Internal Revenue Code:Sec. 38. General business credit

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Contents


Location in Internal Revenue Code


     TITLE 26 - INTERNAL REVENUE CODE
      Subtitle A - Income Taxes
       CHAPTER 1 - NORMAL TAXES AND SURTAXES
        Subchapter A - Determination of Tax Liability
         PART IV - CREDITS AGAINST TAX
          Subpart D - Business Related Credits
        

Statute

    Sec. 38. General business credit
 
    (a) Allowance of credit
      There shall be allowed as a credit against the tax imposed by
    this chapter for the taxable year an amount equal to the sum of -
        (1) the business credit carryforwards carried to such taxable
      year,
        (2) the amount of the current year business credit, plus
        (3) the business credit carrybacks carried to such taxable
      year.
    (b) Current year business credit                
      For purposes of this subpart, the amount of the current year
    business credit is the sum of the following credits determined for
    the taxable year:
        (1) the investment credit determined under section 46,
        (2) the work opportunity credit determined under section 51(a),
        (3) the alcohol fuels credit determined under section 40(a),
        (4) the research credit determined under section 41(a),
        (5) the low-income housing credit determined under section 42(a),
        (6) the enhanced oil recovery credit under section 43(a),
        (7) in the case of an eligible small business (as defined in
          section 44(b)), the disabled access credit determined under
          section 44(a),
        (8) the renewable electricity production credit under section 45(a),
        (9) the empowerment zone employment credit determined under
          section 1396(a),
        (10) the Indian employment credit as determined under section 45A(a),
        (11) the employer social security credit determined under
          section 45B(a),
        (12) the orphan drug credit determined under section 45C(a),
        (13) the new markets tax credit determined under section 45D(a),
        (14) in the case of an eligible employer (as defined in section 45E(c)),
          the small employer pension plan startup cost credit
          determined under section 45E(a),
        (15) the employer-provided child care credit determined under
          section 45F(a), 
        (16) the railroad track maintenance credit determined 
          under section 45G(a), 
        (17) the biodiesel fuels credit determined under section 40A(a),
        (18) the low sulfur diesel fuel production credit determined under
          section 45H(a),
        (19) the marginal oil and gas well production credit 
          determined under section 45I(a),
        (20) the distilled spirits credit determined under section 5011(a), 
        (21) the advanced nuclear power facility production credit
          determined under section 45J(a), 
        (22)the nonconventional source production credit determined under
           section 45K(a).
        (23) the new energy efficient home credit determined under section 45L(a), 
        (24) the energy efficient appliance credit determined under section 45M(a), 
        (25) the portion of the alternative motor vehicle credit
         to which section 30B(g)(1) applies,
        (26) the portion of the alternative fuel vehicle refueling
         property credit to which section 30C(d)(1) applies,
        (27) the Hurricane Katrina housing credit determined under 
        section 1400P(b),
        (28) the Hurricane Katrina employee retention credit 
        determined under section 1400R(a),
        (29) the Hurricane Rita employee retention credit 
        determined under section 1400R(b),
        (30) the Hurricane Wilma employee retention credit 
        determined under section 1400R(c), plus
        (31) the mine rescue team training credit determined under 
        section 45N(a).
    (c) Limitation based on amount of tax
      (1) In general
        The credit allowed under subsection (a) for any taxable year
      shall not exceed the excess (if any) of the taxpayer's net income
      tax over the greater of -
          (A) the tentative minimum tax for the taxable year, or
          (B) 25 percent of so much of the taxpayer's net regular tax
        liability as exceeds $25,000.
      For purposes of the preceding sentence, the term ''net income
      tax'' means the sum of the regular tax liability and the tax
      imposed by section 55, reduced by the credits allowable under
      subparts A and B of this part, and the term ''net regular tax
      liability'' means the regular tax liability reduced by the sum of
      the credits allowable under subparts A and B of this part.
      (2) Empowerment zone employment credit may offset 25 percent of
          minimum tax
        (A) In general
          In the case of the empowerment zone employment credit credit
        -
            (i) this section and section 39 shall be applied separately
          with respect to such credit, and
            (ii) for purposes of applying paragraph (1) to such credit
          -
              (I) 75 percent of the tentative minimum tax shall be
            substituted for the tentative minimum tax under
            subparagraph (A) thereof, and
              (II) the limitation under paragraph (1) (as modified by
            subclause (I)) shall be reduced by the credit allowed under
            subsection (a) for the taxable year (other than the
            empowerment zone employment credit, the New York Liberty 
            Zone business employee credit, and the specified credits).
        (B) Empowerment zone employment credit
          For purposes of this paragraph, the term ''empowerment zone
        employment credit'' means the portion of the credit under
        subsection (a) which is attributable to the credit determined
        under section 1396 (relating to empowerment zone employment
        credit).
      (3) Special rules for new york liberty zone business 
         employee credit.--
        (A) In general.--In the case of the New York 
            Liberty Zone business employee credit--
            (i) <<NOTE: Applicability.>>  this section 
                and section 39 shall be applied separately with 
                respect to such credit, and
            (ii) in applying paragraph (1) to such credit--
              (I) the tentative minimum tax 
                  shall be treated as being zero, and
