i)(3)Such credit is given even if §30B credit applies such vehicle in a prior TY.
IRC 30B(j)This subsection sets regulations.
IRC 30B(j)(1)Secretary shall make regulations as necessary to carry out §30B.
IRC 30B(j)(2)Sec., Administrator of EPA, &c., determines motor vehicle eligibility.
IRC 30B(k)§30B does not apply to any property purchased after—
IRC 30B(k)(1)20141231 for new qualified fuel cell motor vehicles ((b)),
IRC 30B(k)(2)20101231 for advanced lean burn technology cars ((c)) or hybrids ((d)(2)(A)),
IRC 30B(k)(3)20091231 for new qualified hybrid motor vehicles ((d)(2)(B)), and
IRC 30B(k)(4)20101231 for new qualified alternative fuel vehicles ((e)).
 
IRC 30CThis section discusses the alternative fuel vehicle refueling property credit.
IRC 30C(a)Credit is 30% of cost of any qualified property placed in service in TY.
IRC 30C(b)Credit allowed by (a) with respect to any such property is limited to—
IRC 30C(b)(1)$30K for property subject to an allowance for depreciation, and
IRC 30C(b)(2)$1K in any other case.
IRC 30C(c)"Qualified alternative fuel vehicle refueling property" is by §179A(c) as if—
IRC 30C(c)(1)§179A(d)(1) didn't apply to property installed on principal residence (§121), &
IRC 30C(c)(2)only the following is considered clean-burning fuels for §179A(d):
IRC 30C(c)(2)(A)Fuel where ethanol, natural gas, hydrogen, &c., is at least 85% of its volume.
IRC 30C(c)(2)(B)Any mixture—
IRC 30C(c)(2)(B)(i)which has 2 or more of: fuel by §40A(d)(1), §4083(a)(3), or kerosene, and
IRC 30C(c)(2)(B)(ii)which has at least 20% of volume of fuel by §40A(d)(1) regardless of kerosene.
IRC 30C(d)This subsection sets application with other credits.
IRC 30C(d)(1)Credit by (a) for depreciable property is considered as credit by §38(b).
IRC 30C(d)(2)Credit by (a) for any TY is limited to any excess of—
IRC 30C(d)(2)(A)liability by §26(b) reduced by credits by §§21 - 26, 27, 30, & 30B over
IRC 30C(d)(2)(B)the tentative minimum tax for the taxable year.
IRC 30C(e)This subsection sets special rules for §30C.
IRC 30C(e)(1)Reduce the basis of any applicable property by credit allowed by (a).
IRC 30C(e)(2)Taxpayer selling car can claim (a) for depreciation if disclosed to recipient.
IRC 30C(e)(3)No credit allowed to property by §50(b)(1) or cost accounted by §179.
IRC 30C(e)(4)No credit by (a) is allowed if taxpayer elects for §30C to not apply.
IRC 30C(e)(5)Recapture rules similar to those by §179A(e)(4).
IRC 30C(e)(6)Rules for property put in service in TYs beginning between 20081231 & 20110101.
IRC 30C(e)(6)(A)For any such property which doesn't relate to hydrogen—
IRC 30C(e)(6)(A)(i)(a) is applied by substituting "50%" for "30%",
IRC 30C(e)(6)(A)(ii)(b)(1) is applied by substituting "$50K" for "$30K", and
IRC 30C(e)(6)(A)(iii)(b)(2) is applied by substituting "$2K" for "$1K", and
IRC 30C(e)(6)(B)substitute "$200K" for "$30" in applying (b)(1) for property not by (A).
IRC 30C(f)Secretary sets regulations as necessary to carry out §30C.
IRC 30C(g)§30C does not apply to property placed in service after—
IRC 30C(g)(1)20141231 for property relating to hydrogen, and
IRC 30C(g)(2)20131231 for any other property.
 
IRC 30DThis section discusses new qualified plug-in electric drive motor vehicles.
IRC 30D(a)Total (b) amount for each such vehicle put in service in TY is chapter 1 credit.
IRC 30D(b)This subsection sets the per vehicle dollar limitation.
IRC 30D(b)(1)Amount by (b) for any such qualified vehicle is sum of amounts by (2) and (3).
IRC 30D(b)(2)The base amount determined under (2) is $2500.
IRC 30D(b)(3)$417, plus $417 per KWH of traction battery capacity exceeding 5 KWH. $5K limit.
IRC 30D(c)This subsection sets application with other credits.
IRC 30D(c)(1)Credit by (a) for depreciable property is considered as given under §38(b).
IRC 30D(c)(2)For 26 USC, credit by (a) is a credit allowable under subpart A for the TY.
IRC 30D(d)Definition of a "new qualified plug-in electric drive motor vehicle" for §30D.
IRC 30D(d)(1)A new qualified plug-in electric drive motor vehicle is a vehicle—
IRC 30D(d)(1)(A)the original use of which commences with the taxpayer,
IRC 30D(d)(1)(B)which is acquired for use or lease by the taxpayer and not for resale,
IRC 30D(d)(1)(C)which is made by a manufacturer,
IRC 30D(d)(1)(D)which is treated as a motor vehicle for purposes of title II of PL 88-206,
IRC 30D(d)(1)(E)which has a gross vehicle weight rating of less than 14000 pounds, and
IRC 30D(d)(1)(F)which is significantly propelled by a electric motor from using a battery which—
IRC 30D(d)(1)(F)(i)has a capacity of at least 4 kilowatt hours, and
IRC 30D(d)(1)(F)(ii)is capable of being recharged from an external source of electricity.
IRC 30D(d)(2)A "motor vehicle" is manufactured mainly for use on public roads & has 4 wheels.
IRC 30D(d)(3)A "manufacturer" is set by the Administrator of EPA for title II of PL 88-206.
IRC 30D(d)(4)A battery's "capacity" is the quantity of energy it stores at 100% charge state.
IRC 30D(e)Limitation on number of new qualified plug-in vehicles eligible for credit.
IRC 30D(e)(1)If (d) vehicle is sold in period by (2), apply percentage by (3) to (a) credit.
IRC 30D(e)(2)Phaseout period starts 2nd quarter after 200K (d) vehicles have sold after 2009.
IRC 30D(e)(3)For purposes of (1), the applicable percentage is—
IRC 30D(e)(3)(A)50% for the first 2 calendar quarters of the phaseout period,
IRC 30D(e)(3)(B)25% for the 3rd and 4th calendar quarters of the phaseout period, and
IRC 30D(e)(3)(C)0% for each calendar quarter thereafter.
IRC 30D(e)(4)Rules similar to those under §30B(f)(4) apply for purposes of (e).
IRC 30D(f)This subsection sets special rules.
IRC 30D(f)(1)For subtitle A, the adjusted basis of such vehicle is reduced by credit by (a).
IRC 30D(f)(2)Any other chapter 1 credit, &c., for such vehicle is reduced by credit by (a).
IRC 30D(f)(3)If use meets (3) or (4) of §50(b), vehicle's seller has put vehicle in service.
IRC 30D(f)(4)No credit by (a) is allowed to property subject to §50(b)(1).
IRC 30D(f)(5)Sec. may recapture credit by (a) if property ceases to be eligible for credit.
IRC 30D(f)(6)No credit by (a) is allowed if the taxpayer elects for §30D to not apply.
IRC 30D(f)(7)To be eligible for credit by §30D, a motor vehicle must be in compliance with—
IRC 30D(f)(7)(A)the applicable rules by PL 88-206 (unless §209(b) of such PL applies), and
IRC 30D(f)(7)(B)the vehicle safety provisions of §§30101 - 30169 of 49 USC.
IRC 30D(g)A credit allowed for 2 and 3 wheeled plug-in electric vehicles.
IRC 30D(g)(1)For any TY, in the case of a qualified 2 or 3 wheeled plug-in electric vehicle—
IRC 30D(g)(1)(A)credit of applicable amount is allowed for each such vehicle put in service, and
IRC 30D(g)(1)(B)credit amount allowed under (A) is treated as a credit allowed under (a).
IRC 30D(g)(2)For (1), the "applicable amount" is equal to the lesser of—
IRC 30D(g)(2)(A)10% of the cost of the qualified 2 or 3 wheeled plug-in electric vehicle, or
IRC 30D(g)(2)(B)$2500.
IRC 30D(g)(3)A "qualified 2 or 3 wheeled plug-in electric vehicle" is any vehicle which—
IRC 30D(g)(3)(A)has 2 or 3 wheels,
IRC 30D(g)(3)(B)meets requirements of (A) - (C), (E), and (F) of (d)(1),
IRC 30D(g)(3)(C)is manufactured primarily for use on public streets, roads, and highways,
IRC 30D(g)(3)(D)is capable of achieving speed of 45 miles per hour or greater, and
IRC 30D(g)(3)(E)is acquired after 20111231 and before 20140101.
 
Subtitle A, Chapter 1, Subchapter A, Part IV, Subpart C.
 
IRC 31This section discusses the tax withheld on wages.
IRC 31(a)Rules for wage withholding for income tax purposes.
IRC 31(a)(1)Amount withheld as tax by chapter 24 is allowed as credit against chapter 1 tax.
IRC 31(a)(2)Such amount is allowed as credit for last TY beginning in such calendar year.
IRC 31(b)This subsection sets a credit for special refunds of Social Security tax.
IRC 31(b)(1)Sec. may allow wage refund by §6413(c) as a chapter 1 tax credit under §3402.
IRC 31(b)(2)Such refund is allowed as credit for last TY beginning in such calendar year.
IRC 31(c)Credit for any amount withheld by §3406 is allowed for TY of receipt.
 
IRC 32This section discusses earned income.
IRC 32(a)This subsection sets the allowance of credit.
IRC 32(a)(1)Credit is credit percentage of earned income within earned income amount.
IRC 32(a)(2)Credit by (1) is limited to any excess of—
IRC 32(a)(2)(A)the credit percentage of earned income amount, over
IRC 32(a)(2)(B)phaseout percentage of greater of AGI or earned income exceeding phaseout limit.
IRC 32(b)This subsection sets percentages and amounts.
IRC 32(b)(1)Credit percentage and phaseout percentage shall be determined by these tables:
IRC 32(b)(1)(A)TY after 1995, base percentage for both is 7.65 for no qualifying children.
IRC 32(b)(1)(B)TY in 1995, credit percentage is 36 for having two or more qualifying children.
IRC 32(b)(1)(C)TY in 1994, both percentages are less than (B) if individual has children.
IRC 32(b)(2)The earned income amount and phaseout amount is by these tables:
IRC 32(b)(2)(A)Base amounts (no qualifying children) is $4220 earned income and $5280 phaseout.
IRC 32(b)(2)(B)For taxpayers filing a joint return, phaseout amounts by (A) is increased by—
IRC 32(b)(2)(B)(i)$1000 for taxable years beginning in 2002, 2003, and 2004,
IRC 32(b)(2)(B)(ii)$2000 for taxable years beginning in 2005, 2006, and 2007, and
IRC 32(b)(2)(B)(iii)$3000 for taxable years beginning after 2007.
IRC 32(b)(3)This paragraph sets special rules for taxable year beginning in 2009 - 2017.
IRC 32(b)(3)(A)Credit percentage is 45% for taxpayers with 3 or more qualifying children.
IRC 32(b)(3)(B)This subparagraph sets a reduction of marriage penalty.
IRC 32(b)(3)(B)(i)The dollar amount in effect under (2)(B) is $5000.
IRC 32(b)(3)(B)(ii)For TYs in 2010, $5000 amount by (i) is increased by an amount equal to—
IRC 32(b)(3)(B)(ii)(I)such dollar amount, multiplied by
IRC 32(b)(3)(B)(ii)(II)the cost-of-living adjustment by §1(f)(3); swap "2008" for "1992" in such (B).
IRC 32(b)(3)(B)(iii)(j)(2)(A) applies after accounting any increase under (ii).
IRC 32(c)This subsection sets definitions and special rules.
IRC 32(c)(1)This paragraph defines an "eligible individual".
IRC 32(c)(1)(A)An eligible individual is—
IRC 32(c)(1)(A)(i)any individual who has a qualifying child for the taxable year, or
IRC 32(c)(1)(A)(ii)any other individual who does not have a qualifying child, if—
IRC 32(c)(1)(A)(ii)(I)such individual's principal abode is in the US for more than half the TY,
IRC 32(c)(1)(A)(ii)(II)the age of such individual is between 25 and 65 at TY end, and
IRC 32(c)(1)(A)(ii)(III)such individual is not a dependent (§151). Marital status is by §7703.
IRC 32(c)(1)(B)Qualifying children are not eligible individuals for any taxable year.
IRC 32(c)(1)(C)An eligible individual does not include those who claim benefits under §911.
IRC 32(c)(1)(D)Nonresident aliens are ineligible if election by (g) or (h) of §6013 isn't made.
IRC 32(c)(1)(E)No credit allowed to eligible individual who does not include on the return—
IRC 32(c)(1)(E)(i)such individual's TIN, and
IRC 32(c)(1)(E)(ii)if the individual is married (as by §7703), the TIN of the spouse.
IRC 32(c)(1)(F)No child is accounted by (b) if (3)(D) is not met.
IRC 32(c)(2)This paragraph defines "earned income".
IRC 32(c)(2)(A)Earned income is—
IRC 32(c)(2)(A)(i)wages, salaries, tips, and other such amounts includible in gross income, plus
IRC 32(c)(2)(A)(ii)net earnings from self-employment (§1402(a)), ignoring deduction by §164(f).
IRC 32(c)(2)(B)For purposes of (A)—
IRC 32(c)(2)(B)(i)figure individual's earned income without regard to community property laws,
IRC 32(c)(2)(B)(ii)no amount from a pension or annuity is taken into account,
IRC 32(c)(2)(B)(iii)no amount to which §871(a) applies is taken into account,
IRC 32(c)(2)(B)(iv)no amount received for services provided while an inmate is accounted,
IRC 32(c)(2)(B)(v)no amount by (A) received for subsidized service under any State program, and
IRC 32(c)(2)(B)(vi)exclusions by §112 is earned income for nay taxable year ending—
IRC 32(c)(2)(B)(vi)(I)after 20041004 and,
IRC 32(c)(2)(B)(vi)(II)before 20080101.
IRC 32(c)(3)This paragraph defines a "qualifying child".
IRC 32(c)(3)(A)A qualifying child is by §152(c) (without accounting such (1)(D) and §152(e)).
IRC 32(c)(3)(B)Married individuals for which no §151 deduction is allowed are not qualifying.
IRC 32(c)(3)(C)For (A), §152(c)(1)(B) is met only if the principal abode is within the US.
IRC 32(c)(3)(D)This subparagraph sets identification requirements.
IRC 32(c)(3)(D)(i)Child is not taken into account by (b) unless name, age, and TIN is provided.
IRC 32(c)(3)(D)(ii)Secretary may prescribe other methods for providing information in clause (i).
IRC 32(c)(4)The main home for Armed Forces members is in US while serving active duty.
IRC 32(d)Married individuals by §7703 apply §32 if return is filed jointly under §6013.
IRC 32(e)No credit by (a) is allowed for TYs of less than 12 months unless taxpayer dies.
IRC 32(f)This subsection sets rules to determine amount of credit under tables.
IRC 32(f)(1)The Secretary shall prescribe the tables for the credit by §32.
IRC 32(f)(2)Such tables are similar to (a) & (b) and won't have brackets more than $50 each—
IRC 32(f)(2)(A)for earned income between $0 and credit phaseout amount under (b), and
IRC 32(f)(2)(B)for AGI between where phaseout begins and ends under (b).
IRC 32(g)Repealed.
IRC 32(h)Repealed.
IRC 32(i)A denial of credit to individuals with excessive investment income.
IRC 32(i)(1)No credit allowed if aggregate amount of disqualified income exceeds $2200.
IRC 32(i)(2)For (1), "disqualified income" is—
IRC 32(i)(2)(A)interest or dividends which are includible in gross income for the TY,
IRC 32(i)(2)(B)interest received or accrued which is exempt from chapter 1 tax,
IRC 32(i)(2)(C)any excess of—
IRC 32(i)(2)(C)(i)gross income from rents or royalties not derived from business, over
IRC 32(i)(2)(C)(ii)the sum of—
IRC 32(i)(2)(C)(ii)(I)the deductions which are directly allocable to such gross income, plus
IRC 32(i)(2)(C)(ii)(II)interest deductions properly allocable to such gross income,
IRC 32(i)(2)(D)capital gain net income (§1222) of the taxpayer for the taxable year, and
IRC 32(i)(2)(E)any excess of, in respect of passive activities as under §469—
IRC 32(i)(2)(E)(i)aggregate income (disregarding income accounted by (c)(2) or (A) - (D)), over
IRC 32(i)(2)(E)(ii)aggregate losses.
IRC 32(j)This subsection sets inflation adjustments.
IRC 32(j)(1)For TYs beginning after 1996, the amounts in (b)(2) and (i)(1) is increased by—
IRC 32(j)(1)(A)such dollar amount, multiplied by
IRC 32(j)(1)(B)the cost-of-living adjustment by §1(f)(3) for the taxable year, determined—
IRC 32(j)(1)(B)(i)for (b)(2)(A) and (i)(1), by swapping "1995" for "1992" in §1(f)(3)(B), and
IRC 32(j)(1)(B)(ii)for the $3K amount in (b)(2)(B)(iii), by swapping "2007" for "1992" in such (B).
IRC 32(j)(2)This paragraph sets rules for rounding.
IRC 32(j)(2)(A)After applying (1), (b)(2)(A) amounts are rounded to nearest multiple of $10.
IRC 32(j)(2)(B)After applying (1), (i)(1) amounts are rounded to next lowest multiple of $50.
IRC 32(k)Restrictions on taxpayers who improperly claimed credit in a prior year.
IRC 32(k)(1)Rules for taxpayers making prior fraudulent or reckless claims.
IRC 32(k)(1)(A)No credit by §32 is allowed for any TY in the disallowance period.
IRC 32(k)(1)(B)The "disallowance period" is—
IRC 32(k)(1)(B)(i)10 TYs after most recent TY where claim of §32 credit was fraudulent, and
IRC 32(k)(1)(B)(ii)2 TYs after most recent TY where rules for such claim were recklessly ignored.
IRC 32(k)(2)For denial under §§6211 - 6216, only Sec. can approve credit in subsequent TYs.
IRC 32(l)Refunds by §32 and employer payments under §3507 is not income for purposes of—
IRC 32(l)(1)PL 75-412 (United States Housing Act of 1937),
IRC 32(l)(2)title V of PL 81-171 (Housing Act of 1949),
IRC 32(l)(3)§101 of PL 89-117 (Housing and Urban Development Act of 1965),
IRC 32(l)(4)§§221(d)(3), 235, and 236 of PL 73-479 (National Housing Act), and
IRC 32(l)(5)PL 88-525 (Food Stamp Act of 1977).
IRC 32(m)For (1)(E) and (3)(D) of (c), A TIN is a SSN issued by the SS Administration.
 
IRC 33Tax withheld at source under §§1441 - 1446 is credit against chapter 1 tax.
 
IRC 34This section discusses certain uses of gasoline and special fuels.
IRC 34(a)A credit is allowed against chapter 1 tax equal to the sum of amounts payable—
IRC 34(a)(1)under §6420 (determined without regard to such (g)),
IRC 34(a)(2)under §6421 (determined without regard to such (i)), and
IRC 34(a)(3)under §6427 (determined without regard to such (k)),
IRC 34(b)Credit by (a) isn't allowed for payments claimed under §6421(i) or §6427(k).
 
IRC 35This section discusses health insurance costs of eligible individuals.
IRC 35(a)Individual may claim 72.5% of coverage cost for months by (b) as credit.
IRC 35(b)This subsection defines an "eligible coverage month" for purposes of §35.
IRC 35(b)(1)An "eligible coverage month" is any month if—
IRC 35(b)(1)(A)as of the first day of such month, the taxpayer—
IRC 35(b)(1)(A)(i)is an eligible individual,
IRC 35(b)(1)(A)(ii)pays the premium upon and is covered by qualified health insurance,
IRC 35(b)(1)(A)(iii)does not have other specified coverage, and
IRC 35(b)(1)(A)(iv)is not imprisoned under Federal, State, or local authority, and
IRC 35(b)(1)(B)such month begins more than 90 days after 20020806 and before 20140101.
IRC 35(b)(2)For joint returns, (1)(A) is met if at least one spouse meets requirements.
IRC 35(c)This subsection defines an "eligible individual".
IRC 35(c)(1)An eligible individual is—
IRC 35(c)(1)(A)an eligible TAA recipient,
IRC 35(c)(1)(B)an eligible alternative TAA recipient, and
IRC 35(c)(1)(C)an eligible PGBC pension recipient.
IRC 35(c)(2)This paragraph defines an "eligible TAA recipient".
IRC 35(c)(2)(A)Such person gets amounts by PL 93-618 (or would if not for such §231(a)(3)(B)).
IRC 35(c)(2)(B)For months by (b) starting after 20090217, such a recipient—
IRC 35(c)(2)(B)(i)receives a trade readjustment allowance by chapter 2 of title II of PL 93-618,
IRC 35(c)(2)(B)(ii)would receive (i) except for a break exceeding period by §233(e) of such PL, or
IRC 35(c)(2)(B)(iii)gets §85(b) pay & would get (i) if (3)(B) & (5) of such §231(a) were ignored.
IRC 35(c)(3)An "eligible alternative TAA recipient" means, for any month, someone who—
IRC 35(c)(3)(A)is a worker by §246(a)(3)(B) of PL 93-618 and is a plan participant, and
IRC 35(c)(3)(B)receives a benefit for such month under §246(a)(2) of such PL.
IRC 35(c)(4)An "eligible PBGC pension recipient" means, for any month, someone who has—
IRC 35(c)(4)(A)reached age 55 at the first day of such month, and
IRC 35(c)(4)(B)at least partial benefits paid by the PBGC under title IV of PL 93-406.
IRC 35(d)This subsection defines a "qualifying family member".
IRC 35(d)(1)A qualifying family member is, in respect of the taxpayer—
IRC 35(d)(1)(A)his spouse, and
IRC 35(d)(1)(B)any of his uncovered dependents for which a deduction by §151(c) is allowed.
IRC 35(d)(2)If a child meets (2) or (4) of §152(e), (1)(B) only applies to custodial parent.
IRC 35(e)This subsection defines "qualified health insurance".
IRC 35(e)(1)Qualified health insurance is coverage under any of the following:
IRC 35(e)(1)(A)A COBRA continuation provision (§9832(d)(1)).
IRC 35(e)(1)(B)State-based continuation as provided by the State and required by State law.
IRC 35(e)(1)(C)A qualified State high risk pool (§2744(c)(2) of PL 91-572).
IRC 35(e)(1)(D)A health insurance program offered for State employees.
IRC 35(e)(1)(E)A State-based health insurance program that is comparable to the program of (D).
IRC 35(e)(1)(F)An arrangement entered into by a State and—
IRC 35(e)(1)(F)(i)a group health plan (as by §3(37) of PL 93-406),
IRC 35(e)(1)(F)(ii)an issuer of health insurance coverage,
IRC 35(e)(1)(F)(iii)an administrator, or
IRC 35(e)(1)(F)(iv)an employer.
IRC 35(e)(1)(G)A State arrangement with a private sector health care coverage purchasing pool.
IRC 35(e)(1)(H)A State-operated health plan that does not receive any Federal finances.
IRC 35(e)(1)(I)A group health plan that is available through the employment of the spouse.
IRC 35(e)(1)(J)30 days of individual health insurance if previously qualified for—
IRC 35(e)(1)(J)(i)in the case of an eligible TAA recipient, the amount in (c)(2).
IRC 35(e)(1)(J)(ii)in the case of an eligible alternative recipient, the amount in (c)(3)(B).
IRC 35(e)(1)(J)(iii)in the case of an eligible PGBC pension recipient, the amount in (c)(4)(B).
IRC 35(e)(1)(K)Coverage funded by §501(c)(9) person by court order, &c.
IRC 35(e)(2)This paragraph sets requirements for state-based coverage.
IRC 35(e)(2)(A)For (B) - (H) of (1), State must elect §35 to apply and the following is met:
IRC 35(e)(2)(A)(i)Those who pay premiums or provide credit by §7257(d) are guaranteed enrollment.
IRC 35(e)(2)(A)(ii)No pre-existing condition limitations are imposed to any qualifying individual.
IRC 35(e)(2)(A)(iii)Premiums for a qualifying individual does not exceed that for non-qualifiers.
IRC 35(e)(2)(A)(iv)Benefits under coverage are similar to those provided to non-qualifiers.
IRC 35(e)(2)(B)For (2), a "qualifying individual" is—
IRC 35(e)(2)(B)(i)someone who seeks to enroll in coverage, meets (iii) and (iv) of (b)(1)(A), and
IRC 35(e)(2)(B)(ii)the qualifying family members of such eligible individual.
IRC 35(e)(3)"Qualified health insurance" doesn't include—
IRC 35(e)(3)(A)a flexible spending or similar arrangement, and
IRC 35(e)(3)(B)any insurance if majority of its coverage is of expected benefits by §9832(c).
IRC 35(f)Individual has other specified coverage for any full month if following is met:
IRC 35(f)(1)This paragraph sets rules for subsidized coverage.
IRC 35(f)(1)(A)Such person is covered under insurance by employer plan paying 50% of costs.
IRC 35(f)(1)(B)For eligible alternative TAA recipients, such individual is either—
IRC 35(f)(1)(B)(i)eligible for insurance coverage which related employer pays 50% of costs, or
IRC 35(f)(1)(B)(ii)covered by insurance which any part of cost is paid by a related employer.
IRC 35(f)(1)(C)Extent of coverage paid by employer is benefits from a cafeteria plan (§125(d)).
IRC 35(f)(2)Such individual, in respect of the Social Security ACt—
IRC 35(f)(2)(A)receives benefits by part A of title XVIII or is enrolled under part B, or
IRC 35(f)(2)(B)is enrolled under title XIX or title XXI (other than such §1928).
IRC 35(f)(3)Such individual is—
IRC 35(f)(3)(A)enrolled in a health benefits plan under chapter 89 of 5 USC, or
IRC 35(f)(3)(B)entitled to receive benefits under chapter 55 of 10 USC.
IRC 35(g)This subsection sets special rules.
IRC 35(g)(1)Credit under (a) is reduced by aggregate amount paid under §7527.
IRC 35(g)(2)Accounted amounts of (a) are not accounted for any deduction by §162(l) or §213.
IRC 35(g)(3)Distributions from accounts by §220(d) or §223(d) are not accounted for (a).
IRC 35(g)(4)No credit is allowed to individual subject to §151 deduction regarding taxpayer.
IRC 35(g)(5)The spouse is not treated as a qualifying family member for (a), if—
IRC 35(g)(5)(A)the taxpayer is married at the end of the taxable year,
IRC 35(g)(5)(B)the taxpayer and his spouse are both eligible individuals during the year, and
IRC 35(g)(5)(C)the taxpayer files a separate return for the taxable year.
IRC 35(g)(6)Rules similar to those of (3) and (4) §21(e) apply for §35.
IRC 35(g)(7)Apply §213(d)(6) to contracts paying coverage of persons unrelated to taxpayer.
IRC 35(g)(8)This paragraph sets the treatment of payments.
IRC 35(g)(8)(A)Secretary's payments of §7257 amounts are made on first day of month of receipt.
IRC 35(g)(8)(B)Payments for eligible coverage months occur on first day of month of payment.
IRC 35(g)(9)Individuals subject to §3001 of PL 111-5 aren't eligible, &c., for §35 & §7527.
IRC 35(g)(10)Continued qualification of family members within 24 months after certain events.
IRC 35(g)(10)(A)Month subject to (f)(2)(A) is (b)(1) month to figure credit for members by (d).
IRC 35(g)(10)(B)(c) applies to spouse under finalized divorce to figure credit by §35 & §7527.
IRC 35(g)(10)(C)For the death of a person by (c), within 24 months after such death—
IRC 35(g)(10)(C)(i)any spouse thereof is such a person (if so qualifying before death), and
IRC 35(g)(10)(C)(ii)any person by (i) is an eligible individual to figure credit by §35 and §7527.
IRC 35(g)(10)Secretary may prescribe regulations as needed for §§35, 6050T, and 7527.
 
IRC 36This section discusses the first-time homebuyer credit.
IRC 36(a)(c)(1) person is allowed 10% of purchase price as credit against subtitle A tax.
IRC 36(b)This subsection sets limitations.
IRC 36(b)(1)This paragraph sets a dollar limitation.
IRC 36(b)(1)(A)Except as otherwise set, credit allowed by (a) is limited to $8K.
IRC 36(b)(1)(B)For MFS individuals, (A) is applied by substituting "$4K" for "$8K".
IRC 36(b)(1)(C)(a) is allocated to multiple unmarried individuals who purchase a residence.
IRC 36(b)(1)(D)If (c)(6) applies, swap "$6.5K" for "$8K" and "$3250" for "$4K" in (A) - (C).
IRC 36(b)(2)A limitation based on modified adjusted gross income ("MAGI").
IRC 36(b)(2)(A)Credit by (a) is reduced by amount bearing same ratio to such credit as—
IRC 36(b)(2)(A)(i)any excess of—
IRC 36(b)(2)(A)(i)(I)taxpayer's MAGI for the taxable year, over
IRC 36(b)(2)(A)(i)(II)$75K ($150K in the case of a joint return), bears to
IRC 36(b)(2)(A)(ii)$20K.
IRC 36(b)(2)(B)MAGI is taxpayer's adjusted gross income plus exclusions by §§911, 931, or 933.
IRC 36(b)(3)No credit by (a) is allowed if residence purchase price exceeds $800K.
IRC 36(b)(4)Credit by (a) requires taxpayer or spouse to be age 18 or more on purchase date.
IRC 36(c)This subsection sets definitions for purposes of §36.
IRC 36(c)(1)A "first-time homebuyer" had no residence ownership in 3 years before purchase.
IRC 36(c)(2)A "principal residence" has the same meaning as used in §121.
IRC 36(c)(3)This paragraph defines a "purchase".
IRC 36(c)(3)(A)A purchase is any acquisition, but only if—
IRC 36(c)(3)(A)(i)the property is not acquired from a person related to the acquirer, and
IRC 36(c)(3)(A)(ii)the basis of the property in the hands of the acquirer is not determined—
IRC 36(c)(3)(A)(ii)(I)in any part by reference to the basis of the property to the former holder, or
IRC 36(c)(3)(A)(ii)(II)under §1014(a) (relating to property acquired from a decedent).
IRC 36(c)(3)(B)A residence constructed the taxpayer is purchased when occupancy starts.
IRC 36(c)(4)The "purchase price" is the principal residence's basis on the date of purchase.
IRC 36(c)(5)In general, two persons are related if the relationship meets §267 or §707(b).
IRC 36(c)(6)Owner of same residence for 5 years within 8 years after purchase meets (1).
IRC 36(d)No credit under (a) is allowed for any TY for the purchase of a residence if—
IRC 36(d)(1)the taxpayer is a nonresident alien,
IRC 36(d)(2)the residence is disposed or (c)(2) no longer applies before such TY ends,
IRC 36(d)(3)a deduction under §151 regarding the taxpayer is allowed to another taxpayer, or
IRC 36(d)(4)an copy of an executed settlement statement isn't attached to the tax return.
IRC 36(e)If reporting is required by §6045(e)(2) person, disregard exception by §6045(e).
IRC 36(f)This subsection sets rules for the recapture of credit.
IRC 36(f)(1)Chapter 1 tax is increased by 6.6% of credit by (a) for each TY of (7) period.
IRC 36(f)(2)If event by (d)(2) applies to taxpayer before end of period by (7)—
IRC 36(f)(2)(A)chapter 1 tax is excess of credit amount over tax imposed by (1) in prior TYs, &
IRC 36(f)(2)(B)(1) doesn't apply regarding such credit for such TY and any subsequent TY.
IRC 36(f)(3)If residence is sold to unrelated person, (2) increase is limited to sale gain.
IRC 36(f)(4)This paragraph sets exceptions.
IRC 36(f)(4)(A)(1) and (2) don't apply to any TY ending after the date of the taxpayer's death.
IRC 36(f)(4)(B)Don't apply (2) if §1033(a) applies & new residence is acquired within 2 years.
IRC 36(f)(4)(C)In the case of a transfer of a residence to which §1041(a) applies—
IRC 36(f)(4)(C)(i)(2) doesn't apply to such transfer, and
IRC 36(f)(4)(C)(ii)for TYs after such transfer, (1) & (2) applies to transferee as if transferor.
IRC 36(f)(4)(D)For credit allowed for the purchase of a residence between 20081231 & 20091201—
IRC 36(f)(4)(D)(i)(1) doesn't apply, and
IRC 36(f)(4)(D)(ii)(2) applies if event by (d)(2) occurs within 36 months after date of purchase.
IRC 36(f)(4)(E)This subparagraph sets a special rule for members of the armed forces, &c.
IRC 36(f)(4)(E)(i)For disposition of residence after 20081231 in connection to service by (ii)—
IRC 36(f)(4)(E)(i)(I)(2) and (d)(2) don't apply to such disposition, and
IRC 36(f)(4)(E)(i)(II)(1) doesn't apply to TY of such disposition if acquisition was before 20090101.
IRC 36(f)(4)(E)(ii)"Qualified official extended duty service" is qualified duty service as—
IRC 36(f)(4)(E)(ii)(I)a member of the uniformed services,
IRC 36(f)(4)(E)(ii)(II)a member of the Foreign Service of the United States, or
IRC 36(f)(4)(E)(ii)(III)an employee of the intelligence community.
IRC 36(f)(4)(E)(iii)Any term used in (E) has the same meaning as used under §121(d)(9).
IRC 36(f)(5)For MFJ returns, half of (a) credit is considered allowed to each individual.
IRC 36(f)(6)Taxpayer is required to file a return of any chapter 1 tax is imposed under (f).
IRC 36(f)(7)Recapture period is 15 TYs starting 2nd TY after purchase subject to (a) occurs.
IRC 36(g)Purchase may be deemed made on December 31 of prior year if made after 20081231.
IRC 36(h)This subsection sets rules for the application of §36.
IRC 36(h)(1)§36 only applies to principal residence purchased between 20080409 and 20100501.
IRC 36(h)(2)For (1), swap "20101001" for "20100501" if purchase is before 20101001, &c.
IRC 36(h)(3)If 90 days of service by §121(d)(9)(C)(i) between 20081231 & 20100501 is given—
IRC 36(h)(3)(A)(1) and (2) are applied by swapping "20110501" for "20100501", and
IRC 36(h)(3)(B)(2) is applied by swapping "20110701" for "20100701" and "20101001".
 
IRC 36AThis section discusses the making work pay credit.
IRC 36A(a)For person by (d)(1), credit against subtitle A tax is allowed equal to—
IRC 36A(a)(1)6.2% of the earned income of the taxpayer, or, if lesser
IRC 36A(a)(2)$400 ($800 in the case of a joint return).
IRC 36A(b)A limitation based on modified adjusted gross income ("MAGI").
IRC 36A(b)(1)(a) credit is reduced by 2% of MAGI exceeding $75K ($150K for joint returns).
IRC 36A(b)(2)MAGI is taxpayer's AGI plus any amounts excluded by §§911, 931, or 933.
IRC 36A(c)(a) credit is reduced by payments or credits in TY by §2201 & §2202 of PL 111-5.
IRC 36A(d)This subsection sets definitions and special rules for purposes of §36A.
IRC 36A(d)(1)This paragraph defines an "eligible individual".
IRC 36A(d)(1)(A)An eligible individual is any individual other than—
IRC 36A(d)(1)(A)(i)any nonresident alien individual,
IRC 36A(d)(1)(A)(ii)any individual for which deduction by §151 is allowed to another taxpayer, and
IRC 36A(d)(1)(A)(iii)an estate or trust.
IRC 36A(d)(1)(B)Such term doesn't include any individual who doesn't include on the tax return—
IRC 36A(d)(1)(B)(i)such individual's social security account number, and
IRC 36A(d)(1)(B)(ii)in the case of a joint return, the SSN of one of the taxpayers on such return.
IRC 36A(d)(2)"Earned income" is by §32(c)(2). Untaxed self-employment income is excluded.
IRC 36A(e)§36A doesn't apply to taxable years beginning after 20101231.
 
IRC 36BA refundable credit for coverage under a qualified health plan.
IRC 36B(a)(b) amount is credit against subtitle A tax imposed on an applicable taxpayer.
IRC 36B(b)This subsection defines the "premium assistance credit amount" for §36B.
IRC 36B(b)(1)Such amount is total of amounts by (2) for all coverage months in the TY.
IRC 36B(b)(2)The premium assistance amount for any coverage month is the lesser of—
IRC 36B(b)(2)(A)month's premium for plans enrolled through Exchange by §1311 of PL 111-148, or
IRC 36B(b)(2)(B)any excess of—
IRC 36B(b)(2)(B)(i)adjusted monthly premium by (3)(C) of taxpayer's applicable plan by (3)(B), over
IRC 36B(b)(2)(B)(ii)1/12th of the applicable percentage of taxpayer's household income for the year.
IRC 36B(b)(3)Other terms & rules relating to premium assistance amounts for purposes of (2).
IRC 36B(b)(3)(A)This subparagraph sets the applicable percentage.
IRC 36B(b)(3)(A)(i)### Rate is by ###, increased on a sliding scale in a linear manner within tiers.
IRC 36B(b)(3)(A)(ii)This clause sets indexing.
IRC 36B(b)(3)(A)(ii)(I)After 2014, (i) is adjusted to reflect premium growth from prior year.
IRC 36B(b)(3)(A)(ii)(II)After 2018, rates by (I) are additionally adjusted for CPI growth.
IRC 36B(b)(3)(A)(ii)(III)(II) applies if total credits & reductions by PL 111-148 exceeds 0.504% of GDP.
IRC 36B(b)(3)(B)Applicable 2nd lowest cost silver plan is that in taxpayer's rating area which—
IRC 36B(b)(3)(B)(i)is offered through same Exchange through which plans were accounted by (2)(A), &
IRC 36B(b)(3)(B)(ii)provides—
IRC 36B(b)(3)(B)(ii)(I)self-only coverage in the case of an applicable taxpayer—
IRC 36B(b)(3)(B)(ii)(I)(aa)subject to §1(c) tax and isn't allowed §151 deduction for a dependent, or
IRC 36B(b)(3)(B)(ii)(I)(bb)not by (aa), but has purchased only self-only coverage, and
IRC 36B(b)(3)(B)(ii)(II)family coverage in the case of any other applicable taxpayer.
IRC 36B(b)(3)(C)Premium is as if plan covers taxpayer with adjustment by §2701 of PL 78-410.
IRC 36B(b)(3)(D)(2) doesn't apply to premium for benefits in addition to essential benefits if—
IRC 36B(b)(3)(D)(i)a plan by §1302(b)(5) of PL 111-148 offers additional health benefits, or
IRC 36B(b)(3)(D)(ii)State requires plan by §1311(d)(3)(B) of such PL to cover additional benefits.
IRC 36B(b)(3)(E)Pediatric dental benefits required by PL 111-148 is payable for (c)(3)(A) plan.
IRC 36B(c)Definitions and rules for applicable taxpayers, qualified health plans, &c.
IRC 36B(c)(1)This paragraph defines an "applicable taxpayer".
IRC 36B(c)(1)(A)Such taxpayer has household income exceeding within 100% - 400% of poverty line.
IRC 36B(c)(1)(B)A taxpayer meets (A) with such income exceeding 100% of poverty line if he—
IRC 36B(c)(1)(B)(i)has household income within 100% of the poverty line amount for his family, and
IRC 36B(c)(1)(B)(ii)is an alien lawfully present in the US but isn't eligible for title XIX of SSA.
IRC 36B(c)(1)(C)Such term applies to married taxpayers only if a joint return is filed.
IRC 36B(c)(1)(D)§36B credit isn't allowed to an individual subject to §151 for another taxpayer.
IRC 36B(c)(2)This paragraph defines a "coverage month" for purposes of (c).
IRC 36B(c)(2)(A)A coverage month is, with respect to an applicable taxpayer, any month if—
IRC 36B(c)(2)(A)(i)as of its 1st day, taxpayer, &c., is covered under §1311 of PL 111-148, and
IRC 36B(c)(2)(A)(ii)premium for month's coverage is paid by taxpayer (or under §1412 of such PL).
IRC 36B(c)(2)(B)This subparagraph sets an exception for minimum essential coverage.
IRC 36B(c)(2)(B)(i)Don't apply (A) if individual is eligible under §5000A(f) (except such (1)(C)).
IRC 36B(c)(2)(B)(ii)"Minimum essential coverage" is defined by §5000A(f).
IRC 36B(c)(2)(C)A special rule for employer-sponsored minimum essential coverage.
IRC 36B(c)(2)(C)(i)An employee isn't eligible for minimum essential coverage if such coverage—
IRC 36B(c)(2)(C)(i)(I)consists of an eligible employer-sponsored plan (as by §5000A(f)(2)), and
IRC 36B(c)(2)(C)(i)(II)contribution by §5000A(e)(1)(B) exceeds 9.5% of taxpayer's household income.
IRC 36B(c)(2)(C)(ii)§5000A(f)(2) plan coverage allowing within 60% of costs doesn't meet (B)(ii).
IRC 36B(c)(2)(C)(iii)(i) & (ii) don't apply if employee is under plan by §5000A(f)(2) or (3)(B).
IRC 36B(c)(2)(C)(iv)After 2014, Sec. adjusts 9.8% rate by (i)(II) as under (b)(3)(A)(ii).
IRC 36B(c)(3)This paragraph sets definitions and other rules.
IRC 36B(c)(3)(A)"Qualified health plan" is by §1301(a) of PL 111-148; such §1302(e) is excluded.
IRC 36B(c)(3)(B)A "grandfathered health plan" is defined by §1251 of PL 111-148.
IRC 36B(d)Definition of terms relating to income and families for purposes of §36B.
IRC 36B(d)(1)Taxpayer's family size is number of deductions by §151 allowed to him in the TY.
IRC 36B(d)(2)This subparagraph defines "household income".
IRC 36B(d)(2)(A)The household income of any taxpayer is equal to the sum of—
IRC 36B(d)(2)(A)(i)the modified adjusted gross income of the taxpayer, plus
IRC 36B(d)(2)(A)(ii)the aggregate of such income of all other individuals who were—
IRC 36B(d)(2)(A)(ii)(I)accounted under (1) to figure the taxpayer's family size, and—
IRC 36B(d)(2)(A)(ii)(II)required to file a return of tax imposed by §1 for the taxable year.
IRC 36B(d)(2)(B)"Modified adjusted gross income" is adjusted gross income increased by—
IRC 36B(d)(2)(B)(i)any amount excluded from gross income under §911,
IRC 36B(d)(2)(B)(ii)any interest received or accrued in the TY which is exempt from tax, and
IRC 36B(d)(2)(B)(iii)any SS benefits by §86(d) which are excluded from gross income under §86.
IRC 36B(d)(3)This paragraph defines the "poverty line".
IRC 36B(d)(3)(A)The poverty line is determined under §2110(c)(5) of SSA.
IRC 36B(d)(3)(B)Line is figured when (c)(3)(A) plan offered through Exchange starts enrollment.
IRC 36B(e)This subsection sets rules for individuals not lawfully present.
IRC 36B(e)(1)If an individual subject to a taxpayer's §151 deduction isn't lawfully present—
IRC 36B(e)(1)(A)(i) & (ii) of (b)(2)(A) amounts are reduced by their applicable premiums, and
IRC 36B(e)(1)(B)the relationship between income & poverty level is made by any following method:
IRC 36B(e)(1)(B)(i)A method under which—
IRC 36B(e)(1)(B)(i)(I)the taxpayer's family size is figured without accounting such individuals, and
IRC 36B(e)(1)(B)(i)(II)household income is product of taxpayer's household income with a fraction of—
IRC 36B(e)(1)(B)(i)(II)(aa)a numerator of the poverty line for the family size after applying (I), and
IRC 36B(e)(1)(B)(i)(II)(bb)a denominator of poverty line for the family size without applying (I).
IRC 36B(e)(1)(B)(ii)A comparable method reaching the same result as that under clause (i).
IRC 36B(e)(2)A US citizen, &c., present in US during enrollment period is lawfully present.
IRC 36B(e)(3)Sec. of Health and Human Services sets rules to calculate (1) and (2) of (d).
IRC 36B(f)This subsection sets rules for reconciliation of credit and advance credit.
IRC 36B(f)(1)§36B credit is reduced by any advance payment in the TY by §1412 of PL 111-148.
IRC 36B(f)(2)This paragraph sets rules for excess advance payments.
IRC 36B(f)(2)(A)Chapter 1 tax is increased by payment by such §1412 which exceeds §36B credit.
IRC 36B(f)(2)(B)A limitation on (A) if (d)(2) income is within certain amount of poverty line.
IRC 36B(f)(2)(B)(i)### (A) increase is limited to amount by ### (at least $600, up to $2500).
IRC 36B(f)(2)(B)(ii)After 201421231, increase amounts in table under clause (i) by—
IRC 36B(f)(2)(B)(ii)(I)such dollar amount, multiplied by
IRC 36B(f)(2)(B)(ii)(II)the cost-of-living adjustment by §1(f)(3); swap "2013" for "1992" in such (B).
IRC 36B(f)(3)Exchange reports following to Sec. & taxpayer regarding any coverage thereunder:
IRC 36B(f)(3)(A)The level of coverage by §1302(d) of PL 111-148 and the period of effectiveness.
IRC 36B(f)(3)(B)Total premium for the coverage without §36B or reductions by §1402 of such PL.
IRC 36B(f)(3)(C)Total of any advance payment of such credit or reductions by §1412 of such PL.
IRC 36B(f)(3)(D)The name, address, and TIN of the primary insured and other coverage recipients.
IRC 36B(f)(3)(E)Any information provided to the Exchange to determine the amount of such credit.
IRC 36B(f)(3)(F)Information needed to figure if a taxpayer has received excess advance payments.
IRC 36B(g)Sec. sets regulations for purposes of carrying out §36B, including rules to—
IRC 36B(g)(1)coordinate §36B credit with program for payment under §1412 of PL 111-148, and
IRC 36B(g)(2)apply (f) if filing status is dissimilar than when payment by (1) is made.
 
IRC 37See §6401 for credit against subtitle A tax for overpayments of tax.
 
Subtitle A, Chapter 1, Subchapter A, Part IV, Subpart D.
 
IRC 38This section discusses the general business credit.
IRC 38(a)Credit against chapter 1 tax is allowed equal to the sum of—
IRC 38(a)(1)the business credit carryforwards carried to the taxable year,
IRC 38(a)(2)the amount of current year business credit, plus
IRC 38(a)(3)the business credit carrybacks carried to the taxable year.
IRC 38(b)For subpart D, the current year business credit is sum of following for the TY:
IRC 38(b)(1)the investment credit by §46,
IRC 38(b)(2)the work opportunity credit by §51(a),
IRC 38(b)(3)the alcohol fuels credit by §40(a),
IRC 38(b)(4)the research credit by §41(a),
IRC 38(b)(5)the low-income housing credit by §42(a),
IRC 38(b)(6)the enhanced oil recovery credit by §43(a),
IRC 38(b)(7)for an eligible small business (§44(b)), the disabled access credit by §44(a),
IRC 38(b)(8)the renewable electricity production credit by §45(a),
IRC 38(b)(9)the empowerment zone employment credit by §1396(a),
IRC 38(b)(10)the Indian employment credit by §45A(a),
IRC 38(b)(11)the employer social security credit by §45B(a),
IRC 38(b)(12)the orphan drug credit by §45C(a),
IRC 38(b)(13)the new markets tax credit by §45D(a),
IRC 38(b)(14)for employers (§45E(c)), the pension plan startup cost credit by §45E(a),
IRC 38(b)(15)the employer-provided child care credit by §45F(a),
IRC 38(b)(16)the railroad track maintenance credit by §45G(a),
IRC 38(b)(17)the biodiesel fuels credit by §40A(a),
IRC 38(b)(18)the low sulfur diesel fuel production credit by §45H(a),
IRC 38(b)(19)the marginal oil and gas well production credit by §45I(a),
IRC 38(b)(20)the distilled spirits credit by §5011(a),
IRC 38(b)(21)the advanced nuclear power facility production credit by §45J(a),
IRC 38(b)(22)the nonconventional source production credit by §45K(a),
IRC 38(b)(23)the new energy efficient home credit by §45L(a),
IRC 38(b)(24)the energy efficient appliance credit by §45M(a),
IRC 38(b)(25)the portion of the alternative motor vehicle credit to which §30B(g)(1) applies,
IRC 38(b)(26)the portion of the vehicle refueling property credit by §30C(g)(1),
IRC 38(b)(27)the Hurricane Katrina housing credit by §1400P(b),
IRC 38(b)(28)the Hurricane Katrina employee retention credit by §1400R(a),
IRC 38(b)(29)the Hurricane Rita employee retention credit by §1400R(b),
IRC 38(b)(30)the Hurricane Wilma employee retention credit by §1400R(c),
IRC 38(b)(31)the mine rescue team training credit by §45N(a),
IRC 38(b)(32)for an eligible agricultural business by §45O(e), the credit by §45O(a),
IRC 38(b)(33)the differential wage payment credit by §45P(a),
IRC 38(b)(34)the carbon dioxide sequestration credit by §45Q(a),
IRC 38(b)(35)the new qualified plug-in electric drive motor vehicle credit by §30D(c)(1), and
IRC 38(b)(36)the small employer health insurance credit determined by §45R.
IRC 38(c)This subsection sets a limitation based on amount of tax.
IRC 38(c)(1)Credit by (a) is limited to taxpayer's net income tax exceeding the greater of—
IRC 38(c)(1)(A)the tentative minimum tax for the taxable year, or
IRC 38(c)(1)(B)25% of taxpayer's net regular tax liability exceeding $25K.
IRC 38(c)(2)Allowance for empowerment zone employment credit to offset 25% of minimum tax.
IRC 38(c)(2)(A)In the application of the empowerment zone employment credit—
IRC 38(c)(2)(A)(i)§38 and §39 are applied separately to such credit, and
IRC 38(c)(2)(A)(ii)for purposes of applying (1) to such credit—
IRC 38(c)(2)(A)(ii)(I)75% of tentative minimum tax is substituted for (A) thereof, and
IRC 38(c)(2)(A)(ii)(II)limitation of (1) is reduced by credit allowed by (a) for the TY.
IRC 38(c)(2)(B)The "empowerment zone employment credit" is attributable to credit by §1396.
IRC 38(c)(3)Special rules for the New York Liberty Zone business employee credit.
IRC 38(c)(3)(A)In the case of the New York Liberty Zone business employee credit—
IRC 38(c)(3)(A)(i)§38 and §39 are applied separately with respect to such credit, and
IRC 38(c)(3)(A)(ii)in applying (1) to such credit—
IRC 38(c)(3)(A)(ii)(I)the tentative minimum tax is treated as being zero, and
IRC 38(c)(3)(A)(ii)(II)limitation of (1) is reduced by credit allowed by (a) for taxable year.
IRC 38(c)(3)(B)The "New York Liberty Zone business employee credit" is from §51, by §1400L(a).
IRC 38(c)(4)This paragraph sets special rules for specified credits.
IRC 38(c)(4)(A)In the case of specified credits—
IRC 38(c)(4)(A)(i)§38 and §39 are applied separately to such credits, and
IRC 38(c)(4)(A)(ii)in applying (1) to such credits—
IRC 38(c)(4)(A)(ii)(I)the tentative minimum tax is treated as being zero, and
IRC 38(c)(4)(A)(ii)(II)the limitation of (1) is reduced by credit of (a) for the TY (except specified).
IRC 38(c)(4)(B)For (c), a "specified credit" is—
IRC 38(c)(4)(B)(i)for TYs starting after 20041231, the credit determined by §40,
IRC 38(c)(4)(B)(ii)credit by §42 attributable to buildings placed in service after 20071231,
IRC 38(c)(4)(B)(iii)the credit by §45 to attributable extent of electricity of coal produced—
IRC 38(c)(4)(B)(iii)(I)at a facility which is original placed in service after 20041022, and
IRC 38(c)(4)(B)(iii)(II)during the 4-year period starting on such date of being placed in service.
IRC 38(c)(4)(B)(iv)the credit determined under §45B,
IRC 38(c)(4)(B)(v)the credit determined under §45G,
IRC 38(c)(4)(B)(vi)the credit determined under §45R,
IRC 38(c)(4)(B)(vii)credit by §46 attributable to the energy credit determined under §48,
IRC 38(c)(4)(B)(viii)credit by §46 related to credit by §47 for expenses incurred after 20071231, and
IRC 38(c)(4)(B)(ix)the credit determined under §51.
IRC 38(c)(5)This paragraph sets special rules for eligible small business credits in 2010.
IRC 38(c)(5)(A)For eligible small business credits determined in TYs beginning in 2010—
IRC 38(c)(5)(A)(i)§38 and §39 are applied separately with respect to such credits, and
IRC 38(c)(5)(A)(ii)in applying (1) to such credits—
IRC 38(c)(5)(A)(ii)(I)the tentative minimum tax is treated as being 0, and
IRC 38(c)(5)(A)(ii)(II)the limitation under (1) is reduced by credit by (a) for such TY.
IRC 38(c)(5)(B)"Eligible small business credits" is sum of credits by (b) for business by (C).
IRC 38(c)(5)(C)An "eligible small business" has average receipts within $50M in 3 TYs and is a—
IRC 38(c)(5)(C)(i)a corporation whose stock is not publicly traded,
IRC 38(c)(5)(C)(ii)a partnership, or
IRC 38(c)(5)(C)(iii)a sole proprietorship.
IRC 38(c)(5)(D)If partner, &c., meets (C), credit is deemed an eligible small business credit.
IRC 38(c)(6)This paragraph sets special rules in respect of the $25000 limit by (1)(B).
IRC 38(c)(6)(A)Such limit is halved for MFS filers, unless spouse has no §38 or §39 amounts.
IRC 38(c)(6)(B)Such limit is reduced proportionally for controlled group (§1563(a)) members.
IRC 38(c)(6)(C)Such limit is the ratable share regarding persons by (A) or (B) of §46(e)(1).
IRC 38(c)(6)(D)For estates, limit is reduced by ratio of unallocated income to total income.
IRC 38(d)This subsection sets ordering rules.
IRC 38(d)(1)The order of credit's use is determined by the credit's listing order in (b).
IRC 38(d)(2)The order of credit used from §46 is set by the credit's listing order in §46.
IRC 38(d)(3)This paragraph sets rules for credits no longer listed.
IRC 38(d)(3)(A)Credits by §40 and §41(a) are referred to in that order after end of (b).
IRC 38(d)(3)(B)The credit determined under §46 attributable to extent of percentage by—
IRC 38(d)(3)(B)(i)such (a)(2)(E) (as in effect as of day before 19840718) comes after §46(1), and
IRC 38(d)(3)(B)(ii)such (b)(1) (as in effect as of day before 19901105) is first credit in §46.
 
IRC 39This section discusses carryback and carryforward of unused business credits.
IRC 39(a)This subsection sets the general rule.
IRC 39(a)(1)If sum of carryforwards and current credit exceeds §38(c) limit, excess is—
IRC 39(a)(1)(A)a business credit carryback to the TY preceding the unused credit year, and
IRC 39(a)(1)(B)a carryforward to each of the following 20 TYs, subject to (b) and (c).
IRC 39(a)(2)This paragraph sets the amount carried to each year.
IRC 39(a)(2)(A)Unused credit is carried to earliest of 21 TYs to which it can be carried.
IRC 39(a)(2)(B)Unused credit not carried due to (b) or (c) is carried to such other 20 TYs.
IRC 39(a)(3)Despite (d), for the marginal oil and gas well production credit—
IRC 39(a)(3)(A)§39 is applied separately from the other business credits,
IRC 39(a)(3)(B)apply (1)(A) by substituting "each of the 5 TYs" for "the TY", and
IRC 39(a)(3)(C)apply (2) by substituting—
IRC 39(a)(3)(C)(i)"25 TYs" for "21 TYs" in (A) thereof, and
IRC 39(a)(3)(C)(ii)"24 TYs" for "20 TYs" in (B) thereof.
IRC 39(b)Unused credit by §38(a)(3) is limited by amount §38(c) limit exceeds sum of—
IRC 39(b)(1)the amounts figured by (1) and (2) of §38(a) for the taxable year, plus
IRC 39(b)(2)amounts carried back to such current TY and attributable to prior TYs.
IRC 39(c)§38(a)(1) credit is limited to excess of §38(c) over prior carryforwards.
IRC 39(d)No credit from §38(b) can be carried back to TYs before 1st TY credit is given.
 
IRC 40This section discusses alcohol used as a fuel.
IRC 40(a)For §38, the alcohol fuels credit for the taxable year is equal to the sum of—
IRC 40(a)(1)the alcohol mixture credit,
IRC 40(a)(2)the alcohol credit
IRC 40(a)(3)the small ethanol producer credit, in the case of an eligible producer, plus
IRC 40(a)(4)the second generation biofuel producer credit.
IRC 40(b)This subsection defines the credits referred to in (1) - (3) of (a).
IRC 40(b)(1)This paragraph defines the "alcohol mixture credit".
IRC 40(b)(1)(A)Such credit is 60¢ per gallon used in the production of a qualified mixture.
IRC 40(b)(1)(B)A "qualified mixture" is a mix of alcohol with gasoline or with other fuel—
IRC 40(b)(1)(B)(i)which is sold by the taxpayer producing such mixture for use as a fuel, or
IRC 40(b)(1)(B)(ii)which is used as a fuel by the taxpayer producing such mixture.
IRC 40(b)(1)(C)Alcohol used in the production of a qualified mixture is taken into account—
IRC 40(b)(1)(C)(i)only if the sale or use by (B) is in a trade or business of the taxpayer, and
IRC 40(b)(1)(C)(ii)for the taxable year in which such sale or use occurs.
IRC 40(b)(1)(D)No credit is allowed for casual off-farm production of a qualified mixture.
IRC 40(b)(2)This paragraph defines the "alcohol credit".
IRC 40(b)(2)(A)Such credit is 60¢ per gallon of unmixed alcohol and which—
IRC 40(b)(2)(A)(i)is used by the taxpayer as a fuel in a trade or business, or
IRC 40(b)(2)(A)(ii)is sold by the taxpayer at retail to a person, and placed in purchaser's tank.
IRC 40(b)(3)For alcohol of 149 - 190 proof, swap "45¢" for "60¢" in (1)(A) and (2)(A).
IRC 40(b)(4)This paragraph defines the "small ethanol producer credit".
IRC 40(b)(4)(A)Such credit is 10¢ for each gallon of qualified ethanol fuel production.
IRC 40(b)(4)(B)"Qualified ethanol fuel production" is production by (g)(1) person which—
IRC 40(b)(4)(B)(i)is of ethanol sold by such producer to another person—
IRC 40(b)(4)(B)(i)(I)for use by such other person in the production of a qualified mixture,
IRC 40(b)(4)(B)(i)(II)for use by such other person as a fuel in a trade or business, or
IRC 40(b)(4)(B)(i)(III)who sells it at retail to another person and places it in their fuel tank, or
IRC 40(b)(4)(B)(ii)is of ethanol used or sold by such producer for any purpose described in (i).
IRC 40(b)(4)(C)Such qualified production for any TY is limited to 15M gallons.
IRC 40(b)(4)(D)Alcohol which has its proof increased by distillation isn't accounted by (4).
IRC 40(b)(5)The addition of denaturant is not treated as the production of a mixture.
IRC 40(b)(6)This paragraph sets the second generation biofuel producer credit.
IRC 40(b)(6)(A)Such credit is the applicable amount of each gallon of production by (C).
IRC 40(b)(6)(B)For (A), the amount is $1.01; for fuel by (E) which is alcohol, reduce $1.01 by—
IRC 40(b)(6)(B)(i)credit in effect for such alcohol under (b)(1) (ignore (b)(3)) when produced, &
IRC 40(b)(6)(B)(ii)in the case of ethanol, amount of credit in effect under (b)(4) at such time.
IRC 40(b)(6)(C)"Qualified second generation biofuel production" is (E) fuel produced which—
IRC 40(b)(6)(C)(i)is sold by the taxpayer to another person—
IRC 40(b)(6)(C)(i)(I)for use by such person in a business or trade to produce mixture by (D),
IRC 40(b)(6)(C)(i)(II)for use by such other person as a fuel in a trade or business, or
IRC 40(b)(6)(C)(i)(III)who sells such biofuel at retail to another person, or
IRC 40(b)(6)(C)(ii)is used or sold by the taxpayer for any purpose by (i).
IRC 40(b)(6)(D)A "qualified 2nd generation biofuel mixture" is a mix of (E) & gasoline which—
IRC 40(b)(6)(D)(i)is sold by the person producing such mixture to any person for use as a fuel, or
IRC 40(b)(6)(D)(ii)is used as a fuel by the person producing such mixture.
IRC 40(b)(6)(E)This subparagraph defines "second generation biofuel".
IRC 40(b)(6)(E)(i)Second generation biofuel is any liquid fuel which—
IRC 40(b)(6)(E)(i)(I)is derived by or from qualified feedstocks, and
IRC 40(b)(6)(E)(i)(II)meets the requirements for fuels set by EPA under §211 of PL 88-206.
IRC 40(b)(6)(E)(ii)Alcohol with a proof of less than 150 (without denaturants) is excluded.
IRC 40(b)(6)(E)(iii)2nd generation biofuel doesn't include any fuel if, regarding the fuel's weight—
IRC 40(b)(6)(E)(iii)(I)more than 4% of such fuel is any combination of water and sediment,
IRC 40(b)(6)(E)(iii)(II)the ash content of such fuel is more than 1%, or
IRC 40(b)(6)(E)(iii)(III)such fuel has an acid number greater than 25.
IRC 40(b)(6)(F)For purposes of (6), "qualified feedstock" is—
IRC 40(b)(6)(F)(i)any lignocellulosic matter that is available on a renewable basis, and
IRC 40(b)(6)(F)(ii)any cultivated algae, cyanobacteria, or lemna.
IRC 40(b)(6)(G)If (F)(ii) fuel is sold to refine to (E)(i)(II) fuel & not subject to (E)(iii)—
IRC 40(b)(6)(G)(i)its sale is treated as described under (C)(i),
IRC 40(b)(6)(G)(ii)the fuel meets (E)(i)(II) and is not excluded under (E)(iii) for the seller, and
IRC 40(b)(6)(G)(iii)the fuel (and any derived fuel) is not subject to (C) for seller or buyer.
IRC 40(b)(6)(H)Rules similar to rules under (g)(6) apply for purposes of (6).
IRC 40(b)(6)(I)Credit by (6) requires taxpayer to be registered with Sec. under §4101.
IRC 40(b)(6)(J)This paragraph sets rules for the application of (6).
IRC 40(b)(6)(J)(i)(6) applies to biofuel production between 20081231 and 20140101.
IRC 40(b)(6)(J)(ii)If (6) doesn't apply by reason of clause (i), rules of (e)(2) apply.
IRC 40(c)§40 credit is reduced by applicable credits by §§4041(b)(2), 6426, or 6427(e).
IRC 40(d)This subsection sets other definitions and special rules.
IRC 40(d)(1)This paragraph defines "alcohol".
IRC 40(d)(1)(A)Alcohol includes methanol and ethanol but does not include—
IRC 40(d)(1)(A)(i)alcohol produced from petroleum, natural gas, or coal (including peat), or
IRC 40(d)(1)(A)(ii)alcohol with a proof of less than 150.
IRC 40(d)(1)(B)Determination of alcohol proof is made without regard to added denaturants.
IRC 40(d)(2)"Special fuel" includes any liquid fuel (other than gas) usable in an engine.
IRC 40(d)(3)This paragraph defines sets rules for mixtures or alcohol not used as fuel.
IRC 40(d)(3)(A)A tax of 60¢ for each gallon of alcohol in a mixture is imposed if—
IRC 40(d)(3)(A)(i)any credit was given with respect to the production of a qualified mixture, and
IRC 40(d)(3)(A)(ii)any person—
IRC 40(d)(3)(A)(ii)(I)separates the alcohol from the mixture, or
IRC 40(d)(3)(A)(ii)(II)without separation, uses the mixture other than as a fuel.
IRC 40(d)(3)(B)A tax of 60¢ for each gallon of alcohol used is imposed if—
IRC 40(d)(3)(B)(i)any credit was given with respect to the retail sale of any alcohol, and
IRC 40(d)(3)(B)(ii)any person mixes such alcohol or uses such alcohol other than as a fuel.
IRC 40(d)(3)(C)A tax of 10¢ for each gallon of alcohol used is imposed if—
IRC 40(d)(3)(C)(i)any credit was determined under (a)(3), and
IRC 40(d)(3)(C)(ii)any person doesn't use the fuel for a purpose as described in (b)(4)(B).
IRC 40(d)(3)(D)Tax of (b)(6)(B) amount on each gallon of biofuel used is imposed if—
IRC 40(d)(3)(D)(i)any credit was determined under (a)(4), and
IRC 40(d)(3)(D)(ii)any person doesn't use the fuel for a purpose as described in (b)(6)(C).
IRC 40(d)(3)(E)Taxes and applicable laws are imposed on (A) - (D) as if under §4081.
IRC 40(d)(4)For (a), the volume of alcohol includes up to 5% of volume of denaturants.
IRC 40(d)(5)Per Secretary's regulations, rules similar to those by §52(d) apply to §40.
IRC 40(d)(6)Credit under (a)(4) requires such fuel to be produced and used within the US.
IRC 40(d)(7)No credit by §40 is allowed for alcohol produced or used without the US.
IRC 40(e)This subsection sets rules for termination.
IRC 40(e)(1)This section shall not apply to any sale or use for any period—
IRC 40(e)(1)(A)after 20111231, or
IRC 40(e)(1)(B)before 20120101, during which the tax by §4081(a)(2)(A) is 4.3¢ per gallon.
IRC 40(e)(2)No carryforwards by §39 may be made to 3 TYs starting when (1) occurs.
IRC 40(f)This subsection sets an election to have the alcohol fuels credit not apply.
IRC 40(f)(1)A taxpayer may elect to have §40 not apply for any taxable year.
IRC 40(f)(2)Such election can be made or revoked within 3 year period of return's due date.
IRC 40(f)(3)Such election is made in such manner as Sec. prescribes in regulations.
IRC 40(g)Definitions and special rules for the eligible small ethanol producer credit.
IRC 40(g)(1)Such producer has productive capacity for alcohol within 60M gallons in a TY.
IRC 40(g)(2)All members of same controlled group or under common control are one person.
IRC 40(g)(3)For pass-thru entities, limits of (b)(4)(C) and (1) are applied at entity level.
IRC 40(g)(4)Sec. allocates the productive capacity among persons with facility interest.
IRC 40(g)(5)The Secretary may prescribe such regulations as may be necessary to prevent—
IRC 40(g)(5)(A)(a)(3) credit going to persons with production exceeding 60M gallons, or
IRC 40(g)(5)(B)any person from benefiting with respect to more than 15M gallons.
IRC 40(g)(6)Allocation of credit to patrons of cooperative organizations by §1381(a).
IRC 40(g)(6)(A)This subparagraph sets an election to allocate.
IRC 40(g)(6)(A)(i)Organization may elect to allocate (a)(3) credit on basis of patron business.
IRC 40(g)(6)(A)(ii)Election by (i) is made on a timely filed return for the TY and is irrevocable.
IRC 40(g)(6)(B)This subparagraph sets treatment of organizations and patrons.
IRC 40(g)(6)(B)(i)(a)(3) credit not allocated by (A) is included for the TY of the organization.
IRC 40(g)(6)(B)(ii)Patrons include (A) in 1st TY ending as of last day of period by §1382(d).
IRC 40(g)(6)(B)(iii)Organization treats as an increase of chapter 1 tax any excess of—
IRC 40(g)(6)(B)(iii)(I)(a)(3) credit for a TY which is less than such credit shown on its return, over
IRC 40(g)(6)(B)(iii)(II)the amount not apportioned to patrons under (A) for such taxable year.
IRC 40(h)This subsection sets a reduced for ethanol blenders.
IRC 40(h)(1)For credit by (1) or (2) of (b) regarding ethanol sold between 2001 and 2011—
IRC 40(h)(1)(A)swap "the blender amount" for "60¢" in (b)(1)(A) and (b)(2)(A),
IRC 40(h)(1)(B)swap "low-proof blender amount" for "45¢" and apply (A) to (b)(3), and
IRC 40(h)(1)(C)apply substitutions by (A) and (B) to (d)(3)(A) and (d)(3)(B).
IRC 40(h)(2)### For (1), the blender amount and the low-proof blender amount are by ###.
IRC 40(h)(3)A reduction until yearly ethanol production or importation is 7.5B gallons.
IRC 40(h)(3)(A)After 2008, if (B) is made, blender amount by (2) after 2007 is 51¢.
IRC 40(h)(3)(B)Sec. & EPA determines that less than 7.5B gallons have been made or imported.
 
IRC 40AThis section discusses biodiesel and renewable diesel used as fuel.
IRC 40A(a)For §38, the biodiesel fuels credit for the taxable year is equal to the sum of—
IRC 40A(a)(1)the biodiesel mixture credit,
IRC 40A(a)(2)the biodiesel credit, plus
IRC 40A(a)(3)the small agri-biodiesel producer credit, in the case of an eligible producer.
IRC 40A(b)This subsection defines the terms used in (a).
IRC 40A(b)(1)This paragraph defines the "biodiesel mixture credit".
IRC 40A(b)(1)(A)Credit is 50¢ per gallon of biodiesel fuel used to produce qualified mixtures.
IRC 40A(b)(1)(B)A "qualified biodiesel mixture" has biodiesel & diesel fuel (§4083(a)(3)) and—
IRC 40A(b)(1)(B)(i)is sold by the producing taxpayer to any person for use as a fuel, or
IRC 40A(b)(1)(B)(ii)is used as a fuel by the taxpayer producing such mixture.
IRC 40A(b)(1)(C)Biodiesel used in production of a qualified mixture is taken into account—
IRC 40A(b)(1)(C)(i)only if the sale or use by (B) is in taxpayer's business, and
IRC 40A(b)(1)(C)(ii)for the taxable year in which such sale or use occurs.
IRC 40A(b)(1)(D)No credit is allowed for casual off-farm production of a qualified mixture.
IRC 40A(b)(2)This paragraph defines the "biodiesel credit".
IRC 40A(b)(2)(A)Credit is 50¢ per gallon of biodiesel which is not in a mixture & which in a TY—
IRC 40A(b)(2)(A)(i)is used by taxpayer as a fuel in a business, or
IRC 40A(b)(2)(A)(ii)is sold at retail to a person and placed in his vehicle's fuel tank.
IRC 40A(b)(2)(B)No credit is allowed by (A)(i) for biodiesel sold as by (A)(ii).
IRC 40A(b)(3)For agri-biodiesel, apply (1)(A) and (2)(A) by substituting "$1" for "50¢".
IRC 40A(b)(4)No credit is allowed by (a)(1) or (a)(2) unless fuel contents are certified.
IRC 40A(b)(5)This paragraph defines the "small agri-biodiesel producer credit".
IRC 40A(b)(5)(A)Such credit is 10¢ for each gallon of qualified agri-biodiesel production.
IRC 40A(b)(5)(B)"Qualified agri-biodiesel production" is by an eligible producer of—
IRC 40A(b)(5)(B)(i)agri-diesel biofuel which is sold by such producer to another person—
IRC 40A(b)(5)(B)(i)(I)for use by such other person in production of a qualified mixture,
IRC 40A(b)(5)(B)(i)(II)for use by such other person as a fuel in a business, or
IRC 40A(b)(5)(B)(i)(III)who sells such fuel at retail to another person (placing fuel in tank), or
IRC 40A(b)(5)(B)(ii)such biofuel which is used or sold by such producer for any purpose by (i).
IRC 40A(b)(5)(C)Qualified production for any producer is limited to 15M gallons per TY.
IRC 40A(c)Credit by §40A is reduced to account benefits from applying §6246 or §6427(e).
IRC 40A(d)This subsection sets definitions and special rules.
IRC 40A(d)(1)"Biodiesel" is monoalkyl esters of long chain fatty acids from matter, meeting—
IRC 40A(d)(1)(A)the registration requirements for fuels by §211 of PL 84-159, and
IRC 40A(d)(1)(B)the requirements of the American Society of Testing and Materials D6751.
IRC 40A(d)(2)"Agri-biodiesel" is derived solely from virgin oils, such as corn, soybeans, &c.
IRC 40A(d)(3)This paragraph sets rules for mixtures or biodiesel not used as a fuel, &c.
IRC 40A(d)(3)(A)Tax of (b)(1)(A) rate multiplied by gallons of biodiesel used is imposed if—
IRC 40A(d)(3)(A)(i)any credit was given for biodiesel used in production of a qualified mixture, &
IRC 40A(d)(3)(A)(ii)any person—
IRC 40A(d)(3)(A)(ii)(I)separates the biodiesel from the mixture, or
IRC 40A(d)(3)(A)(ii)(II)uses the mixture other than as a fuel without separation.
IRC 40A(d)(3)(B)Tax of (b)(2)(A) rate multiplied by gallons of biodiesel used is imposed if—
IRC 40A(d)(3)(B)(i)any credit was allowed with respect to retail sale of any biodiesel, and
IRC 40A(d)(3)(B)(ii)any person mixes such biodiesel or uses such biodiesel other than as fuel.
IRC 40A(d)(3)(C)Tax of 10¢ per gallon of agri-biodiesel used is imposed if—
IRC 40A(d)(3)(C)(i)any credit was given by (a)(3), and
IRC 40A(d)(3)(C)(ii)a person's use of such use doesn't meet (b)(5)(B).
IRC 40A(d)(3)(D)Any taxes imposed by (A) or (B) are considered imposed by §4081.
IRC 40A(d)(4)Per Sec.'s regulations, rules similar to those by §52(d) apply to §40A.
IRC 40A(e)Definitions and special rules for small agri-biodiesel producer credit.
IRC 40A(e)(1)An eligible producer has productive capacity within 60M gallons.
IRC 40A(e)(2)For (b)(5)(C) & (1), all controlled group & common control members are 1 person.
IRC 40A(e)(3)For (b)(5)(C) & (1), limitations therein are applied at entity or partner level.
IRC 40A(e)(4)Secretary prescribes allocation of productive capacity to all interest holders.
IRC 40A(e)(5)Secretary shall prescribe regulations as necessary to prevent—
IRC 40A(e)(5)(A)credit of (a)(3) applying to excess of 60M gallons of agri-biodiesel, or
IRC 40A(e)(5)(B)any direct or indirect benefit from excess of 15M gallons in the taxable year.
IRC 40A(e)(6)Allocation of credit to patrons of cooperative organizations by §1381(a).
IRC 40A(e)(6)(A)This subparagraph sets an election to allocate.
IRC 40A(e)(6)(A)(i)Organization may elect to allocate (a)(3) credit on basis of patron business.
IRC 40A(e)(6)(A)(ii)Election by (i) is made on a timely filed return for the TY and is irrevocable.
IRC 40A(e)(6)(B)This subparagraph sets treatment of organizations and patrons.
IRC 40A(e)(6)(B)(i)(a)(3) credit not allocated by (A) is included for the TY of the organization.
IRC 40A(e)(6)(B)(ii)Patrons include (A) in 1st TY ending as of last day of period by §1382(d).
IRC 40A(e)(6)(B)(iii)Organization treats as an increase of chapter 1 tax any excess of—
IRC 40A(e)(6)(B)(iii)(I)(a)(3) credit for a TY which is less than such credit shown on its return, over
IRC 40A(e)(6)(B)(iii)(II)the amount not apportioned to patrons under (A) for such taxable year.
IRC 40A(f)This subsection sets rules for renewable diesel.
IRC 40A(f)(1)Except by (2), renewable diesel is treated in the same manner as biodiesel.
IRC 40A(f)(2)This paragraph sets exceptions to (1).
IRC 40A(f)(2)(A)Apply (b)(1)(A) and (b)(2)(A) by substituting "$1" for "50¢".
IRC 40A(f)(2)(B)(b)(3) and (b)(5) do not apply with respect to renewable diesel.
IRC 40A(f)(3)Renewable diesel is from biomass (§45K(c)(3)) by depolymerization process that—
IRC 40A(f)(3)(A)meets registration requirements by §211 of PL 84-159, and
IRC 40A(f)(3)(B)meets requirements of American Society of Testing And Materials D975 or D396.
IRC 40A(g)This section does not apply to any sale or use after 20131231.
 
IRC 41This section discusses the credit for increasing research activities.
IRC 41(a)For §38, the research credit for the TY is an amount equal to the sum of—
IRC 41(a)(1)20% of any excess of—
IRC 41(a)(1)(A)the qualified research expenses for the taxable year, over
IRC 41(a)(1)(B)the base amount,
IRC 41(a)(2)20% of the basic research payments determined under (e)(1)(A), and
IRC 41(a)(3)20% of payments incurred in business to an energy research consortium.
IRC 41(b)This subsection defines "qualified research expenses".
IRC 41(b)(1)Such expenses is the sum of the following, paid in TY for taxpayer's business—
IRC 41(b)(1)(A)in-house research expenses, and
IRC 41(b)(1)(B)contract research expenses.
IRC 41(b)(2)This paragraph defines "in-house research expenses".
IRC 41(b)(2)(A)In-house research expenses are—
IRC 41(b)(2)(A)(i)any wages paid to an employee for qualified services performed,
IRC 41(b)(2)(A)(ii)any amount paid or incurred for supplies used in qualified research, and
IRC 41(b)(2)(A)(iii)amounts paid to other persons for the right to use computers in such research.
IRC 41(b)(2)(B)"Qualified services" are services consisting of—
IRC 41(b)(2)(B)(i)engaging in qualified research, or
IRC 41(b)(2)(B)(ii)engaging in the direct supervision of activities that are qualified research.
IRC 41(b)(2)(C)"Supplies" are any tangible property other than—
IRC 41(b)(2)(C)(i)land or improvements to land, and
IRC 41(b)(2)(C)(ii)property of a character subject to the allowance for depreciation.
IRC 41(b)(2)(D)This subparagraph defines "wages".
IRC 41(b)(2)(D)(i)In general, "wages" has the meaning given by §3401(a).
IRC 41(b)(2)(D)(ii)For employees by §401(c), wages includes earned income by §401(c)(2).
IRC 41(b)(2)(D)(iii)Amounts accounted to figure credit under §51(a) are not considered "wages".
IRC 41(b)(3)This paragraph defines "contract research expenses".
IRC 41(b)(3)(A)Such expenses are 65% of costs taxpayer pays to a person for qualified research.
IRC 41(b)(3)(B)Expenses paid in TY before research occurs is deemed paid when research is made.
IRC 41(b)(3)(C)This subparagraph sets rules for amounts paid to certain research consortia.
IRC 41(b)(3)(C)(i)For (A), swap 75% for 65% for payments to consortium by (ii) for research.
IRC 41(b)(3)(C)(ii)A "qualified research consortium" means any organization which—
IRC 41(b)(3)(C)(ii)(I)is described in (3) or (6) of §501(c) and is tax-exempt by §501(a),
IRC 41(b)(3)(C)(ii)(II)is organized and operated primarily to conduct scientific research, and
IRC 41(b)(3)(C)(ii)(III)is not a private foundation.
IRC 41(b)(3)(D)Payments to eligible small businesses, universities, and Federal laboratories.
IRC 41(b)(3)(D)(i)For (A), swap "100%" for "65%" for payments by the taxpayer to—
IRC 41(b)(3)(D)(i)(I)an eligible small business,
IRC 41(b)(3)(D)(i)(II)an institution of higher education (as defined by §3304(f)), or
IRC 41(b)(3)(D)(i)(III)an organization which is a Federal laboratory.
IRC 41(b)(3)(D)(ii)An "eligible small business" is any which taxpayer doesn't own more than 50% of—
IRC 41(b)(3)(D)(ii)(I)in case of a corporation, its outstanding stock (either by vote or value), and
IRC 41(b)(3)(D)(ii)(II)in case of a partnership, its capital and profits interest.
IRC 41(b)(3)(D)(iii)This clause defines a "small business" for purposes of (D).
IRC 41(b)(3)(D)(iii)(I)A small business employs an average of up to 500 employees within 2 prior years.
IRC 41(b)(3)(D)(iii)(II)Rules by (B) and (D) of §220(c)(4) apply for purposes of (iii).
IRC 41(b)(3)(D)(iv)A "Federal laboratory" is by §4(6) of PL 96-480 as in effect upon 20050808.
IRC 41(b)(4)(1) is met if costs by (2) are incurred for use in conduct of a future business—
IRC 41(b)(4)(A)of the taxpayer, or
IRC 41(b)(4)(B)or 1 or more other persons considered 1 taxpayer under (f)(1).
IRC 41(c)This subsection defines the "base amount".
IRC 41(c)(1)The base amount is, regarding TY when §41 credit is figured (the "credit year")—
IRC 41(c)(1)(A)the fixed-base percentage, multiplied by
IRC 41(c)(1)(B)average annual gross receipts for the 4 TYs preceding the credit year.
IRC 41(c)(2)The base amount is at least 50% of the qualified research expenses for the TY.
IRC 41(c)(3)This paragraph sets the "fixed-base percentage".
IRC 41(c)(3)(A)Percentage is rate of costs by (b) for certain TYs of total gross receipts.
IRC 41(c)(3)(B)This subparagraph sets rules for start-up companies.
IRC 41(c)(3)(B)(i)The fixed-base percentage is determined under (B) if—
IRC 41(c)(3)(B)(i)(I)the first TY for both expenses and gross receipts is after 19831231, or
IRC 41(c)(3)(B)(i)(II)there are less than 3 TYs of expenses & receipts between 19831231 and 19890101.
IRC 41(c)(3)(B)(ii)If (B) applies, the fixed-base percentage is, for TYs beginning after 19931231—
IRC 41(c)(3)(B)(ii)(I)3% for the first 5 such TYs for which there is qualified research,
IRC 41(c)(3)(B)(ii)(II)for the 6th such TY, 1/6 of expenses divided by receipts from 4th and 5th TY,
IRC 41(c)(3)(B)(ii)(III)for the 7th such TY, 1/3 of expenses divided by receipts from 5th and 6th TY,
IRC 41(c)(3)(B)(ii)(IV)for the 8th such TY, 1/2 of expenses divided by receipts from 5th, 6th & 7th TY,
IRC 41(c)(3)(B)(ii)(V)for the 9th such TY, 2/3 of expenses divided by receipts from 5th - 8th TYs,
IRC 41(c)(3)(B)(ii)(VI)for 10th such TY, 5/6 of expenses divided by receipts from 5th - 9th TYs, and
IRC 41(c)(3)(B)(ii)(VII)for TYs after (VI), the expenses divided by receipts from 5th - 10th TYs.
IRC 41(c)(3)(B)(iii)Sec. may set that de minimis receipts & expenses aren't accounted by (i) & (ii).
IRC 41(c)(3)(C)The fixed-base percentage is limited to 16%.
IRC 41(c)(3)(D)The percentages figured in (A) & (B) of (ii) is rounded to nearest .01 of 1%.
IRC 41(c)(4)This paragraph sets an election of alternative incremental credit.
IRC 41(c)(4)(A)If elected, (a)(1) credit is, regarding average by (c)(1)(B), the sum of—
IRC 41(c)(4)(A)(i)3% of expenses by (b) exceeding 1% but not 1.5% such average,
IRC 41(c)(4)(A)(ii)4% of expenses by (b) exceeding 1.5% but not 2% of such average, and
IRC 41(c)(4)(A)(iii)5% of expenses by (b) which exceed 2% of such average.
IRC 41(c)(4)(B)Election applies to TY when made and all subsequent TYs unless revoked by Sec.
IRC 41(c)(5)This paragraph sets an election of alternative simplified credit.
IRC 41(c)(5)(A)(a)(1) is 12% of excess of (b) over ½ of average of such costs in 3 prior TYs.
IRC 41(c)(5)(B)A special rule if no expenses by (b) are incurred in any of 3 prior TYs.
IRC 41(c)(5)(B)(i)(B) applies if taxpayer has no expenses by (3) in any of 3 prior TYs.
IRC 41(c)(5)(B)(ii)Credit by (B) is 6% of qualified research expenses of the taxable year.
IRC 41(c)(5)(C)Election applies as by (c)(4)(B) and isn't allowed if election by (4) is made.
IRC 41(c)(6)This paragraph sets a requirement for consistent treatment of expenses.
IRC 41(c)(6)(A)Method to figure (b) in credit year is used to figure fixed-base percentage.
IRC 41(c)(6)(B)Secretary may set rules to prevent errors caused by accounting method changes.
IRC 41(c)(7)Gross receipts is reduced by returns & allowances (within US or possessions).
IRC 41(d)This subsection defines "qualified research".
IRC 41(d)(1)Qualified research means research not by (4) which—
IRC 41(d)(1)(A)may have its expenditures treated as expenses under §174,
IRC 41(d)(1)(B)is undertaken for the purpose of discovering information—
IRC 41(d)(1)(B)(i)which is technological in nature, and
IRC 41(d)(1)(B)(ii)intended for use in the development of a new or improved business component, and
IRC 41(d)(1)(C)constitute a process of experimentation for a purpose by (3).
IRC 41(d)(2)A requirement of separate application to each business component.
IRC 41(d)(2)(A)(1) is applied separately to each business component of the taxpayer.
IRC 41(d)(2)(B)A "business component" is any product, process, software, &c., which is to be—
IRC 41(d)(2)(B)(i)held for sale, lease, or licence, or
IRC 41(d)(2)(B)(ii)used by the taxpayer in his trade or business.
IRC 41(d)(2)(C)Any technique, &c., for business component commercial production is separate.
IRC 41(d)(3)This paragraph sets purposes for which research may qualify for credit.
IRC 41(d)(3)(A)Research is conducted for a purpose described by (3) it relates to—
IRC 41(d)(3)(A)(i)a new or improved function,
IRC 41(d)(3)(A)(ii)performance, or
IRC 41(d)(3)(A)(iii)reliability or quality.
IRC 41(d)(3)(B)Research doesn't apply if it relates to style, taste, or other design factors.
IRC 41(d)(4)"Qualified research" does not include any of the following:
IRC 41(d)(4)(A)Research conducted after commercial production of the component has started.
IRC 41(d)(4)(B)Research for the adaptation of an existing component to a customer's request.
IRC 41(d)(4)(C)Research related to reproduction of an existing product from public information.
IRC 41(d)(4)(D)Any—
IRC 41(d)(4)(D)(i)efficiency surveys,
IRC 41(d)(4)(D)(ii)activity relating to management function or technique,
IRC 41(d)(4)(D)(iii)market research, testing, or development (including advertising or promotions),
IRC 41(d)(4)(D)(iv)routine data collection, or
IRC 41(d)(4)(D)(v)routine testing or inspection for quality control.
IRC 41(d)(4)(E)Research of computer software developed and used by the taxpayer, except in—
IRC 41(d)(4)(E)(i)an activity which constitutes qualified research, or
IRC 41(d)(4)(E)(ii)a production process with respect to which the requirements of (1) are met.
IRC 41(d)(4)(F)Any research conducted outside the US, Puerto Rico, or any US possession.
IRC 41(d)(4)(G)Any research in the social sciences, arts, or humanities.
IRC 41(d)(4)(H)The extent of funding by grants, &c., from another person or government entity.
IRC 41(e)A credit for certain payments to qualified organizations for basic research.
IRC 41(e)(1)For any taxpayer who makes basic research payments for any taxable year—
IRC 41(e)(1)(A)the amount of such payments taken into account by (a)(2) is the excess of—
IRC 41(e)(1)(A)(i)such basic research payments, over
IRC 41(e)(1)(A)(ii)the qualified organization base period amount, and
IRC 41(e)(1)(B)payments within base period amount is contract research expenses for (a)(1).
IRC 41(e)(2)This paragraph defines "basic research payments".
IRC 41(e)(2)(A)Such payments are of cash by a corporation to an qualified organization, if—
IRC 41(e)(2)(A)(i)such payment is subject to a written agreement between the two entities, and
IRC 41(e)(2)(A)(ii)such basic research is to be performed by such qualified organization.
IRC 41(e)(2)(B)(A)(ii) doesn't apply to organizations described by (C) or (D) of (6).
IRC 41(e)(3)The "qualified organization base period amount" is equal to the sum of—
IRC 41(e)(3)(A)the minimum basic research amount, plus
IRC 41(e)(3)(B)the maintenance-of-effort amount.
IRC 41(e)(4)This paragraph defines the "minimum basic research amount".
IRC 41(e)(4)(A)The minimum basic research amount is equal to the greater of—
IRC 41(e)(4)(A)(i)1% of the average of the amounts paid or incurred during the base period for—
IRC 41(e)(4)(A)(i)(I)any in-house research expenses, and
IRC 41(e)(4)(A)(i)(II)any contract research expenses, or
IRC 41(e)(4)(A)(ii)amounts treated as contract research expenses in base period under (e).
IRC 41(e)(4)(B)The minimum basic research amount for a base period is at least 50% of payments.
IRC 41(e)(5)This paragraph defines "maintenance-of-effort amount".
IRC 41(e)(5)(A)The maintenance-of-effort amount is, for any TY, equal to the excess of—
IRC 41(e)(5)(A)(i)an amount equal to—
IRC 41(e)(5)(A)(i)(I)average of nondesignated university contributions paid in base period, times
IRC 41(e)(5)(A)(i)(II)the cost-of-living adjustment for the calendar year when TY starts, over
IRC 41(e)(5)(A)(ii)the amount of nondesignated university contributions paid in the taxable year.
IRC 41(e)(5)(B)"Nondesignated university contributions" are toward any organization in (6)(A)—
IRC 41(e)(5)(B)(i)for which a deduction by §170 was allowed, and
IRC 41(e)(5)(B)(ii)which was not taken into account—
IRC 41(e)(5)(B)(ii)(I)in figuring the credit by §41 during any TY in the base period, or
IRC 41(e)(5)(B)(ii)(II)as a basic research payment for purposes of §41.
IRC 41(e)(5)(C)This subparagraph defines the "cost-of-living adjustment".
IRC 41(e)(5)(C)(i)The adjustment is figured in §1(f)(3); swap "1987" for "1992" in (B) thereof.
IRC 41(e)(5)(C)(ii)Swap end of base period year which isn't 1983 or 1984 for "1992" in §1(f)(3)(B).
IRC 41(e)(6)A "qualified organization" is any of the following organizations:
IRC 41(e)(6)(A)Any educational organization which is—
IRC 41(e)(6)(A)(i)an institution of higher education (as under §3304(f)), and
IRC 41(e)(6)(A)(ii)described in §170(b)(1)(A)(ii).
IRC 41(e)(6)(B)Any organization not described in (A) which is—
IRC 41(e)(6)(B)(i)described in §503(c)(3) and is tax exempt by §501(a),
IRC 41(e)(6)(B)(ii)organized and operated primarily to conduct scientific research, and
IRC 41(e)(6)(B)(iii)not a private foundation.
IRC 41(e)(6)(C)Any organization which—
IRC 41(e)(6)(C)(i)is described in—
IRC 41(e)(6)(C)(i)(I)§501(c)(3) (other than a private foundation) or
IRC 41(e)(6)(C)(i)(II)§506(c)(6),
IRC 41(e)(6)(C)(ii)is tax exempt by §501(a),
IRC 41(e)(6)(C)(iii)is operated primarily to promote scientific research by organizations in (A), &
IRC 41(e)(6)(C)(iv)incurs costs for grants to, or research contracts with, entities by (A) from—
IRC 41(e)(6)(C)(iv)(I)substantially all of its funds, or
IRC 41(e)(6)(C)(iv)(II)substantially all the basic research payments which it receives.
IRC 41(e)(6)(D)Any organization not described in (B) or (C) which is—
IRC 41(e)(6)(D)(i)described in §501(c)(3) and tax exempt by §501(a) (except private foundations),
IRC 41(e)(6)(D)(ii)established and maintained by an organization meeting (i) before 19810710,
IRC 41(e)(6)(D)(iii)made exclusively for the purpose of making grants to organizations in (A), and
IRC 41(e)(6)(D)(iv)elects to be considered a private foundation for 26 USC (except §4940).
IRC 41(e)(7)This paragraph sets definitions and special rules for purposes of (e).
IRC 41(e)(7)(A)"Basic research" is any new investigation to raise scientific knowledge unless—
IRC 41(e)(7)(A)(i)it is conducted outside of the United States, and
IRC 41(e)(7)(A)(ii)it is in the social sciences, arts, or humanities.
IRC 41(e)(7)(B)The "base period" is 3 TYs, ending in TY before first TY after 19831231.
IRC 41(e)(7)(C)In applying (a)(1), the basic research payments taken into account by (a)(2)—
IRC 41(e)(7)(C)(i)are not treated as qualified research expenses under (a)(1)(A), and
IRC 41(e)(7)(C)(ii)are not included in the computation of base amount under (a)(1)(B).
IRC 41(e)(7)(D)In applying (b)(1), recognize payments in TY of payment (ignoring (b)(3)(B)).
IRC 41(e)(7)(E)A "corporation" does not include—
IRC 41(e)(7)(E)(i)an S corporation,
IRC 41(e)(7)(E)(ii)a personal holding company (as defined in §542), or
IRC 41(e)(7)(E)(iii)a service organization (as defined in §414(m)(3)).
IRC 41(f)This subsection sets special rules for purposes of §41.
IRC 41(f)(1)This paragraph sets rules for the aggregation of expenditures.
IRC 41(f)(1)(A)In determining §41 credit for a controlled group of corporations, all members—
IRC 41(f)(1)(A)(i)belonging to the same group are treated as a single taxpayer, and
IRC 41(f)(1)(A)(ii)are allowed credit on basis of their proportional share of expenses & payments.
IRC 41(f)(1)(B)Per Secretary's regulations, to figure §41 credit for a common control group—
IRC 41(f)(1)(B)(i)all businesses (incorporated or not) under it are treated as one taxpayer, and
IRC 41(f)(1)(B)(ii)each person gets credit based on proportional share of expenses, payments, &c.
IRC 41(f)(2)This paragraph sets rules for allocations.
IRC 41(f)(2)(A)Per Sec.'s regulations, rules similar to those of §52(d) apply.
IRC 41(f)(2)(B)Per Sec.'s regulations, credit is allocated among partners of partnership.
IRC 41(f)(3)This paragraph sets adjustments for certain acquisitions after 19831231.
IRC 41(f)(3)(A)This subparagraph sets rules for acquisitions.
IRC 41(f)(3)(A)(i)Business acquiror's expenses paid and receipts is increased by (ii) and (iii).
IRC 41(f)(3)(A)(ii)Amount determined by (ii) for applying §41 to the taxable year—
IRC 41(f)(3)(A)(ii)(I)of acquisition is the acquisition year amount, and
IRC 41(f)(3)(A)(ii)(II)after acquisition is expenses paid by predecessor during (vi) period.
IRC 41(f)(3)(A)(iii)(iii) amount is as if reference to expenses in (ii) & (iv) is made to receipts.
IRC 41(f)(3)(A)(iv)For (ii), the acquisition year amount is the product of—
IRC 41(f)(3)(A)(iv)(I)research costs paid by predecessor regarding acquired business in (vi) period, &
IRC 41(f)(3)(A)(iv)(II)the number of days between date of acquisition & last day in TY of acquisition.
IRC 41(f)(3)(A)(v)If the acquiring person & predecessor have TYs which begin on a different date—
IRC 41(f)(3)(A)(v)(I)reference to a TY in (ii) & (iv) refer to appropriate TY of acquirer,
IRC 41(f)(3)(A)(v)(II)predecessor's expenses, &c., within (vi) period is allocated to days in such TY,
IRC 41(f)(3)(A)(v)(III)expenses accounted under (ii) & (iv) are equal to expenses accounted by (II), &
IRC 41(f)(3)(A)(v)(IV)receipts accounted under (iii) are equal to receipts accounted under (II).
IRC 41(f)(3)(A)(vi)"Measurement period" is any acquiror's period accounted to figure prior credit.
IRC 41(f)(3)(B)Predecessor who gives data to apply (A) can reduce expenses and receipts by—
IRC 41(f)(3)(B)(i)in the case of the TY of disposition, an amount equal to the product of—
IRC 41(f)(3)(B)(i)(I)predecessor's expenses paid and receipts incurred within (A)(vi) period, and
IRC 41(f)(3)(B)(i)(II)the number of days between date of acquisition & last day in acquisition TY, and
IRC 41(f)(3)(B)(ii)the amount by (i)(I) in the case of a TY after the TY of disposition.
IRC 41(f)(3)(C)If reimbursement after (B) occurs, expenses subject to (c)(3) is raised by—
IRC 41(f)(3)(C)(i)amount of decrease under (B) allocable to TYs taken into account, or, is lesser
IRC 41(f)(3)(C)(ii)the product of TYs by the amount of reimbursement described in (C).
IRC 41(f)(4)Secretary may set methods to annualize expenses and receipts for a short TY.
IRC 41(f)(5)A "controlled group of corporations" has same meaning under §1563(a), except—
IRC 41(f)(5)(A)"50%" is swapped for "80%" each place it appears in §1563(a)(1), and
IRC 41(f)(5)(B)the determination is made by ignoring (a)(4) and (e)(3)(C) of §1563.
IRC 41(f)(6)This paragraph defines an "energy research consortium".
IRC 41(f)(6)(A)An energy research consortium is any organization which—
IRC 41(f)(6)(A)(i)is—
IRC 41(f)(6)(A)(i)(I)by §501(c)(3), tax exempt by §501(a), and mainly conducts energy research, or
IRC 41(f)(6)(A)(i)(II)operated mainly to conduct energy research in the public interest (§501(c)(3)),
IRC 41(f)(6)(A)(ii)is not a private foundation,
IRC 41(f)(6)(A)(iii)receives amounts for research from at least 5 unrelated persons in the year, and
IRC 41(f)(6)(A)(v)receives within 50% of total amounts received for research from a single person.
IRC 41(f)(6)(B)Persons under (a) or (b) of §52 are related (A)(iii) and 1 person for (A)(iv).
IRC 41(f)(6)(C)For (a)(3), payments for research without US, its possessions, &c., are ignored.
IRC 41(f)(6)(D)Amounts accounted by (a)(3) are not accounted by (1) or (2) of (a).
IRC 41(f)(6)(E)"Energy research" doesn't include research which isn't qualified research.
IRC 41(g)Credit by (a) is limited to tax allocable to portion of income of a person who—
IRC 41(g)(1)owns an interest in an unincorporated trade or business,
IRC 41(g)(2)is a partner in a partnership,
IRC 41(g)(3)is a beneficiary of an estate or trust, or
IRC 41(g)(4)is a shareholder in an S Corporation.
IRC 41(h)This subsection sets rules for termination.
IRC 41(h)(1)§41 doesn't apply to any amount paid or incurred—
IRC 41(h)(1)(A)after 19950630 and before 19960701, or
IRC 41(h)(1)(B)after 20131231.
IRC 41(h)(2)Base amount of credit year is proportion of days in TY to full calendar year.
 