              (II) the limitation under 
                   paragraph (1) (as modified by subclause 
                   (I)) shall be reduced by the credit 
                   allowed under subsection (a) for the 
                   taxable year (other than the New York 
                   Liberty Zone business employee credit and the  
                   specified credits).
        (B) New york liberty zone business employee 
            credit.--For purposes of this subsection, the term `New 
            York Liberty Zone business employee credit' means the 
            portion of work opportunity credit under section 51 
            determined under section 1400L(a).
      (4) Special rules for specified credits.--
        (A) In general.--In the case of specified 
                credits--
             (i) this section and section 39 shall be 
                      applied separately with respect to such credits, 
                      and
            (ii) in applying paragraph (1) to such 
                      credits--
                   (I) the tentative minimum tax 
                                shall be treated as being zero, and
                  (II) the limitation under 
                                paragraph (1) (as modified by subclause 
                                (I)) shall be reduced by
                                credit allowed under subsection (a) for 
                                the taxable year (other than the 
                                specified credits).
        (B) Specified credits.--For purposes of this 
                subsection, the term `specified credits' means--
             (i) for taxable years beginning after 
                      December 31, 2004, the credit determined under 
                      section 40,
            (ii) the credit determined under section 45 
                      to the extent that such credit is attributable to 
                      electricity or refined coal produced--
                   (I) at a facility which is 
                                originally placed in service after the 
                                date of the enactment of this paragraph, 
                                and
                  (II) during the 4-year period 
                                beginning on the date that such facility 
                                was originally placed in service.,
           (iii) the credit determined under section 
                      45B, and
            (iv) the credit determined under section 
                      51.
      (5) Special rules
        (A) Married individuals
          In the case of a husband or wife who files a separate return,
        the amount specified under subparagraph (B) of paragraph (1)
        shall be $12,500 in lieu of $25,000. This subparagraph shall
        not apply if the spouse of the taxpayer has no business credit
        carryforward or carryback to, and has no current year business
        credit for, the taxable year of such spouse which ends within
        or with the taxpayer's taxable year.
        (B) Controlled groups
          In the case of a controlled group, the $25,000 amount
        specified under subparagraph (B) of paragraph (1) shall be
        reduced for each component member of such group by apportioning
        $25,000 among the component members of such group in such
        manner as the Secretary shall by regulations prescribe.  For
        purposes of the preceding sentence, the term ''controlled
        group'' has the meaning given to such term by section 1563(a).
        (C) Limitations with respect to certain persons
          In the case of a person described in subparagraph (A) or (B)
        of section 46(e)(1) (as in effect on the day before the date of
        the enactment of the Revenue Reconciliation Act of 1990), the
        $25,000 amount specified under subparagraph (B) of paragraph
        (1) shall equal such person's ratable share (as determined
        under section 46(e)(2) (as so in effect) of such amount.
        (D) Estates and trusts
          In the case of an estate or trust, the $25,000 amount
        specified under subparagraph (B) of paragraph (1) shall be
        reduced to an amount which bears the same ratio to $25,000 as
        the portion of the income of the estate or trust which is not
        allocated to beneficiaries bears to the total income of the
        estate or trust.
    (d) Ordering rules
      For purposes of any provision of this title where it is necessary
    to ascertain the extent to which the credits determined under any
    section referred to in subsection (b) are used in a taxable year or
    as a carryback or carryforward -
      (1) In general
        The order in which such credits are used shall be determined on
      the basis of the order in which they are listed in subsection (b)
      as of the close of the taxable year in which the credit is used.
      (2) Components of investment credit
        The order in which the credits listed in section 46 are used
      shall be determined on the basis of the order in which such
      credits are listed in section 46 as of the close of the taxable
      year in which the credit is used.
      (3) Credits no longer listed
        For purposes of this subsection -
          (A) the credit allowable by section 40, as in effect on the
        day before the date of the enactment of the Tax Reform Act of
        1984, (relating to expenses of work incentive programs) and the
        credit allowable by section 41(a), as in effect on the day
        before the date of the enactment of the Tax Reform Act of 1986,
        (relating to employee stock ownership credit) shall be treated
        as referred to in that order after the last paragraph of
        subsection (b), and
          (B) the credit determined under section 46 -
            (i) to the extent attributable to the employee plan
          percentage (as defined in section 46(a)(2)(E) as in effect on
          the day before the date of the enactment of the Tax Reform
          Act of 1984) shall be treated as a credit listed after
          paragraph (1) of section 46, and
            (ii) to the extent attributable to the regular percentage
          (as defined in section 46(b)(1) as in effect on the day
          before the date of the enactment of the Revenue
          Reconciliation Act of 1990) shall be treated as the first
          credit listed in section 46.
 