IRC 42This section discusses the low-income housing credit.
IRC 42(a)For purposes of §38, credit for any TY in the credit period is equal to—
IRC 42(a)(1)the applicable percentage of
IRC 42(a)(2)the qualified basis of each qualified low-income building.
IRC 42(b)Applicable percentage for new buildings and other buildings.
IRC 42(b)(1)This paragraph sets the determination of the "applicable percentage".
IRC 42(b)(1)(A)Such percentage is percentage set by Sec. under (B) for the earlier of—
IRC 42(b)(1)(A)(i)the month in which any building is placed in service, or
IRC 42(b)(1)(A)(ii)at the election of the taxpayer, the month in which—
IRC 42(b)(1)(A)(ii)(I)an agreement of allocated credit amount is made with housing credit agency, or
IRC 42(b)(1)(A)(ii)(II)the tax-exempt obligations are issued, if (h)(4)(B) applies.
IRC 42(b)(1)(B)Percentage is rate yielding (a) credit over 10 year period and present value of—
IRC 42(b)(1)(B)(i)70% of the qualified basis of a new building which isn't federally subsidized, &
IRC 42(b)(1)(B)(ii)30% of the qualified basis of a building not by (i).
IRC 42(b)(1)(C)The present value under (B) is determined—
IRC 42(b)(1)(C)(i)as of the last day of 1st year of 10-year period referred to in (B),
IRC 42(b)(1)(C)(ii)with a rate of 72% of rates under §1274(d)(1) to months by (i) or (ii) of (A), &
IRC 42(b)(1)(C)(iii)by assuming that credit under §42 is received on the last day of such year.
IRC 42(b)(2)The applicable percentage is not less than 9% for any new building—
IRC 42(b)(2)(A)put in service after 20130102 regarding before allocations made before 2014, and
IRC 42(b)(2)(B)which is not federally subsidized for the taxable year.
IRC 42(b)(2)(C)The present value under (B) is determined—
IRC 42(b)(2)(C)(i)as of the last day of the 1st year of the 10 year period of (B),
IRC 42(b)(2)(C)(ii)by using a discount rate of 72% of annual Federal rates by §1274(d)(1), and
IRC 42(b)(2)(C)(iii)by assuming that the credit by §42 is received on the last day of such year.
IRC 42(b)(3)This paragraph sets cross references. See:
IRC 42(b)(3)(A)(e) for figuring certain rehabilitation costs as separate new buildings.
IRC 42(b)(3)(B)(f)(3) for figuring applicable percentage for increases in qualified basis.
IRC 42(b)(3)(C)(h)(7) for authority of housing credit agency to limit percentage and basis.
IRC 42(c)This subsection defines "qualified basis" and "qualified low-income building".
IRC 42(c)(1)This paragraph defines "qualified basis".
IRC 42(c)(1)(A)The qualified basis of a qualified low-income building for any TY is equal to—
IRC 42(c)(1)(A)(i)the applicable fraction (determined at end of TY) of
IRC 42(c)(1)(A)(ii)the eligible basis of such building (determined under (d)(5)).
IRC 42(c)(1)(B)"Applicable fraction" is the lesser of unit fraction or floor space fraction.
IRC 42(c)(1)(C)For (B), the term "unit fraction" means the fraction which has a—
IRC 42(c)(1)(C)(i)numerator of the number of low-income units in the building, and
IRC 42(c)(1)(C)(ii)denominator of the number of residential rental units in the building.
IRC 42(c)(1)(D)For (B), the "floor space fraction" means the fraction which has a—
IRC 42(c)(1)(D)(i)numerator by the total floor space of the building's low-income units, and
IRC 42(c)(1)(D)(ii)denominator by the total floor space of the building's residential rental units.
IRC 42(c)(1)(E)Qualified basis of building by (i)(3)(B)(iii) is increased by the lesser of—
IRC 42(c)(1)(E)(i)the eligible basis of the building used to provide supportive services, or
IRC 42(c)(1)(E)(ii)20% of the qualified basis of such building (ignoring (E)).
IRC 42(c)(2)A "qualified low-income building" is any building—
IRC 42(c)(2)(A)which is part of a qualified project at all times during the period—
IRC 42(c)(2)(A)(i)starting on 1st day in compliance period of which such building is a part, and
IRC 42(c)(2)(A)(ii)ending on the last day of the compliance period for such building, and
IRC 42(c)(2)(B)to which the amendments made by §201(a) of PL 99-514 apply.
IRC 42(d)This subsection defines "eligible basis".
IRC 42(d)(1)New building's eligible basis is adjusted basis at end of 1st credit period TY.
IRC 42(d)(2)This paragraph sets rules for existing buildings.
IRC 42(d)(2)(A)The eligible basis of an existing building is—
IRC 42(d)(2)(A)(i)its adjusted basis at end of 1st TY of credit period if (B) is met, and
IRC 42(d)(2)(A)(ii)0 in any other case.
IRC 42(d)(2)(B)A building meets the requirements of (B) if—
IRC 42(d)(2)(B)(i)the building is acquired by purchase (as defined in §179(d)(2)),
IRC 42(d)(2)(B)(ii)there is at least 10 years between date of acquisition and placement in service,
IRC 42(d)(2)(B)(iii)taxpayer or any related person didn't previously place it in service, and
IRC 42(d)(2)(B)(iv)except as under (f)(5), credit by (a) is allowed by reason of (e).
IRC 42(d)(2)(C)For (A), basis determined by reference to other property is not accounted.
IRC 42(d)(2)(D)This subparagraph sets special rules for (B).
IRC 42(d)(2)(D)(i)To figure date under (B)(ii)(I), do not account any placement in service—
IRC 42(d)(2)(D)(i)(I)connected to building acquisition if basis is determined by reference,
IRC 42(d)(2)(D)(i)(II)by a person whose basis in the building is determined by §1014(a),
IRC 42(d)(2)(D)(i)(III)by any governmental unit or organization by (h)(5) if (B)(ii) is met,
IRC 42(d)(2)(D)(i)(IV)by any acquirer by foreclosure of any interest held if (B)(ii) is met, or
IRC 42(d)(2)(D)(i)(V)of a single-family house by an individual for use as his principal residence.
IRC 42(d)(2)(D)(iii)Persons meeting §267(b) or §707(b)(1), or under control by §52, are related.
IRC 42(d)(3)A reduction of eligible basis for disproportionate standards of units.
IRC 42(d)(3)(A)Basis is reduced by proportion non-low-income and above average quality units.
IRC 42(d)(3)(B)This subparagraph sets an exception if taxpayer elects to exclude excess costs.
IRC 42(d)(3)(B)(i)(A) doesn't apply to a building's rental unit that is not low-income if—
IRC 42(d)(3)(B)(i)(I)the excess of (ii) for such unit is no more than 15% of the cost by (ii)(II), &
IRC 42(d)(3)(B)(i)(II)taxpayer elects to exclude such excess from such building's eligible basis.
IRC 42(d)(3)(B)(ii)The excess described by (ii) for any unit is the excess of—
IRC 42(d)(3)(B)(ii)(I)the cost of such unit, over
IRC 42(d)(3)(B)(ii)(II)such cost if average cost per ft² of low-income units applied to entire unit.
IRC 42(d)(4)This paragraph sets special rules regarding determination of adjusted basis.
IRC 42(d)(4)(A)Adjusted basis is figured by ignoring basis of non-rental property.
IRC 42(d)(4)(B)Adjusted basis is figured by including basis of common areas or amenities.
IRC 42(d)(4)(C)Inclusion of property used to provide services for certain nontenants in basis.
IRC 42(d)(4)(C)(i)The basis of buildings in a census tract include community service facilities.
IRC 42(d)(4)(C)(ii)Maximum increase in adjusted basis for building accounted by (i) is the sum of—
IRC 42(d)(4)(C)(ii)(I)25% of low-income housing project's qualified basis within $15M, plus
IRC 42(d)(4)(C)(ii)(II)10% of such qualified basis not accounted under clause (i).
IRC 42(d)(4)(C)(iii)"Community service facility" serves persons of income at 60% or less of median.
IRC 42(d)(4)(D)Figure adjusted basis of any building without regard to (2) and (3) of §1016(a).
IRC 42(d)(5)This paragraph sets special rules for figuring eligible basis.
IRC 42(d)(5)(A)Building basis excludes any costs financed by Federal grant proceeds.
IRC 42(d)(5)(B)This subparagraph sets an increase in credit for buildings in high cost areas.
IRC 42(d)(5)(B)(i)For buildings in a qualified census tract, difficult development area, &c.,—
IRC 42(d)(5)(B)(i)(I)the eligible basis of new buildings is 130% of basis figured ignoring (C), and
IRC 42(d)(5)(B)(i)(II)rehabilitation costs by (e) is 130% of such costs figured ignoring (C).
IRC 42(d)(5)(B)(ii)This clause defines a "qualified census tract".
IRC 42(d)(5)(B)(ii)(I)Such a tract is by Secretary of HUD and has at least 25% poverty rate, &c.
IRC 42(d)(5)(B)(ii)(II)Area designated by (C) has within 20% of such statistical area's population.
IRC 42(d)(5)(B)(ii)(III)For (ii), treat areas by (III) of (iv) as separate & areas by (IV) of (iv) as 1.
IRC 42(d)(5)(B)(iii)This clause defines "difficult development areas".
IRC 42(d)(5)(B)(iii)(I)Such areas are set by HUD as having high land costs relative to (iv)(II) income.
IRC 42(d)(5)(B)(iii)(II)Area designated by (C) has within 20% of such statistical area's population.
IRC 42(d)(5)(B)(iv)This clause sets other special rules and definitions for purposes of (C).
IRC 42(d)(5)(B)(iv)(I)Population is determined on basis of most recent and available decennial census.
IRC 42(d)(5)(B)(iv)(II)Area gross median income is determined in accordance with (g)(4).
IRC 42(d)(5)(B)(iv)(III)A "metropolitan statistical area" has meaning from §143(k)(2)(B).
IRC 42(d)(5)(B)(iv)(IV)A "nonmetropolitan area" is a county or part thereof not within area by (III).
IRC 42(d)(5)(B)(v)Building set by State agency as requiring credit increase is in (iii)(I) area.
IRC 42(d)(6)Credit is given for certain buildings acquired in 10 year period of (2)(B)(ii).
IRC 42(d)(6)(A)(2)(B)(ii) doesn't apply to any building by (C).
IRC 42(d)(6)(B)Sec. may waive (2)(B)(ii) for buildings acquired from depository in default.
IRC 42(d)(6)(C)Definition of "Federally-assisted building" and "State-assisted building".
IRC 42(d)(6)(C)(i)Federally-assisted building is operated in housing program (PL 75-412 §8, &c.).
IRC 42(d)(6)(C)(ii)State-assisted building is operated in State law similar to clause (i).
IRC 42(d)(7)Rules for building acquisition before prior compliance period ends.
IRC 42(d)(7)(A)Per Secretary's regulations, if taxpayer acquires a building described by (B)—
IRC 42(d)(7)(A)(i)(2)(B) does not apply, but
IRC 42(d)(7)(A)(ii)credit by (a) is amount which would have been allowed to prior owner.
IRC 42(d)(7)(B)A building is described by (B) if—
IRC 42(d)(7)(B)(i)a credit was allowed by (a) to any prior owner of such building, and
IRC 42(d)(7)(B)(ii)the building was acquired before compliance period ended for prior owner.
IRC 42(e)Treatment of rehabilitation expenditures as a separate new building.
IRC 42(e)(1)For §42, treat expenses by (2) for any building as a separate new building.
IRC 42(e)(2)This paragraph defines "rehabilitation expenditures".
IRC 42(e)(2)(A)Such costs are chargeable to capital account in connection to rehabilitation.
IRC 42(e)(2)(B)Cost of acquisition or amounts excluded by (3) or (4) of (d) are excluded.
IRC 42(e)(3)This paragraph sets the minimum expenditures to qualify.
IRC 42(e)(3)(A)(1) applies to rehabilitation expenditures regarding any building only if—
IRC 42(e)(3)(A)(i)the costs are allocable to 1 or more low-income units or for their benefit, and
IRC 42(e)(3)(A)(ii)the greater amount of such costs in a 24-month period meet these requirements:
IRC 42(e)(3)(A)(ii)(I)Such amount is not less than 10% of building's adjusted basis (as by (d)(4)(D)).
IRC 42(e)(3)(A)(ii)(II)Qualified basis related to costs, divided by low-income units, is $6K or more.
IRC 42(e)(3)(B)For acquisition of gov't unit, ignore (A)(ii)(I) and apply (b)(2)(B)(ii) rate.
IRC 42(e)(3)(C)Determination of (A) is made at close of the 1st TY in the credit period.
IRC 42(e)(3)(D)For expenditures in service after 2009, increase $6K amount in (A)(ii)(II) by—
IRC 42(e)(3)(D)(i)such dollar amount, multiplied by
IRC 42(e)(3)(D)(ii)the cost-of-living adjustment in §1(f)(3); swap "2008" for "1992" in such (B).
IRC 42(e)(4)To apply §42 to expenditures which are treated by §42 as a separate building—
IRC 42(e)(4)(A)such expenditures are placed in service at end of 24-month period by (3)(A), and
IRC 42(e)(4)(B)applicable fraction by (c)(1) applies to costs. (d)(2) doesn't prevent credit.
IRC 42(e)(5)Expenditures may be accounted only under (e) or (d)(2)(A)(i).
IRC 42(e)(6)Secretary may treat a group of units related to expenditures as a new building.
IRC 42(f)This subsection defines the "credit period" and sets special rules.
IRC 42(f)(1)The credit period is, for any qualified low-income building, 10 TYs starting in—
IRC 42(f)(1)(A)the TY in which the building is placed in service, or
IRC 42(f)(1)(B)the TY succeeding TY by (A), at the irrevocable election of the taxpayer.
IRC 42(f)(2)This paragraph sets the special rule for the 1st year of credit period.
IRC 42(f)(2)(A)Figure credit for (a) by substituting applicable fraction of (c)(1) a fraction—
IRC 42(f)(2)(A)(i)with a numerator of the sum of fractions by (c)(1) at close of each month, and
IRC 42(f)(2)(A)(ii)with a denominator of 12.
IRC 42(f)(2)(B)Any reduction by (A) for 1st TY is allowed for 1st TY after credit period.
IRC 42(f)(3)Applicable percentage for basis increases after 1st TY of credit period.
IRC 42(f)(3)(A)Rate by (b) is reduced 33% if a building is qualified at end of such 1st TY and—
IRC 42(f)(3)(A)(i)qualified basis of such building at end of any TY in compliance period exceeds
IRC 42(f)(3)(A)(ii)qualified basis of such building at end of 1st TY in credit period.
IRC 42(f)(3)(B)Rules similar to (2)(A) apply to any increase of basis to which (A) applies.
IRC 42(f)(4)If building is disposed, credit by (a) is allocated based on length of holding.
IRC 42(f)(5)This subsection sets rules for the credit period for existing buildings.
IRC 42(f)(5)(A)Such period doesn't begin before 1st credit period TY for (e)(2) expenditures.
IRC 42(f)(5)(B)Allowance of acquisition credit for certain buildings with no rehabilitation.
IRC 42(f)(5)(B)(i)For a building described by (ii) and its applicable credit period—
IRC 42(f)(5)(B)(i)(I)(d)(2)(B)(iv) does not apply, and
IRC 42(f)(5)(B)(i)(II)such period doesn't start before period in respect of (ii)(II) would start.
IRC 42(f)(5)(B)(ii)A building is described in this clause if—
IRC 42(f)(5)(B)(ii)(I)waiver is granted by (d)(6)(C) for acquisition of the building, and
IRC 42(f)(5)(B)(ii)(II)(I) of (e)(3)(A)(ii) is ignored & such (II) is met by swapping "$2K" for "$3K".
IRC 42(g)This subsection defines a "qualified low-income housing project".
IRC 42(g)(1)Such project is for residential rental property if elected to meet (A) or (B):
IRC 42(g)(1)(A)20% of the units are rent-restricted, tenants earn 50% of median gross income.
IRC 42(g)(1)(B)40% of the units are rent-restricted, tenants earn 60% of median gross income.
IRC 42(g)(2)This paragraph defines "rent-restricted units".
IRC 42(g)(2)(A)Such units have gross rent within 30% of allocable imputed income limitation.
IRC 42(g)(2)(B)For (A), gross rent includes—
IRC 42(g)(2)(B)(i)no payment under §8 of the PL 75-412 or any equivalent assistance program,
IRC 42(g)(2)(B)(ii)any utility allowance from the Secretary after accounting such §8,
IRC 42(g)(2)(B)(iii)no fee for a supportive service if it is inseparable from rent assistance, and
IRC 42(g)(2)(B)(iv)no rental payment to the extent of FHA payments by §515 of PL 81-171.
IRC 42(g)(2)(C)The "imputed income limitation" is limit by (1) applied to unit occupants as if:
IRC 42(g)(2)(C)(i)1 individual occupied units with no separate bedroom.
IRC 42(g)(2)(C)(ii)1.5 individuals occupied units with at least one bedroom.
IRC 42(g)(2)(D)Treatment of units occupied by individuals whose incomes rise above limit.
IRC 42(g)(2)(D)(i)Unit is still treated as low-income if tenants initially met income limitation.
IRC 42(g)(2)(D)(ii)If tenant's income increases above 140% of limit under (1), (i) does not apply.
IRC 42(g)(2)(E)If rent exceeds limit due to income increase, unit is still rent-restricted if—
IRC 42(g)(2)(E)(i)a Federal rental assistance payment by (B)(i) is made to such unit or tenants, &
IRC 42(g)(2)(E)(ii)sum of such payment and gross rent does not exceed sum of such amounts as if—
IRC 42(g)(2)(E)(ii)(I)tenant's income did not exceed appliable income limitation under (1), and
IRC 42(g)(2)(E)(ii)(II)units were rest-restricted. (ii) applies only if required by Federal statute.
IRC 42(g)(3)This paragraph sets the dates for meeting requirements.
IRC 42(g)(3)(A)Building is qualified only if project meets (1) at end of 1st credit period TY.
IRC 42(g)(3)(B)Rules for buildings which rely on later buildings for qualification.
IRC 42(g)(3)(B)(i)Additional buildings put in service in (A) period may apply for qualification.
IRC 42(g)(3)(B)(ii)If (i) is elected, period by (A) for such buildings is same as prior building.
IRC 42(g)(3)(B)(iii)Prior building is put in service when most recent placement in service occurs.
IRC 42(g)(3)(C)No building is qualified unless it is part of a qualified project, except—
IRC 42(g)(3)(C)(i)the 1st building placed in service as part of a qualified project, and
IRC 42(g)(3)(C)(ii)buildings put in service regarding prior buildings after 12-month period by (A).
IRC 42(g)(3)(D)A project has 1 building unless more are identified by end of 1st project year.
IRC 42(g)(4)Apply §142(d) & §6652(j) to figure qualification; "gross rent" is by (2)(B).
IRC 42(g)(5)Taxpayer may elect to treat building as not in a project after period by (i)(1).
IRC 42(g)(6)Despite de minimis payments toward purchase, property is still rental type if—
IRC 42(g)(6)(A)all such payments are refunded to tenant upon cessation of unit occupation, and
IRC 42(g)(6)(B)the unit can't be purchased until end of period by (i)(1). (6) applies to (2).
IRC 42(g)(7)Buildings form a project if all residential units therein are rent-restricted.
IRC 42(g)(8)On application by the taxpayer, the Secretary may waive—
IRC 42(g)(8)(A)any recapture under (j) for any de minimis error in complying with (1), or
IRC 42(g)(8)(B)annual tenant income recertification, if entire building has low-income tenants.
IRC 42(g)(9)Project meets general public use requirement despite rules which favor tenants—
IRC 42(g)(9)(A)with special needs,
IRC 42(g)(9)(B)who are members of a specified group in a Federal or State housing program, or
IRC 42(g)(9)(C)who are involved in artistic or literary activities.
IRC 42(h)Limitations on allowable credit regarding projects located in a State.
IRC 42(h)(1)A limitation of credit to credit amount allocated to a building.
IRC 42(h)(1)(A)§42 credit is limited to housing credit allocated to such building by (h).
IRC 42(h)(1)(B)Unless (C) - (F) is met, allocation is made by end of year when put in service.
IRC 42(h)(1)(C)There must be a binding commitment by housing credit agency to make allocation.
IRC 42(h)(1)(D)This subparagraph sets an exception for increases in qualified basis.
IRC 42(h)(1)(D)(i)Allocation meets (D) if made at end of year in TY and within limit by (ii).
IRC 42(h)(1)(D)(ii)Limitation is amount of §42 credit in respect of basis increase is excess of—
IRC 42(h)(1)(D)(ii)(I)qualified basis of such building at end of 1st TY when allocation applies, over
IRC 42(h)(1)(D)(ii)(II)such basis at end of 1st TY when most recent prior §42 credit applied.
IRC 42(h)(1)(D)(iii)Notwithstanding clause (i), full amount of allocation is accounted under (2).
IRC 42(h)(1)(E)This subparagraph sets an exception where 10% of cost is incurred.
IRC 42(h)(1)(E)(i)Allocations made within 2 years after year building is put in service meets (E).
IRC 42(h)(1)(E)(ii)If basis in project is more than 10% of expected basis, building is qualified.
IRC 42(h)(1)(F)This subparagraph sets rules for allocation of credit on a project basis.
IRC 42(h)(1)(F)(i)For projects with more than 1 building, allocation meets (F) if it—
IRC 42(h)(1)(F)(i)(I)is made to the project for a calendar year within the project period,
IRC 42(h)(1)(F)(i)(II)only applies to buildings placed in service during or after allocation year, and
IRC 42(h)(1)(F)(i)(III)is specified as for such buildings as of end of year building is put in service.
IRC 42(h)(1)(F)(ii)For clause (i), the "project period" is the period which—
IRC 42(h)(1)(F)(ii)(I)starts with 1st year which allocation is allowed to 1st building, and
IRC 42(h)(1)(F)(ii)(II)ends with year when last building is placed in service as part of the project.
IRC 42(h)(2)Any housing credit amount allocated to any building for any calendar year—
IRC 42(h)(2)(A)applies for all TYs in compliance period ending during or after such year, and
IRC 42(h)(2)(B)reduces aggregate credit of the allocating agency only for such calendar year.
IRC 42(h)(3)This paragraph sets the housing credit dollar amount for agencies.
IRC 42(h)(3)(A)Agency may allocate its portion of State credit ceiling allocated under (3).
IRC 42(h)(3)(B)State housing credit ceiling for each year is allocated to agency of such State.
IRC 42(h)(3)(C)State housing credit ceiling applicable to any State for any year is sum of—
IRC 42(h)(3)(C)(i)the unused State housing credit ceiling of such State for preceding year,
IRC 42(h)(3)(C)(ii)the greater of—
IRC 42(h)(3)(C)(ii)(I)$1.75 ($1.50 for 2001) multiplied by the State population, or
IRC 42(h)(3)(C)(ii)(II)$2M,
IRC 42(h)(3)(C)(iii)amount of State housing credit ceiling returned in the calendar year, plus
IRC 42(h)(3)(C)(iv)any amount allocated by (D) to such State by the Secretary. Other rules apply.
IRC 42(h)(3)(D)Allocation of unused housing credit carryovers among certain States.
IRC 42(h)(3)(D)(i)Secretary allocates such credit to qualified States for the succeeding year.
IRC 42(h)(3)(D)(ii)The unused housing credit carryover of a state for any year is excess of—
IRC 42(h)(3)(D)(ii)(I)unused State housing credit ceiling for previous year, over
IRC 42(h)(3)(D)(ii)(II)aggregate housing credit amount allocated for such year.
IRC 42(h)(3)(D)(iii)Allocation is based on ratio of total carryovers to total population of States.
IRC 42(h)(3)(D)(iv)A "qualified State" is, for any calendar year, any State which—
IRC 42(h)(3)(D)(iv)(I)allocated its entire credit ceiling for the previous year, and
IRC 42(h)(3)(D)(iv)(II)made a request (before May 1 of the year) to receive an allocation under (iii).
IRC 42(h)(3)(E)A special rule for States with constitutional home rule cities.
IRC 42(h)(3)(E)(i)The credit for such a city is amount with same ratio to credit ceiling as—
IRC 42(h)(3)(E)(i)(I)the population of such city bears to
IRC 42(h)(3)(E)(i)(II)the population of the entire State.
IRC 42(h)(3)(E)(ii)Reduce State credit ceiling by total amounts allocated to such home rule cities.
IRC 42(h)(3)(E)(iii)A "constitutional home city" has the meaning given by §146(d)(3)(C).
IRC 42(h)(3)(F)Rules similar to those in §146(e) (except (2)(B) thereof) apply for (3).
IRC 42(h)(3)(G)For (3), population is determined in accordance with §146(j).
IRC 42(h)(3)(H)This subparagraph explains the cost-of-living adjustment.
IRC 42(h)(3)(H)(i)After 2002, the $2 million and $1.75 amounts in (C) is increased by—
IRC 42(h)(3)(H)(i)(I)such dollar amount, multiplied by
IRC 42(h)(3)(H)(i)(II)the cost-of-living adjustment in §1(f)(3); swap "2001" for "1992" in such (B).
IRC 42(h)(3)(H)(ii)This clause sets rules for rounding.
IRC 42(h)(3)(H)(ii)(I)For the $2M amount, amounts are rounded to next lowest multiple of $5K.
IRC 42(h)(3)(H)(ii)(II)For the $1.75 amount, amounts are rounded to next lowest multiple of 5¢.
IRC 42(h)(3)(I)For 2008 and 2009, in respect of (C)(ii), increase the amount in effect under—
IRC 42(h)(3)(I)(i)(I) (after increase under (H)) by 20¢, and
IRC 42(h)(3)(I)(ii)(II) (after such increase) by 10% (rounded to next lowest $5K multiple).
IRC 42(h)(4)Buildings financed by tax-exempt bonds are subject to unaccounted volume cap.
IRC 42(h)(4)(A)(1) doesn't apply to credit on basis financed by obligations subject to §103 if—
IRC 42(h)(4)(A)(i)such obligation is taken into account under §146, and
IRC 42(h)(4)(A)(ii)principal payments to redeem such obligation are made in a reasonable period.
IRC 42(h)(4)(B)If financing by (A) constitutes 50% or more of basis, (1) doesn't apply to (a).
IRC 42(h)(5)Portion of State ceiling set-aside for projects with nonprofit organizations.
IRC 42(h)(5)(A)No more than 90% of State ceiling is allocated to projects other than by (B).
IRC 42(h)(5)(B)An organization by (C) must own interest and participate in the project.
IRC 42(h)(5)(C)A "qualified nonprofit organization" is any organization if—
IRC 42(h)(5)(C)(i)it is described in (3) or (4) of §501(c) and is tax-exempt by §501(a),
IRC 42(h)(5)(C)(ii)it is determined to not be affiliated with a for-profit organization, and
IRC 42(h)(5)(C)(iii)1 of the exempt purposes for it is the fostering of low-income housing.
IRC 42(h)(5)(D)This subparagraph sets the treatment of certain subsidiaries.
IRC 42(h)(5)(D)(i)Organization meets (B) if it holds stock in other qualified corporation.
IRC 42(h)(5)(D)(ii)A "qualified corporation" has all stock owned by nonprofit organizations.
IRC 42(h)(5)(E)Nothing in (3)(F) allows a State to not comply with (A).
IRC 42(h)(6)Credit eligibility only for minimum long-term commitment to low-income housing.
IRC 42(h)(6)(A)Credit requires "extended low-income housing commitment" to be made by TY end.
IRC 42(h)(6)(B)Such commitment is an agreement between taxpayer and credit agency which—
IRC 42(h)(6)(B)(i)requires (c)(1) fraction to at least equal agreed amount and prohibits (E)(ii),
IRC 42(h)(6)(B)(ii)allows individuals meeting (g) the right to enforce clause (i) in State court,
IRC 42(h)(6)(B)(iii)prohibits disposition of any portion of the building to any other person,
IRC 42(h)(6)(B)(iv)doesn't refuse to lease to holders of vouchers by §8 of PL 75-412 due to status,
IRC 42(h)(6)(B)(v)is binding on all successors of the taxpayer, and
IRC 42(h)(6)(B)(vi)is recorded pursuant to State law as a restrictive covenant.
IRC 42(h)(6)(C)Allocation of credit is limited to amount necessary to support commitment.
IRC 42(h)(6)(C)(i)Credit allocation is limited to (c)(1) fraction plus increases by (f)(3).
IRC 42(h)(6)(C)(ii)If (4) applies, maximum credit is amount needed to support (c)(1) fraction.
IRC 42(h)(6)(D)For (6), the "extended use period" means the period—
IRC 42(h)(6)(D)(i)starting on 1st day of compliance period which building is part of project, and
IRC 42(h)(6)(D)(ii)ending on the later date which is—
IRC 42(h)(6)(D)(ii)(I)specified by such agency in such agreement, or
IRC 42(h)(6)(D)(ii)(II)15 years after the close of the compliance period.
IRC 42(h)(6)(E)Exceptions for foreclosure or if no buyer maintains low-income status.
IRC 42(h)(6)(E)(i)The extended use period for any building terminates on the date—
IRC 42(h)(6)(E)(i)(I)of acquisition by foreclosure, unless such action was part of an arrangement, or
IRC 42(h)(6)(E)(i)(II)when subparagraph (I) ends, if no new owner will use low-income status.
IRC 42(h)(6)(E)(ii)Termination by (i) does not permit before end of 3 years after such event—
IRC 42(h)(6)(E)(ii)(I)the eviction (other than for good cause) of a low-income unit tenant, or
IRC 42(h)(6)(E)(ii)(II)any increase in gross rent for such unit which is otherwise not allowed.
IRC 42(h)(6)(F)A "qualified contract" grants acquisition of low-income building portion for—
IRC 42(h)(6)(F)(i)an amount not less than the applicable fraction of the sum of—
IRC 42(h)(6)(F)(i)(I)the outstanding indebtedness secured by the building,
IRC 42(h)(6)(F)(i)(II)the adjusted investor equity in the building, plus
IRC 42(h)(6)(F)(i)(III)other capital contributions not reflected by (I) or (II), reduced by
IRC 42(h)(6)(F)(ii)cash distributions from the project. Sec. sets regulations for (6).
IRC 42(h)(6)(G)This subparagraph defines adjusted investor equity.
IRC 42(h)(6)(G)(i)Such equity is, for any year, sum of project cash investments increased by—
IRC 42(h)(6)(G)(i)(I)such amount, multiplied by
IRC 42(h)(6)(G)(i)(II)the cost-of-living adjustment by §1(f)(3), substituting base year for 1987.
IRC 42(h)(6)(G)(ii)If CPI exceeds last year's by 5%, apply such excess to base year CPI for (i).
IRC 42(h)(6)(G)(iii)The "base calendar year" is year in which 1st TY of credit period ends.
IRC 42(h)(6)(H)Low-income portion of a building is specified in extended housing commitment.
IRC 42(h)(6)(I)Period is 1 year starting when taxpayer requests agency to find interest buyer.
IRC 42(h)(6)(J)If agreement failed in TY, (A) still applies if failure is corrected in 1 year.
IRC 42(h)(6)(K)Secretary regulates application of (6) to projects with more than 1 building.
IRC 42(h)(7)This paragraph sets special rules.
IRC 42(h)(7)(A)Credit is only allocable to buildings in agency's governmental jurisdiction.
IRC 42(h)(7)(B)If allocations exceed State ceiling, reduce amounts in reverse of their issue.
IRC 42(h)(7)(C)Credit is reduced if allocation is less than credit without some limitations.
IRC 42(h)(7)(C)(i)§42 credit is limited to (ii) percentage that would apply to such building.
IRC 42(h)(7)(C)(ii)The (ii) percentage with respect to any building is the percentage which—
IRC 42(h)(7)(C)(ii)(I)the housing credit dollar amount allocated to such building bears to
IRC 42(h)(7)(C)(ii)(II)the credit amount determined by (iii).
IRC 42(h)(7)(C)(iii)Such amount is credit which would apply in respect to such building if—
IRC 42(h)(7)(C)(iii)(I)§42 were applied without (2)(A) and (3)(B) of (f), and
IRC 42(h)(7)(C)(iii)(II)(f)(3)(A) was applied without accounting the applicable percentage reduction.
IRC 42(h)(7)(D)Agency sets applicable percentage & maximum basis for an allocated building.
IRC 42(h)(8)This paragraph sets other definitions.
IRC 42(h)(8)(A)A "housing credit agency" is any agency authorized to carry out (h).
IRC 42(h)(8)(B)A "State" includes a US possession.
IRC 42(i)This subsection sets definitions and special rules for §42.
IRC 42(i)(1)The "compliance period" is 15 TYs starting with 1st TY of credit period.
IRC 42(i)(2)Determination of whether a building is federally subsidized.
IRC 42(i)(2)(A)For (b)(1), a building is subsidized if funded by Federal loan proceeds.
IRC 42(i)(2)(B)A loan does not apply to (A) if taxpayer elects to exclude from basis by (d)—
IRC 42(i)(2)(B)(i)in the case of a loan, the principal amount of such loan, and
IRC 42(i)(2)(B)(ii)in the case of a tax-exempt obligation, the proceeds thereof.
IRC 42(i)(2)(C)(A) applies to no tax-exempt obligation or below market loan for financing if—
IRC 42(i)(2)(C)(i)such note (at issue) identified the building for which the proceeds apply, and
IRC 42(i)(2)(C)(ii)the obligation is redeemed or loan is repaid before building is put in service.
IRC 42(i)(3)This paragraph defines a "low-income unit".
IRC 42(i)(3)(A)A low-income unit is any unit in a building if—
IRC 42(i)(3)(A)(i)such unit is rent-restricted (as by (g)(2)), and
IRC 42(i)(3)(A)(ii)tenants of such unit meet income limitation by (g)(1) regarding the project.
IRC 42(i)(3)(B)This subparagraph sets exceptions.
IRC 42(i)(3)(B)(i)A low-income unit must be suitable for living and not used on a transient basis.
IRC 42(i)(3)(B)(ii)The suitability by (i) is regulated by local health, building, and safety codes.
IRC 42(i)(3)(B)(iii)A unit meets (i) if it has a bedroom, kitchen, bathroom, and is in a building—
IRC 42(i)(3)(B)(iii)(I)used exclusively to facilitate homeless individuals to independent living, and
IRC 42(i)(3)(B)(iii)(II)which a qualified entity provides such individuals to locate & acquire housing.
IRC 42(i)(3)(B)(iv)A single-room unit is not used on transient basis even if rented month-by-month.
IRC 42(i)(3)(C)For buildings with 4 or less units, none are low-income if units are owned by—
IRC 42(i)(3)(C)(i)an individual who occupies a residential unit in such building, or
IRC 42(i)(3)(C)(ii)anyone related (by (d)(2)(D)(iii)) to such individual.
IRC 42(i)(3)(D)A unit retains low-income status even if it is occupied—
IRC 42(i)(3)(D)(i)by an individual who is—
IRC 42(i)(3)(D)(i)(I)a student and receiving assistance by title IV of the SSA, or
IRC 42(i)(3)(D)(i)(II)enrolled in a job training program and receiving benefits by PL 97-300, or
IRC 42(i)(3)(D)(ii)entirely by full-time students if such students are—
IRC 42(i)(3)(D)(ii)(I)single parents and their children, to which dependency (§152) can be claimed, or
IRC 42(i)(3)(D)(ii)(II)married and file a joint return.
IRC 42(i)(3)(E)Buildings with 4 or less units are eligible if there is a development plan.
IRC 42(i)(3)(E)(i)(C) doesn't apply if there is a development plan sponsored by State, &c.
IRC 42(i)(3)(E)(ii)If (i) applies, applicable fraction is no more than 80% of unit fraction.
IRC 42(i)(3)(E)(iii)If (i) applies, units unrented for 90 days are considered occupied by owner.
IRC 42(i)(4)A "new building" is a building whose original use begins with the taxpayer.
IRC 42(i)(5)An "existing building" is any building which is not a new building.
IRC 42(i)(6)Credit and tax by (j) is apportioned between any trust and its beneficiaries.
IRC 42(i)(7)This paragraph sets rules for tenant's right of 1st refusal to acquire property.
IRC 42(i)(7)(A)No tax benefit is denied due to 1st refusal to buy property at price by (B).
IRC 42(i)(7)(B)The minimum purchase price under (B) is equal to the sum of—
IRC 42(i)(7)(B)(i)principal amount of currently outstanding debts secured by the building, and
IRC 42(i)(7)(B)(ii)all Federal, State, and local taxes attributable to such sale.
IRC 42(i)(8)Rural project income limit is greater of area or non-metropolitan median income.
IRC 42(i)(9)This paragraph sets coordination with low-income housing grants.
IRC 42(i)(9)(A)For 2009, reduce (h)(3)(C) by amounts used to figure grant by §1602 of PL 111-5.
IRC 42(i)(9)(B)Basis of a qualified low-income building is not reduced by any grant under (A).
IRC 42(j)This subsection sets rules for the recapture of credit.
IRC 42(j)(1)Chapter 1 tax for TY is increased by credit recapture amount if—
IRC 42(j)(1)(A)as of a TY end in compliance period, qualified basis in a building is less than
IRC 42(j)(1)(B)amount of such basis at end of preceding taxable year.
IRC 42(j)(2)For (1), the credit recapture amount is equal to the sum of—
IRC 42(j)(2)(A)all credit decreases by §38 if accelerated portion by (3) weren't allowed, plus
IRC 42(j)(2)(B)interest at overpayment rate by §6621 on (A) amount for applicable prior TYs.
IRC 42(j)(3)Accelerated portion of credit for prior TYs for any basis amount is excess of—
IRC 42(j)(3)(A)aggregate credit allowed by §42, ignoring (j), for such years and basis, over
IRC 42(j)(3)(B)aggregate credit which would be allowed if rated over entire compliance period.
IRC 42(j)(4)This paragraph sets special rules.
IRC 42(j)(4)(A)Carryforwards and carrybacks by §39 are adjusted if not used to reduce tax.
IRC 42(j)(4)(B)Qualified basis used for (1)(B) is no more than basis used for (a) in last TY.
IRC 42(j)(4)(C)(1) applies to basis decrease to extent decrease is more than basis in (f)(3).
IRC 42(j)(4)(D)Increase in tax by (j) is not treated as tax imposed to figure chapter 1 credit.
IRC 42(j)(4)(E)Tax increase doesn't apply to basis reduction due to unrestored casualty loss.
IRC 42(j)(4)(F)Secretary may not apply tax increase under (j) to any building if—
IRC 42(j)(4)(F)(i)such increase is from a de minimis change in floor space fraction in (c)(1), and
IRC 42(j)(4)(F)(ii)the building is a qualified low-income building after such change.
IRC 42(j)(5)This paragraph sets rules to treat certain partnerships as the taxpayer.
IRC 42(j)(5)(A)For applying (j) to an partnership subject to (j)—
IRC 42(j)(5)(A)(i)it is treated as the taxpayer to which the credit of (a) is allowed,
IRC 42(j)(5)(A)(ii)such credit is amount that would be allowed to partnership if permitted,
IRC 42(j)(5)(A)(iii)(4)(A) does not apply, and
IRC 42(j)(5)(A)(iv)tax increase for any TY is allocated to partners as for allocation of income.
IRC 42(j)(5)(B)Unless elected otherwise, (5) applies to partnerships with 35 or more partners.
IRC 42(j)(5)(C)This subparagraph sets special rules.
IRC 42(j)(5)(C)(i)For (B)(i), a husband and wife (and their estates) are treated as 1 partner.
IRC 42(j)(5)(C)(ii)Any election made under (B) is irrevocable.
IRC 42(j)(6)No recapture on disposition of building which continues in qualified use.
IRC 42(j)(6)(A)Ignore (j) increase if qualified use continues in remaining compliance period.
IRC 42(j)(6)(B)If disposal causes basis reduction which increases tax under (j), then—
IRC 42(j)(6)(B)(i)period of assessment doesn't expire within 3 years after notification to Sec., &
IRC 42(j)(6)(B)(ii)deficiency may be assessed within (i) period despite any other applicable law.
IRC 42(k)This subsection sets the application of at-risk rules.
IRC 42(k)(1)Certain rules by (a)(1), (a)(2), and (b)(1) of §49 apply for figuring basis.
IRC 42(k)(2)This paragraph sets special rules for determining a qualified person.
IRC 42(k)(2)(A)Qualification of financing borrowed from (h)(5) entity meeting (B) - (D) is—
IRC 42(k)(2)(A)(i)made regardless of if such entity actively and regularly lends money, or
IRC 42(k)(2)(A)(ii)made regardless of if such entity is described by §49(a)(1)(D)(iv)(II).
IRC 42(k)(2)(B)(B) is met if building secures financing, except for buildings by (d)(6)(B) if—
IRC 42(k)(2)(B)(i)a security interest in the building is not permitted by holding agency, and
IRC 42(k)(2)(B)(ii)any proceeds from financing are applied to acquire or improve such building.
IRC 42(k)(2)(C)No more than 60% of building's eligible basis can come from such financing.
IRC 42(k)(2)(D)The federal financing must be fully repaid on or before the earliest of—
IRC 42(k)(2)(D)(i)the date on which such financing matures,
IRC 42(k)(2)(D)(ii)the 90th day after compliance period ends for the low-income building, or
IRC 42(k)(2)(D)(iii)the date of its refinancing or the sale of such building. Other rules apply.
IRC 42(k)(3)Basis is equal to financing if discounted rate is within 1% below Federal rate.
IRC 42(k)(4)This paragraph sets rules for failure to fully repay.
IRC 42(k)(4)(A)If (2)(D) isn't met, tax is increased by portion by (B) & interest in period—
IRC 42(k)(4)(A)(i)starting with due date for filing return for 1st TY of allowed credit, and
IRC 42(k)(4)(A)(ii)ending with due date for TY of failure. Rate and method under §6621 applies.
IRC 42(k)(4)(B)Applicable portion is net decrease under §38 for prior TYs as if (2)(D) failed.
IRC 42(k)(4)(C)Rules similar to those of (A) - (D) of (j)(4) apply for (k).
IRC 42(l)This subsection sets rules for certifications and other reports to the Sec.
IRC 42(l)(1)After end of 1st TY in credit period, taxpayer shall certify to Secretary—
IRC 42(l)(1)(A)the TY and calendar year in which such building was placed in service,
IRC 42(l)(1)(B)the adjusted basis and eligible basis of such building as of such time,
IRC 42(l)(1)(C)the maximum applicable percentage and basis allowed by agency under (h),
IRC 42(l)(1)(D)the election by (g) in regard to the qualified low-income housing project, and
IRC 42(l)(1)(E)any other information the Secretary may require.
IRC 42(l)(2)The Secretary may require an annual information return for each TY, reporting—
IRC 42(l)(2)(A)the qualified basis for the TY of each qualified low-income building,
IRC 42(l)(2)(B)the information described by (1)(C) for the TY, and
IRC 42(l)(2)(C)any other required information. Penalty by §6652(j) applies for noncompliance.
IRC 42(l)(3)Agencies which allocate housing credit submit an annual report which specifies—
IRC 42(l)(3)(A)the amount of housing credit allocated to each building for the year,
IRC 42(l)(3)(B)sufficient information to identify all related buildings and taxpayers, and
IRC 42(l)(3)(C)any other required information. Penalty by §6652(j) applies for noncompliance.
IRC 42(m)This subsection sets the responsibilities of housing credit agencies.
IRC 42(m)(1)This paragraph sets rules for plans for allocation of credit among projects.
IRC 42(m)(1)(A)The housing credit dollar amount for any building is zero unless—
IRC 42(m)(1)(A)(i)such allocation is under a plan (B), subject to rules similar to §147(f)(2),
IRC 42(m)(1)(A)(ii)the agency notifies the CEO of local jurisdiction of location for such project,
IRC 42(m)(1)(A)(iii)a market study of needs of low-income persons is made before allocation, and
IRC 42(m)(1)(A)(iv)an explanation is made public for any allocation not otherwise in accordance.
IRC 42(m)(1)(B)A "qualified allocation plan" is any plan which—
IRC 42(m)(1)(B)(i)sets selection criteria to determine housing priorities of the agency,
IRC 42(m)(1)(B)(ii)gives preference in allocating credit among selected projects to those which—
IRC 42(m)(1)(B)(ii)(I)serve the lowest income tenants,
IRC 42(m)(1)(B)(ii)(II)oblige to serve qualified tenants for the longest periods, and
IRC 42(m)(1)(B)(ii)(III)are located in tracts by (d)(5)(C) and is part of a revitalization plan, and
IRC 42(m)(1)(B)(iii)sets procedures to monitor noncompliance and IRS notification thereof.
IRC 42(m)(1)(C)The selection criteria set forth in a qualified allocation plan must include—
IRC 42(m)(1)(C)(i)project location,
IRC 42(m)(1)(C)(ii)housing needs characteristics,
IRC 42(m)(1)(C)(iii)project characteristics, including if the plan uses existing housing,
IRC 42(m)(1)(C)(iv)sponsor characteristics,
IRC 42(m)(1)(C)(v)tenant populations with special housing needs,
IRC 42(m)(1)(C)(vi)public housing waiting lists,
IRC 42(m)(1)(C)(vii)tenant populations of individuals with children,
IRC 42(m)(1)(C)(viii)projects intended for eventual tenant ownership,
IRC 42(m)(1)(C)(ix)the energy efficiency of the project, and
IRC 42(m)(1)(C)(x)the historic nature of the project.
IRC 42(m)(1)(D)(h)(4) does not apply unless project meets applicable qualified allocation plan.
IRC 42(m)(2)Allocation of credit limited to necessary amount to assure project feasibility.
IRC 42(m)(2)(A)Allocation is figured by agency as needed for project's financial feasibility.
IRC 42(m)(2)(B)For determining amount by (A), the housing credit agency must consider—
IRC 42(m)(2)(B)(i)the sources of funds, their use, and the total planned project financing,
IRC 42(m)(2)(B)(ii)any proceeds or receipts expected to be generated from tax benefits,
IRC 42(m)(2)(B)(iii)the percentage of credit used for project costs other than intermediaries, and
IRC 42(m)(2)(B)(iv)the reasonableness of the developmental and operational project costs.
IRC 42(m)(2)(C)This subparagraph sets when determination for (A) occurs.
IRC 42(m)(2)(C)(i)Determination under (A) is made as of each of the following times:
IRC 42(m)(2)(C)(i)(I)The application for the housing credit dollar amount.
IRC 42(m)(2)(C)(i)(II)The allocation of the housing credit dollar amount.
IRC 42(m)(2)(C)(i)(III)The date in which the building is placed in service.
IRC 42(m)(2)(C)(ii)Prior to applying (i), agency must certify extent of all applicable subsidies.
IRC 42(m)(2)(D)(h)(4) doesn't apply unless bond issuer applies rules similar to (A) and (B).
IRC 42(n)Secretary will prescribe regulations as needed, including regulations which—
IRC 42(n)(1)pertain to—
IRC 42(n)(1)(A)projects that include more than 1 building or only a portion of a building,
IRC 42(n)(1)(B)buildings which are placed in service in portions,
IRC 42(n)(2)provide for the application of §42 to short taxable years,
IRC 42(n)(3)prevent the avoidance of the rules of §42, and
IRC 42(n)(4)allow housing credit agencies to correct administrative errors and omissions.
 
IRC 43This section discusses the enhanced oil recovery credit.
IRC 43(a)For §38, such credit for a TY is 15% of taxpayer's qualified oil recovery costs.
IRC 43(b)This subsection sets a phase-out of credit as crude oil prices increase.
IRC 43(b)(1)Credit by (a) for any TY is reduced by amount bearing same ratio as—
IRC 43(b)(1)(A)the reference price for year before year in which TY begins exceeds $28, to
IRC 43(b)(1)(B)$6.
IRC 43(b)(2)The "reference price" is determined for such calendar year by §45K(d)(2)(C).
IRC 43(b)(3)This paragraph sets adjustments for inflation.
IRC 43(b)(3)(A)For TYs after 1991, substitute $28 amount in (1)(A) by the product of—
IRC 43(b)(3)(A)(i)$28, and
IRC 43(b)(3)(A)(ii)the inflation adjustment factor by (B) for such calendar year.
IRC 43(b)(3)(B)Such factor is fraction set by dividing GNP deflator by such deflator for 1990.
IRC 43(c)This subsection defines "qualified enhanced oil recovery costs".
IRC 43(c)(1)Qualified enhanced oil recovery costs are any of the following:
IRC 43(c)(1)(A)Any amount paid or incurred during the taxable year for tangible property which—
IRC 43(c)(1)(A)(i)is an integral part of a qualified enhanced oil recovery project, and
IRC 43(c)(1)(A)(ii)has allowable depreciation or amortization under chapter 1.
IRC 43(c)(1)(B)Any intangible drilling and development costs which—
IRC 43(c)(1)(B)(i)are paid or incurred in connection with a qualified recovery project, and
IRC 43(c)(1)(B)(ii)are subject to taxpayer's election under §263(c) for the taxable year.
IRC 43(c)(1)(C)Qualified tertiary injectant expenses (§193(b)) connected to a project.
IRC 43(c)(1)(D)Amounts paid or incurred in the TY to construct a gas treatment plant which—
IRC 43(c)(1)(D)(i)is located within US (as by §638(1)) north of 64° North latitude,
IRC 43(c)(1)(D)(ii)prepares Alaska natural gas for transport in a pipeline of certain capacity, and
IRC 43(c)(1)(D)(iii)produces carbon dioxide which is injected into hydrocarbon-bearing formations.
IRC 43(c)(2)This paragraph defines a "qualified enhanced oil recovery project".
IRC 43(c)(2)(A)A qualified enhanced oil recovery project means any project which—
IRC 43(c)(2)(A)(i)applies 1 or methods by §193(b)(3) to increase the amount of recovered oil,
IRC 43(c)(2)(A)(ii)is located within the United States (as by §683(1)) and
IRC 43(c)(2)(A)(iii)commences the first injection of liquids, gases, or other matter after 19901231.
IRC 43(c)(2)(B)Project is not qualified until certified by petroleum engineer that (A) is met.
IRC 43(c)(3)To figure costs, rules similar to those by (a)(1), (a)(2), and (b) of §49 apply.
IRC 43(c)(4)Immiscible non-hydrocarbon gas displacement meets definition by §193(b)(3).
IRC 43(c)(5)This paragraph defines "Alaska natural gas" for purposes of (1)(D).
IRC 43(c)(5)(A)Such gas enters Alaska natural gas pipeline which is produced form a well—
IRC 43(c)(5)(A)(i)located within certain areas of Alaska north of 64° North latitude, and
IRC 43(c)(5)(A)(ii)pursuant to applicable State and Federal requirements for permit, &c.
IRC 43(c)(5)(B)"Natural gas" is defined by §613A(e)(2).
IRC 43(d)This subsection sets other rules.
IRC 43(d)(1)Any deduction allowed for costs accounted by (a) are reduced by related credit.
IRC 43(d)(2)For costs of property, any increase of such basis is reduced by credit allowed.
IRC 43(e)This subsection sets rules for election to have the credit not apply.
IRC 43(e)(1)A taxpayer may elect to have §43 not apply for any taxable year.
IRC 43(e)(2)Election or revocation of (1) can be made within 3 years of return's due date.
IRC 43(e)(3)Election or revocation of (1) is made by regulations prescribed by Secretary.
 
IRC 44This section discusses expenditures to provide access to disabled individuals.
IRC 44(a)If eligible, the disabled access credit is 50% of costs between $250 and $10250.
IRC 44(b)An "eligible small business" means any person if such person—
IRC 44(b)(1)either—
IRC 44(b)(1)(A)has gross receipts not exceeding $1M for the preceding taxable year, or
IRC 44(b)(1)(B)if (A) doesn't apply, employed no more than 30 full-time employees, and
IRC 44(b)(2)elects the application of §44 for taxable year.
IRC 44(c)This subsection defines "eligible access expenditures".
IRC 44(c)(1)Such expenditures are paid by business by (b) for compliance with PL 101-336.
IRC 44(c)(2)Eligible access expenditures includes amounts paid or incurred—
IRC 44(c)(2)(A)for removing certain barriers which make a business unusable by the disabled,
IRC 44(c)(2)(B)to make aurally delivered materials available to those with hearing impairments,
IRC 44(c)(2)(C)to make visually delivered materials available to those with visual impairments,
IRC 44(c)(2)(D)to acquire or modify equipment or devices for the disabled, or
IRC 44(c)(2)(E)to provide other similar services, modifications, materials, or equipment.
IRC 44(c)(3)Amounts paid by (2) only include necessary and reasonable expenditures.
IRC 44(c)(4)Costs by (2)(A) paid to facilities put in service after 19901105 are excluded.
IRC 44(c)(5)Costs by (2)(A) must meet standards by certain Barriers Compliance Board.
IRC 44(d)This subsection defines "disability" and sets other special rules.
IRC 44(d)(1)Disability has same meaning as when used in PL 101-336.
IRC 44(d)(2)This paragraph sets rules for controlled groups of corporations.
IRC 44(d)(2)(A)All members of same group or under common control as under §52 are 1 person.
IRC 44(d)(2)(B)Secretary apportions dollar limitation of (a) among group members of (A).
IRC 44(d)(3)For partnerships or S-Corps, limitation of (a) applies respectively to members.
IRC 44(d)(4)Secretary sets adjustments for (b)(1) if preceding TY is less than 12 months.
IRC 44(d)(5)Gross receipts for any TY are reduced by returns and allowances.
IRC 44(d)(6)The reference to any person in (b)(1) also refers to any predecessor.
IRC 44(d)(7)For the amount of credit determined by §44—
IRC 44(d)(7)(A)no credit or deduction is allowed for such amount under any other provision, and
IRC 44(d)(7)(B)adjusted basis of any property is not increased in respect of such amount.
IRC 44(e)Secretary prescribes regulations necessary to carry out purposes of §44.
 
IRC 44ARenumbered §21.
 
IRC 44BRepealed.
 
IRC 44CRenumbered §23.
 
IRC 44DRenumbered §29.
 
IRC 44ERenumbered §40.
 
IRC 44FRenumbered §30.
 
IRC 44GRenumbered §41.
 
IRC 44HRenumbered §45C.
 
IRC 45This section discusses electricity produced from certain renewable sources.
IRC 45(a)For §38, the renewable electricity production credit is the product of—
IRC 45(a)(1)1.5¢, multiplied by
IRC 45(a)(2)the kilowatt hours of electricity—
IRC 45(a)(2)(A)produced by the taxpayer—
IRC 45(a)(2)(A)(i)from qualified energy resources, and
IRC 45(a)(2)(A)(ii)at a qualified facility in 10-year period starting at placement in service, and
IRC 45(a)(2)(B)sold by the taxpayer to an unrelated person during the taxable year.
IRC 45(b)This subsection sets limitations and adjustments.
IRC 45(b)(1)Credit is reduced by amount bearing same ratio to the amount of credit as—
IRC 45(b)(1)(A)amount the reference price for year of sale exceeds 8¢, bears to
IRC 45(b)(1)(B)3¢.
IRC 45(b)(2)Amounts used to figure credit & phaseout are adjusted by factor under (e)(2)(C).
IRC 45(b)(3)Credit regarding any project is reduced by multiplying it by ½ or a fraction—
IRC 45(b)(3)(A)with a numerator which is the sum, for the TY and all prior TYs, of—
IRC 45(b)(3)(A)(i)grants from the US, a State, or political subdivision for project use,
IRC 45(b)(3)(A)(ii)proceeds from government obligations which are tax-exempt by §103,
IRC 45(b)(3)(A)(iii)the aggregate energy financing from Federal, State, or local programs, and
IRC 45(b)(3)(A)(iv)amount of any other credit allowed to property which is part of the project, and
IRC 45(b)(3)(B)with a denominator of sum amount of additions to the project capital account.
IRC 45(b)(4)Credit rate & other rules regarding facilities by (3), (5) - (7), & (9) of (d).
IRC 45(b)(4)(A)(a)(1) is halved if such facility produces & sells electricity after 2003.
IRC 45(b)(4)(B)This subparagraph sets the credit period.
IRC 45(b)(4)(B)(i)For such facilities, swap "10-year" with "5-year" to apply (a)(2)(A)(ii).
IRC 45(b)(4)(B)(ii)For (i), swap "20050101" for "5-year" for facilities by (d)(3)(A)(ii).
IRC 45(b)(4)(B)(iii)Clause (i) does not apply to any facility placed in service after 20050808.
IRC 45(c)This subsection defines resources.
IRC 45(c)(1)"Qualified energy sources" means—
IRC 45(c)(1)(A)wind,
IRC 45(c)(1)(B)closed-loop biomass,
IRC 45(c)(1)(C)open-loop biomass,
IRC 45(c)(1)(D)geothermal energy,
IRC 45(c)(1)(E)solar energy,
IRC 45(c)(1)(F)small irrigation power,
IRC 45(c)(1)(G)municipal solid waste,
IRC 45(c)(1)(H)qualified hydropower production, and
IRC 45(c)(1)(I)marine and hydrokinetic renewable energy.
IRC 45(c)(2)"Closed-loop biomass" is organic material raised for energy production purposes.
IRC 45(c)(3)This paragraph defines "open-loop biomass"
IRC 45(c)(3)(A)Open-loop biomass is—
IRC 45(c)(3)(A)(i)any agricultural livestock waste nutrients, or
IRC 45(c)(3)(A)(ii)solid, nonhazardous waste material segregated from other waste & derived from—
IRC 45(c)(3)(A)(ii)(I)mill and harvesting residues, slash, brush, and other forest-related resources,
IRC 45(c)(3)(A)(ii)(II)pallets, crates, and other wood waste materials (with no chemical treatment),
IRC 45(c)(3)(A)(ii)(III)orchard tree tops, grain, sugar, and other agriculture sources or by-products.
IRC 45(c)(3)(B)This subparagraph defines "agricultural livestock waste nutrients".
IRC 45(c)(3)(B)(i)Such nutrients are livestock manure and litter, including straw, rice hulls, &c.
IRC 45(c)(3)(B)(ii)"Agricultural livestock" includes bovine, swine, poultry, and sheep.
IRC 45(c)(4)"Geothermal energy" is derived from a geothermal deposit (as by §613(e)(2)).
IRC 45(c)(5)"Small irrigation power" is power which is—
IRC 45(c)(5)(A)generated without any dam or impoundment of water by an irrigation system, and
IRC 45(c)(5)(B)between 150 kilowatts and 5 megawatts for its nameplate capacity rating.
IRC 45(c)(6)"Municipal solid waste" is defined as "solid waste" under §2(27) of PL 94-580.
IRC 45(c)(7)This paragraph defines "refined coal".
IRC 45(c)(7)(A)Refined coal is a fuel which—
IRC 45(c)(7)(A)(i)is a liquid, solid, or gaseous fuel produced from coal or high carbon fly ash,
IRC 45(c)(7)(A)(ii)is sold with reasonable expectation that it will be used for steam production,
IRC 45(c)(7)(A)(iii)is certified by the taxpayer as resulting in a qualified emission reduction, and
IRC 45(c)(7)(A)(iv)is produced to result in an increase of at least 50% market value.
IRC 45(c)(7)(B)"Qualified emission reduction" is reduction of 20% or more of certain emissions.
IRC 45(c)(8)This paragraph defines "qualified hydropower production".
IRC 45(c)(8)(A)Qualified hydropower production is—
IRC 45(c)(8)(A)(i)the incremental hydropower production for the TY, and
IRC 45(c)(8)(A)(ii)for dams by (C), the hydropower production from the facility for the TY.
IRC 45(c)(8)(B)This subparagraph sets determination of incremental hydropower production.
IRC 45(c)(8)(B)(i)Such production is certified percentage attributable to efficiency improvements.
IRC 45(c)(8)(B)(ii)Operational changes not related to efficiency improvements aren't accounted.
IRC 45(c)(8)(C)For (A), a facility is a nonhydroelectric dam if it is—
IRC 45(c)(8)(C)(i)licensed by the FERC meets other applicable regulatory requirements,
IRC 45(c)(8)(C)(ii)placed in service before 20050808 & made no hydroelectric power at such date, &
IRC 45(c)(8)(C)(iii)augmented by turbines, &c., after 20050808 to produce hydroelectric power.
IRC 45(c)(9)This paragraph defines "Indian coal".
IRC 45(c)(9)(A)Indian coal is coal produced from reserves which, on 20050614—
IRC 45(c)(9)(A)(i)were owned by an Indian tribe, or
IRC 45(c)(9)(A)(ii)were held in trust by the US for the benefit of an Indian tribe or its members.
IRC 45(c)(9)(B)An "Indian tribe" has the same meaning as by §7871(c)(3)(E)(ii).
IRC 45(c)(10)This paragraph defines "marine and hydrokinetic renewable energy".
IRC 45(c)(10)(A)Marine and hydrokinetic renewable energy is energy derived from—
IRC 45(c)(10)(A)(i)waves, tides, and currents in oceans, estuaries, and tidal areas,
IRC 45(c)(10)(A)(ii)free flowing water in rivers, lakes, and streams,
IRC 45(c)(10)(A)(iii)free flowing water in a man-made channel, & projects which hasten water flow, or
IRC 45(c)(10)(A)(iv)differentials in ocean temperature (ocean thermal energy conversion).
IRC 45(c)(10)(B)Diversionary structures (not by (A)(iii)) for electric production are excluded.
IRC 45(d)This subsection sets rules for qualified facilities.
IRC 45(d)(1)A qualified wind facility is in service by 19931231 and constructed by 20140101.
IRC 45(d)(2)This paragraph sets qualification of a closed-loop biomass facility.
IRC 45(d)(2)(A)For such a facility to be qualified, it must be—
IRC 45(d)(2)(A)(i)placed in service after 19921231 and constructed before 20140101, or
IRC 45(d)(2)(A)(ii)modified for such use by the Biomass Power for Rural Development Programs, &c.
IRC 45(d)(2)(B)Include electricity from unit in service after 20041022 & connected to (A)(i).
IRC 45(d)(2)(C)For a qualified facility described in (A)(ii)—
IRC 45(d)(2)(C)(i)10-year period of (a) begins no earlier than 20041022, and
IRC 45(d)(2)(C)(ii)person eligible for credit is lessee if owner doesn't produce electricity.
IRC 45(d)(3)This paragraph sets qualification of an open-loop biomass facility.
IRC 45(d)(3)(A)An open-loop biomass facility is qualified if its owned by the taxpayer and—
IRC 45(d)(3)(A)(i)in the case of a facility which uses agricultural livestock waste nutrients—
IRC 45(d)(3)(A)(i)(I)is in service before 20041022 and constructed before 20140101, and
IRC 45(d)(3)(A)(i)(II)the nameplate capacity rating of which is not less than 150 kilowatts, and
IRC 45(d)(3)(A)(ii)for other facilities, is placed in service before 20140101.
IRC 45(d)(3)(B)Include electricity from unit put in service after 20041022 & connected to (A).
IRC 45(d)(3)(C)Person eligible for credit is lessee if owner doesn't produce electricity.
IRC 45(d)(4)Geothermal or solar facility is qualified if in service after 20041022 & which—
IRC 45(d)(4)(A)is in service before 20060101, if the facility uses solar energy, and
IRC 45(d)(4)(B)is in construction before 20140101, if the facility uses geothermal energy.
IRC 45(d)(5)Small irrigation facilities in service within 20041022 & 20140101 is qualified.
IRC 45(d)(6)Landfill gas facility in service & constructed by 20041022 & 20140101 qualifies.
IRC 45(d)(7)Trash facility in service & constructed by 20041022 & 20140101 qualifies.
IRC 45(d)(8)A refined coal facility in service within 20041022 & 20140101 is qualified.
IRC 45(d)(8)A facility producing refined coal is qualified if it has been placed in service—
IRC 45(d)(8)(A)before 20100101, if the facility produces steel industry fuel, and
IRC 45(d)(8)(B)between 20041022 & 20120101, if the facility doesn't meet (A).
IRC 45(d)(9)Definition of a "qualified hydropower facility".
IRC 45(d)(9)(A)A facility which produces qualified production by (c)(8) qualifies if—
IRC 45(d)(9)(A)(i)it has any additions ((c)(8)(B)) in service between 20041022 and 20140101, and
IRC 45(d)(9)(A)(ii)it has any other facility in service before 200410122 and made before 20140101.
IRC 45(d)(9)(C)For (A), 10-year period of (a) starts when such additions are placed in service.
IRC 45(d)(10)Indian coal production facility is qualified if put in service before 20140101.
IRC 45(d)(11)A facility producing power as by (c)(10) is qualified if it—
IRC 45(d)(11)(A)has a nameplate capacity rating of at least 150 kilowatts, and
IRC 45(d)(11)(B)is originally placed in service before 20041022 and constructed before 20140101.
IRC 45(e)This subsection sets definitions and special rules.
IRC 45(e)(1)Sales are accounted for §45 only for the production of electricity within—
IRC 45(e)(1)(A)the United States (within meaning of §638(1)), or
IRC 45(e)(1)(B)a possession of the United States (within meaning of §638(2)).
IRC 45(e)(2)Rules for computation of inflation adjustment factor and reference price.
IRC 45(e)(2)(A)Sec. publishes such factor and price in the Federal Register, as of April 1.
IRC 45(e)(2)(B)Inflation adjustment factor is set by dividing current GDP deflator by 1992's.
IRC 45(e)(2)(C)Reference price is annual average contract price per electrical KWH.
IRC 45(e)(3)Production is proportionally allocated among persons with ownership interest.
IRC 45(e)(4)Persons are considered related if treated by §52(b) as a single employer.
IRC 45(e)(5)Per Secretary's regulations, rules similar to those of §52(d) apply.
IRC 45(e)(6)Repealed.
IRC 45(e)(7)Credit to not apply to electricity sold to utilities by certain contracts.
IRC 45(e)(7)(A)Credit by (a) does not apply to electricity which is—
IRC 45(e)(7)(A)(i)produced at a facility by (d)(1) which is placed in service after 19990630, &
IRC 45(e)(7)(A)(ii)sold to a utility under a contract initially entered into before 19870101.
IRC 45(e)(7)(B)(A) doesn't apply if—
IRC 45(e)(7)(B)(i)energy prices and capacity are established in an amendment to (A)(ii) contract,
IRC 45(e)(7)(B)(ii)(i) sets that prices exceeding avoided cost prices apply to no more than—
IRC 45(e)(7)(B)(ii)(I)the average annual quantity of electricity sold to utility from 1994 - 1998, or
IRC 45(e)(7)(B)(ii)(II)estimate of annual production, or, greatest quantity sold from 1996 - 1998, and
IRC 45(e)(7)(B)(iii)such amendment provides that energy and capacity exceeding (ii) may be sold to—
IRC 45(e)(7)(B)(iii)(I)the utility only at prices which don't exceed avoided cost prices, or
IRC 45(e)(7)(B)(iii)(II)a 3rd party upon notice. "Avoided cost prices" are set by 18 CFR 292.304(d)(1).
IRC 45(e)(8)This paragraph sets rules for refined coal production facilities.
IRC 45(e)(8)(A)For such producers, §45 credit is increased by $4.375 per ton of qualified coal—
IRC 45(e)(8)(A)(i)produced at a facility during 10-year period starting when entered service, and
IRC 45(e)(8)(A)(ii)sold by the taxpayer—
IRC 45(e)(8)(A)(ii)(I)to an unrelated person, and
IRC 45(e)(8)(A)(ii)(II)during such 10-year period and such taxable year.
IRC 45(e)(8)(B)Increase by (A) is reduced by amount bearing same ratio to increase as—
IRC 45(e)(8)(B)(i)excess of feedstock fuel price over product of 1.7 by 2002 fuel price bears to
IRC 45(e)(8)(B)(ii)$8.75.
IRC 45(e)(8)(C)Rules similar to those by (b)(3) and paragraphs (1) - (5) apply to (8).
IRC 45(e)(9)Coordination with credit for producing fuel from a nonconventional source.
IRC 45(e)(9)(A)A "qualified facility" does not use biodegradation (if given credit by §45K).
IRC 45(e)(9)(B)A "refined coal production facility" doesn't include those given credit by §45K.
IRC 45(e)(10)This paragraph sets rules for Indian coal production facilities.
IRC 45(e)(10)(A)For such producers, §45 credit is increased by applicable dollar amount per ton—
IRC 45(e)(10)(A)(i)produced at such facility during 8-year period starting 20060101, and
IRC 45(e)(10)(A)(ii)sold by the taxpayer—
IRC 45(e)(10)(A)(ii)(I)to an unrelated person, and
IRC 45(e)(10)(A)(ii)(II)during such 8-year period and such taxable year.
IRC 45(e)(10)(B)This subparagraph defines the "applicable dollar amount".
IRC 45(e)(10)(B)(i)Such amount is—
IRC 45(e)(10)(B)(i)(I)$1.50 for 2006 - 2009, and
IRC 45(e)(10)(B)(i)(II)$2.00 for years after 2009.
IRC 45(e)(10)(B)(ii)After 2006, adjust (i) for inflation as by (2)(B); swap 2005 for 1992 therein.
IRC 45(e)(10)(C)Rules similar to those by (b)(3) and (1), (3), (4), and (5) apply to (10).
IRC 45(e)(10)(D)(10) is specified credit for §38(c)(4)(A) during 4 years after entering service.
IRC 45(e)(11)This paragraph sets allocation of credit to patrons of agricultural cooperative.
IRC 45(e)(11)(A)This subparagraph sets rules for an election to allocate.
IRC 45(e)(11)(A)(i)Credit by (a) is apportioned to patrons if organization by (D) makes election.
IRC 45(e)(11)(A)(ii)Election is irrevocable and not in effect until patrons are notified.
IRC 45(e)(11)(B)Any credit apportioned to patrons under (A) is—
IRC 45(e)(11)(B)(i)not included in the amount determined by (a) for the organization, and
IRC 45(e)(11)(B)(ii)included in 1st TY after end of payment period (or patron's TY end if earlier).
IRC 45(e)(11)(C)If organization's credit is less than shown on return, its tax is increased by—
IRC 45(e)(11)(C)(i)such reduction, exceeding
IRC 45(e)(11)(C)(ii)amounts not apportioned to patrons under (A) for the taxable year.
IRC 45(e)(11)(D)An "eligible cooperative" is by §1381(a) in which producers own more than 50%.
 
IRC 45AThis section discusses the Indian employment credit.
IRC 45A(a)For §38, the Indian employment credit is equal to 20% of any excess of—
IRC 45A(a)(1)the sum of—
IRC 45A(a)(1)(A)qualified wages paid or incurred during the taxable year, plus
IRC 45A(a)(1)(B)qualified employee health insurance costs paid or incurred during such TY, over
IRC 45A(a)(2)the sum of qualified wages and insurance costs paid by the employer during 1993.
IRC 45A(b)This subsection defines "qualified wages" & "qualified health insurance costs".
IRC 45A(b)(1)This paragraph defines "qualified wages".
IRC 45A(b)(1)(A)Such wages are paid by an employer for services of a qualified employee.
IRC 45A(b)(1)(B)Such wages do not include wages accounted by §51 in 1st year of employment.
IRC 45A(b)(2)This paragraph defines "qualified employee health insurance costs".
IRC 45A(b)(2)(A)Such costs are paid by employer for health insurance coverage of (c) employee.
IRC 45A(b)(2)(B)No amount paid pursuant to a salary reduction arrangement is accounted by (A).
IRC 45A(b)(3)Sum of wages and insurance costs taken into account is limited to $20000.
IRC 45A(c)This subsection defines a "qualified employee".
IRC 45A(c)(1)Except as provided otherwise, such employee is any employee who—
IRC 45A(c)(1)(A)is an enrolled member of an Indian tribe or a spouse of an enrolled member,
IRC 45A(c)(1)(B)performs substantially all services within an Indian reservation, and
IRC 45A(c)(1)(C)has a principal place of abode on or near such Indian reservation.
IRC 45A(c)(2)Employee is not qualified if total wages paid by employer in TY exceeds $30000.
IRC 45A(c)(3)Sec. applies §415(d) to (2) for years after 1994; base period starts 19931001.
IRC 45A(c)(4)Employee qualifies only if more than 50% of wages are for business services.
IRC 45A(c)(5)A "qualified employee" does not include—
IRC 45A(c)(5)(A)any individual described by (A), (B), or (C) of §51(i)(1),
IRC 45A(c)(5)(B)any 5% owner (as defined by §416(i)(1)(B)), and
IRC 45A(c)(5)(C)any individual performing gaming activity services as by §4 of PL 100-497.
IRC 45A(c)(6)An "Indian tribe" is a group, &c., recognized as eligible for special programs.
IRC 45A(c)(7)An "Indian reservation" has the meaning given by §168(j)(6).
IRC 45A(d)This subsection sets rules for early termination of employment by employer.
IRC 45A(d)(1)If employment is terminated within first year in which work began—
IRC 45A(d)(1)(A)no wages of such employee are considered for (a) in the taxable year, and
IRC 45A(d)(1)(B)chapter 1 tax is increased by credits of prior TYs by §38(a) for such wages.
IRC 45A(d)(2)Carrybacks and carryforwards under §39 are properly adjusted if (1) applies.
IRC 45A(d)(3)This paragraph sets cases where (d) may not apply.
IRC 45A(d)(3)(A)(1) does not apply to a termination of employment of an individual who—
IRC 45A(d)(3)(A)(i)voluntarily leaves taxpayer's employment,
IRC 45A(d)(3)(A)(ii)becomes disabled to perform employment services within period by (1), or
IRC 45A(d)(3)(A)(iii)is determined by State unemployment law to be due to misconduct.
IRC 45A(d)(3)(B)For (1), relationship between employee and employer is not terminated—
IRC 45A(d)(3)(B)(i)by a transaction under §381(a) if the employee continues service, or
IRC 45A(d)(3)(B)(ii)due to a mere change in conducting business, if employee continues service.
IRC 45A(d)(4)Any tax increase under (1) is not treated as imposed by chapter 1 for—
IRC 45A(d)(4)(A)determining the amount of credit allowable under chapter 1, and
IRC 45A(d)(4)(B)determining the amount of tax imposed by §55.
IRC 45A(e)This subsection sets other definitions and special rules.
IRC 45A(e)(1)"Wages" has the same meaning as given by §51.
IRC 45A(e)(2)This paragraph sets rules for controlled groups of corporations.
IRC 45A(e)(2)(A)All employers treated as single employer by (a) or (b) of §52 are 1 employer.
IRC 45A(e)(2)(B)Credit for each employer is proportionate share of related wages and costs.
IRC 45A(e)(3)Rules similar to those of §51(k), and (c), (d), & (e) of §52 apply.
IRC 45A(e)(4)Reference to provisions not in 26 USC are treated as such on 19930810.
IRC 45A(e)(5)(a)(2) amount is multiplied by fractional TY portion for short taxable years.
IRC 45A(f)§45A does not apply to taxable years starting after 20131231.
 
IRC 45BCredit for portion of employer SS taxes paid with respect to employee cash tips.
IRC 45B(a)For §38, credit is equal to excess employer SS tax paid during the TY.
IRC 45B(b)This subsection defines "excess employer social security tax".
IRC 45B(b)(1)Employer pays such tax under §3111 for tips received, to the extent such tips—
IRC 45B(b)(1)(A)are paid by the employer under §3121(q) (ignoring if reported to §6053), and
IRC 45B(b)(1)(B)exceed wages less than amount which would be paid by §6(a)(1) of PL 75-718.
IRC 45B(b)(2)Account tips only if in connection with food service if tipping is customary.
IRC 45B(c)No deduction is allowed for any amount used to determine credit under §45B.
IRC 45B(d)Taxpayer may elect to not have §45B apply for any taxable year.
 
IRC 45CClinical testing expenses for certain drugs for rare diseases or conditions.
IRC 45C(a)For §38, credit is 50% of qualified clinical testing expenses for TY.
IRC 45C(b)This subsection sets rules for qualified clinical testing expenses.
IRC 45C(b)(1)This paragraph defines "qualified clinical testing expenses".
IRC 45C(b)(1)(A)Such expenses would be described by §41(b) after applying modifications by (B).
IRC 45C(b)(1)(B)For (A), §41(b) shall be applied by substituting—
IRC 45C(b)(1)(B)(i)"clinical testing" for "qualified research" within such (2) and (3), and
IRC 45C(b)(1)(B)(ii)"100%" for "65%" within such (3)(A).
IRC 45C(b)(1)(C)Funding from any grant, contract, or other persons are not accounted.
IRC 45C(b)(1)(D)For (b), §41 remains in effect between 19950630 and 19960701, & after 20131231.
IRC 45C(b)(2)This paragraph defines "clinical testing".
IRC 45C(b)(2)(A)Clinical testing is any human clinical testing—
IRC 45C(b)(2)(A)(i)under an exemption for testing a disease or condition by §505(i) of PL 75-717,
IRC 45C(b)(2)(A)(ii)which occurs—
IRC 45C(b)(2)(A)(ii)(I)after the date the drug is designated under §526 of such PL, and
IRC 45C(b)(2)(A)(ii)(II)before the date of application by §505(b) of such PL is approved, &c., and
IRC 45C(b)(2)(A)(iii)conducted by taxpayer, or person to whom §526 of such PL applies.
IRC 45C(b)(2)(B)Only testing related to drugs designated by §526 of such PL apply to (a).
IRC 45C(c)Rules for coordination with credit for increasing research expenditures.
IRC 45C(c)(1)Expenses subject to §45C election are not accounted for credit under §41.
IRC 45C(c)(2)(b)(1) expenses which meet §41(b) are accounted to figure base period expenses.
IRC 45C(d)This subsection sets definitions and special rules.
IRC 45C(d)(1)A "rare disease or condition" is any disease or condition—
IRC 45C(d)(1)(A)which affects less than 200000 persons in the United States, or
IRC 45C(d)(1)(B)for which the cost of drug development is expected to exceed its sales in US.
IRC 45C(d)(2)This paragraph sets special limitations on foreign testing.
IRC 45C(d)(2)(A)No credit is allowed for any clinical testing conducted outside the US unless—
IRC 45C(d)(2)(A)(i)such remote testing is due to a lack of testing population in the US, and
IRC 45C(d)(2)(A)(ii)a US or unrelated person (§526 of PL 75-717) conducts such test.
IRC 45C(d)(2)(B)No credit is allowed for testing done by corporation under election by §936.
IRC 45C(d)(3)Rules similar to those under (1) and (2) of §41 apply to §45C.
IRC 45C(d)(4)§45C only applies to a taxable year subject to taxpayer's election.
 
IRC 45DThis section discusses the new markets tax credit.
IRC 45D(a)This subsection sets the allowance of credit.
IRC 45D(a)(1)Credit is percentage by (2) of payments to qualified entities at original issue.
IRC 45D(a)(2)For (1), the applicable percentage is—
IRC 45D(a)(2)(A)5% with respect to the first 3 credit allowance dates, and
IRC 45D(a)(2)(B)6% for the remainder of such credit allowance dates.
IRC 45D(a)(3)The "credit allowance date" is, for any qualified entity investment—
IRC 45D(a)(3)(A)the date on which such investment is first made, and
IRC 45D(a)(3)(B)each of the 6 anniversary dates of such date thereafter.
IRC 45D(b)This subsection defines a "qualified equity investment".
IRC 45D(b)(1)Such investment is any equity investment in an entity by (c) if—
IRC 45D(b)(1)(A)such investment is acquired at its original issue solely in exchange for cash,
IRC 45D(b)(1)(B)such entity uses substantially all such cash to make investments by (d), and
IRC 45D(b)(1)(C)it is designated for purposes of §45D by such entity.
IRC 45D(b)(2)Maximum amount designated by (1)(C) is limited to limitation by (f).
IRC 45D(b)(3)(1)(B) is met if at least 85% of entity's gross assets are for such investments.
IRC 45D(b)(4)"Qualified equity investment" is treated as such if so treated by prior holder.
IRC 45D(b)(5)A rule similar to that under §1202(c)(3) applies for purposes of (b).
IRC 45D(b)(6)An "equity investment" is—
IRC 45D(b)(6)(A)any stock (except nonpreferred stock by §351(g)(2)) in a corporate entity, and
IRC 45D(b)(6)(B)any capital interest in a partnership entity.
IRC 45D(c)This subsection defines a "qualified community development entity".
IRC 45D(c)(1)Such entity any domestic corporation or partnership if the entity has—
IRC 45D(c)(1)(A)a primary mission in serving low-income communities or residents,
IRC 45D(c)(1)(B)accountability to such residents through their representation, and
IRC 45D(c)(1)(C)the Secretary's certification as being such a qualified development entity.
IRC 45D(c)(2)The requirements of (1) are considered met by—
IRC 45D(c)(2)(A)any specialized small business investment company (§1044(c)(3)), and
IRC 45D(c)(2)(B)any community development financial institution as by §103 of PL 103-325.
IRC 45D(d)Definition of "qualified low-income community investments".
IRC 45D(d)(1)A qualified low-income community investment is—
IRC 45D(d)(1)(A)any capital investment in any qualified active low-income community business,
IRC 45D(d)(1)(B)the purchase of loans which meets (d) and is issued from another entity by (c),
IRC 45D(d)(1)(C)financial counseling, &c., to low-income community businesses and residents, and
IRC 45D(d)(1)(D)any equity investment in, or loan to, a qualified community development entity.
IRC 45D(d)(2)This paragraph defines a "qualified active low-income community business".
IRC 45D(d)(2)(A)Such a business is any corporation (including nonprofit) or partnership if—
IRC 45D(d)(2)(A)(i)at least 50% of gross income comes from business within a low-income community,
IRC 45D(d)(2)(A)(ii)a majority of tangible property used by such entity is within such communities,
IRC 45D(d)(2)(A)(iii)a majority of services performed by such entity are within such communities,
IRC 45D(d)(2)(A)(iv)less than 5% of property's aggregate bases are collectibles (§408(m)(2)), and
IRC 45D(d)(2)(A)(v)less than 5% of such bases are nonqualified financial property (§1397C(e)).
IRC 45D(d)(2)(B)(A) applies to business as a proprietorship as if it were incorporated.
IRC 45D(d)(2)(C)Includes any business which would qualify if it were separately incorporated.
IRC 45D(d)(3)A "qualified business" has meaning by §1397C(d), except that—
IRC 45D(d)(3)(A)rental of real property with improvements in community by (e) is so qualified, &
IRC 45D(d)(3)(B)such (3) does not apply.
IRC 45D(e)This subsection defines a "low-income community".
IRC 45D(e)(1)A low-income community means any population census tract if—
IRC 45D(e)(1)(A)the poverty rate for such tract is at least 20%, or
IRC 45D(e)(1)(B)the median family income for such tract does not exceed—
IRC 45D(e)(1)(B)(i)80% of statewide median for tracts not in a metropolitan area, or
IRC 45D(e)(1)(B)(ii)80% of metropolitan area median. (B) uses possession income if applicable.
IRC 45D(e)(2)Sec. may treat areas by §103(20) of PL 103-325 as low-income communities.
IRC 45D(e)(3)Untracted areas use equivalent county divisions for figuring poverty rates, &c.
IRC 45D(e)(4)A census tract with population less than 2000 is a low-income community if it—
IRC 45D(e)(4)(A)is within an empowerment zone under designation by §1391, and
IRC 45D(e)(4)(B)is contiguous to 1 or more low-income communities not by (4).
IRC 45D(e)(5)Modification of requirements for tracts with "high migration rural counties".
IRC 45D(e)(5)(A)For tracts within such a county, swap "85%" for "80%" in (1)(B)(i).
IRC 45D(e)(5)(B)Such a county has a net out-migration of at least 10% of population in 20 years.
IRC 45D(f)This subsection sets a national limitation of designated investments.
IRC 45D(f)(1)The new markets tax credit limitation for a calendar year is—
IRC 45D(f)(1)(A)$1B for 2001,
IRC 45D(f)(1)(B)$1.5B for 2002 and 2003,
IRC 45D(f)(1)(C)$2B for 2004 and 2005,
IRC 45D(f)(1)(D)$3.5B for 2006 and 2007,
IRC 45D(f)(1)(E)$5B for 2008,
IRC 45D(f)(1)(F)$5B for 2009, and
IRC 45D(f)(1)(G)$3.5B for 2010 - 2013.
IRC 45D(f)(2)Secretary allocates (1) to qualified entities. Priority goes to entities which—
IRC 45D(f)(2)(A)have a record of providing capital or assistance to disadvantaged businesses, or
IRC 45D(f)(2)(B)can meet (b)(1)(B) by making investments (d) in other unrelated entities.
IRC 45D(f)(3)Excess of limitation over aggregate of (2) is added to next year's limitation.
IRC 45D(g)This subsection sets the recapture of credit in certain cases.
IRC 45D(g)(1)Increase tax by amount by (2) in 7-year period starting from original issue.
IRC 45D(g)(2)For (1), the credit recapture amount is equal to the sum of—
IRC 45D(g)(2)(A)net decrease of credits by §38 for all prior TYs if §45D didn't apply, plus
IRC 45D(g)(2)(B)interest at §6621 underpayment rate on amount by (A) for each prior TY involved.
IRC 45D(g)(3)For (1), there is a recapture event to a qualified development entity if—
IRC 45D(g)(3)(A)such entity ceases to be a qualified community development entity,
IRC 45D(g)(3)(B)the use of investment proceeds cease to meet (b)(1)(B), or
IRC 45D(g)(3)(C)such investment is redeemed by such entity.
IRC 45D(g)(4)This paragraph sets special rules.
IRC 45D(g)(4)(A)Increase by (1) is only for credits which reduce tax liability. §39 is adjusted.
IRC 45D(g)(4)(B)For §55, any tax increase by (g) is not treated as imposed by chapter 1.
IRC 45D(h)Except for §§1202, 1400B, & 1400F, credit reduces basis of (b)(4) investment.
IRC 45D(i)Secretary sets regulations to carry out §45D, including regulations which—
IRC 45D(i)(1)limit investment credits subsidized by Federal tax benefits (§42, §103),
IRC 45D(i)(2)prevent the abuse of the purposes of §45D,
IRC 45D(i)(3)provide rules for determining if the requirements by (b)(1)(B) are met,
IRC 45D(i)(4)impose appropriate reporting requirements,
IRC 45D(i)(5)apply the provisions of §45D to newly formed entries, and
IRC 45D(i)(6)proportionately allocate investments by (b)(4) to non-metropolitan counties.
 
IRC 45EThis section discusses the credit for small employer pension plan startup costs.
IRC 45E(a)For §38, such credit is 50% of qualified startup costs paid or incurred in TY.
IRC 45E(b)The amount of credit under §45E for any taxable year is limited to—
IRC 45E(b)(1)$500 for 1st credit year and each of the 2 TYs following such first year, and
IRC 45E(b)(2)0 for any other taxable year.
IRC 45E(c)This subsection defines an "eligible employer".
IRC 45E(c)(1)An eligible employer has the same meaning as given by §408(p)(2)(C)(i).
IRC 45E(c)(2)Employer who maintains certain plan in 3 TYs before (d)(3) year isn't eligible.
IRC 45E(d)This subsection sets other definitions.
IRC 45E(d)(1)This paragraph defines "qualified startup costs".
IRC 45E(d)(1)(A)Such costs are necessary expenses of an eligible employer paid with—
IRC 45E(d)(1)(A)(i)the establishment or administration of an eligible employer plan, or
IRC 45E(d)(1)(A)(ii)the retirement-related education of employees with respect to such plan.
IRC 45E(d)(1)(B)Expenses for plans which no highly compensated employee can join are excluded.
IRC 45E(d)(2)An "eligible employer plan" is a qualified plan with meaning by §4972(d).
IRC 45E(d)(3)The "first credit year" is the TY—
IRC 45E(d)(3)(A)which includes the date costs related to eligible plan become effective, or
IRC 45E(d)(3)(B)the TY after TY by (A), if elected by eligible employer.
IRC 45E(e)This subsection sets special rules for §45E.
IRC 45E(e)(1)All persons subject to (a) or (b) of §52 or (m) or (o) of §414 are 1 person.
IRC 45E(e)(2)No deduction is allowed for expenses accounted to figure credit of (a).
IRC 45E(e)(3)§45E does not apply if elected by the taxpayer.
 
IRC 45FThis section discusses the employer-provided child care credit.
IRC 45F(a)For §38, such credit for the taxable year is equal to the sum of—
IRC 45F(a)(1)25% of the qualified child care expenditures, and
IRC 45F(a)(2)10% of the taxpayer's qualified child care resource and referral expenditures.
IRC 45F(b)Credit allowed under (a) is limited to $150000.
IRC 45F(c)This subsection sets definitions for purposes of §45F.
IRC 45F(c)(1)This paragraph defines a "qualified child care expenditure".
IRC 45F(c)(1)(A)A qualified child care expenditure is any amount paid or incurred—
IRC 45F(c)(1)(A)(i)to acquire, construct, rehabilitate, or expand property which—
IRC 45F(c)(1)(A)(i)(I)will be used as part of a qualified child care facility of the taxpayer,
IRC 45F(c)(1)(A)(i)(II)is subject to a deduction for depreciation (or amortization),
IRC 45F(c)(1)(A)(i)(III)is not part of taxpayer's principal residence (§121) or any employee thereof.
IRC 45F(c)(1)(A)(ii)for the various operating costs for a qualified child care facility, or
IRC 45F(c)(1)(A)(iii)under a contract with such a qualified facility to provide child care services.
IRC 45F(c)(1)(B)Expenses in excess of the FMV of such child care are excluded.
IRC 45F(c)(2)This paragraph defines a "qualified child care facility".
IRC 45F(c)(2)(A)A qualified child care facility is a facility which—
IRC 45F(c)(2)(A)(i)has the principal use of providing child care assistance, and
IRC 45F(c)(2)(A)(ii)meets requirements of all applicable laws of the State, &c., where it's located.
IRC 45F(c)(2)(B)A facility is not qualified with respect to a taxpayer unless—
IRC 45F(c)(2)(B)(i)facility enrollment is open to taxpayer's employees during the TY,
IRC 45F(c)(2)(B)(ii)at least 30% of enrollees are dependents of such employees, and
IRC 45F(c)(2)(B)(iii)facility use does not unfairly favor highly compensated employees (§414(q)).
IRC 45F(c)(3)Definition of "qualified child care resource and referral expenditure".
IRC 45F(c)(3)(A)Such cost is paid under a contract to provide such services to an employee.
IRC 45F(c)(3)(B)Services which favor highly compensated employees (§414(q)) are disqualified.
IRC 45F(d)This subsection sets the recapture of acquisition and construction credit.
IRC 45F(d)(1)If there is a recapture event, chapter 1 tax is increased by the product of—
IRC 45F(d)(1)(A)the applicable recapture percentage, and
IRC 45F(d)(1)(B)aggregate credit decrease by §38 for all prior TYs if (c)(1)(A) was 0.
IRC 45F(d)(2)This subparagraph sets the applicable recapture percentage.
IRC 45F(d)(2)(A)### Such percentage is by ###. For the first 3 years, rate is 100%; after 10, 0%.
IRC 45F(d)(2)(B)For (A), year 1 begins on 1st day of TY which facility is placed in service.
IRC 45F(d)(3)For (d), a "recapture event" is:
IRC 45F(d)(3)(A)The cessation of facility operation as a qualified child care facility.
IRC 45F(d)(3)(B)This subparagraph sets rules for change in ownership.
IRC 45F(d)(3)(B)(i)The taxpayer's interest in a facility to which credit was allowed is disposed.
IRC 45F(d)(3)(B)(ii)(i) is inapplicable if acquirer agrees to assume recapture liability.
IRC 45F(d)(4)This paragraph sets special rules.
IRC 45F(d)(4)(A)Increase by (1) is only for credits which reduce tax liability. §39 is adjusted.
IRC 45F(d)(4)(B)For §55, any tax increase by (d) is not treated as imposed by chapter 1.
IRC 45F(d)(4)(C)Tax increase does not apply to facility casualty loss, to extent of replacement.
IRC 45F(e)This subsection sets special rules.
IRC 45F(e)(1)All persons deemed a single employer by (a) or (b) of §52 are 1 taxpayer.
IRC 45F(e)(2)Rules similar to those under §52(d) apply.
IRC 45F(e)(3)Per Secretary's regulations, credit under §45F is allocated amongst partners.
IRC 45F(f)This subsection sets disallowance of double benefit.
IRC 45F(f)(1)This paragraph sets rules for reduction of basis for purposes of subtitle A.
IRC 45F(f)(1)(A)The basis of property accounted by (c)(1)(A) is reduced by credit under §45F.
IRC 45F(f)(1)(B)The basis of property reduced by (A) is increased by any credit recapture.
IRC 45F(f)(2)No other deduction or credit is allowed for any amounts given credit under §45F.
 
IRC 45GThis section discusses the railroad track maintenance credit.
IRC 45G(a)For §38, such credit is 50% of qualified railroad track maintenance costs paid.
IRC 45G(b)This subsection sets limitations.
IRC 45G(b)(1)Credit allowed under (a) for any TY is limited to the product of—
IRC 45G(b)(1)(A)$3500, multiplied by—
IRC 45G(b)(1)(B)the sum of—
IRC 45G(b)(1)(B)(i)the number of miles of railroad track owned by eligible taxpayer at TY end, and
IRC 45G(b)(1)(B)(ii)the miles of railroad track assigned by a Class II or Class III railroad.
IRC 45G(b)(2)With respect to any assignment of a mile of railroad track under (1)(B)(ii)—
IRC 45G(b)(2)(A)such assignment can only be made once per TY, and is treated as made at TY end,
IRC 45G(b)(2)(B)such mile cannot be accounted under §45G by such railroad for such TY, and
IRC 45G(b)(2)(C)such assignment is accounted in TY which includes the date such event occurred.
IRC 45G(c)For §45G, an "eligible taxpayer" is any—
IRC 45G(c)(1)Class II or Class III railroad, and
IRC 45G(c)(2)person who transports property with such railroad or performs services for them.
IRC 45G(d)"Qualified railroad track maintenance expenditures" apply to entity by (c)(1).
IRC 45G(e)This subsection sets other definitions and special rules.
IRC 45G(e)(1)Surface Transportation Board defines "Class II" and "Class III" railroads.
IRC 45G(e)(2)Rules similar to those of §41(f)(1) apply to §45G for controlled groups.
IRC 45G(e)(3)Basis of railroad track is reduced by any credit allowed.
IRC 45G(f)§45G applies to expenditures paid between 20041231 and 20120101.
 
IRC 45HThis section discusses the credit for production of low sulfur diesel fuel.
IRC 45H(a)For §38, such credit for any facility is 5¢ per gallon of fuel produced in TY.
IRC 45H(b)This subsection sets the maximum credit.
IRC 45H(b)(1)Sum of credit under (a) for any taxable year is limited to—
IRC 45H(b)(1)(A)25% of qualified capital costs incurred by such facility, reduced by
IRC 45H(b)(1)(B)aggregate credits determined under §45H for all prior taxable years.
IRC 45H(b)(2)If daily runs exceed 155000 barrels, reduce (1)(A) by ratio of excess to 50000.
IRC 45H(c)This subsection sets definitions and a special rule.
IRC 45H(c)(1)A "small business refiner" is, for any taxable year, a refiner of crude oil—
IRC 45H(c)(1)(A)for which no more than 1500 individuals engage in operations on any day in TY, &
IRC 45H(c)(1)(B)for which the average daily run (as of 20021231) did not exceed 205000 barrels.
IRC 45H(c)(2)"Qualified capital costs" are paid for EPA regulation compliance, sitework, &c.
IRC 45H(c)(3)Applicable EPA regulations are Highway Diesel Fuel Sulfur Control Requirements.
IRC 45H(c)(4)"Applicable period" starts on 20030101 and ends when (3) is met or 20091231.
IRC 45H(c)(5)"Low sulfur diesel fuel" has a sulfur content of 15 parts per million or less.
IRC 45H(d)For §45H & §179B(b), account refineries of taxpayer and persons by §613A(d)(3).
IRC 45H(e)This subsection sets rules for certification.
IRC 45H(e)(1)Within 30 months of 1st day of 1st TY of credit, certification is required.
IRC 45H(e)(2)Certification includes relevant information to determine EPA compliance.
IRC 45H(e)(3)Notice of certification is made within 60 days of receipt.
IRC 45H(e)(4)For the credit under §45H, in respect of any assessment of deficiency—
IRC 45H(e)(4)(A)statutory period therefor lasts at least 3 years after period by (3) ends, and
IRC 45H(e)(4)(B)such assessment may occur before the expiration of such 3 year period.
IRC 45H(f)This section sets rules for cooperative organizations.
IRC 45H(f)(1)This paragraph sets the apportionment of credit.
IRC 45H(f)(1)(A)Organizations by §1381(a) elect for apportionment (of basis, &c.) among patrons.
IRC 45H(f)(1)(B)Such election for a TY is made on timely filed return. Election is irrevocable.
IRC 45H(f)(2)This paragraph sets the treatment of organizations and patrons.
IRC 45H(f)(2)(A)Amounts not apportioned by (1) are included in under (a) for the organization.
IRC 45H(f)(2)(B)Patrons apply (a) for 1st TY, ending on payment period (§1382(d)) or TY end.
IRC 45H(f)(3)If credit apportioned to any patron by (f) is decreased—
IRC 45H(f)(3)(A)such amount doesn't increase the tax imposed on such patron, and
IRC 45H(f)(3)(B)tax imposed by chapter 1 on such organization is increased by such amount.
IRC 45H(g)No credit under (a) is determined if elected by the taxpayer.
 
IRC 45IThis section discusses the credit for producing oil and gas from marginal wells.
IRC 45I(a)For §38, marginal well production credit or any TY is equal to the product of—
IRC 45I(a)(1)the credit amount, and
IRC 45I(a)(2)the qualified crude oil and natural gas production attributable to taxpayer.
IRC 45I(b)This subsection sets the credit amount for purposes of §45I.
IRC 45I(b)(1)In general, the credit amount is—
IRC 45I(b)(1)(A)$3 per barrel of qualified crude oil production, and
IRC 45I(b)(1)(A)50¢ per 1000 ft³ of qualified natural gas production.
IRC 45I(b)(2)This paragraph sets a reduction as oil and gas prices increase.
IRC 45I(b)(2)(A)Amounts under (1) are reduced by amount bearing same ratio to such amount as—
IRC 45I(b)(2)(A)(i)excess of applicable reference price over $15 ($1.67 for gas), bears to
IRC 45I(b)(2)(A)(ii)$3 (33¢ for gas). Applicable reference price is preceding year's price.
IRC 45I(b)(2)(B)For TYs after 2005, (A) is adjusted as under §43(b)(3)(B); swap 2004 for 1990.
IRC 45I(b)(2)(C)For (2), the "reference price" is, for any year is the—
IRC 45I(b)(2)(C)(i)reference price determined by §45K(d)(2)(C) for qualified oil production, and
IRC 45I(b)(2)(C)(ii)Sec.'s estimate of annual average wellhead price per 1000 ft³, for natural gas.
IRC 45I(c)This subsection defines qualified crude oil and natural gas production.
IRC 45I(c)(1)Such production is domestic oil or gas produced from a qualified marginal well.
IRC 45I(c)(2)This paragraph sets a limitation on the production amount which may qualify.
IRC 45I(c)(2)(A)Excess production over 1095 barrels or equivalents (§45K(d)(5)) doesn't apply.
IRC 45I(c)(2)(B)This subparagraph sets proportionate reductions.
IRC 45I(c)(2)(B)(i)For short TYs, limitations of (1) are reduced by ratio bearing TY's days to 365.
IRC 45I(c)(2)(B)(ii)Limitations are reduced by ratio of production days bearing to total TY days.
IRC 45I(c)(3)This paragraph sets definitions.
IRC 45I(c)(3)(A)A "qualified marginal well" is a domestic well which—
IRC 45I(c)(3)(A)(i)has its production treated as marginal production (§613A(c)(6)) for the TY, or
IRC 45I(c)(3)(A)(ii)during the TY—
IRC 45I(c)(3)(A)(ii)(I)has average daily production not more than 25 equivalents by §45K(d)(5), and
IRC 45I(c)(3)(A)(ii)(II)produces water at a rate not less than 95% of total well effluent.
IRC 45I(c)(3)(B)"Crude oil", "natural gas" , "domestic", and "barrel" are defined by §613A(e).
IRC 45I(d)This subsection sets other rules.
IRC 45I(d)(1)For wells with multiple owners, production is allocated by investment ratio.
IRC 45I(d)(2)Credit can only be claimed on attributable production to interest holder.
IRC 45I(d)(3)No credit is allowed from §45I unless taxpayer elects to not claim §45K credit.
 
IRC 45JCredit for production from advanced nuclear power facilities.
IRC 45J(a)For §38, the facility production credit for any taxpayer in TY is product of—
IRC 45J(a)(1)1.8¢, multiplied by
IRC 45J(a)(2)the kilowatt hours of electricity—
IRC 45J(a)(2)(A)produced at an advanced nuclear power facility within its first 8 years, and
IRC 45J(a)(2)(B)sold by the taxpayer to an unrelated person in the taxable year.
IRC 45J(b)This subsection sets a national limitation.
IRC 45J(b)(1)Credit is limited by amount (without applying (c)) bearing same ratio as the—
IRC 45J(b)(1)(A)national megawatt capacity limitation allocated to facility by Sec., bears to
IRC 45J(b)(1)(B)total megawatt nameplate capacity of such facility.
IRC 45J(b)(2)The national megawatt capacity limitation is limited to 6000 megawatts.
IRC 45J(b)(3)Secretary allocates national limitation as he may prescribe.
IRC 45J(b)(4)Within 20060204, Sec. prescribes regulations for (b) and certification process.
IRC 45J(c)This subsection sets other limitations.
IRC 45J(c)(1)Credit allowed under (a) is limited to amount bearing same ratio to $125M as—
IRC 45J(c)(1)(A)the national megawatt capacity limitation allocated to the facility, bears to
IRC 45J(c)(1)(B)1000.
IRC 45J(c)(2)This paragraph sets a phaseout of credit.
IRC 45J(c)(2)(A)Credit is reduced by amount bearing same ratio to credit (ignoring (2)) as—
IRC 45J(c)(2)(A)(i)excess of reference price (§45(e)(2)(C)) in year of sale over 8¢, bears to
IRC 45J(c)(2)(A)(ii)3¢.
IRC 45J(c)(2)(B)Multiply (A) by inflation factor by §45(e)(2)(B); round to nearest 0.1¢.
IRC 45J(d)This subsection defines an "advanced nuclear power facility".
IRC 45J(d)(1)Such a facility any advanced nuclear power facility which is—
IRC 45J(d)(1)(A)owned by the taxpayer and uses nuclear energy to produce electricity, and
IRC 45J(d)(1)(B)placed in service after the date (d) is enacted and before 20210101.
IRC 45J(d)(2)Such facility must be approved by Nuclear Regulatory Commission after 19931231.
IRC 45J(e)Rules similar to those by (1), (3), (4), and (5) of §45(e) apply for §45J.
 
IRC 45KThis section sets the credit for producing fuel from a nonconventional source.
IRC 45K(a)A credit is allowed against tax imposed by chapter 1 in an amount equal to—
IRC 45K(a)(1)$3, multiplied by
IRC 45K(a)(2)the barrel-of-oil equivalent of qualified fuels—
IRC 45K(a)(2)(A)sold by the taxpayer to an unrelated person during the taxable year, and
IRC 45K(a)(2)(B)the production of which is attributable to the taxpayer.
IRC 45K(b)This subsection sets limitations and adjustments.
IRC 45K(b)(1)Credit allowed under (a) is reduced by amount bearing same ratio as—
IRC 45K(b)(1)(A)the amount by which the reference price in year of sale exceeds $23.50, bears to
IRC 45K(b)(1)(B)$6.
IRC 45K(b)(2)Dollar amounts by (a) and (1) are adjusted for inflation.
IRC 45K(b)(3)Reduction of credit for grants, tax-exempt bonds, and subsidized financing.
IRC 45K(b)(3)(A)Credit is reduced by amount which is product of amount of (a) by a fraction—
IRC 45K(b)(3)(A)(i)the numerator of which is the sum, for the current and all prior TYs, of—
IRC 45K(b)(3)(A)(i)(I)grants provided by the US, &c., for use in connection with the project,
IRC 45K(b)(3)(A)(i)(II)proceeds from any State obligation tax-exempt by §103 used for the project, and
IRC 45K(b)(3)(A)(i)(III)total subsidized energy financing (as by §48(a)(4)(C)) for the project, and
IRC 45K(b)(3)(A)(ii)the denominator is sum amount of additions to capital account for the project.
IRC 45K(b)(3)(B)Amounts under (A) for any TY are determined at close of the TY.
IRC 45K(b)(4)Credit under (a), figured after applying (1) - (3), is reduced by any excess of—
IRC 45K(b)(4)(A)sum amount allowed under §38 with respect to property used in the project, over
IRC 45K(b)(4)(B)sum amount recaptured with respect to amount described in (A)—
IRC 45K(b)(4)(B)(i)under §49(b) or §50(a) for all taxable years, or
IRC 45K(b)(4)(B)(ii)under (4) for any prior TY. (4) applies to recaptures of §49(b) or §50(a).
IRC 45K(b)(5)Credit under (a), figured after applying (1) - (4), is reduced by excess any of—
IRC 45K(b)(5)(A)sum amount allowed under §38 by reason of credit under §43, over
IRC 45K(b)(5)(B)sum amount recaptured with respect to the amount of (A) for any prior TY.
IRC 45K(c)This subsection defines "qualified fuels".
IRC 45K(c)(1)Qualified fuels are—
IRC 45K(c)(1)(A)oil produced from shale and tar sands,
IRC 45K(c)(1)(B)gas produced from—
IRC 45K(c)(1)(B)(i)geopressured brine, Devonian shale, coal seams, or a tight formation, or
IRC 45K(c)(1)(B)(ii)biomass, and
IRC 45K(c)(1)(C)liquid, gaseous, or solid synthetic fuels made from coal (including lignite).
IRC 45K(c)(2)This paragraph defines "gas from geopressured brine", &c., as under (1)(B)(i).
IRC 45K(c)(2)(A)Determination of such gas is made as under §503 of PL 95-621.
IRC 45K(c)(2)(B)"Gas produced from a tight formation" is only gas from a tight formation which—
IRC 45K(c)(2)(B)(i)as of 19770420 was committed to interstate commerce (§2(18) of PL 95-621), or
IRC 45K(c)(2)(B)(ii)which is produced from a well that is drilled after 19901105.
IRC 45K(c)(3)"Biomass" means any organic material other than—
IRC 45K(c)(3)(A)oil and natural gas (or any product thereof), and
IRC 45K(c)(3)(B)coal (including lignite) or any product thereof.
IRC 45K(d)This subsection sets other definitions and special rules.
IRC 45K(d)(1)§45K only applies to the production of qualified fuels within—
IRC 45K(d)(1)(A)the United States (as under §638(1)), or
IRC 45K(d)(1)(B)a possession of the United States (as under §638(2)).
IRC 45K(d)(2)Rules for computation of inflation adjustment factor and reference price.
IRC 45K(d)(2)(A)Sec. annually sets inflation adjustment factor & reference price within April 1.
IRC 45K(d)(2)(B)Inflation adjustment factor is ratio of current year deflator to 1979 deflator.
IRC 45K(d)(2)(C)Reference price is Secretary's estimated barrel price for all unregulated oil.
IRC 45K(d)(3)Property production is allocated among owners proportionally to gross sales.
IRC 45K(d)(4)Credit is figured by ignoring production from (c)(2) sources before 19800101.
IRC 45K(d)(5)The "barrel-of-oil equivalent" is amount of fuel which has a BTU of 5.8 million.
IRC 45K(d)(6)A "barrel" is 42 US gallons.
IRC 45K(d)(7)Persons are related if treated as single employer under §52(b).
IRC 45K(d)(8)Per Secretary's regulations, rules similar to those of §52(d) apply.
IRC 45K(e)§45K applies with respect to qualified fuels—
IRC 45K(e)(1)which are produced—
IRC 45K(e)(1)(A)from a well drilled after 19791231 and before 19930101, or
IRC 45K(e)(1)(B)in a facility placed in service after 19791231 and before 19930101, and
IRC 45K(e)(2)which are sold before 20030101.
IRC 45K(f)This subsection sets an extension for certain facilities.
IRC 45K(f)(1)For facilities producing fuels described by (B)(ii) or (C) of (c)(1)—
IRC 45K(f)(1)(A)for (e)(1)(B), it is in service by 19930101 if bound by contract by 19970101, &
IRC 45K(f)(1)(B)if in service after 19921231, apply (e)(2) by replacing "2008" for "2003".
IRC 45K(f)(2)(1) does not apply to coke or coke gas production unless initiated by taxpayer.
IRC 45K(g)This subsection sets an extension for facilities producing coke or coke gas.
IRC 45K(g)(1)If in service by 19930101 or between 19980630 & 20100101, §45K applies from—
IRC 45K(g)(1)(A)the later of 20060101 or date facility is placed in service, until
IRC 45K(g)(1)(B)the date which is 4 years after such period began.
IRC 45K(g)(2)Special rules to figure credit by §45K solely by reason of (g).
IRC 45K(g)(2)(A)Amount of accountable fuel is limited to 4000 barrels or equivalents.
IRC 45K(g)(2)(B)For applying (b)(2) for sales after 2005, swap "2004" for "1979" in (d)(2)(B).
IRC 45K(g)(2)(C)(g) doesn't apply to credit given for current TY or prior TYs by (f).
IRC 45K(g)(2)(D)(b)(1) doesn't apply.
 
IRC 45LThis section discusses the new energy efficient home credit.
IRC 45L(a)This subsection sets the allowance of credit.
IRC 45L(a)(1)For §38, such credit is applicable amount for each qualified home which is—
IRC 45L(a)(1)(A)constructed by the eligible contractor, and
IRC 45L(a)(1)(B)acquired by a person from such eligible contractor for use as a residence.
IRC 45L(a)(2)For (1), the applicable amount is equal to—
IRC 45L(a)(2)(A)$2000 for a dwelling described by (c)(1) or (c)(2), and
IRC 45L(a)(2)(B)$1000 for a dwelling described by (c)(3).
IRC 45L(b)This subsection sets definitions for purposes of §45L.
IRC 45L(b)(1)An "eligible contractor" is—
IRC 45L(b)(1)(A)the person who constructed the qualified new energy efficient home, or
IRC 45L(b)(1)(B)for a manufactured home, the manufactured home producer.
IRC 45L(b)(2)A "qualified new energy efficient home" is a dwelling unit—
IRC 45L(b)(2)(A)located in the United States,
IRC 45L(b)(2)(B)which is substantially completed after 20050808, and
IRC 45L(b)(2)(C)which meets the energy saving requirements of (c).
IRC 45L(b)(3)"Construction" includes substantial reconstruction and rehabilitation.
IRC 45L(b)(4)"Acquire" includes purchase.
IRC 45L(c)A dwelling unit meets the energy saving requirements if such unit—
IRC 45L(c)(1)is certified—
IRC 45L(c)(1)(A)as having annual energy consumption at least 50% below that of a similar unit—
IRC 45L(c)(1)(A)(i)constructed to meet chapter 4 of 2003 International Energy Conservation Code, &
IRC 45L(c)(1)(A)(ii)for which equipment efficiencies equal that under regulations by PL 100-12, and
IRC 45L(c)(1)(B)has building envelope component improvements accounting for 1/5 of such 50%,
IRC 45L(c)(2)meets the Federal Manufactured Home Construction and Safety Standards, & (1), or
IRC 45L(c)(3)meets such Standards (part 3280 of 24 CFR), and which—
IRC 45L(c)(3)(A)meets (1) by replacing "30%" for "50%" and "1/3" for "1/5" where it appears, or
IRC 45L(c)(3)(B)meets EPA Administrator requirements under an Energy Star Labeled Homes program.
IRC 45L(d)For certification described in (c):
IRC 45L(d)(1)Sec. prescribes guidance with consultation of Secretary of Energy.
IRC 45L(d)(2)It is made in writing and specifies related components & equipment installed.
IRC 45L(e)Basis of applicable property is reduced by any credit given under §45L.
IRC 45L(f)Expenditures accounted by §47(a) and §48(a) do not apply to §45L.
IRC 45L(g)§45L does not apply to qualified homes acquired after 20131231.
 
IRC 45MThis section discusses the energy efficient appliance credit.
IRC 45M(a)This subsection sets the general rule.
IRC 45M(a)(1)For §38, such credit is equal to sum of amounts by (2) for each appliance type.
IRC 45M(a)(2)The credit amount for any type of qualified energy efficient appliance is—
IRC 45M(a)(2)(A)the applicable amount determined by (b) for such type, multiplied by
IRC 45M(a)(2)(B)the eligible production for such type.
IRC 45M(b)This subsection sets the applicable amount for purposes of (a).
IRC 45M(b)(1)The applicable amount is, in respect of dishwashers manufactured in—
IRC 45M(b)(1)(A)2008 or 2009, $45, if use is within 324 KWH and 5.8 gallons per cycle,
IRC 45M(b)(1)(B)2008 - 2010, $75, if use is generally within 307 KWH and 5.0 gallons per cycle,
IRC 45M(b)(1)(C)2011, $25, if use is generally within 307 KWH and 5.0 gallons per cycle,
IRC 45M(b)(1)(D)2011 - 2013, $50, if use is within 295 KWH and 4.25 gallons per cycle, and
IRC 45M(b)(1)(E)2011 - 2013, $75, if use is within 280 KWH and 4.0 gallons per cycle.
IRC 45M(b)(2)The applicable amount is, in respect of a clothes washer manufactured in—
IRC 45M(b)(2)(A)2008 & meets (f)(4), $75, if (f)(6) is within 1.72 and (f)(10) is within 8.0,
IRC 45M(b)(2)(B)2008 - 2009 & by (f)(4), $125, if (f)(6) is within 1.8 & (f)(10) is within 7.5,
IRC 45M(b)(2)(C)2008 - 2010, $150, if (f)(6) is within 2.0 and (f)(10) is within 6.0,
IRC 45M(b)(2)(D)2008 - 2010, $250, if (f)(6) is within 2.2 and (f)(10) is within 4.5,
IRC 45M(b)(2)(E)2011 & meets (f)(4), $175, if (f)(6) is within 2.2 and (f)(10) is within 4.4, &
IRC 45M(b)(2)(F)2011 - 2013, $225, if such washer is—
IRC 45M(b)(2)(F)(i)by (f)(4), and (f)(6) factor is within 2.4 and (f)(10) factor is within 4.2, or
IRC 45M(b)(2)(F)(ii)not by (i), and (f)(6) factor is within 2.8 and (f)(10) factor is within 3.5.
IRC 45M(b)(3)The applicable amount is, in respect of a refrigerator manufactured in—
IRC 45M(b)(3)(A)2008, $50, if consumption is within 20% - 22.9% of (f)(8) standard,
IRC 45M(b)(3)(B)2008 - 2009, $75, if consumption is within 23% - 24.9% of (f)(8) standard,
IRC 45M(b)(3)(C)2008 - 2010, $100, if consumption is within 25% - 29.9% of (f)(8) standard,
IRC 45M(b)(3)(D)2008 - 2010, $200, if consumption is at least 30% of (f)(8) standard,
IRC 45M(b)(3)(E)2011 - 2013, $150, if consumption is at least 30% of (f)(8) standard, and
IRC 45M(b)(3)(F)2011 - 2013, $200, if consumption is at least 35% of (f)(8) standard.
IRC 45M(c)The eligible production in a year for each type of appliance is the excess of—
IRC 45M(c)(1)number of such appliance type produced by taxpayer in the US for the year, over
IRC 45M(c)(2)average of such appliance type produced in such manner in preceding 2 years.
IRC 45M(d)For §45M, the types of energy efficient appliances are—
IRC 45M(d)(1)dishwashers by (b)(1),
IRC 45M(d)(2)clothes washers by (b)(2), and
IRC 45M(d)(3)refrigerators by (b)(3).
IRC 45M(e)This subsection sets limitations.
IRC 45M(e)(1)Total credit by (a) is limited to $25M, reduced by credit for TYs after 2010.
IRC 45M(e)(2)Appliances by (F) of (b)(2) and (b)(3) are not accounted under (1).
IRC 45M(e)(3)Credit is limited to 4% of average annual gross receipts for 3 prior TYs.
IRC 45M(e)(4)For (e), rules by (2) and (3) of §448(c) apply.
IRC 45M(f)This subsection sets definitions.
IRC 45M(f)(1)A "qualified energy efficient appliance" means—
IRC 45M(f)(1)(A)any dishwasher described in (b)(1),
IRC 45M(f)(1)(B)any clothes washer described in (b)(2), and
IRC 45M(f)(1)(C)any refrigerator described in (b)(3).
IRC 45M(f)(2)A "dishwasher" meets the energy conversation standards by Department of Energy.
IRC 45M(f)(3)A "clothes washer" is a residential model, including a coin operated washer.
IRC 45M(f)(4)A "top-loading clothes washer" operates on a vertical axis.
IRC 45M(f)(5)A "refrigerator" has auto-defrost and at least 16.5 ft³ of volume.
IRC 45M(f)(6)Modified energy factor is set for compliance with Federal conservation standard.
IRC 45M(f)(7)"Produced" includes manufactured.
IRC 45M(f)(8)The "2001 energy conservation standard" is set by the Department of Energy.
IRC 45M(f)(9)"Gallons per cycle" is the amount a dishwasher requires to complete a cycle.
IRC 45M(f)(10)Water consumption factor is per-cycle consumption divided by washer's capacity.
IRC 45M(g)This subsection sets special rules for purposes of §45M.
IRC 45M(g)(1)Rules similar to those of (c) - (e) of §52 apply.
IRC 45M(g)(2)This paragraph sets rules for controlled groups.
IRC 45M(g)(2)(A)Single employers by (a) or (b) of §52 or (m) or (o) of §414 are one producer.
IRC 45M(g)(2)(B)For applying §52 to (A), ignore §1563(b)(2)(C).
IRC 45M(g)(3)Credit under §45M requires Secretary's receipt of necessary certification.
 
IRC 45NThis section discusses the mine rescue team training credit.
IRC 45N(a)For §38, such credit for each qualified employee of an eligible employer is—
IRC 45N(a)(1)20% of amount paid by the taxpayer for training program costs (plus wages), or
IRC 45N(a)(2)$10000.
IRC 45N(b)A "qualified mine rescue team employee" is a miner who for more than ½ the TY—
IRC 45N(b)(1)can serve on such team by completion of a certain 20-hour course at minimum, or
IRC 45N(b)(2)can serve on such team by receiving at least 40 hours of refresher training.
IRC 45N(c)An "eligible employer" employs miners to work underground mines in the US.
IRC 45N(d)"Wages" is defined by §3306(b).
IRC 45N(e)§45N doesn't apply to taxable years beginning after 20131231.
 
IRC 45OThis section discusses the agricultural chemicals security credit.
IRC 45O(a)For §38, for a business by (e), such credit is 30% of expenditures by (d).
IRC 45O(b)Credit determined under (a) regarding any facility for any TY is limited to—
IRC 45O(b)(1)$100000, reduced by
IRC 45O(b)(2)total credits under (a) figured for such facility for the 5 prior TYs.
IRC 45O(c)Credit by (a) for any taxpayer for any TY is limited to $2M.
IRC 45O(d)A "qualified chemical security expenditure" is incurred by business by (e) for—
IRC 45O(d)(1)employee security training and background checks,
IRC 45O(d)(2)limitations imposed on controls of specified agricultural chemicals (as by (f)),
IRC 45O(d)(3)tagging, &c., made to prevent the theft or illegal use of such chemicals,
IRC 45O(d)(4)protection of the perimeter of specified agricultural chemicals,
IRC 45O(d)(5)installation of security equipment and intrusion detection sensors,
IRC 45O(d)(6)implementation of features to increase the security of computers and networks,
IRC 45O(d)(7)conduction a security vulnerability assessment,
IRC 45O(d)(8)implementing a site security plan, and
IRC 45O(d)(9)any other measures to protect such chemicals as set by Sec.'s regulations.
IRC 45O(e)An "eligible agricultural business" is any person in the business of—
IRC 45O(e)(1)selling agricultural products at retail mainly to farmers and ranchers, or
IRC 45O(e)(2)manufacturing, distributing, &c., specified agricultural chemicals.
IRC 45O(f)For §45O, "specified agricultural chemicals" are—
IRC 45O(f)(1)any fertilizer commonly used in agricultural operations which is listed under—
IRC 45O(f)(1)(A)§302(a)(2) of Title III of PL 99-499,
IRC 45O(f)(1)(B)§101 of part 172 of 49 CFR, or
IRC 45O(f)(1)(C)part 126, 127, or 154 of 33 CFR, and
IRC 45O(f)(2)any pesticide by §2(u) of PL 80-104 used on crops grown for food, &c.
IRC 45O(g)Rules by (1) and (2) of §41(f) apply for purposes of §45O.
IRC 45O(h)Sec. may set regulations for §45O, including rules for the proper treatment of—
IRC 45O(h)(1)amounts paid to protect any chemical by (f) and for other purposes, and
IRC 45O(h)(2)related properties as one facility for purposes of (b).
IRC 45O(i)§45O doesn't apply to amounts paid or incurred after 20121231.
 
IRC 45PEmployer wage credit regarding active duty members of uniformed services.
IRC 45P(a)For an employer by (b)(3), such credit is 20% of payments by (b)(1) in the TY.
IRC 45P(b)This subsection sets definitions for purposes of §45P.
IRC 45P(b)(1)"Eligible differential wage payments" are payments by §3401(h)(2) within $20K.
IRC 45P(b)(2)A "qualified employee" is an employee for 91 days before payment by (1) is made.
IRC 45P(b)(3)This paragraph defines an "eligible small business employer".
IRC 45P(b)(3)(A)For any taxable year, an eligible small business employer—
IRC 45P(b)(3)(A)(i)employs an average of less than 50 employees on business days in such TY, and
IRC 45P(b)(3)(A)(ii)under a written plan, provides payments by (b)(1) to every qualified employee.
IRC 45P(b)(3)(B)For (A), all persons subject to (b), (c), (m), or (o) of §414 are one employer.
IRC 45P(c)Credit given by chapter 1 for paid compensation is reduced by credit under §45P.
IRC 45P(d)No credit is allowed under (a) to a taxpayer for—
IRC 45P(d)(1)any TY after 20080617 in which a judgement, &c., under 38 USC §4323 applies, and
IRC 45P(d)(2)the 2 succeeding taxable years.
IRC 45P(e)For §45P, rules similar to those by (c) - (e) of §52 apply.
IRC 45P(f)§45P doesn't apply to payments made after 20131231.
 
IRC 45QThis section discusses the credit for carbon dioxide ("CO2") sequestration.
IRC 45Q(a)For §38, such credit for any taxable year is equal to the sum of—
IRC 45Q(a)(1)$20 per metric ton of qualified carbon dioxide which is—
IRC 45Q(a)(1)(A)captured by the taxpayer at a qualified facility, and
IRC 45Q(a)(1)(B)disposed of in secure geological storage and not used as by (2)(B),
IRC 45Q(a)(2)$10 per metric ton of qualified carbon dioxide which is—
IRC 45Q(a)(2)(A)captured by the taxpayer at a qualified facility, and
IRC 45Q(a)(2)(B)used as a tertiary injectant in a qualified recovery project as by (d)(4), and
IRC 45Q(a)(2)(C)disposed of by the taxpayer in secure geological storage.
IRC 45Q(b)This subsection defines "qualified carbon dioxide" for purposes of §45Q.
IRC 45Q(b)(1)Qualified carbon dioxide is captured from an industrial source which—
IRC 45Q(b)(1)(A)would otherwise be released into the atmosphere as an industrial emission, and
IRC 45Q(b)(1)(B)is measured at the source of capture and verified at the point of disposal.
IRC 45Q(b)(2)Such term includes initial deposit of captured CO2 used as a tertiary injectant.
IRC 45Q(c)For §45Q, a "qualified facility" is any industrial facility—
IRC 45Q(c)(1)which is owned by the taxpayer,
IRC 45Q(c)(2)at which carbon capture equipment is placed in service, and
IRC 45Q(c)(3)which captures at least 500K metric tons of carbon dioxide during the TY.
IRC 45Q(d)This subsection sets other special rules and definitions for purposes of §45Q.
IRC 45Q(d)(1)Credit under §45Q applies only regarding the use of CO2 by (b) within—
IRC 45Q(d)(1)(A)the United States (as by §638(1)), or
IRC 45Q(d)(1)(B)a possession of the United States (as by §638(2)).
IRC 45Q(d)(2)Sec. and EPA sets regulations for storage of CO2 under (1)(B) or (2)(C) of (a).
IRC 45Q(d)(3)A "tertiary injectant" is by §193(b)(1).
IRC 45Q(d)(4)A "qualified project" is by §43(c)(2) as if such (A)(i) includes natural gas.
IRC 45Q(d)(5)§45Q credit is attributed to the person who ensures the use or disposal of CO2.
IRC 45Q(d)(6)Sec. sets recapture of credit by (a) if CO2 use doesn't meet §45Q.
IRC 45Q(d)(7)For TYs after 2009, dollar amounts in (a) are substituted by the product of—
IRC 45Q(d)(7)(A)such dollar amount, multiplied by
IRC 45Q(d)(7)(B)the §43(b)(3)(B) inflation factor for such year; swap "2008" for "1990" therein.
IRC 45Q(e)Credit applies to years where use of at least 75M metric tons of CO2 meets §45Q.
 
IRC 45RCredit for employee health insurance expenses of small employers.
IRC 45R(a)For §38, credit for qualified small employer in credit period is amount by (b).
IRC 45R(b)Credit to (d) employer is 50% (35% if tax-exempt) of total (e)(3) contributions—
IRC 45R(b)(1)which such employer makes under (d)(4), or, if lesser
IRC 45R(b)(2)made as if all employees were in a qualified health plan with certain premium.
IRC 45R(c)Amount of credit by (b) is reduced (not below 0) by the sum of the following:
IRC 45R(c)(1)Such (b) multiplied by excess of (d)(2)(A) over 10 divided by 15.
IRC 45R(c)(2)Such (b) multiplied by excess of (d)(3)(A) over (d)(3)(B) divided by (d)(3)(B).
IRC 45R(d)This subsection defines an "eligible small employer" for purposes of §45R.
IRC 45R(d)(1)For any TY, an eligible small employer is an employer which has—
IRC 45R(d)(1)(A)within 25 full-time equivalent employees for the taxable year,
IRC 45R(d)(1)(B)average annual wages within twice the amount by (3)(B) for such TY, and
IRC 45R(d)(1)(C)an arrangement by (4) in effect.
IRC 45R(d)(2)This paragraph defines "full-time equivalent employees".
IRC 45R(d)(2)(A)Such term is a number of employees equal to the number figured by dividing—
IRC 45R(d)(2)(A)(i)total number of service hours for which wages were paid by the employer, by
IRC 45R(d)(2)(A)(ii)2080.
IRC 45R(d)(2)(B)Employee's service exceeding 2080 hours in a TY isn't accounted under (A).
IRC 45R(d)(2)(C)Sec. with Sec. of Labor sets rules to determine employee's hours of service.
IRC 45R(d)(3)This paragraph defines "average annual wages".
IRC 45R(d)(3)(A)Such wages of an eligible small employer is determined by dividing—
IRC 45R(d)(3)(A)(i)total wages paid by the employer to employees in the TY, by
IRC 45R(d)(3)(A)(ii)number of full-time equivalent employees determined under (2) for such TY.
IRC 45R(d)(3)(B)This subparagraph sets the dollar amount for purposes of (1)(B).
IRC 45R(d)(3)(B)(i)The amount for TYs beginning between 2011 - 2013 is $25000.
IRC 45R(d)(3)(B)(ii)The amount for TYs after (i) is $20000, with adjustment as under §1(f)(3).
IRC 45R(d)(4)Arrangement requires (e)(3) contribution of uniform percentage of premium.
IRC 45R(d)(5)This paragraph sets a rule to not count seasonal worker hours and wages.
IRC 45R(d)(5)(A)A seasonal employee must work at least 120 days of the TY to be accounted.
IRC 45R(d)(5)(B)A "seasonal worker" works on a seasonal basis or meets 29 CFR §500.20(s)(1).
IRC 45R(e)This subsection sets other rules and definitions for purposes of §45R.
IRC 45R(e)(1)This paragraph defines an "employee".
IRC 45R(e)(1)(A)An employee doesn't include any individual who is—
IRC 45R(e)(1)(A)(i)an employee as by §401(c)(1),
IRC 45R(e)(1)(A)(ii)a 2% shareholder by §1372(b) of an eligible small business which is an S-Corp,
IRC 45R(e)(1)(A)(iii)a 5% owner as by §416(i)(1)(B)(i) of an eligible small business, or
IRC 45R(e)(1)(A)(iv)related to an individual by (i) - (iii) as under (A) - (H) of §152(d)(2).
IRC 45R(e)(1)(B)An employee includes a leased employee as under §414(n).
IRC 45R(e)(2)"Credit period" is 2 TYs starting with 1st TY plan is offered through Exchange.
IRC 45R(e)(3)A "nonelective contribution" is not pursuant to a salary reduction arrangement.
IRC 45R(e)(4)"Wages" is by §3121(a) (determined without regard to any dollar limit therein).
IRC 45R(e)(5)Application of aggregation and other rules for purposes of §45R.
IRC 45R(e)(5)(A)All employers subject to (b), (c), (m), or (o) of §414 are deemed 1 employer.
IRC 45R(e)(5)(B)Rules similar to that under (c) - (e) of §52 apply.
IRC 45R(f)Availability of credit made to tax-exempt eligible small employers.
IRC 45R(f)(1)Employer by (2) is entitled to credit under subpart C equal to the lesser of—
IRC 45R(f)(1)(A)credit determined under §45R with respect to such employer, or
IRC 45R(f)(1)(B)the amount of the employer's payroll taxes for the year such TY begins.
IRC 45R(f)(2)A "tax-exempt eligible small employer" is subject to §501(c) and meets (d).
IRC 45R(f)(3)This paragraph defines "payroll taxes" for purposes of (f).
IRC 45R(f)(3)(A)Payroll taxes are—
IRC 45R(f)(3)(A)(i)amounts required to be withheld from employees of such employer under §3401(a),
IRC 45R(f)(3)(A)(ii)amounts required to be withheld from such employees under §3101(b), and
IRC 45R(f)(3)(A)(iii)taxes imposed on such employer under §3111(b).
IRC 45R(f)(3)(B)Rule similar to that under §24(d)(2)(C) applies for purposes of (A).
IRC 45R(g)To figure (a) credit, apply the following for TYs starting between 2010 - 2013:
IRC 45R(g)(1)Figure credit as if TY isn't in a credit period. No period starts after 2013.
IRC 45R(g)(2)Amount of credit determined under (b) is determined by using—
IRC 45R(g)(2)(A)"35% (25% if tax-exempt)" in lieu of "50% (35% if tax-exempt)" therein,
IRC 45R(g)(2)(B)employer's nonelective contributions for premiums for coverage by §9832(b)(1), &
IRC 45R(g)(2)(C)average premium figured by Sec. of Health and Human Services for (b)(2).
IRC 45R(h)Terms used in §45R are defined under PL 78-410 or §§1001 - 1004 of PL 111-148.
IRC 45R(i)Sec. sets rules for §45R and to prevent avoidance of limit through successors.
 
Subtitle A, Chapter 1, Subchapter A, Part IV, Subpart E.
 
IRC 46The amount of investment credit figured under §46 for any TY is the sum of—
IRC 46(1)the rehabilitation credit,
IRC 46(2)the energy credit,
IRC 46(3)the qualifying advanced coal project credit,
IRC 46(4)the qualifying gasification project credit,
IRC 46(5)the qualifying advanced energy project credit, and
IRC 46(6)the qualifying therapeutic discovery project credit.
 
IRC 47This section discusses the rehabilitation credit.
IRC 47(a)For §46, such credit for any taxable year is the sum of—
IRC 47(a)(1)10% of qualified expenditures to any building except historic structures, and
IRC 47(a)(2)20% of qualified rehabilitation expenditures for certified historic structures.
IRC 47(b)This subsection sets when expenditures are taken into account.
IRC 47(b)(1)Qualified expenditures for a building apply to the TY when placed in service.
IRC 47(b)(2)Amounts in (1) are reduced by (d), to extent of amount unrecaptured by §50(a).
IRC 47(c)This subsection sets definitions for purposes of §47.
IRC 47(c)(1)This paragraph defines a "qualified rehabilitated building".
IRC 47(c)(1)(A)Such a building any building and its structural components if—
IRC 47(c)(1)(A)(i)it has been substantially rehabilitated,
IRC 47(c)(1)(A)(ii)it was placed in service before the beginning of the rehabilitation,
IRC 47(c)(1)(A)(iii)the building is not a historic structure and in the rehabilitation process—
IRC 47(c)(1)(A)(iii)(I)at least 50% of existing external walls remain in place as external walls,
IRC 47(c)(1)(A)(iii)(II)at least 75% of existing external walls are in place as such or internal, and
IRC 47(c)(1)(A)(iii)(III)at least 75% of existing structural framework is retained in place, and
IRC 47(c)(1)(A)(iv)depreciation or amortization is allowable to such building.
IRC 47(c)(1)(B)Except historic structures, buildings must be placed in service before 1936.
IRC 47(c)(1)(C)This subparagraph defines the state of being "substantially rehabilitated".
IRC 47(c)(1)(C)(i)A building is so rehabilitated if costs by (2) during 2-year period exceed—
IRC 47(c)(1)(C)(i)(I)the adjusted basis of such building, or, if greater
IRC 47(c)(1)(C)(i)(II)$5000. Basis by (I) is set on 1st day of such 2-year period or holding period.
IRC 47(c)(1)(C)(ii)For rehabilitation to be completed in specific phases, period by (i) is 5 years.
IRC 47(c)(1)(C)(iii)The Secretary prescribes regulations for applying (C) to lessees.
IRC 47(c)(1)(D)Rehabilitation includes reconstruction.
IRC 47(c)(2)This paragraph defines "qualified rehabilitation expenditures".
IRC 47(c)(2)(A)Such expenditures are any amounts properly chargeable to a capital account—
IRC 47(c)(2)(A)(i)for property to which depreciation is allowed by §168 and which is—
IRC 47(c)(2)(A)(i)(I)nonresidential real property,
IRC 47(c)(2)(A)(i)(II)residential real property,
IRC 47(c)(2)(A)(i)(III)real property which has a class life of more than 12.5 years, or
IRC 47(c)(2)(A)(i)(IV)an addition or improvement to property listed in (I) - (III), and
IRC 47(c)(2)(A)(ii)in connection with the rehabilitation of a qualified rehabilitated building.
IRC 47(c)(2)(B)Such expenditures do not include any of the following:
IRC 47(c)(2)(B)(i)Expenditures not subject to (c) or (g) of §168, except (B) or (C) of §168(g)(1).
IRC 47(c)(2)(B)(ii)The cost of acquiring any building or interest therein.
IRC 47(c)(2)(B)(iii)Expenditures attributable to the enlargement of an existing building.
IRC 47(c)(2)(B)(iv)Rehabilitation of a historic building, unless certified by (C) or if—
IRC 47(c)(2)(B)(iv)(I)such building was not a certified historic structure,
IRC 47(c)(2)(B)(iv)(II)it is certified that such building is not historically significant, and
IRC 47(c)(2)(B)(iv)(III)taxpayer shows he wasn't aware of (II) if work begins after such certification.
IRC 47(c)(2)(B)(v)This clause sets rules for tax-exempt use property.
IRC 47(c)(2)(B)(v)(I)Rehabilitation expenditures attributable to tax-exempt use property (§168(h)).
IRC 47(c)(2)(B)(v)(II)(1)(C) doesn't account (v) for determining substantial rehabilitation.
IRC 47(c)(2)(B)(vi)Lessee's costs if term remainder is less than recovery period by §168(c).
IRC 47(c)(2)(C)"Certified rehabilitation" is of a structure within historic character.
IRC 47(c)(2)(D)Terms used in (I) - (III) of (A)(i) have respective meanings as under §168.
IRC 47(c)(3)This paragraph defines a "certified historic structure".
IRC 47(c)(3)(A)Such a structure is any building and its structural components which—
IRC 47(c)(3)(A)(i)is listed in the National Register, or
IRC 47(c)(3)(A)(ii)is located in a historic district and is certified as being significant.
IRC 47(c)(3)(B)A "registered historic district" is—
IRC 47(c)(3)(B)(i)any district listed in the National Register, and
IRC 47(c)(3)(B)(ii)any district which is—
IRC 47(c)(3)(B)(ii)(I)designated under a statute of State or local government, if certified, and
IRC 47(c)(3)(B)(ii)(II)certified as meeting substantially all requirements for listing of districts.
IRC 47(d)This subsection sets rules for progress expenditures.
IRC 47(d)(1)Except by (3), for buildings subject to (d), account costs by (c)(3) in TY—
IRC 47(d)(1)(A)when chargeable to capital account, if building is self-rehabilitated, and
IRC 47(d)(1)(B)when such costs are paid, if building is not self-rehabilitated property.
IRC 47(d)(2)This paragraph sets property to which (d) applies.
IRC 47(d)(2)(A)(d) applies to any building being rehabilitated by or for the taxpayer if—
IRC 47(d)(2)(A)(i)normal rehabilitation period for such building is 2 years or more, and
IRC 47(d)(2)(A)(ii)the building is expected to be qualified once it is placed in service.
IRC 47(d)(2)(B)"Normal rehabilitation period" is time reasonably expected to be required which—
IRC 47(d)(2)(B)(i)starts when physical rehabilitation work began (or 1st day of TY if elected), &
IRC 47(d)(2)(B)(ii)ends when it's expected for the property to be ready for placement in service.
IRC 47(d)(3)This paragraph sets special rules for applying (1).
IRC 47(d)(3)(A)Property which is a component of any applicable building is taken into account—
IRC 47(d)(3)(A)(i)no earlier than when it becomes irrevocably devoted to building use, and
IRC 47(d)(3)(A)(ii)as if the component's cost was paid which is chargeable to a capital account.
IRC 47(d)(3)(B)Amounts loaned from a rehabilitator do not count as expenses.
IRC 47(d)(3)(C)A limitation for buildings which are not self-rehabilitated.
IRC 47(d)(3)(C)(i)(1)(B) amount is limited to completed portion costs if not self-rehabilitated.
IRC 47(d)(3)(C)(ii)For buildings which are not self-rehabilitated—
IRC 47(d)(3)(C)(ii)(I)excess of (1)(B) over amount by clause (i) is accounted for next TY, or
IRC 47(d)(3)(C)(ii)(II)excess of (i) over (1)(B) is added to (i) limitation amount for next TY.
IRC 47(d)(3)(D)Figure (C)(i) on the basis of engineering, architectural, or accounting records.
IRC 47(d)(3)(E)No expenditures are accounted before 1st day of 1st TY of election under (5).
IRC 47(d)(3)(F)No expenditures are accounted for the earlier of—
IRC 47(d)(3)(F)(i)the taxable year in which the building is placed in service, or
IRC 47(d)(3)(F)(ii)the first TY in which recapture is required by §50(a)(2), or any TY afterwards.
IRC 47(d)(4)A "self-rehabilitated building" has more than half of costs paid by taxpayer.
IRC 47(d)(5)(d) only applies if elected; only the Sec. may revoke the election.
 
IRC 48This section discusses the energy credit.
IRC 48(a)This subsection establishes the energy credit.
IRC 48(a)(1)Credit is energy percentage of basis of energy properties placed in service.
IRC 48(a)(2)This paragraph defines the "energy percentage".
IRC 48(a)(2)(A)In general, the energy percentage is—
IRC 48(a)(2)(A)(i)30% in the case of—
IRC 48(a)(2)(A)(i)(I)qualified fuel cell property,
IRC 48(a)(2)(A)(i)(II)energy property by (3)(A)(i), for periods ending before 20170101,
IRC 48(a)(2)(A)(i)(III)energy property by (3)(A)(ii), and
IRC 48(a)(2)(A)(i)(IV)qualified small wind energy property, and
IRC 48(a)(2)(A)(iii)if clause (i) does not apply to the energy property, 10%.
IRC 48(a)(2)(B)Such rate does not apply to any basis attributable to rehabilitation expenses.
IRC 48(a)(3)For purposes of subpart E, "energy property" means any property—
IRC 48(a)(3)(A)which—
IRC 48(a)(3)(A)(i)uses solar energy to generate electricity, heating or cooling a structure, &c.,
IRC 48(a)(3)(A)(ii)uses solar energy for illumination through fiber-optics (until 20170101),
IRC 48(a)(3)(A)(iii)uses energy from a geothermal deposit (§613(e)(2)) up to transmission stage,
IRC 48(a)(3)(A)(iv)is qualified fuel cell or microturbine property,
IRC 48(a)(3)(A)(v)is combined heat and power system property,
IRC 48(a)(3)(A)(vi)is qualified small wind energy property, or
IRC 48(a)(3)(A)(vii)uses ground water as thermal energy for a structure (until 20170101),
IRC 48(a)(3)(B)which—
IRC 48(a)(3)(B)(i)the taxpayer completes its construction, reconstruction, erection, or
IRC 48(a)(3)(B)(ii)is acquired by the taxpayer if he commences the property's original use,
IRC 48(a)(3)(C)with respect to which depreciation or amortization is allowed, and
IRC 48(a)(3)(D)which meets any performance and quality standards which—
IRC 48(a)(3)(D)(i)were prescribed by the Secretary (after consultation with Sec. of Energy), and
IRC 48(a)(3)(D)(ii)are in effect when acquired. Property subject to §45 is excluded.
IRC 48(a)(4)A special rule for property financed by subsidized energy financing, &c.
IRC 48(a)(4)(A)Account basis multiplied by (B) to figure percentage of property financed by—
IRC 48(a)(4)(A)(i)subsidized energy financing, or
IRC 48(a)(4)(A)(ii)private activity bonds (§141) with tax exempt interest as by §103.
IRC 48(a)(4)(B)For (A), such fraction is 1 reduced by a fraction with—
IRC 48(a)(4)(B)(i)a numerator which is the property's basis allocable to items by (A), and
IRC 48(a)(4)(B)(ii)a denominator of the property's basis.
IRC 48(a)(4)(C)"Subsidized energy financing" is State, &c., funds used for energy projects.
IRC 48(a)(4)(D)(4) doesn't apply after 20081231, as by rules under §48(m) (as of 19901104).
IRC 48(a)(5)An election to treat qualified facilities as energy property.
IRC 48(a)(5)(A)For property by (D) which is part of a qualified investment credit facility—
IRC 48(a)(5)(A)(i)such property is treated as energy property for purposes of §48, and
IRC 48(a)(5)(A)(ii)the energy percentage with respect to such property is 30%.
IRC 48(a)(5)(B)No credit by §45 is allowed regarding any qualified investment credit facility.
IRC 48(a)(5)(C)For (5), "qualified investment credit facility" is a facility—
IRC 48(a)(5)(C)(i)which is a qualified facility described in (1) - (7), (9), or (11) of §45(d),
IRC 48(a)(5)(C)(ii)which is in service after 2008 and construction begins before 20140101, and
IRC 48(a)(5)(C)(iii)with respect to which—
IRC 48(a)(5)(C)(iii)(I)no credit has been allowed under §45, and
IRC 48(a)(5)(C)(iii)(II)the taxpayer makes an irrevocable election to have (5) apply.
IRC 48(a)(5)(D)For (5), "qualified property" is property—
IRC 48(a)(5)(D)(i)which is—
IRC 48(a)(5)(D)(i)(I)tangible personal property, or
IRC 48(a)(5)(D)(i)(II)other tangible property which is an integral part of the facility by (C),
IRC 48(a)(5)(D)(ii)for which depreciation (or amortization in lieu of depreciation) is allowable,
IRC 48(a)(5)(D)(iii)constructed, reconstructed, erected, or acquired by the taxpayer, and
IRC 48(a)(5)(D)(iv)the original use of which is commenced by with the taxpayer.
IRC 48(b)Rules by (c)(4) and (d) of §46 (as of 19901105) apply for purposes of (a).
IRC 48(c)This subsection sets definitions for purposes of §48.
IRC 48(c)(1)This paragraph defines "qualified fuel cell property".
IRC 48(c)(1)(A)Qualified fuel cell property is a fuel cell power plant which has—
IRC 48(c)(1)(A)(i)nameplate electric capacity of 0.5 kilowatt or more by electrothermal process, &
IRC 48(c)(1)(A)(ii)an electricity-only generation efficiency greater than 30%.
IRC 48(c)(1)(B)Credit by (a) is limited to $1500 per ½ kilowatt of capacity for such property.
IRC 48(c)(1)(C)A fuel cell power plant is an integrated system for electrochemical conversion.
IRC 48(c)(1)(D)"Qualified fuel cell property" doesn't include any period after 20161231.
IRC 48(c)(2)This paragraph defines "qualified microturbine property".
IRC 48(c)(2)(A)Such property is a stationary microturbine power plant which has—
IRC 48(c)(2)(A)(i)a nameplate capacity of less than 2000 kilowatts, and
IRC 48(c)(2)(A)(ii)an electricity-only generation efficiency of at least 26% at ISO conditions.
IRC 48(c)(2)(B)Credit by (a) is limited to $200 per kilowatt of property's capacity.
IRC 48(c)(2)(C)Stationary microturbine power plants are integrated systems for fuel conversion.
IRC 48(c)(2)(D)"Qualified microturbine property" doesn't include any period after 20161231.
IRC 48(c)(3)This paragraph defines "combined heat and power system property".
IRC 48(c)(3)(A)Such property is property comprising of a system—
IRC 48(c)(3)(A)(i)which uses the same energy source to generate electric power and thermal energy,
IRC 48(c)(3)(A)(ii)which produces at least 20% of its total useful energy as—
IRC 48(c)(3)(A)(ii)(I)thermal energy which is not used to produce electrical power, as well as
IRC 48(c)(3)(A)(ii)(II)energy in the form of electrical or mechanical power (or combination thereof).
IRC 48(c)(3)(A)(iii)the energy efficiency percentage of which exceeds 60%, and
IRC 48(c)(3)(A)(iv)which is placed in service before 20170101.
IRC 48(c)(3)(B)This subparagraph sets a limitation of the credit amount under (a)(1).
IRC 48(c)(3)(B)(i)Credit is proportion of capacity by (ii) bearing to property's capacity.
IRC 48(c)(3)(B)(ii)Applicable capacity is 15 MW or a mechanical energy of more than 20K horsepower.
IRC 48(c)(3)(B)(iii)Property which exceeds 50 MW or 67K horsepower capacity is excluded.
IRC 48(c)(3)(C)This subparagraph sets special rules.
IRC 48(c)(3)(C)(i)For (3), the energy efficiency of a system is a fraction figured by dividing—
IRC 48(c)(3)(C)(i)(I)the total power produced and consumed by the system at normal rates, by
IRC 48(c)(3)(C)(i)(II)the lower heating value of the fuel sources for the system.
IRC 48(c)(3)(C)(ii)The percentages determined under (C) and (A)(ii) are figured on Btu basis.
IRC 48(c)(3)(C)(iii)Property used to transport or distribute energy from a facility are excluded.
IRC 48(c)(3)(D)For systems which meet (2) & (3) of §45(c) for at least 90% of energy source—
IRC 48(c)(3)(D)(i)(A)(iii) doesn't apply, but
IRC 48(c)(3)(D)(ii)(a) credit is proportion of energy efficiency percentage bearing to 60%.
IRC 48(c)(4)This paragraph defines "qualified small wind energy property".
IRC 48(c)(4)(A)Such property uses a qualifying small wind turbine to generate electricity.
IRC 48(c)(4)(B)A "qualifying small wind turbine" has a nameplate capacity within 100 kilowatts.
IRC 48(c)(4)(C)Such property doesn't include any property for any period after 20161231.
IRC 48(d)Rules for property subject to grant by the Secretary under §1603 of PL 111-5.
IRC 48(d)(1)No credit by §45 or §48 is allowed to such property in any TY if grant is made.
IRC 48(d)(2)If §48 credit is determined for such property for any TY before grant is made—
IRC 48(d)(2)(A)subtitle A tax for TY of grant is increased by credit allowed under §38,
IRC 48(d)(2)(B)carryforwards by §39 are adjusted for the credit which is disallowed, and
IRC 48(d)(2)(C)figure the grant amount without regard to any basis reduction from such credit.
IRC 48(d)(3)Any such grant—
IRC 48(d)(3)(A)is not included in the gross income of the taxpayer, but
IRC 48(d)(3)(B)is accounted to figure basis of property, but §50(c) applies as if under (a).
 
IRC 48AThis section discusses the qualified advanced coal project credit.
IRC 48A(a)For §46, such credit for any taxable year is equal to—
IRC 48A(a)(1)20% of qualified investment for such TY of projects by (d)(3)(B)(i), and
IRC 48A(a)(2)15% of qualified investment for such TY of projects by (d)(3)(B)(ii).
IRC 48A(b)This subsection defines "qualified investment".
IRC 48A(b)(1)Such investment for any TY is basis of eligible property placed in service—
IRC 48A(b)(1)(A)which is part of a qualifying advanced coal project and is—
IRC 48A(b)(1)(A)(i)constructed, reconstructed, or erected by the taxpayer, or
IRC 48A(b)(1)(A)(ii)acquired by the taxpayer if such person initiates property's use, and
IRC 48A(b)(1)(B)for which depreciation or amortization is allowable.
IRC 48A(b)(2)Rules similar to those of §48(a)(4) (except such (D)) apply for §48A.
IRC 48A(b)(3)Rules similar to those of (c)(4) and (d) of §46 (as of 19901105) apply for §48A.
IRC 48A(c)This subsection sets definitions.
IRC 48A(c)(1)A "qualifying advanced coal project" meets the requirements of (e).
IRC 48A(c)(2)An "advanced coal-based generation technology" meets the requirements of (f).
IRC 48A(c)(3)"Eligible property" is property which is a part of—
IRC 48A(c)(3)(A)a project by (e) using an integrated gasification combined cycle, and
IRC 48A(c)(3)(B)any other qualifying advanced coal project.
IRC 48A(c)(4)"Coal" is anthracite, bituminous coal, subbituminous coal, and peat.
IRC 48A(c)(5)"Greenhouse gas capture capability" are facilities which remove, &c., such gas.
IRC 48A(c)(6)"Electric generation units" have at least 50% net annual electric power output.
IRC 48A(c)(7)"Integrated gasification combined cycle" units convert coal to fuel turbines.
IRC 48A(d)This subsection sets rules for qualifying coal project programs.
IRC 48A(d)(1)Sec. establishes a qualifying program for deployment of advanced technologies.
IRC 48A(d)(2)This paragraph sets rules for certification.
IRC 48A(d)(2)(A)Application meeting (B) must be submitted within 3 years after (1) occurs.
IRC 48A(d)(2)(B)Application must have information necessary for Sec. to find it to meet (e)(1).
IRC 48A(d)(2)(C)Such determination is made within 60 days following application's submission.
IRC 48A(d)(2)(D)Applicant provides evidence of meeting (e)(2) within 2 years of approval by (B).
IRC 48A(d)(2)(E)Applicant must place certified project in service within 5 years of issue.
IRC 48A(d)(3)This paragraph sets aggregate credit limits.
IRC 48A(d)(3)(A)Aggregate of credits by (a) for projects certified by (2) is limited to $1.3B.
IRC 48A(d)(3)(B)Of dollar amount by (A), Secretary is authorized to certify—
IRC 48A(d)(3)(B)(i)$800M for integrated gasification combined cycle projects, and
IRC 48A(d)(3)(B)(ii)$500M for projects which use other advanced coal-based technologies.
IRC 48A(d)(4)This paragraph sets rules for review and redistribution.
IRC 48A(d)(4)(A)Sec. reviews credits allocated by §45A as of 20110808 no later than 20110808.
IRC 48A(d)(4)(B)Sec. may reallocate credits under (i) and (ii) of (3)(B) if—
IRC 48A(d)(4)(B)(i)there is insufficient quantity of pending applications at time of review, or
IRC 48A(d)(4)(B)(ii)any certifications were revoked by (2)(D) due to litigation with the project.
IRC 48A(d)(4)(C)Sec. may conduct an additional application program if credit is reallocated.
IRC 48A(e)This subsection sets rules for qualifying advanced coal projects.
IRC 48A(e)(1)For (c)(1), project qualifies which Sec. may certify by (d)(2) if at a minimum—
IRC 48A(e)(1)(A)the project uses an advanced coal-based generation technology—
IRC 48A(e)(1)(A)(i)to power a new electric generation unit, or
IRC 48A(e)(1)(A)(ii)to retrofit or repower an existing generation unit,
IRC 48A(e)(1)(B)the fuel input of the completed project is at least 75% coal,
IRC 48A(e)(1)(C)the project's nameplate generating capacity is at least 400 megawatts,
IRC 48A(e)(1)(D)the applicant provides evidence that most of project's output will be utilized,
IRC 48A(e)(1)(E)the applicant provides evidence of site control for long-term project basis, and
IRC 48A(e)(1)(F)the project is located in the United States.
IRC 48A(e)(2)For (d)(2)(D), project may be certified if Sec. determines that the applicant—
IRC 48A(e)(2)(A)has received all Federal and State environmental authorizations, &c., and
IRC 48A(e)(2)(B)has entered into a binding contract for purchase of turbines. Exceptions apply.
IRC 48A(e)(3)For determining certification of (d)(2), the Secretary must—
IRC 48A(e)(3)(A)certify capacity, by procedures of (d), in relatively equal amounts to—
IRC 48A(e)(3)(A)(i)projects using bituminous coal as a primary feedstock,
IRC 48A(e)(3)(A)(ii)projects using subbituminous coal as a primary feedstock, and
IRC 48A(e)(3)(A)(iii)projects using lignite as a primary feedstock, and
IRC 48A(e)(3)(B)give high priority to projects which include, as determined by Secretary—
IRC 48A(e)(3)(B)(i)greenhouse gas capture capability,
IRC 48A(e)(3)(B)(ii)increased by-product utilization, and
IRC 48A(e)(3)(B)(iii)other benefits.
IRC 48A(f)This subsection sets rules for advanced coal-based generation technology.
IRC 48A(f)(1)An electric generation unit uses such technology if—
IRC 48A(f)(1)(A)the unit—
IRC 48A(f)(1)(A)(i)uses integrated gasification combined cycle technology, or
IRC 48A(f)(1)(A)(ii)ignoring (3), has design net heat rate of 8530 BTU/KWH (40% efficiency), &
IRC 48A(f)(1)(B)### is designed to meet the emission removal performance requirements of ###.
IRC 48A(f)(2)For (f), design net heat rate for an electric generation unit is—
IRC 48A(f)(2)(A)measured in BTU per kilowatt hour (higher heating value),
IRC 48A(f)(2)(B)based on design annual heat input and rated net power, &c., output of the unit,
IRC 48A(f)(2)(C)adjusted for coal's heat content ("X"); multiply the unit net heat rate by—
IRC 48A(f)(2)(C)(i)1 - (((13500 - X)/1000)* 0.013), if X is between 7000 to 13500 BTU per pound, &
IRC 48A(f)(2)(C)(ii)1 - (((13500 - X)/1000)* 0.018), if X is no more than 7000 BTU per pound, and
IRC 48A(f)(2)(D)be corrected for the site reference conditions of—
IRC 48A(f)(2)(D)(i)elevation above seal level of 500 feet,
IRC 48A(f)(2)(D)(ii)air pressure of 14.4 pounds per square inch absolute,
IRC 48A(f)(2)(D)(iii)temperature, dry bulb of 63°F,
IRC 48A(f)(2)(D)(iv)temperature, wet bulb of 54°F, and
IRC 48A(f)(2)(D)(v)relative humidity of 55%.
IRC 48A(f)(3)For existing units, required minimum efficiency is 35% and improvement of—
IRC 48A(f)(3)(A)thermal design efficiency at 7%-points for coal exceeding 9000 BTU,
IRC 48A(f)(3)(B)thermal design efficiency at 6%-points for coal between 7000 to 9000 BTU, and
IRC 48A(f)(3)(C)thermal design efficiency at 4%-points for coal less than 7000 BTU.
IRC 48A(g)Credit for any technology or emission reduction does not indicate that it is—
IRC 48A(g)(1)adequately demonstrated for purposes of §111 of PL 84-159,
IRC 48A(g)(2)achievable for purposes of §169 of such PL, or
IRC 48A(g)(3)achievable in practice for purposes of §171 of such PL.
 
IRC 48BThis section discusses the qualifying gasification project credit.
IRC 48B(a)For §46, such credit for any TY is equal to 20% of qualified investment.
IRC 48B(b)This subsection defines "qualified investment".
IRC 48B(b)(1)Such investment is basis of (3) property put in service by taxpayer in such TY—
IRC 48B(b)(1)(A)which is part of a qualifying gasification project and is—
IRC 48B(b)(1)(A)(i)constructed, reconstructed, or erected by the taxpayer, or
IRC 48B(b)(1)(A)(ii)which is acquired by the taxpayer who initiates property's use, and
IRC 48B(b)(1)(B)for which depreciation or amortization is allowed.
IRC 48B(b)(2)Rules similar to those of §48(a)(4) (except such (D)) apply for §48B.
IRC 48B(b)(3)Rules similar to those of (c)(4) and (d) of §46 (as of 19901105) apply for §48B.
IRC 48B(c)This subsection sets definitions.
IRC 48B(c)(1)A "qualifying gasification project" is any project which—
IRC 48B(c)(1)(A)employs gasification technology,
IRC 48B(c)(1)(B)is carried out by an eligible entity, and
IRC 48B(c)(1)(C)is determined by Sec. as eligible for credit (within $650M) under §48B.
IRC 48B(c)(2)"Gasification technology" is any process which converts products from coal, &c.
IRC 48B(c)(3)"Eligible property" is that which is a necessary part of a qualifying project.
IRC 48B(c)(4)This paragraph defines "biomass".
IRC 48B(c)(4)(A)Biomass is any—
IRC 48B(c)(4)(A)(i)agricultural or plant waste,
IRC 48B(c)(4)(A)(ii)byproduct of wood or paper mill operations, including certain lining, and
IRC 48B(c)(4)(A)(iii)other products of forestry maintenance.
IRC 48B(c)(4)(B)"Biomass" does not include paper which is commonly recycled.
IRC 48B(c)(5)"Carbon capture capability" is equipment designed to capture of carbon dioxide.
IRC 48B(c)(6)"Coal" is anthracite, bituminous coal, subbituminous coal, lignite, and peat.
IRC 48B(c)(7)"Eligible entity" is any person seeking certification for a project related to—
IRC 48B(c)(7)(A)chemicals,
IRC 48B(c)(7)(B)fertilizers,
IRC 48B(c)(7)(C)glass,
IRC 48B(c)(7)(D)steel,
IRC 48B(c)(7)(E)petroleum residues,
IRC 48B(c)(7)(F)forest products, and
IRC 48B(c)(7)(G)agriculture, including feedlots and dairy operations.
IRC 48B(c)(8)"Petroleum residue" is carbonized hydrocarbon fractions product from processing.
IRC 48B(d)This subsection sets rules for qualifying gasification project programs.
IRC 48B(d)(1)Within 20060204, Sec. establishes a program to award certification.
IRC 48B(d)(2)Certificate of eligibility by (1) is issued in 10 FY period starting 20051001.
IRC 48B(d)(3)For certification, recipient must document to Sec.'s satisfaction that—
IRC 48B(d)(3)(A)the recipient is financially viable without receipt of more Federal funding,
IRC 48B(d)(3)(B)the recipient will provide information to ensure investment is used efficiently,
IRC 48B(d)(3)(C)a market exists for the products of the proposed projects (from contracts, &c.),
IRC 48B(d)(3)(D)related fuels are at least 90% of that required for feedstock production, &c.,
IRC 48B(d)(3)(E)recipient's project team is competent in technology's construction, and
IRC 48B(d)(3)(F)the recipient has met any other criteria established by the Secretary.
IRC 48B(e)No credit is allowed by §48B for investments which received credit by §48A.
 
IRC 48CThis section discusses the qualifying advanced energy project credit.
IRC 48C(a)Such credit is 30% of the amount of investment by (b) regarding (c)(1) projects.
IRC 48C(b)This subsection defines a qualified investment.
IRC 48C(b)(1)Investment is basis of eligible property put in service for (c)(1) projects.
IRC 48C(b)(2)Rules by (c)(4) and (d) of §46 (as of 19901105) apply for purposes of §48C.
IRC 48C(b)(3)Sec. sets amount eligible to be designated as qualified investment for all TYs.
IRC 48C(c)This subsection sets definitions.
IRC 48C(c)(1)This paragraph defines a "qualifying advanced energy project".
IRC 48C(c)(1)(A)A qualifying advanced energy project is a project—
IRC 48C(c)(1)(A)(i)which re-equips, expands, or establishes a manufacturing facility to produce—
IRC 48C(c)(1)(A)(i)(I)property to produce energy from the sun, wind, deposits by §613(e)(2), &c.,
IRC 48C(c)(1)(A)(i)(II)fuel cells, microturbines, or energy systems for use by electric vehicles,
IRC 48C(c)(1)(A)(i)(III)electric grids to transmit and store intermittent sources of renewable energy,
IRC 48C(c)(1)(A)(i)(IV)property designed to capture and sequester carbon dioxide emissions,
IRC 48C(c)(1)(A)(i)(V)property to refine renewable fuels or make energy conservation technology,
IRC 48C(c)(1)(A)(i)(VI)new qualified vehicles as by §30D or §30(d), or components used therein, or
IRC 48C(c)(1)(A)(i)(VII)other advanced energy property designed reduced greenhouse emissions, and
IRC 48C(c)(1)(A)(ii)any portion of qualified investment certified by the Sec. under (d).
IRC 48C(c)(1)(B)Such term doesn't apply to production of property to refine transportation fuel.
IRC 48C(c)(2)"Eligible property" is any property—
IRC 48C(c)(2)(A)which is necessary for the production of property by (1)(A)(i),
IRC 48C(c)(2)(B)which is—
IRC 48C(c)(2)(B)(i)tangible personal property, or
IRC 48C(c)(2)(B)(ii)property used as a main part of the qualified investment credit facility, and
IRC 48C(c)(2)(C)with respect to which depreciation or amortization is allowable.
IRC 48C(d)Rules for the Qualifying Advanced Energy Project Program.
IRC 48C(d)(1)This paragraph sets the establishment of such program.
IRC 48C(d)(1)(A)By 20090816, Sec. sets such program to certify eligible qualified investments.
IRC 48C(d)(1)(B)Total amount of credit to be allocated under such program is limited to $2.3B.
IRC 48C(d)(2)This paragraph sets rules for certification.
IRC 48C(d)(2)(A)Applications may be submitted within 2 years after establishment by (1) occurs.
IRC 48C(d)(2)(B)Applicant has 1 year within Sec.'s acceptance to prove certification compliance.
IRC 48C(d)(2)(C)Applicant has 3 years within Sec.'s acceptance to place such project in service.
IRC 48C(d)(3)To determine certification of projects by (c)(1) under §48C, the Secretary—
IRC 48C(d)(3)(A)will consider only those projects which are reasonably commercially viable, and
IRC 48C(d)(3)(B)will consider which projects—
IRC 48C(d)(3)(B)(i)will provide the greatest domestic job creation during the credit period,
IRC 48C(d)(3)(B)(ii)will provide the greatest net impact in reducing pollution or greenhouse gas,
IRC 48C(d)(3)(B)(iii)have the greatest potential for technological innovation and commercial use,
IRC 48C(d)(3)(B)(iv)have the lowest levelized cost of energy, or reduces energy consumption, and
IRC 48C(d)(3)(B)(v)have the shortest project time from certification to completion.
IRC 48C(d)(4)This paragraph sets rules for review and redistribution.
IRC 48C(d)(4)(A)By 20130217, Sec. will review credits allocated under §48C as of such date.
IRC 48C(d)(4)(B)Sec. may reallocate credits awarded under §48C if it is determined that—
IRC 48C(d)(4)(B)(i)there are too few qualifying applications at the time of the review, or
IRC 48C(d)(4)(B)(ii)any certification by (2) has been revoked under (2)(B) due to litigation.
IRC 48C(d)(4)(C)Sec. may conduct an additional program if credit is available to be reallocated.
IRC 48C(d)(5)Sec. discloses the identity of certified applicants and amounts allocated.
IRC 48C(e)Credit under §48C isn't allowed for any investment credited under §§48 - 48B.
 
IRC 48DThis section discusses the qualifying therapeutic discovery project credit.
IRC 48D(a)For §46, such credit is 50% of qualified investment for any project by (c)(1).
IRC 48D(b)This subsection defines a "qualified investment".
IRC 48D(b)(1)Such investment is total costs paid for the conduct of a project by (c)(1).
IRC 48D(b)(2)Qualified investment amount is limited to amount certified by Sec. as eligible.
IRC 48D(b)(3)Qualified investment of a qualifying project by (c)(1) doesn't include any cost—
IRC 48D(b)(3)(A)for remuneration for an employee described in §162(m)(3),
IRC 48D(b)(3)(B)for interest expenses,
IRC 48D(b)(3)(C)for facility maintenance expenses as by (c)(3),
IRC 48D(b)(3)(D)identified as a service cost under 26 CFR §1.263A-1(e)(4), or
IRC 48D(b)(3)(E)for any other expense Sec. determines as appropriate for purposes of §48D.
IRC 48D(b)(4)Depreciable cost by (1) are subject to (c)(4) & (d) of §46 (as before 19901105).
IRC 48D(b)(5)Investment is qualified only if made in a TY beginning in 2009 or 2010.
IRC 48D(c)This subsection sets definitions.
IRC 48D(c)(1)A "qualifying therapeutic discovery project" is a project which is designed—
IRC 48D(c)(1)(A)to treat disease through clinical trials or for approval by PL 75-717, &c.,
IRC 48D(c)(1)(B)to diagnose diseases or develop molecular diagnostics to guide therapy, or
IRC 48D(c)(1)(C)to deploy a product, &c., to further the administration of therapeutics.
IRC 48D(c)(2)This paragraph defines an "eligible taxpayer".
IRC 48D(c)(2)(A)Such taxpayer employs within 250 employees when (d)(2) application is submitted.
IRC 48D(c)(2)(B)All persons subject to (a) or (b) of §52 or (m) or (o) of §414 are 1 employer.
IRC 48D(c)(3)"Facility maintenance expenses" are costs paid to maintain a facility, such as—
IRC 48D(c)(3)(A)mortgage or rent payments,
IRC 48D(c)(3)(B)insurance payments,
IRC 48D(c)(3)(C)utility and maintenance costs, and
IRC 48D(c)(3)(D)costs of employment of maintenance personnel.
IRC 48D(d)Rules for the qualifying therapeutic discovery project program.
IRC 48D(d)(1)This paragraph establishes the qualifying therapeutic discovery project program.
IRC 48D(d)(1)(A)By 20100522, Sec. forms a program to certify investments eligible for (a).
IRC 48D(d)(1)(B)For 2009 & 2010, total credits allocated under such program is limited to $1B.
IRC 48D(d)(2)This paragraph sets rules for certification.
IRC 48D(d)(2)(A)Applicant submits application per Sec.'s rules after (1) program is established.
IRC 48D(d)(2)(B)Sec. will approve or deny any application by (A) within 30 days of submission.
IRC 48D(d)(2)(C)Application by (A) may request to allocate credits for more than one year.
IRC 48D(d)(3)To figure qualifying projects with certified investments, the Sec. will—
IRC 48D(d)(3)(A)consider only those projects that show reasonable potential—
IRC 48D(d)(3)(A)(i)to result in new therapies—
IRC 48D(d)(3)(A)(i)(I)to treat areas of unmet medical need, or
IRC 48D(d)(3)(A)(i)(II)to prevent, detect, or treat chronic or acute diseases and conditions,
IRC 48D(d)(3)(A)(ii)to reduce long-term health care costs in the United States, or
IRC 48D(d)(3)(A)(iii)to advance the cure of cancer within 30 years after (1) program is formed, and
IRC 48D(d)(3)(B)consider which projects have the greatest potential—
IRC 48D(d)(3)(B)(i)to create and sustain United States jobs with high quality and pay, and
IRC 48D(d)(3)(B)(ii)to advance the competitiveness of the US in the fields of medical science, &c.
IRC 48D(d)(4)Recipient of certification under (d) and allocated credit is publicly disclosed.
IRC 48D(e)This subsection sets special rules.
IRC 48D(e)(1)Basis of depreciable property is reduced by any credit allowed under §48D.
IRC 48D(e)(2)This paragraph sets a denial of double benefit.
IRC 48D(e)(2)(A)§48D credit isn't given if §§168(k), 1400L(b)(1), or 1400N(d)(1) applies.
IRC 48D(e)(2)(B)No deduction is allowed for any portion of expenses given credit under §48D.
IRC 48D(e)(2)(C)This subparagraph sets coordination with credit for research activities.
IRC 48D(e)(2)(C)(i)Except by (ii), expenses accounted by §48D aren't accounted under §41 or §45C.
IRC 48D(e)(2)(C)(ii)Expenses by §41(b) are accounted to figure base period research expenses.
IRC 48D(f)Coordination for investments subject to grant under §9023(e) of PL 111-148.
IRC 48D(f)(1)(a) is disallowed for such investment when grant is made and all TYs thereafter.
IRC 48D(f)(2)If (a) was allowed for such investment in a TY ending before grant is made—
IRC 48D(f)(2)(A)subtitle A tax for TY when grant is made is increased by amount of such credit,
IRC 48D(f)(2)(B)business carryforwards under §39 are adjusted to recapture disallowed credit, &
IRC 48D(f)(2)(C)grant amount is figured without any reduction of basis due to credit allowance.
IRC 48D(f)(3)Any such grant is not included in the gross income of the taxpayer.
 
IRC 49This section discusses at-risk rules.
IRC 49(a)This subsection sets the general rule.
IRC 49(a)(1)Rules for exclusion of certain nonrecourse financing from credit base.
IRC 49(a)(1)(A)Reduce credit base of applicable property by nonqualified nonrecourse financing.
IRC 49(a)(1)(B)(1) applies to any property which—
IRC 49(a)(1)(B)(i)is placed in service during the TY by a taxpayer subject to §465(a)(1), and
IRC 49(a)(1)(B)(ii)is used for an activity for which any loss is limited by §465.
IRC 49(a)(1)(C)For (1), the "credit base" is—
IRC 49(a)(1)(C)(i)portion of basis of any rehabilitated building attributable to expenditures,
IRC 49(a)(1)(C)(ii)the basis of any energy property,
IRC 49(a)(1)(C)(iii)the basis of property part of a qualifying coal project under §48A,
IRC 49(a)(1)(C)(iv)the basis of property part of a qualifying gasification project under §48B,
IRC 49(a)(1)(C)(v)the basis of property part of a qualifying advanced energy project under §48C, &
IRC 49(a)(1)(C)(vi)basis of property part of a qualifying therapeutic discovery project under §48D.
IRC 49(a)(1)(D)This subparagraph defines "nonqualified nonrecourse financing".
IRC 49(a)(1)(D)(i)For (1) and (2), such financing is not qualified commercial financing.
IRC 49(a)(1)(D)(ii)For (1), "qualified commercial financing" is any financing for property if—
IRC 49(a)(1)(D)(ii)(I)such property is acquired from someone who is not related,
IRC 49(a)(1)(D)(ii)(II)such amount does not exceed 80% of the property's credit base, and
IRC 49(a)(1)(D)(ii)(III)such financing is from a qualified person, State, &c. & isn't convertible debt.
IRC 49(a)(1)(D)(iii)For (D), "nonrecourse financing" includes—
IRC 49(a)(1)(D)(iii)(I)amounts which the taxpayer is protected against loss through arrangements, and
IRC 49(a)(1)(D)(iii)(II)loans from anyone (including relatives) who has interest in related activity.
IRC 49(a)(1)(D)(iv)A "qualified person" regularly lends money for a business and is not—
IRC 49(a)(1)(D)(iv)(I)related to the taxpayer,
IRC 49(a)(1)(D)(iv)(II)a person (including relatives) from which the taxpayer acquired the property,
IRC 49(a)(1)(D)(iv)(III)a recipient (including relatives) of fees from taxpayer's property investment.
IRC 49(a)(1)(D)(v)A "related person" is defined by §465(b)(3)(C) and is determined at end of TY.
IRC 49(a)(1)(E)This subparagraph sets application of (1) to partnerships and S-Corps.
IRC 49(a)(1)(E)(i)Determination of allocable share is at partnership or shareholder level.
IRC 49(a)(1)(E)(ii)A S-Corp shareholder is liable for his share of any corporation financing if—
IRC 49(a)(1)(E)(ii)(I)it is recourse financing (determined at corporate level), and
IRC 49(a)(1)(E)(ii)(II)it is provided with respect to qualified business property of such S-Corp.
IRC 49(a)(1)(E)(iii)"Qualified business property" means any property if such corporation—
IRC 49(a)(1)(E)(iii)(I)uses such property in the active conduct of its trade or business,
IRC 49(a)(1)(E)(iii)(II)had 3 full-time employees performing services for 12 months ending at TY end, &
IRC 49(a)(1)(E)(iii)(III)had 1 full-time employee performing management for 12 months ending at TY end.
IRC 49(a)(1)(E)(iv)Determination of allocable share is made in same manner as by credit by §38.
IRC 49(a)(1)(F)Rules by §46(c)(8)(F) as in effect on 19901105 apply for (1).
IRC 49(a)(2)Subsequent decreases in nonqualified nonrecourse financing for property.
IRC 49(a)(2)(A)A reduction of such financing increases property's credit base as by (C).
IRC 49(a)(2)(B)Such financing is not decreased by surrender or other use of such property.
IRC 49(a)(2)(C)This subparagraph sets the manner in which credit is taken into account.
IRC 49(a)(2)(C)(i)For §38 and §58(a)(1), the increase occurs in TY it was 1st placed in service.
IRC 49(a)(2)(C)(ii)Any credit allowed for such increase is earned during TY of financing decrease.
IRC 49(b)This subsection sets rules for increases in nonqualified nonrecourse financing.
IRC 49(b)(1)In such case, tax is increased by reduction of credit by §38 for all prior TYs.
IRC 49(b)(2)A transfer of evidence of debt is inapplicable if after 1 year from issue.
IRC 49(b)(3)Rules similar to those under §47(d)(3) (as of 19901105) apply to (b).
IRC 49(b)(4)Any tax increase is not considered a chapter 1 tax to figure chapter 1 credit.
 
IRC 50This section discusses other special rules.
IRC 50(a)This subsection sets rules for recapture in case of dispositions, &c.
IRC 50(a)(1)This paragraph sets rules for early disposition, &c.
IRC 50(a)(1)(A)In such event, increase tax by recapture percentage of all credits in prior TYs.
IRC 50(a)(1)(B)For (A), such percentage is set by this table:
IRC 50(a)(1)(B)(i)100% for cessation of credit property within first year after service placement,
IRC 50(a)(1)(B)(ii)80% for cessation of credit property within one year after (i),
IRC 50(a)(1)(B)(iii)60% for cessation of credit property within one year after (ii),
IRC 50(a)(1)(B)(iv)40% for cessation of credit property within one year after (iii),
IRC 50(a)(1)(B)(v)20% for cessation of credit property within one year after (iv).
IRC 50(a)(2)Rules for property ceasing to qualify for progress expenditures.
IRC 50(a)(2)(A)Increase tax by aggregate decrease of credit by §38 if §47(d) no longer applies.
IRC 50(a)(2)(B)Amounts which reduce §47(b)(2) below zero are recaptured by (A).
IRC 50(a)(2)(C)(A) doesn't apply to amount within §47(d) cost for lessee of leaseback.
IRC 50(a)(2)(D)(1) applies to credit by §47(d) if property is disposed after service placement.
IRC 50(a)(2)(E)(2) applies in cases where progress expenditures were accounted by §48(b).
IRC 50(a)(3)Carrybacks and carryforwards of §39 are adjusted by cessations of (1) and (2).
IRC 50(a)(4)(1) and (2) does not apply to—
IRC 50(a)(4)(A)a transfer by reason of death, or
IRC 50(a)(4)(B)a transaction to which §381(a) applies. Change of business is not cessation.
IRC 50(a)(5)This paragraph sets definitions and special rules.
IRC 50(a)(5)(A)"Investment credit property" is eligible for credit determined by subpart E.
IRC 50(a)(5)(B)For transfers described by §1041(a)—
IRC 50(a)(5)(B)(i)the foregoing provisions of (a) do not apply, and
IRC 50(a)(5)(B)(ii)the tax treatment of transferred property applies to recipient.
IRC 50(a)(5)(C)Any tax increase by (1) or (2) is not considered imposed by chapter 1.
IRC 50(b)No credit is determined under subpart E with respect to the following:
IRC 50(b)(1)This paragraph sets rules for property used outside the United States.
IRC 50(b)(1)(A)Except as by (B), no credit is determined for property outside the US.
IRC 50(b)(1)(B)(A) does not apply to property described by §168(g)(4).
IRC 50(b)(2)No credit is given for property mainly used for lodging, except for—
IRC 50(b)(2)(A)nonlodging commercial facilities equally available to users and non-users,
IRC 50(b)(2)(B)property used by a hotel for the business of accommodating transients,
IRC 50(b)(2)(C)the basis of a certified historic structure for rehabilitation costs, and
IRC 50(b)(2)(D)any energy property.
IRC 50(b)(3)Property used by a tax exempt organization (not by §521). Exceptions apply.
IRC 50(b)(4)Property used by governmental units, foreign persons, or entities.
IRC 50(b)(4)(A)No credit is determined under subpart E for any property used by—
IRC 50(b)(4)(A)(i)the US, any State or subdivision thereof, any US possession, &c., or
IRC 50(b)(4)(A)(ii)any foreign person or entity (§168(h)(2)(C)) where §168(h)(2)(A)(iii) applies.
IRC 50(b)(4)(B)(3) and (4) don't apply to property under leases with terms under 6 months.
IRC 50(b)(4)(C)Don't apply (4) to figure credit of rehabilitated building leased to gov't unit.
IRC 50(b)(4)(D)For (3) and (4), rules similar to those of (5) and (6) of §168(h) apply.
IRC 50(b)(4)(E)See §168(h) for special rules in applying (3) and (4).
IRC 50(c)This subsection sets rules to adjust basis of investment credit property.
IRC 50(c)(1)Basis of property subject to credit is reduced by any such determined credit.
IRC 50(c)(2)For any recapture amount, basis of subject property is increased by such amount.
IRC 50(c)(3)For any energy credit—
IRC 50(c)(3)(A)only 50% of such credit is taken into account for (1), and
IRC 50(c)(3)(B)only 50% of any attributable recapture amount is accounted for (2).
IRC 50(c)(4)This paragraph sets rules for the recapture of reductions.
IRC 50(c)(4)(A)For §1245 and §1250, any reduction is treated as a deduction for depreciation.
IRC 50(c)(4)(B)For §1250(b), determine SL adjustments by ignoring reductions under §50.
IRC 50(c)(5)Adjustments are made to account adjustments by (c) for the adjusted basis of—
IRC 50(c)(5)(A)a partner's interest in a partnership, and
IRC 50(c)(5)(B)stock in a S corporation.
IRC 50(d)For subpart E, apply rules similar to the following (as in effect on 19901105):
IRC 50(d)(1)§46(e) (limitations with respect to certain persons (for certain TYs)).
IRC 50(d)(2)§46(f) (limitation in case of certain regulated companies).
IRC 50(d)(3)§46(h) (special rules for cooperatives).
IRC 50(d)(4)(2) and (3) of §48(b) (special rule for sale-leasebacks).
IRC 50(d)(5)§48(d) (certain leased property).
IRC 50(d)(6)§48(f) (estates and trusts).
IRC 50(d)(7)§48(r) (certain §501(d) organizations).
 
IRC 50ARepealed.
 
IRC 50BRepealed.
 
Subtitle A, Chapter 1, Subchapter A, Part IV, Subpart F.
 
IRC 51This section discusses the amount of the work opportunity credit.
IRC 51(a)For §38, credit amount for TY is 40% of qualified first-year wages for such TY.
IRC 51(b)This subsection defines "qualified wages" for subpart F.
IRC 51(b)(1)Such wages are paid by employers to individual members of a targeted group.
IRC 51(b)(2)"Qualified first-year wages" are within 1-year period starting on 1st work day.
IRC 51(b)(3)Accountable first-year wages for any individual is limited to certain amount.
IRC 51(c)This subsection defines wages.
IRC 51(c)(1)Except by (h)(2), "wages" are defined by §3306(b), ignoring limitations therein.
IRC 51(c)(2)Rules for on-the-job training and work supplementation payments.
IRC 51(c)(2)(A)"Wages" do not include federally funded payments for on-the-job training.
IRC 51(c)(2)(B)Wages are reduced by payments from a program under §482(e) of SSA.
IRC 51(c)(3)"Wages" do not include payments for substantially similar service if—
IRC 51(c)(3)(A)the principal place of employment of an individual is a plant or facility, and
IRC 51(c)(3)(B)there is a strike or lockout involving employees at such location.
IRC 51(c)(4)"Wages" do not include amounts paid to an individual who starts work—
IRC 51(c)(4)(A)after 19941231 and before 19961001, or
IRC 51(c)(4)(B)after 20131231.
IRC 51(d)This subsection defines members of targeted groups for purposes of subpart F.
IRC 51(d)(1)An individual is a member of a targeted group if such person is—
IRC 51(d)(1)(A)a qualified IV-A recipient,
IRC 51(d)(1)(B)a qualified veteran,
IRC 51(d)(1)(C)a qualified ex-felon,
IRC 51(d)(1)(D)a designated community resident,
IRC 51(d)(1)(E)a vocational rehabilitational referral,
IRC 51(d)(1)(F)a qualified summer youth employee,
IRC 51(d)(1)(G)a qualified food stamp recipient,
IRC 51(d)(1)(H)a qualified SSI recipient, or
IRC 51(d)(1)(I)a long-term family assistance recipient.
IRC 51(d)(2)This paragraph defines a "qualified IV-A recipient".
IRC 51(d)(2)(A)They are under a IV-A program for any 9 months in 1.5 years before hiring date.
IRC 51(d)(2)(B)A "IV-A program" is State assistance funded by part A of title IV of SSA.
IRC 51(d)(3)This paragraph defines a "qualified veteran".
IRC 51(d)(3)(A)Such a veteran is certified by the designated local agency as—
IRC 51(d)(3)(A)(i)a member of a family receiving certain assistance by a program by PL 88-525,
IRC 51(d)(3)(A)(ii)entitled to compensation for service-connected disability, and having—
IRC 51(d)(3)(A)(ii)(I)a hiring date within 1 year after discharge or release from USAF duty, or
IRC 51(d)(3)(A)(ii)(II)a total of at least 6 months of unemployment in 1 year before hiring date, or
IRC 51(d)(3)(A)(iii)a total of at least 4 weeks of unemployment in 1 year before hiring date, or
IRC 51(d)(3)(A)(iv)a total of at least 6 months of unemployment in 1 year before hiring date.
IRC 51(d)(3)(B)For (A), a "veteran" is any individual certified by designated local agency as—
IRC 51(d)(3)(B)(i)
IRC 51(d)(3)(B)(i)(I)having served on active duty in USAF for more than 180 days, or
IRC 51(d)(3)(B)(i)(II)having been discharged from active duty in USAF by disability, and
IRC 51(d)(3)(B)(ii)was not in extended active duty within 60 days before hiring date.
IRC 51(d)(3)(C)For (A), "compensation" and "service-connected" are defined by 38 USC §101.
IRC 51(d)(4)A "qualified ex-felon" is certified by the designated local agency as—
IRC 51(d)(4)(A)having been convicted of a felony under any statute of the US or any State, and
IRC 51(d)(4)(B)having a hiring date within 1 year after being released from prison.
IRC 51(d)(5)This paragraph defines "designated community residents".
IRC 51(d)(5)(A)Such a resident is certified by the designated local agency as—
IRC 51(d)(5)(A)(i)having attained age 18 but not age 40 on the hiring date, and
IRC 51(d)(5)(A)(ii)having his principal place of abode within an EZ, EC, RC, or area by (C).
IRC 51(d)(5)(B)Qualified wages don't include payments when such abode is outside of such areas.
IRC 51(d)(5)(C)For (5), a "rural renewal county" is any county which—
IRC 51(d)(5)(C)(i)is outside a metropolitan statistical area (as defined by the OMB), and
IRC 51(d)(5)(C)(ii)had a net population loss in the periods between 1990 - 1994 and 1995 - 1999.
IRC 51(d)(6)"Vocational rehabilitation referral" are individuals certified by agency as—
IRC 51(d)(6)(A)having a physical or mental disability resulting in handicap to employment, and
IRC 51(d)(6)(B)being referred to the employer upon receipt of rehabilitative services by—
IRC 51(d)(6)(B)(i)an employment plan under a State rehabilitation plan approved under PL 93-112,
IRC 51(d)(6)(B)(ii)a program of vocational rehabilitation under chapter 31 of 38 USC, or
IRC 51(d)(6)(B)(iii)a work plan implemented by an employment network as under §1148(g) of SSA.
IRC 51(d)(7)This paragraph defines a "qualified summer youth employee".
IRC 51(d)(7)(A)Such an employee means any individual who—
IRC 51(d)(7)(A)(i)performs services between May 1 and September 15,
IRC 51(d)(7)(A)(ii)is certified by agency as having attained age 16 but not 18 on hiring date,
IRC 51(d)(7)(A)(iii)has not been an employee at any time prior to 90-day period of (B)(i), and
IRC 51(d)(7)(A)(iv)is certified as having principal abode within an EZ, EC, or RC.
IRC 51(d)(7)(B)For applying subpart F to wages paid to a qualified summer youth employee—
IRC 51(d)(7)(B)(i)apply (b)(2) by using the 90 day period set under (A)(i), and
IRC 51(d)(7)(B)(ii)swap "$3000" for "$6000" in (b)(3), unless member of another targeted group.
IRC 51(d)(7)(C)(5)(B) applies for purposes of (A)(iv).
IRC 51(d)(8)This paragraph defines a "qualified food stamp recipient".
IRC 51(d)(8)(A)Such recipient is an individual certified by the designated local agency—
IRC 51(d)(8)(A)(i)as having attained age 18 but not age 40 on the hiring date, and
IRC 51(d)(8)(A)(ii)as being a member of a family receiving assistance under a program by PL 88-525—
IRC 51(d)(8)(A)(ii)(I)for the 6-month period ending on the hiring date, or
IRC 51(d)(8)(A)(ii)(II)for at least 3 months of 5 months ending on hiring date, if assistance ends.
IRC 51(d)(8)(B)Sec. of Treasury & of Agriculture informs agencies of food stamp participation.
IRC 51(d)(9)A "qualified SSI recipient" receives income by title XVI of SSA.
IRC 51(d)(10)A "long-term family assistance recipient" is certified by the agency by (12)—
IRC 51(d)(10)(A)as being a member of family under a program by (2)(B) within a certain period,
IRC 51(d)(10)(B)
IRC 51(d)(10)(B)(i)as being such a member for 18 months beginning after 19970805, and
IRC 51(d)(10)(B)(ii)as having a hiring date within 2 years after period by (i) or (A) ends, or
IRC 51(d)(10)(C)
IRC 51(d)(10)(C)(i)as being a member of family which ceases to receive assistance under law, and
IRC 51(d)(10)(C)(ii)as having a hiring date within 2 years after the date of such cessation.
IRC 51(d)(11)The "hiring date" is the day the individual is hired by the employer.
IRC 51(d)(12)A "designated local agency" is a State employment security agency by PL 73-30.
IRC 51(d)(13)This paragraph sets some special rules for certifications.
IRC 51(d)(13)(A)An individual is not a member of a targeted group unless—
IRC 51(d)(13)(A)(i)as of first day of work, employer receives notification of group membership, or
IRC 51(d)(13)(A)(ii)
IRC 51(d)(13)(A)(ii)(I)as of first day of work, a pre-screening notice is completed by employer, and
IRC 51(d)(13)(A)(ii)(II)by 21st day of work, employer submits such notice to designated agency.
IRC 51(d)(13)(B)Certification will be revoked & wages paid after revocation do not qualify if—
IRC 51(d)(13)(B)(i)an individual has been certified by a designated local agency as a member, and
IRC 51(d)(13)(B)(ii)such certification is wrong due to false information.
IRC 51(d)(13)(C)Agency will provide written explanation for denial of certification.
IRC 51(d)(13)(D)This subparagraph sets a credit for unemployed veterans.
IRC 51(d)(13)(D)(i)Within 1 year of hiring date, in respect of (3)(A), a veteran meets such—
IRC 51(d)(13)(D)(i)(I)(ii)(IV) or (iv) if he received unemployment pay for up to 6 months, and
IRC 51(d)(13)(D)(i)(II)(iii) if he received unemployment pay for up to 4 weeks.
IRC 51(d)(13)(D)(ii)Sec. may set alternate rules to meet (ii)(IV), (iii), or (iv) of (3)(A).
IRC 51(d)(14)A credit for unemployed veterans and disconnected youths hired in 2009 or 2010.
IRC 51(d)(14)(A)For subpart F, such a veteran or youth is a targeted group member.
IRC 51(d)(14)(B)This subparagraph sets definitions for purposes of (14).
IRC 51(d)(14)(B)(i)An "unemployed veteran" is a veteran by (3)(B) (ignore such (ii)) certified as—
IRC 51(d)(14)(B)(i)(I)having been discharged from the Armed Forces in 5 years before hiring date, and
IRC 51(d)(14)(B)(i)(II)having received unemployment for at least 4 weeks in 1 year before such date.
IRC 51(d)(14)(B)(ii)A "disconnected youth" is certified by the designated local agency—
IRC 51(d)(14)(B)(ii)(I)as having attained age of 16 but not age 25 on the hiring date,
IRC 51(d)(14)(B)(ii)(II)as attending any secondary, &c., school within 6 months before such date,
IRC 51(d)(14)(B)(ii)(III)as not regularly employed during such 6 month period, and
IRC 51(d)(14)(B)(ii)(IV)as not readily employable by reason of insufficient basic skills.
IRC 51(e)Rules for credit for second-year wages for employment of recipients by (d)(10).
IRC 51(e)(1)Regarding the employment of a long-term family assistance recipient—
IRC 51(e)(1)(A)credit under §51 includes 50% of qualified second-year wages for the TY, and
IRC 51(e)(1)(B)for (b)(3), wages accounted by (b)(2) and (2) is limited to $10K per year.
IRC 51(e)(2)For (e), the "qualified second-year wages" are qualified wages which are—
IRC 51(e)(2)(A)paid to a long-term family assistance recipient, and
IRC 51(e)(2)(B)related to service rendered in 1 year after period by (b)(2) ends.
IRC 51(e)(3)If (A) or (B) of (h)(1) applies, substitute—
IRC 51(e)(3)(A)"$10000" for "$6000" in such (A), and
IRC 51(e)(3)(B)"$833.33" for "$500" in such (B).
IRC 51(f)A requirement for remuneration to be for trade or business employment.
IRC 51(f)(1)Amounts paid are accounted only if more than half are for services in trade.
IRC 51(f)(2)Ignore (a) and (b) of §52 to figure application of (1) & (A) or (B) of (h)(1).
IRC 51(g)US Employment Service informs employers of availability of §51 credit.
IRC 51(h)This subsection sets special rules for agricultural labor and railway labor.
IRC 51(h)(1)This paragraph sets rules for unemployment insurance wages.
IRC 51(h)(1)(A)Contribution & benefit bases are $6000 in applying "wages" for §3121(a).
IRC 51(h)(1)(B)Contribution limit is $500 in applying "wages" to 45 USC §358(a).
IRC 51(h)(2)For (1), "wages" are unemployment insurance wages (ignoring limitations).
IRC 51(i)This subsection sets ineligibility of certain individuals.
IRC 51(i)(1)No wages are accounted for (a) with respect to an individual who—
IRC 51(i)(1)(A)bears any relationship described by (A) - (G) of §152(d)(2), &c.,
IRC 51(i)(1)(B)if taxpayer is a trust, &c., bears any such relationship to another trust, or
IRC 51(i)(1)(C)is a dependent (§152(d)(2)(H)) of the taxpayer, or other applicable entities.
IRC 51(i)(2)Wages are not accounted if employee was previously employed by same employer.
IRC 51(i)(3)Rules for individuals not meeting minimum employment periods.
IRC 51(i)(3)(A)Apply (a) by swapping "25%" for "40%" if service is between 120 and 400 hours.
IRC 51(i)(3)(B)No wages are accounted if individual performs less than 120 hours of service.
IRC 51(j)Rules to elect the work opportunity credit to not apply.
IRC 51(j)(1)A taxpayer may elect to have §51 not apply for any taxable year.
IRC 51(j)(2)Such election can be made before end of 3-year period after return's due date.
IRC 51(j)(3)Such election is made in manner as Secretary may prescribe by regulations.
IRC 51(k)Treatment of successor employers & of employees performing services for others.
IRC 51(k)(1)Apply §51 to successor employer (§3306(b)(1)) in same manner as predecessor.
IRC 51(k)(2)Only excess of remuneration from another person to employee may apply to §51.
 
IRC 51ARepealed.
 
IRC 52This section discusses special rules for subpart F.
IRC 52(a)All corporations of a controlled group are 1 employer, as by §1563(a), except—
IRC 52(a)(1)substitute "more than 50%" for "at least 80%" in §1563(a)(1), and
IRC 52(a)(2)determination is made without applying (a)(4) and (e)(3)(C) of §1563.
IRC 52(b)Per regulations prescribed by Secretary—
IRC 52(b)(1)treat all employees of trades under common control as employed by 1 employer, &
IRC 52(b)(2)credit by §51(a) for each trade is its proportionate share of related wages.
IRC 52(c)This subsection sets a disallowance of credit to tax exempt organizations.
IRC 52(c)(1)No credit under §38 from subpart F is allowed to tax exempt organizations.
IRC 52(c)(2)See §3111(e) for payroll tax credit for employment of qualified veterans.
IRC 52(d)For estates and trusts—
IRC 52(d)(1)apportion subpart F credit between beneficiaries on allocable basis, and
IRC 52(d)(2)any portion of credit by (1) is allowed credit under §38(a), subject to §38(c).
IRC 52(e)Rules by (e) and (h) of §46 apply to figure subpart F credit in the case of—
IRC 52(e)(1)regulated investment companies or REITs subject to taxation by subchapter M, and
IRC 52(e)(2)a cooperative organization described in §1381(a).
 
Subtitle A, Chapter 1, Subchapter A, Part IV, Subpart G.
 
IRC 53This section discusses the credit for prior year minimum tax liability.
IRC 53(a)Credit against chapter 1 tax is equal to minimum tax credit for such TY.
IRC 53(b)For (a), minimum tax credit for any TY is any excess of—
IRC 53(b)(1)adjusted net minimum tax imposed for all prior TYs after 1986, over
IRC 53(b)(2)aggregate credit of (a) for all such prior TYs.
IRC 53(c)Credit by (a) is limited to any excess of—
IRC 53(c)(1)regular tax liability reduced by sum of credits by subparts A, B, & D - F, over
IRC 53(c)(2)the tentative minimum tax for the TY.
IRC 53(d)This subsection sets definitions for purposes of §53.
IRC 53(d)(1)This paragraph defines "net minimum tax".
IRC 53(d)(1)(A)Net minimum tax is the tax imposed by §55.
IRC 53(d)(1)(B)This subparagraph sets A disallowance of credit for exclusion preferences.
IRC 53(d)(1)(B)(i)The adjusted net minimum tax for any TY is—
IRC 53(d)(1)(B)(i)(I)amount of net minimum tax for such TY, reduced by
IRC 53(d)(1)(B)(i)(II)amount which would be net minimum tax if only (ii) was accounted.
IRC 53(d)(1)(B)(ii)The following are specified in this clause—
IRC 53(d)(1)(B)(ii)(I)adjustments provided for by §56(b)(1), and
IRC 53(d)(1)(B)(ii)(II)items of tax preference by (1), (5), and (7) of §57(a).
IRC 53(d)(1)(B)(iii)For corporations—
IRC 53(d)(1)(B)(iii)(I)the preceding provisions of (B) do not apply, and
IRC 53(d)(1)(B)(iii)(II)the adjusted net minimum tax is the amount of net minimum tax for such year.
IRC 53(d)(2)"Tentative minimum tax" is defined by §55(b).
IRC 53(e)A special rule for individuals with long-term unused credits.
IRC 53(e)(1)Amount by (c) for TY before 2013 with credits by (3) is at least amount by (2).
IRC 53(e)(2)This paragraph defines the "AMT refundable credit amount" for purposes of (1).
IRC 53(e)(2)(A)Such amount is, for any taxable year, the greater of—
IRC 53(e)(2)(A)(i)$5000,
IRC 53(e)(2)(A)(ii)20% of the long-term unused minimum tax credit for such taxable year, or
IRC 53(e)(2)(A)(iii)any AMT refundable credit amount under (2) for the preceding TY (before (B)).
IRC 53(e)(2)(B)This subparagraph sets a phaseout of AMT refundable credit amount.
IRC 53(e)(2)(B)(i)(A) amount is subject to (B) of §151(d)(3) if AGI exceeds threshold by such (C).
IRC 53(e)(2)(B)(ii)For (i), AGI is determined without regard to §§911, 931, and 933.
IRC 53(e)(3)This paragraph defines "long-term unused minimum tax credit".
IRC 53(e)(3)(A)Such credit is portion of amount by (b) for TYs before 3rd TY before the TY.
IRC 53(e)(3)(B)For (A), credits are allowed under (a) on first-in, first-out basis.
IRC 53(e)(4)For 26 USC, credit allowed under (e) is treated as if allowed under subpart C.
 
Subtitle A, Chapter 1, Subchapter A, Part IV, Subpart H.
 
IRC 54This section discusses the credit to holders of clean renewable energy bonds.
IRC 54(a)If such a bond is held on credit allowance dates, credit is determined by (b).
IRC 54(b)This subsection sets the amount of credit.
IRC 54(b)(1)Credit is 25% of annual credit determined with respect to such bond.
IRC 54(b)(2)The annual credit for any clean renewable energy bond is the product of—
IRC 54(b)(2)(A)credit rate by (3) for the day which such bond was sold, multiplied by
IRC 54(b)(2)(B)the outstanding face amount of the bond.
IRC 54(b)(3)Sec. determines applicable credit rate for bond sale contracts daily.
IRC 54(b)(4)The "credit allowance date" is—
IRC 54(b)(4)(A)March 15,
IRC 54(b)(4)(B)June 15,
IRC 54(b)(4)(C)September 15, and
IRC 54(b)(4)(D)December 15. Such date also includes last day which bond is outstanding.
IRC 54(b)(5)Credit is ratable portion for issues in 3-month period ending on a credit date.
IRC 54(c)Credit by (a) for any TY is limited to any excess of—
IRC 54(c)(1)sum of regular tax liability (§26(b)), plus tax imposed by §55, over
IRC 54(c)(2)sum of credits under §§21 - 54AA (except §§31-36, 54A - 54F, 54AA, & §1400N(l)).
IRC 54(d)This subsection defines a "clean renewable energy bond".
IRC 54(d)(1)Such a bond is any bond issued as part of an issue if—
IRC 54(d)(1)(A)bond is issued by a qualified issuer pursuant to allocation by (f)(2),
IRC 54(d)(1)(B)at least 95% of proceeds will be used for expenditures for qualified projects,
IRC 54(d)(1)(C)the qualified issuer designates such bond for purposes of this section, and
IRC 54(d)(1)(D)the issue meets the requirements of (h).
IRC 54(d)(2)This paragraph defines a "qualified project" and sets special use rules.
IRC 54(d)(2)(A)Such project is a facility by §45(d) (except (10)) owned by qualified borrower.
IRC 54(d)(2)(B)For (1)(B), projects may be refinanced only if debt was made after 20050808.
IRC 54(d)(2)(C)For (1)(B), such bond may reimburse a qualified borrower after enactment, if—
IRC 54(d)(2)(C)(i)before payment of original expense, borrower declares use of such bond,
IRC 54(d)(2)(C)(ii)by 60 days after such payment, issuer adopts official reimbursement intent, &
IRC 54(d)(2)(C)(iii)the reimbursement is made within 1½ years after expense is paid.
IRC 54(d)(2)(D)For (1)(B), issued proceeds must not be used for other projects.
IRC 54(e)This subsection sets maturity limitations.
IRC 54(e)(1)Maturity shall not exceed maximum term determined by Secretary under (2).
IRC 54(e)(2)Each month, Secretary sets maximum term permitted for bonds issued therein.
IRC 54(f)This subsection sets a limitation on amount of bonds designated.
IRC 54(f)(1)The national limit of clean renewable energy bonds is $1.2B.
IRC 54(f)(2)Sec. allocates amount of (1), limited to $750 million for governmental bodies.
IRC 54(g)Gross income includes §54 credit (ignoring (c)), treated as interest income.
IRC 54(h)This subsection sets special rules relating to expenditures.
IRC 54(h)(1)Issue meets requirements of (h) if, as of issue date, issuer expects—
IRC 54(h)(1)(A)at least 95% of proceeds will be spent for qualified projects in next 5 years,
IRC 54(h)(1)(B)a commitment with a third party to spend 10% of proceeds within 6 months, and
IRC 54(h)(1)(C)the use of such proceeds and project completion will come with due diligence.
IRC 54(h)(2)Upon expiration of (1)(A) period, Sec. may extend period with reasonable cause.
IRC 54(h)(3)Issuer redeems nonqualified bonds within 90 days after (1)(A) period ends.
IRC 54(i)Clean renewable energy bond issuers must satisfy arbitrage requirements of §148.
IRC 54(j)Definition of "cooperative electric company", "qualified borrower", &c.
IRC 54(j)(1)A "cooperative electric company" has a loan guarantee under PL 74-605.
IRC 54(j)(2)A "clean renewable energy bond lender" is owned by 100 or more companies by (1).
IRC 54(j)(3)A "governmental body" is any State, US possession, &c., and subdivision thereof.
IRC 54(j)(4)A "qualified issuer" is—
IRC 54(j)(4)(A)a clean renewable energy bond lender,
IRC 54(j)(4)(B)a cooperative electric company, or
IRC 54(j)(4)(C)a governmental body.
IRC 54(j)(5)A "qualified borrower" is—
IRC 54(j)(5)(A)a mutual or cooperative electric company as by §501(c)(12) or §1381(a)(2)(C), or
IRC 54(j)(5)(B)a governmental body.
IRC 54(k)Allocation of pooled financing bond to any loan requires written commitment.
IRC 54(l)This subsection sets other definitions and special rules.
IRC 54(l)(1)"Bond" includes any obligation.
IRC 54(l)(2)"Pooled financing bond" has the same meaning given by §149(f)(6)(A).
IRC 54(l)(3)Rules for partnerships, S-Corps, and other pass-thru entities.
IRC 54(l)(3)(A)Rules similar to those of §41(g) shall apply to such entities for credit by (a).
IRC 54(l)(3)(B)For bonds held by partnership or S-Corp, rules as under §1397E(i) apply.
IRC 54(l)(4)Issuer of bond by (d) must make equal principal payment each outstanding year.
IRC 54(l)(5)Issuers of such bonds submit reports similar to those required by §149(e).
IRC 54(l)(6)Issuers of such bonds submit reports similar to those required by §149(e).
IRC 54(m)§54 does not apply to any bond issued after 20091231.
 
Subtitle A, Chapter 1, Subchapter A, Part IV, Subpart I.
 
IRC 54AThis section discusses the credit to holders of qualified tax credit bonds.
IRC 54A(a)For holders of bonds on (e)(1) dates, Sum of (b) amount is chapter 1 tax credit.
IRC 54A(b)This subsection sets the amount of credit.
IRC 54A(b)(1)Credit given by (b) is 25% of (2) amount regarding a qualified tax credit bond.
IRC 54A(b)(2)The annual credit for any qualified tax credit bond is the product of—
IRC 54A(b)(2)(A)the applicable credit rate by (3), multiplied by
IRC 54A(b)(2)(B)the outstanding face amount of the bond.
IRC 54A(b)(3)Sec. sets applicable rate for issue of bond without discount and interest cost.
IRC 54A(b)(4)Credit's reduced for bonds issued or redeemed within 3 months before (e)(1) day.
IRC 54A(c)This subsection sets a limitation based on amount of tax.
IRC 54A(c)(1)Credit by (a) for any taxable year is limited to the excess of—
IRC 54A(c)(1)(A)sum of regular tax liability (as by §26(b)) plus tax imposed by §55, over
IRC 54A(c)(1)(B)sum of credits allowed under §§21 - 54AA (except §§31 - 36, 54A - 54F, & 54AA).
IRC 54A(c)(2)Excess of (a) credit over (1) limit is carried to next TY & added to (a) amount.
IRC 54A(d)This subsection defines a "qualified tax credit bond".
IRC 54A(d)(1)A qualified tax credit bond is part of an issue which meets (2) - (6) and is—
IRC 54A(d)(1)(A)a qualified forestry conservation bond,
IRC 54A(d)(1)(B)a new clean renewable energy bond,
IRC 54A(d)(1)(C)a qualified energy conservation bond,
IRC 54A(d)(1)(D)a qualified zone academy bond, or
IRC 54A(d)(1)(E)a qualified school construction bond.
IRC 54A(d)(2)This paragraph sets special rules relating to expenditures.
IRC 54A(d)(2)(A)Issue meets (2) if, as of issue date, issuer reasonably expects that—
IRC 54A(d)(2)(A)(i)100% or more of (e)(4) amount will be used for purposes by (C) within 3 years, &
IRC 54A(d)(2)(A)(ii)at least 10% of such amount will be incurred by a third party within 6 months.
IRC 54A(d)(2)(B)Rules for failure to spend 100% of proceeds by (e)(4) within 3 years.
IRC 54A(d)(2)(B)(i)Proceeds unused for (C) purposes are redeemed within 90 days after (ii) period.
IRC 54A(d)(2)(B)(ii)The "expenditure period" the 3 year period beginning with the date of issue.
IRC 54A(d)(2)(B)(iii)Sec. may extend period by (ii) if failure to make expenditure is reasonable.
IRC 54A(d)(2)(C)For (2), a "qualified purpose" is a purpose by—
IRC 54A(d)(2)(C)(i)§54B(e), in the case of a qualified forestry conservation bond,
IRC 54A(d)(2)(C)(ii)§54C(a)(1), in the case of a new clean renewable energy bond,
IRC 54A(d)(2)(C)(iii)§54D(a)(1), in the case of a qualified energy conservation bond,
IRC 54A(d)(2)(C)(iv)§54E(a)(1), in the case of a qualified zone academy bond, and
IRC 54A(d)(2)(C)(v)§54F(a)(1), in the case of a qualified school construction bond.
IRC 54A(d)(2)(D)(e)(4) amount is spent for purposes by (C) if proceeds reimburse issuer only if—
IRC 54A(d)(2)(D)(i)before payment of original expenditure, issuer states intent of reimbursement,
IRC 54A(d)(2)(D)(ii)within 60 days after such payment, issuer adopts intent of reimbursement, and
IRC 54A(d)(2)(D)(iii)the reimbursement is made within 18 months after original expenditure is paid.
IRC 54A(d)(3)Issuers of (d)(1) bonds submit reports similar to those required by §149(e).
IRC 54A(d)(4)This paragraph sets special rules relating to arbitrage.
IRC 54A(d)(4)(A)Issue meets (4) if issuer meets requirements of §148 regarding issue's proceeds.
IRC 54A(d)(4)(B)(A) may be met despite investment of (e)(4) proceeds during (2)(B)(ii) period.
IRC 54A(d)(4)(C)(A) may be met despite use of any fund to repay such issue if such fund—
IRC 54A(d)(4)(C)(i)is funded at a rate not more rapid than equal annual installments,
IRC 54A(d)(4)(C)(ii)is funded in a manner expected to result in amount needed to repay the issue, &
IRC 54A(d)(4)(C)(iii)has a yield within the discount rate determined by (5)(B) regarding such issue.
IRC 54A(d)(5)This paragraph sets a maturity limitation.
IRC 54A(d)(5)(A)Issue meets (5) if maturity of any bond is limited to maximum term by (B).
IRC 54A(d)(5)(B)Each month, Sec. sets maximum term under (5) for bonds issued in prior month.
IRC 54A(d)(6)Issue meets (6) if the issuer certifies that such issue meets any—
IRC 54A(d)(6)(A)applicable State and local laws governing conflicts of interest, and
IRC 54A(d)(6)(B)any additional rules set by Sec. regarding interests by Members of Congress, &c.
IRC 54A(e)This subsection sets other definitions for purposes of subchapter A.
IRC 54A(e)(1)"Credit allowance date" includes the last day when bond is outstanding and is—
IRC 54A(e)(1)(A)March 15,
IRC 54A(e)(1)(B)June 15,
IRC 54A(e)(1)(C)September 15, and
IRC 54A(e)(1)(D)December 15.
IRC 54A(e)(2)A "bond" includes any obligation.
IRC 54A(e)(3)A "State" includes the District of Columbia and any US possession.
IRC 54A(e)(4)"Available project proceeds" are—
IRC 54A(e)(4)(A)the excess of—
IRC 54A(e)(4)(A)(i)the proceeds from the sale of an issue, over
IRC 54A(e)(4)(A)(ii)the issuance costs financed by the issue (within 2% of proceeds), and
IRC 54A(e)(4)(B)the proceeds from any investment of the excess described in (A).
IRC 54A(f)For subtitle A, credit under (a) is interest which is included in gross income.
IRC 54A(g)Treat allocation of §54A credit to S-Corp shareholders as a distribution.
IRC 54A(h)Sec. sets rules for distribution of (a) and (f) to beneficiaries of a REIT.
IRC 54A(i)Rules for when credits may be stripped, per Sec.'s regulations.
IRC 54A(i)(1)If bond ownership is separated, holder of entitled instrument gets §54A credit.
IRC 54A(i)(2)If (1) applies, §1286 applies to (d)(1) bond; §54A credit is §1286(e)(3) coupon.
 
IRC 54BThis section discusses qualified forestry conservation bonds.
IRC 54B(a)A "qualified forestry conservation bond" is any bond as part of an issue if—
IRC 54B(a)(1)100% of issue's project proceeds are used for any purpose by (e),
IRC 54B(a)(2)the bond is issued by a qualified issuer, and
IRC 54B(a)(3)the issuer designates such bond for purposes of §54B.
IRC 54B(b)Total amount of bonds designated under (a) is limited to amount under (d).
IRC 54B(c)The national qualified forestry conservation bond limitation is $500M.
IRC 54B(d)This subsection sets allocations.
IRC 54B(d)(1)Sec. allocates entire limitation by (c) for purposes by (e) before 20100618.
IRC 54B(d)(2)Sec. solicits for allocation of limitation by (c) until 20080916.
IRC 54B(e)An acquisition of forest land is a "qualified forestry conservation purpose" if:
IRC 54B(e)(1)Some portion of the acquired land must be adjacent to US Forest Service land.
IRC 54B(e)(2)At least ½ of land acquired must be transferred to US Forest Service at no cost.
IRC 54B(e)(3)All land must be subject to a plan approved by the US Fish and Wildlife Service.
IRC 54B(e)(4)The amount of acreage acquired must be at least 40000 acres.
IRC 54B(f)A "qualified issuer" is a State, &c., or an organization by §150(a)(4).
IRC 54B(g)§54A(d)(4)(C)(i) doesn't apply to issues with bonds by (a).
IRC 54B(h)An election to treat 50% of bond allocation as payment of tax.
IRC 54B(h)(1)A qualified issuer is considered to pay 50% of (A) amount for chapter 1 tax if—
IRC 54B(h)(1)(A)such issuer receives an allocation of any portion of limitation by (c), and
IRC 54B(h)(1)(B)such issuer elects the application of (h) with respect to such allocation.
IRC 54B(h)(2)This paragraph sets the treatment of deemed payment under (1).
IRC 54B(h)(2)(A)Sec. refunds such payment; such payment is not an offset or credit.
IRC 54B(h)(2)(B)Except by (3)(A), such payment is not accounted to figure interest under 26 USC.
IRC 54B(h)(3)This paragraph sets the requirements for election and effects of election.
IRC 54B(h)(3)(A)Qualified issuer must certify that (1) payment will be used for purposes by (e).
IRC 54B(h)(3)(B)If a qualified issuer makes the election under (h) regarding any allocation—
IRC 54B(h)(3)(B)(i)the issuer may issue no bonds pursuant to the allocation, and
IRC 54B(h)(3)(B)(ii)the Secretary may not reallocate such allocation for any other purpose.
 
IRC 54CThis section discusses new clean renewable energy bonds.
IRC 54C(a)A "new clean renewable energy bond" is any bond as part of an issue if—
IRC 54C(a)(1)100% of issue's project proceeds are used for a facility by (d)(1),
IRC 54C(a)(2)the bond is issued by a qualified issuer, and
IRC 54C(a)(3)the issuer designates such bond for purposes of §54C.
IRC 54C(b)Credit by §54A(b) regarding such bond is 70% of amount determined therein.
IRC 54C(c)This subsection sets a limitation on amount of bonds designated.
IRC 54C(c)(1)Total amount of bonds designated under (a) is limited to amount under (c).
IRC 54C(c)(2)Sec. allocates national limitation of $800M under (3), except that—
IRC 54C(c)(2)(A)no more than 33.3% thereof may be allocated to public power providers,
IRC 54C(c)(2)(B)no more than 33.3% thereof may be allocated to gov't bodies, and
IRC 54C(c)(2)(C)no more than 33.3% thereof may be allocated to cooperative electric companies.
IRC 54C(c)(3)This paragraph sets the method of allocation.
IRC 54C(c)(3)(A)Sec. allocates limitation as (2)(A) limit bears to total cost of projects.
IRC 54C(c)(3)(B)Sec. sets allocation under (2)(B) and (2)(C) for qualified projects.
IRC 54C(c)(4)Such limitation is increased by $1.6B and is allocated as under (2) and (3).
IRC 54C(d)This subsection sets definitions for purposes of §54C.
IRC 54C(d)(1)"Qualified renewable energy facility" is by §45(d) & owned by (2) - (4) person.
IRC 54C(d)(2)"Public power provider" is a State utility as by §217 of title II of PL 74-333.
IRC 54C(d)(3)A "gov't body" is any State or Indian tribal gov't or subdivision thereof.
IRC 54C(d)(4)A "cooperative electric company" is by §501(c)(12) or §1381(a)(2)(C).
IRC 54C(d)(5)"Clean renewable energy bond lender" is owned by 100 or more electric companies.
IRC 54C(d)(6)A "qualified issuer" is by (2) - (5), &c., & recipient of loan by PL 74-605.
 
IRC 54DThis section discusses qualified energy conservation bonds.
IRC 54D(a)A "qualified energy conservation bond" is any bond as part of an issue if—
IRC 54D(a)(1)100% of issue's project proceeds are used for any purpose by (f)(1),
IRC 54D(a)(2)the bond is issued by a State or local government, and
IRC 54D(a)(3)the issuer designates such bond for purposes of §54D.
IRC 54D(b)Credit by §54A(b) regarding such bond is 70% of amount determined therein.
IRC 54D(c)Total face amount of bonds designated under (a) is limited to amount by (e).
IRC 54D(d)The national qualified energy conservation bond limitation is $2.3B.
IRC 54D(e)This subsection sets allocations.
IRC 54D(e)(1)Sec. allocates limitation by (d) in proportion to state population.
IRC 54D(e)(2)This paragraph sets rules for allocations to largest local governments.
IRC 54D(e)(2)(A)Gov't by (C) receives part of State allocation in proportion of population.
IRC 54D(e)(2)(B)Such gov't may reallocate such allocation to the applicable State.
IRC 54D(e)(2)(C)A "large local gov't" is any municipality or county with over 100K population.
IRC 54D(e)(3)Allocation by (e) must be used for no more than 30% of private activity bonds.
IRC 54D(e)(4)Bonds issued for loans by (f)(1)(A)(ii) are not deemed private activity bonds.
IRC 54D(f)This subsection defines a "qualified conservation purpose" for purposes of §54D.
IRC 54D(f)(1)A qualified conservation purpose is any of the following:
IRC 54D(f)(1)(A)Capital expenditures incurred for the purposes of—
IRC 54D(f)(1)(A)(i)reducing energy consumption in publicly-owned buildings by at least 20%,
IRC 54D(f)(1)(A)(ii)implementing green community programs (and the use of loans, &c., therefor),
IRC 54D(f)(1)(A)(iii)rural development for the production of electricity from renewable resources, or
IRC 54D(f)(1)(A)(iv)any qualified facility by §45(d) (ignore such (8) and (10)).
IRC 54D(f)(1)(B)Expenditures regarding research facilities and research grants for research in—
IRC 54D(f)(1)(B)(i)development of cellulosic ethanol or other nonfossil fuels,
IRC 54D(f)(1)(B)(ii)the capture and sequestration of carbon dioxide made from fossil fuels,
IRC 54D(f)(1)(B)(iii)increasing the efficiency of existing technologies to produce nonfossil fuels,
IRC 54D(f)(1)(B)(iv)technology to reduce fossil fuel consumption in automobiles, or
IRC 54D(f)(1)(B)(v)technology to reduce energy use in buildings.
IRC 54D(f)(1)(C)For the reduction of energy consumption and pollution regarding mass commuting.
IRC 54D(f)(1)(D)Demonstration projects designed to promote the commercialization of—
IRC 54D(f)(1)(D)(i)green building technology,
IRC 54D(f)(1)(D)(ii)conversion of agricultural waste for use in production (of fuel, &c.),
IRC 54D(f)(1)(D)(iii)advanced battery manufacturing technologies,
IRC 54D(f)(1)(D)(iv)technologies to reduce peak use of electricity, or
IRC 54D(f)(1)(D)(v)technologies to capture carbon dioxide from fossil fuel burned for electricity.
IRC 54D(f)(1)(E)Public education campaigns to promote energy efficiency.
IRC 54D(f)(2)For private activity bonds, such term doesn't apply to non-capital expenditures.
IRC 54D(g)This subsection sets rules for determining population.
IRC 54D(g)(1)The population of a State or local gov't is determined under §146(j) for 2008.
IRC 54D(g)(2)Population of a large local gov't isn't accounted to figure county population.
IRC 54D(h)For §54D, an Indian tribal gov't is considered a large local gov't, except that—
IRC 54D(h)(1)for (e), such gov't is located in a State in proportion of population therein, &
IRC 54D(h)(2)to meet (a), proceeds of bonds issued by such gov't must meet §103(a).
 
IRC 54EThis section discusses qualified zone academy bonds.
IRC 54E(a)A "qualified zone academy bond" is a bond issued as part of an issue if—
IRC 54E(a)(1)use of 100% of issue's proceeds meets (d)(3) regarding academy by (d)(1),
IRC 54E(a)(2)the bond is issued by the person presiding over where such academy is located, &
IRC 54E(a)(3)such issuing State or local government—
IRC 54E(a)(3)(A)designates such bond for the purposes of §54E,
IRC 54E(a)(3)(B)certifies that it has written assurances that (b) will be met, and
IRC 54E(a)(3)(C)certifies that it has written approval of agency by (d)(2) for such issue.
IRC 54E(b)Academy by (d)(1) has at least 10% of proceeds committed from private entities.
IRC 54E(c)A limitation on amount of national zone academy bonds to be designated per year.
IRC 54E(c)(1)Limit is $400M for 2008, $1.4B for 2009 & 2010, $400M for 2011 - 2013.
IRC 54E(c)(2)Sec. allocates limitation among States based on population below poverty line.
IRC 54E(c)(3)Aggregate face amount of bonds subject to (a) is limited to limitation by (2).
IRC 54E(c)(4)This paragraph sets a carryover of unused limitation.
IRC 54E(c)(4)(A)Limitation amount for a State for any year is increased by any excess if—
IRC 54E(c)(4)(A)(i)the limitation amount for any State in the preceding year exceeds
IRC 54E(c)(4)(A)(ii)the amount of bonds issued in such year which are designated under (a).
IRC 54E(c)(4)(B)Any carryforward of limitation may apply only to two subsequent years.
IRC 54E(c)(4)(C)Any carryover by §1397E(e)(4) is accounted by (A) and subject to (B).
IRC 54E(d)This subsection sets definitions for purposes of §54E.
IRC 54E(d)(1)A "qualified zone academy" is a school or program under agency by (2) where—
IRC 54E(d)(1)(A)such academy is formed in cooperation with business to enhance curriculum, &c.,
IRC 54E(d)(1)(B)such agency's standards equally apply to all students under such agency,
IRC 54E(d)(1)(C)the education plan of such academy is approved by such agency, and
IRC 54E(d)(1)(D)
IRC 54E(d)(1)(D)(i)such academy is located in an empowerment zone or enterprise community, or
IRC 54E(d)(1)(D)(ii)at least 35% of such academy's students may participate under PL 79-396.
IRC 54E(d)(2)An "eligible local education agency" is by §9101 of PL 89-10.
IRC 54E(d)(3)A "qualified purpose" is, in respect of any qualified zone academy—
IRC 54E(d)(3)(A)rehabilitating the public school facility in which the academy is established,
IRC 54E(d)(3)(B)providing equipment for use at such academy,
IRC 54E(d)(3)(C)developing course materials for education provided at such academy, and
IRC 54E(d)(3)(D)training teachers and other school personnel in such academy.
IRC 54E(d)(4)A "qualified contribution" (which is accepted by agency by (2)) is of—
IRC 54E(d)(4)(A)equipment used in the qualified zone academy (including vocational equipment),
IRC 54E(d)(4)(B)assistance to develop training to promote appropriate technology in class,
IRC 54E(d)(4)(C)services of employees as volunteer mentors,
IRC 54E(d)(4)(D)certain educational opportunities for students outside of the academy, or
IRC 54E(d)(4)(E)any other property or service specified by such eligible local education agency.
 
IRC 54FThis section discusses qualified school construction bonds.
IRC 54F(a)Such a bond is any bond issued as part of an issue if such bond—
IRC 54F(a)(1)is only used to support the construction, repair, &c., a public school facility,
IRC 54F(a)(2)is issued by a State or local government wherein such school is located, and
IRC 54F(a)(3)is designated by the issuer as such a bond for purposes of §54F.
IRC 54F(b)Sum bonds designated under (a) is limited to allocation under (d) for the year.
IRC 54F(c)The national qualified school construction bond limitation for each year is—
IRC 54F(c)(1)$11B for 2009,
IRC 54F(c)(2)$11B for 2010, and
IRC 54F(c)(3)except as provided in (e), $0 after 2010.
IRC 54F(d)This subsection sets the allocation of limitation.
IRC 54F(d)(1)Allocate (c) to States in proportion to amounts received by §1124 of PL 89-10.
IRC 54F(d)(2)An allocation of 40% of limitation among largest school districts.
IRC 54F(d)(2)(A)40% of (c) limitation is allocated by Sec. to large local educational agencies.
IRC 54F(d)(2)(B)Allocate (A) in proportion to amounts received by such agencies by such §1124.
IRC 54F(d)(2)(C)Allocation to State by (1) is reduced by allocations under (2) to such agencies.
IRC 54F(d)(2)(D)Allocation under (2) may be reallocated to State where such agency is located.
IRC 54F(d)(2)(E)For (2), a "large local educational agency" is any educational agency which is—
IRC 54F(d)(2)(E)(i)among the 100 agencies with largest number of children living below poverty, or
IRC 54F(d)(2)(E)(ii)1 of up to 25 agencies determined by Sec. as in particular need of assistance.
IRC 54F(d)(3)(1) allocation to certain US possessions is based on population below poverty.
IRC 54F(d)(4)$200M is additionally allocated for schools funded by Bureau of Indian Affairs.
IRC 54F(e)Limitation for the next year is increased by any amount which, for any year—
IRC 54F(e)(1)the amount allocated under (d) to any State exceeds
IRC 54F(e)(2)the amount of bonds issued which are designated under (a) for allocation.
 
Subtitle A, Chapter 1, Subchapter A, Part IV, Subpart J.
 
IRC 54AAThis section discusses build America bonds.
IRC 54AA(a)Holder of build America bond at (e) date is allowed (b) amount as credit.
IRC 54AA(b)Chapter 1 tax credit is 35% of interest payable by issuer at any date by (e).
IRC 54AA(c)This subsection sets a limitation based on amount of tax.
IRC 54AA(c)(1)Credit allowed under (a) for any TY is limited to any excess of—
IRC 54AA(c)(1)(A)sum of regular tax liability by §26(b) plus any tax imposed by §55, over
IRC 54AA(c)(1)(B)sum of credits under §§21 - 54 (except §§31 - 36 and §54AA).
IRC 54AA(c)(2)Excess of (a) over limit by (1) is added to (a) amount for the subsequent TY.
IRC 54AA(d)This subsection defines a "build America bond".
IRC 54AA(d)(1)For §54AA, such bond is any obligation (which isn't a private activity bond) if—
IRC 54AA(d)(1)(A)the interest on such note would be excluded from gross income under §103,
IRC 54AA(d)(1)(B)such obligation is issued before 20110101, and
IRC 54AA(d)(1)(C)the issuer makes an irrevocable election to have §54AA to apply.
IRC 54AA(d)(2)For purposes of applying (1), in respect of a build America bond—
IRC 54AA(d)(2)(A)for §149(b), such bond isn't guaranteed by reason of credit under §6431(a),
IRC 54AA(d)(2)(B)for §148, yield on such bond is figured without regard to credit under (a), and
IRC 54AA(d)(2)(C)any premium over principal amount of such bond is limited to §1273(a)(3) amount.
IRC 54AA(e)"Interest payment date" is when holder of record is to receive interest payment.
IRC 54AA(f)This subsection sets special rules.
IRC 54AA(f)(1)For 26 USC, interest on any build America bond is included in gross income.
IRC 54AA(f)(2)Rules similar to (f) - (i) of §54A apply for purposes of credit under (a).
IRC 54AA(g)For qualified bonds issued before 20110101—
IRC 54AA(g)(1)In lieu of (a), issuer of such bond is allowed credit under §6431.
IRC 54AA(g)(2)For (g), a "qualified bond" is any build America bond if such issue—
IRC 54AA(g)(2)(A)has 100% of any excess used only for capital expenditures from which—
IRC 54AA(g)(2)(A)(i)the available project proceeds (§54A) of such issue exceeds
IRC 54AA(g)(2)(A)(ii)the amounts in a reserve by §150(a)(3) with respect to such issue, and
IRC 54AA(g)(2)(B)is subject to an irrevocable election by its issuer for (g) to apply.
IRC 54AA(h)The Secretary sets regulations as necessary to carry out §54AA and §6431.
 
Subtitle A, Chapter 1, Subchapter A, Part V.
 
 "> Repealed.
 
Subtitle A, Chapter 1, Subchapter A, Part VI.
 
IRC 55This section sets the imposition of alternative minimum tax.
IRC 55(a)Tax (in addition to any other by subtitle A) is imposed equal to excess of—
IRC 55(a)(1)the tentative minimum tax for the taxable year, over
IRC 55(a)(2)the regular tax for the taxable year.
IRC 55(b)This subsection defines the tentative minimum tax for purposes of part VI.
IRC 55(b)(1)This paragraph sets the amount of tentative tax.
IRC 55(b)(1)(A)This subparagraph sets rules for noncorporate taxpayers.
IRC 55(b)(1)(A)(i)For such taxpayers, the tentative minimum tax for TY is sum of—
IRC 55(b)(1)(A)(i)(I)26% of taxable excess within $175000, plus
IRC 55(b)(1)(A)(i)(II)28% of taxable excess over $175000; reduced by AMT foreign tax credit.
IRC 55(b)(1)(A)(ii)"Taxable excess" is excess of alternative minimum income over exemption amount.
IRC 55(b)(1)(A)(iii)For MFS individuals, substitute 50% of amounts under (I) and (II) of (i).
IRC 55(b)(1)(B)For corporations, the tentative minimum tax for the taxable year is—
IRC 55(b)(1)(B)(i)20% of alternative minimum taxable income exceeding exemption amount, reduced by
IRC 55(b)(1)(B)(ii)the alternative minimum foreign tax credit for the taxable year.
IRC 55(b)(2)"Alternative minimum taxable income" is taxpayer's taxable income for the TY—
IRC 55(b)(2)(A)determined with adjustments by §56 and §58, and
IRC 55(b)(2)(B)increased by the amount of tax preference items in §57.
IRC 55(b)(3)Amount determined by (1)(A)(i) is limited to the sum of—
IRC 55(b)(3)(A)such amount as if (3) weren't enacted on taxable excess reduced by—
IRC 55(b)(3)(A)(i)the net capital gain; or, if lesser
IRC 55(b)(3)(A)(ii)the sum of—
IRC 55(b)(3)(A)(ii)(I)the adjusted net capital gain, plus
IRC 55(b)(3)(A)(ii)(II)the unrecaptured §1250 gain, plus
IRC 55(b)(3)(B)0% of adjusted net capital gain limited to excess by §1(h)(1)(B), plus
IRC 55(b)(3)(C)15% of the lesser of—
IRC 55(b)(3)(C)(i)adjusted net capital gain (or taxable excess) exceeding amount by (B), or
IRC 55(b)(3)(C)(ii)the excess described in §1(h)(1)(C)(ii), plus
IRC 55(b)(3)(D)20% of capital gain (or taxable excess) exceeding total of (B) & (C) amounts, &
IRC 55(b)(3)(E)25% of taxable income exceeding the sum of amounts in (A) - (C).
IRC 55(c)This subsection sets rules for regular tax.
IRC 55(c)(1)Such tax is regular tax liability (§26(b)) less foreign credits, &c.
IRC 55(c)(2)Only for §55, §1301 does not apply in computing regular tax liability.
IRC 55(c)(3)See §30C(d)(2) and §38(c) for disallowance of certain credits against tax.
IRC 55(d)This subsection sets the exemption amount.
IRC 55(d)(1)For noncorporation taxpayers, such amount is—
IRC 55(d)(1)(A)$78750 for—
IRC 55(d)(1)(A)(i)a joint return, or
IRC 55(d)(1)(A)(ii)a surviving spouse,
IRC 55(d)(1)(B)$50600 in the case of an individual who—
IRC 55(d)(1)(B)(i)is not a married individual (as by §7703), and
IRC 55(d)(1)(B)(ii)is not a surviving spouse (as by §2(a)),
IRC 55(d)(1)(C)50% of applicable amount by (A) for a married person filing separately, and
IRC 55(d)(1)(D)$22500 in the case of an estate or trust.
IRC 55(d)(2)For corporations, exemption amount is $40000.
IRC 55(d)(3)Exemption is reduced by 25% of amount which alternative taxable income exceeds—
IRC 55(d)(3)(A)$150000 for a taxpayer by (1)(A),
IRC 55(d)(3)(B)$112500 for a taxpayer by (1)(B),
IRC 55(d)(3)(C)50% of amount under (A) in the case of a taxpayer by (C) or (D) of (1), and
IRC 55(d)(3)(D)$150000 for a taxpayer by (2).
IRC 55(d)(4)This paragraph sets an adjustment for inflation.
IRC 55(d)(4)(A)For TYs after 1998, amounts by (B) are increased by product of—
IRC 55(d)(4)(A)(i)such dollar amounts, and
IRC 55(d)(4)(A)(ii)the cost-of-living adjustment by §1(f)(3); swap "2011" for "1992" in such (B).
IRC 55(d)(4)(B)The amounts described in this subparagraph are each amount contained in—
IRC 55(d)(4)(B)(i)(b)(1)(A)(i),
IRC 55(d)(4)(B)(ii)(1), and
IRC 55(d)(4)(B)(iii)(A) and (B) of (3).
IRC 55(d)(4)(C)Increase figured under (A) is rounded to nearest multiple of $100.
IRC 55(e)This subsection sets an exemption for small corporations.
IRC 55(e)(1)This paragraph sets the general rule.
IRC 55(e)(1)(A)Tentative tax is 0 if average annual receipts for 3 prior TYs is within $7½M.
IRC 55(e)(1)(B)Apply (A) by reducing such dollar amount to $5M for 1st 3 TY period.
IRC 55(e)(1)(C)If TY is first TY that such corporation exists, tentative minimum tax is 0.
IRC 55(e)(1)(D)For (1), rules by (2) and (3) of §448(c) apply.
IRC 55(e)(2)If corporation's tentative minimum tax is 0 by (1), use these modifications:
IRC 55(e)(2)(A)(1) & (5) of §56(a) only apply to property placed in service after change date.
IRC 55(e)(2)(B)§56(a)(2) only apply to costs paid or incurred on or after the change date.
IRC 55(e)(2)(C)§56(a)(3) only apply to contracts entered into on or after the change date.
IRC 55(e)(2)(D)For §56(a)(4), swap change date & day before it for "19870101" & "19861231".
IRC 55(e)(2)(E)§56(g)(2)(B) applies to prior TYs beginning on or after the change date.
IRC 55(e)(2)(F)§56(g)(4)(A) does not apply.
IRC 55(e)(2)(G)For (D) and (F) of §56(g)(4), swap change date for "19891231" therein.
IRC 55(e)(3)Modifications of (2) do not apply to—
IRC 55(e)(3)(A)items acquired by the corporation in a transaction under §381, and
IRC 55(e)(3)(B)the basis of property determined by reference, if transferor was subject to (2).
IRC 55(e)(4)For (2), the "change date" is 1st day of TY which (1) no longer applies.
IRC 55(e)(5)If (e)(2) applies, reduce §53(c)(1) by 25% of such amount exceeding $25K.
 
IRC 56This section sets adjustments in computing alternative minimum taxable income.
IRC 56(a)For determination of such income for any TY, the following treatment applies:
IRC 56(a)(1)This paragraph sets rules for depreciation.
IRC 56(a)(1)(A)This subparagraph sets the general rule.
IRC 56(a)(1)(A)(i)For property in service after 19861231, deduction by §167 is given by §168(g).
IRC 56(a)(1)(A)(ii)Otherwise (except for §1250 property), the method of depreciation used—
IRC 56(a)(1)(A)(ii)(I)is the 150% declining balance method,
IRC 56(a)(1)(A)(ii)(II)switches to straight line method for 1st TY which yields higher allowance.
IRC 56(a)(1)(B)(1) doesn't apply to property by (1) - (4) of §168(f) or §168(e)(3)(C)(iv).
IRC 56(a)(1)(C)This subparagraph sets coordination with transitional rules.
IRC 56(a)(1)(C)(i)(1) doesn't apply to certain property placed in service after 19861231.
IRC 56(a)(1)(C)(ii)Apply (1) to property subject to election by §201(a)(1)(B) of PL 99-514.
IRC 56(a)(1)(D)For public utility properties (§168(i)(10)), Sec. sets normalization method.
IRC 56(a)(2)This paragraph sets rules for mining exploration and development costs.
IRC 56(a)(2)(A)Deduction by §616(a) or §617(a) is ratably capitalized over 10-year period.
IRC 56(a)(2)(B)If loss is incurred for property of (A), deduction is given which is lesser of—
IRC 56(a)(2)(B)(i)amount by §165(a) for expenditures if they had remained capitalized, or
IRC 56(a)(2)(B)(ii)amount of such expenditures not previously amortized by (A).
IRC 56(a)(3)Income from long-term contracts is from percentage of completion (see §460(b)).
IRC 56(a)(4)Alternative tax NOL deduction is allowed in lieu of §172 NOL deduction.
IRC 56(a)(5)For pollution control facilities, deduction by §169 is set by §168(g).
IRC 56(a)(6)Adjusted basis of property by (1) or (5) is figured by (1), (2), (5), or (b)(2).
IRC 56(a)(7)§87 does not apply.
IRC 56(b)For determination of an individual's AMT income, the following applies:
IRC 56(b)(1)This paragraph sets the limitation on deductions.
IRC 56(b)(1)(A)No deduction is allowed—
IRC 56(b)(1)(A)(i)for any miscellaneous itemized deduction (as defined by §67(b)), or
IRC 56(b)(1)(A)(ii)for taxes by (1) - (3) of §164(a) or §164(b)(5)(A)(ii) if excluded from income.
IRC 56(b)(1)(B)In determining §213 deduction, disregard such (f).
IRC 56(b)(1)(C)In figuring deduction for interest, apply (d) and (h) of §163, except—
IRC 56(b)(1)(C)(i)in lieu of §163(h)(2)(D), "personal interest" doesn't include housing interest,
IRC 56(b)(1)(C)(ii)(d)(6) and (h)(5) of §163 does not apply,
IRC 56(b)(1)(C)(iii)to apply §163(d), interest on private activity bond is includible in income,
IRC 56(b)(1)(C)(iv)in lieu of §163(d)(3)(B)(i), "investment interest" is not housing interest, and
IRC 56(b)(1)(C)(v)adjustments under §§56 - 58 apply in determining income by §163(d).
IRC 56(b)(1)(D)No recovery of any tax under (A)(ii) is included in gross income.
IRC 56(b)(1)(E)Deductions by §§63(c) (except such (1)(D) or (1)(E)), 151, & 642(b) are ignored.
IRC 56(b)(1)(F)§68 does not apply.
IRC 56(b)(2)Rule for circulation, research, and experimental expenditures.
IRC 56(b)(2)(A)Deductions by §173 and §174(a) to figure tax on paid amounts are capitalized &—
IRC 56(b)(2)(A)(i)for circulation expenditures (§173), are amortized over a 3-year period, or
IRC 56(b)(2)(A)(ii)for research expenditures (§174(a)), are amortized over a 10-year period.
IRC 56(b)(2)(B)If loss is incurred for property of (A), deduction is given which is lesser of—
IRC 56(b)(2)(B)(i)amount by §165(a) for expenditures if they had remain capitalized, or
IRC 56(b)(2)(B)(ii)amount of expenditures not previously amortized by (A).
IRC 56(b)(2)(C)For costs of §173, adjustments also apply to a personal holding company (§542).
IRC 56(b)(2)(D)If §469(h) applies to taxpayer, (2) does not apply to §174(a) deduction.
IRC 56(b)(3)§421 doesn't apply to transfer of stock acquired by an exercised option (§422).
IRC 56(c)For determination of AMT income of a corporation, the following applies:
IRC 56(c)(1)Alternative minimum taxable income is adjusted as provided by (g).
IRC 56(c)(2)For capital construction fund established by chapter 533 of 46 USC—
IRC 56(c)(2)(A)(A) - (C) of §7518(c)(1) (and related provisions of §607) do not apply to—
IRC 56(c)(2)(A)(i)any amount deposited in such fund after 19861231, or
IRC 56(c)(2)(A)(ii)any earnings after 19861231, on amounts in such fund, and
IRC 56(c)(2)(B)no basis reduction is made by §7518(f) for withdrawals to which (A) applies.
IRC 56(c)(3)Deduction determined under §833(b) is not allowed.
IRC 56(d)This subsection defines the "alternative tax net operating loss deduction".
IRC 56(d)(1)For (a)(4), such deduction is NOL deduction for the TY under §172, except—
IRC 56(d)(1)(A)the amount of such deduction is limited by the sum of—
IRC 56(d)(1)(A)(i)the lesser of—
IRC 56(d)(1)(A)(i)(I)deduction amount attributable to net operating losses (except by (ii)(I)), or
IRC 56(d)(1)(A)(i)(II)90% of AMT income, without regard to such deduction and deduction by §199, plus
IRC 56(d)(1)(A)(ii)the lesser of—
IRC 56(d)(1)(A)(ii)(I)amount of such deduction regarding NOL subject to election by §172(b)(1)(H), or
IRC 56(d)(1)(A)(ii)(II)AMT income, without regard to such deduction and deduction by §199, less (i), &
IRC 56(d)(1)(B)in determining the amount of such deduction—
IRC 56(d)(1)(B)(i)net operating loss (§172(c)) for any loss year is adjusted as by (2), and
IRC 56(d)(1)(B)(ii)appropriate adjustments in applying §172(b)(2) are made to account for (A).
IRC 56(d)(2)This paragraph sets adjustments to net operating loss computation.
IRC 56(d)(2)(A)For loss years starting after 19861231, net operating loss by §172(c) is—
IRC 56(d)(2)(A)(i)determined with adjustments provided in §56 and §58, and
IRC 56(d)(2)(A)(ii)reduced by items of tax preference by §57 which increase §172(c) net loss.
IRC 56(d)(2)(B)For loss years before 19870101, carryover for (2) is from 1st TY after 19861231.
IRC 56(e)This subsection defines "qualified housing interest".
IRC 56(e)(1)Such interest is by §163(h)(3) and is paid on debt incurred for property which—
IRC 56(e)(1)(A)is the principal residence (§121) of the taxpayer when interest accrues, or
IRC 56(e)(1)(B)is a qualified dwelling which is a qualified residence (§163(h)(4)).
IRC 56(e)(2)A "qualified dwelling" is any structure or property related to any—
IRC 56(e)(2)(A)house,
IRC 56(e)(2)(B)apartment,
IRC 56(e)(2)(C)condominium, or
IRC 56(e)(2)(D)mobile home not used on a transient basis (as under §7701(a)(19)(C)(v)).
IRC 56(e)(3)"Qualified housing interest" includes interest by §163(h)(3) for debt which—
IRC 56(e)(3)(A)was incurred by the taxpayer before 19820701, and
IRC 56(e)(3)(B)is secured by property which, at time indebtedness was incurred, was—
IRC 56(e)(3)(B)(i)the principal residence (§121) of the taxpayer, or
IRC 56(e)(3)(B)(ii)a qualified dwelling used by the taxpayer or any family member (§267(c)(4)).
IRC 56(f)Repealed.
IRC 56(g)This subsection sets adjustments based on adjusted current earnings.
IRC 56(g)(1)Alternative minimum income for corporations is increased by 75% of excess of—
IRC 56(g)(1)(A)adjusted current earnings of the corporation, over
IRC 56(g)(1)(B)alternative minimum taxable income (without accounting (g) and (d)).
IRC 56(g)(2)This paragraph sets the allowance of negative adjustments.
IRC 56(g)(2)(A)AMT income for corporations is decreased by 75% of excess of—
IRC 56(g)(2)(A)(i)amount referred to in (1)(B), over
IRC 56(g)(2)(A)(ii)amount referred to in (1)(A).
IRC 56(g)(2)(B)The reduction under (A) for any TY is limited by any excess of—
IRC 56(g)(2)(B)(i)aggregate increases in AMT income under (1) for prior TYs, over
IRC 56(g)(2)(B)(ii)aggregate reductions by (2)(A) for prior TYs.
IRC 56(g)(3)"Adjusted current earnings" is alternative minimum taxable income for the TY—
IRC 56(g)(3)(A)determined with adjustments by (4), and
IRC 56(g)(3)(B)determined without regard to (g) and (d).
IRC 56(g)(4)For determining adjusted current earnings, the following adjustments apply:
IRC 56(g)(4)(A)This subparagraph sets rules for depreciation.
IRC 56(g)(4)(A)(i)§168(g) applies to property placed in service between 19891231 and 19931231.
IRC 56(g)(4)(A)(ii)For property to which amendments of §201 of PL 99-514 applies—
IRC 56(g)(4)(A)(ii)(I)account for adjusted basis of such property as of end of TY before 19900101, and
IRC 56(g)(4)(A)(ii)(II)use the SL method over remaining recovery period applicable under §168(g).
IRC 56(g)(4)(A)(iii)For property to which §168 applies and in service in TY starting before 1990—
IRC 56(g)(4)(A)(iii)(I)account for adjusted basis of such property as of end of TY before 19900101, and
IRC 56(g)(4)(A)(iii)(II)use the SL method over remaining recovery period applicable under §168(g).
IRC 56(g)(4)(A)(iv)For property not by (i) - (iii), figure depreciation as for taxable income.
IRC 56(g)(4)(A)(v)For property by (1) - (4) of §168(f), depreciation is that under §168(g).
IRC 56(g)(4)(B)Inclusion of items intended for purposes of computing earnings and profits.
IRC 56(g)(4)(B)(i)For amounts excluded from AMT income but accounted for earnings—
IRC 56(g)(4)(B)(i)(I)include such amounts as if they were includible in gross income, and
IRC 56(g)(4)(B)(i)(II)reduce such income by deductions which would have been given. Exceptions apply.
IRC 56(g)(4)(B)(ii)In the case of any life insurance contract—
IRC 56(g)(4)(B)(ii)(I)income on such contract (§7702(g)) is considered includible in gross income, and
IRC 56(g)(4)(B)(ii)(II)a deduction for premiums attributable to insurance coverage is allowed.
IRC 56(g)(4)(B)(iii)(i) doesn't apply to interest on a bond subject to §57(a)(5)(C)(iii).
IRC 56(g)(4)(B)(iv)This clause sets rules for tax exempt interest on bonds issued in 2009 and 2010.
IRC 56(g)(4)(B)(iv)(I)(i) doesn't apply to interest on any bond issued between 20081231 and 20110101.
IRC 56(g)(4)(B)(iv)(II)For (I), a refunding bond is issued when the refunded bond was issued.
IRC 56(g)(4)(B)(iv)(III)Don't apply (II) to refunding bonds of bonds issued between 20031231 & 20090101.
IRC 56(g)(4)(C)Disallowance of items not deductible in computing earnings and profits.
IRC 56(g)(4)(C)(i)No deduction is allowed for items not deductible in figuring earnings & profits.
IRC 56(g)(4)(C)(ii)This clause sets a special rule for certain dividends.
IRC 56(g)(4)(C)(ii)(I)Ignore (i) for deductions by 100% dividends issued from certain corporations.
IRC 56(g)(4)(C)(ii)(II)"100% dividends" are those which are given a full deduction by §§243 or 245.
IRC 56(g)(4)(C)(iii)This clause sets treatment of taxes on dividends from §936 corporations.
IRC 56(g)(4)(C)(iii)(I)75% of tax paid to US possession for such dividends is paid by such corporation.
IRC 56(g)(4)(C)(iii)(II)Such paid amount is adjusted and limited if it exceeds the excess by (1).
IRC 56(g)(4)(C)(iii)(III)Foreign taxes paid on dividends are considered withholding to extent by §902.
IRC 56(g)(4)(C)(iii)(IV)Apply §904(d) as if such dividends were separate income category by §904(d)(1).
IRC 56(g)(4)(C)(iii)(V)Such dividends are treated as portion disallowed by (i) after applying (ii)(I).
IRC 56(g)(4)(C)(iii)(VI)Any reference in (iii) to §936 includes reference to §30A.
IRC 56(g)(4)(C)(iv)For cooperatives by §§1381 - 1383, (i) does not apply to deductions by §245(c).
IRC 56(g)(4)(C)(v)(i) does not apply to deductions by §199 for domestic production.
IRC 56(g)(4)(C)(vi)(i) does not apply to deductions by §965 for controlled foreign corporations.
IRC 56(g)(4)(D)This subparagraph sets rules for certain other earnings and profits adjustments.
IRC 56(g)(4)(D)(i)Adjustments by §312(n)(2)(A) apply to amounts paid after 19891231.
IRC 56(g)(4)(D)(ii)§§173 and 248 do not apply to amounts paid in TYs starting after 19891231.
IRC 56(g)(4)(D)(iii)Apply §312(n)(4) for TYs starting after 19891231.
IRC 56(g)(4)(D)(iv)For certain installment sales, income is as if installment method was not used.
IRC 56(g)(4)(E)Account no loss for exchange of substantially similar pool of debt obligations.
IRC 56(g)(4)(F)This subparagraph sets rules for depletion.
IRC 56(g)(4)(F)(i)Allowance for depletion of property in service after 19891231 is by §611.
IRC 56(g)(4)(F)(ii)For TYs starting after 19921231, (i) and (C)(i) do not apply to §613A(c).
IRC 56(g)(4)(G)Adjusted basis of each asset is proportionate share of asset's FMV if—
IRC 56(g)(4)(G)(i)there is an ownership change (§382) in TYs after 1989 for a corporation, and
IRC 56(g)(4)(G)(ii)there is a net unrealized built-in loss (§382(h)) for such corporation.
IRC 56(g)(4)(H)Adjust the basis of applicable property as under the provisions of (4).
IRC 56(g)(4)(I)Disregard charitable contributions in applying (g) (despite (B) & (C)).
IRC 56(g)(5)This paragraph sets other definitions for purposes of (4).
IRC 56(g)(5)(A)"Earnings and profits" are those computed for purposes of §§301 - 395.
IRC 56(g)(5)(B)Treatment of items for computing AMT income is made without regard to (g).
IRC 56(g)(6)(g) does not apply to any S-Corp, regulated investment company, REIT, or REMIC.
 
IRC 57This section discusses items of tax preference.
IRC 57(a)The following items are items of tax preference for purposes of part VI:
IRC 57(a)(1)The excess of deduction for depletion by §611 over adjusted basis of property.
IRC 57(a)(2)Rules for intangible drilling costs for oil, gas, and geothermal properties.
IRC 57(a)(2)(A)Such item is costs by (B) which exceed 65% of income by (C).
IRC 57(a)(2)(B)For (A), the excess intangible drilling costs for the TY is the excess of—
IRC 57(a)(2)(B)(i)intangible costs paid for such property allowable by §§263(c) or 291(b), over
IRC 57(a)(2)(B)(ii)amount allowed if costs were capitalized and straight line recovery was used.
IRC 57(a)(2)(C)For (A), net income amount from such properties is excess of—
IRC 57(a)(2)(C)(i)aggregate amount of gross income by §613(a) from such properties, over
IRC 57(a)(2)(C)(ii)sum of deductions allowed to such properties, reduced by excess of (B).
IRC 57(a)(2)(D)(2) is applied separately with respect to—
IRC 57(a)(2)(D)(i)all oil and gas properties not described by (ii), and
IRC 57(a)(2)(D)(ii)all properties which are geothermal deposits (as under §613(e)(2)).
IRC 57(a)(2)(E)For any oil or gas well:
IRC 57(a)(2)(E)(i)(2) doesn't apply to taxpayers who aren't integrated oil companies (§291(b)(4)).
IRC 57(a)(2)(E)(ii)If (i) applies, reduction of alternative minimum income is limited to 40%.
IRC 57(a)(3)Repealed.
IRC 57(a)(4)Repealed.
IRC 57(a)(5)This paragraph sets rules for tax-exempt interest.
IRC 57(a)(5)(A)Private activity bond interest, less any deductions as if included in income.
IRC 57(a)(5)(B)Exempt-interest dividend (§852(b)(5)(A)) interest is considered same as (A).
IRC 57(a)(5)(C)This subparagraph sets rules for specified private activity bonds.
IRC 57(a)(5)(C)(i)Such bonds are defined by §141, issued after 19860807, and subject to §103.
IRC 57(a)(5)(C)(ii)For (i), qualified 501(c)(3) bonds (as under §145) are excluded.
IRC 57(a)(5)(C)(iii)For (i), such a bond doesn't include bonds issued after 20080630 if it is—
IRC 57(a)(5)(C)(iii)(I)an exempt facility bond where 95% of proceeds provide for projects by §142(d),
IRC 57(a)(5)(C)(iii)(II)a qualified mortgage bond (as by §143(a)), or
IRC 57(a)(5)(C)(iii)(III)a qualified veterans' mortgage bond (as by §143(b)).
IRC 57(a)(5)(C)(iv)For (i), refunding bonds issued before 19860808 are excluded.
IRC 57(a)(5)(C)(v)Bonds issued before 19860901 are issued before 19860808, unless §141 is met—
IRC 57(a)(5)(C)(v)(I)if "25%" were substituted for "10%" for each instance in (1) and (2) of §141(b),
IRC 57(a)(5)(C)(v)(II)if (3) - (5) of §141(b) did not apply, and
IRC 57(a)(5)(C)(v)(III)if §141(c)(1)(B) did not apply.
IRC 57(a)(5)(C)(vi)This clause sets an exception for bonds issued in 2009 and 2010.
IRC 57(a)(5)(C)(vi)(I)For (i), any bond issued between 20081231 and 20110101 are excluded.
IRC 57(a)(5)(C)(vi)(II)For (I), a refunding bond is issued when the refunded bond was issued.
IRC 57(a)(5)(C)(vi)(III)Don't apply (II