Sources

    (Added and amended Pub. L. 98-369, div.  A, title IV, Sec. 473,
    title VI, Sec. 612(e)(1), July 18, 1984, 98 Stat. 827, 912; Pub. L.
    99-514, title II, Sec. 221(a), 231(d)(1), (3)(B), 252(b), title
    VII, Sec. 701(c)(4), title XI, Sec. 1171(b)(1), (2), Oct. 22, 1986,
    100 Stat. 2173, 2178, 2179, 2205, 2341, 2513; Pub. L. 100-647,
    title I, Sec. 1002(e)(8)(A), 1007(g)(2), (8), Nov. 10, 1988, 102
    Stat. 3368, 3434, 3435; Pub. L. 101-508, title XI, Sec.
    11511(b)(1), 11611(b)(1), 11813(b)(2), Nov. 5, 1990, 104 Stat.
    1388-485, 1388-503, 1388-551; Pub. L. 102-486, title XIX, Sec.
    1914(b), Oct. 24, 1992, 106 Stat. 3023; Pub. L. 103-66, title XIII,
    Sec. 13302(a)(1), (c)(1), 13322(a), 13443(b)(1), Aug. 10, 1993, 107
    Stat. 555, 559, 569; Pub. L. 104-188, title I, Sec. 1201(e)(1),
    1205(a)(2), 1702(e)(4), Aug. 20, 1996, 110 Stat. 1772, 1775, 1870;
    Pub. L. 106-554, Sec. 1(a)(7) (title I, Sec. 121(b)(1)), Dec. 21,
    2000, 114 Stat. 2763, 2763A-609; Pub. L. 107-16, title II, Sec.
    205(b)(1), title VI, Sec. 619(b), June 7, 2001, 115 Stat. 53, 110.)
 

Amendment of Section

                            AMENDMENT OF SECTION
        For termination of amendment by section 901 of Pub. L. 107-16,
      see Effective and Termination Dates of 2001 Amendment note below.
 

References in Text

                             REFERENCES IN TEXT
      For reference to section 51 of this title, referred to in subsec.
    (b), treated as including reference to section 51A of this title,
    see section 51A(d)(2) of this title.
      The date of the enactment of the Revenue Reconciliation Act of
    1990, referred to in subsecs. (c)(3)(C) and (d)(3)(B)(ii), is the
    date of enactment of Pub. L. 101-508, which was approved Nov. 5,
    1990.
      The date of the enactment of the Tax Reform Act of 1984, referred
    to in subsec. (d)(3)(A), (B)(i), is the date of enactment of Pub.
    L. 98-369, which was approved July 18, 1984.
      The date of the enactment of the Tax Reform Act of 1986, referred
    to in subsec. (d)(3)(A), is the date of enactment of Pub. L.
    99-514, which was approved Oct. 22, 1986.
 

Miscellaneous

                              PRIOR PROVISIONS
      A prior section 38, added Pub. L. 87-834, Sec. 2(a), Oct. 16,
    1962, 76 Stat. 962; amended Pub. L. 94-455, title XIX, Sec.
    1906(b)(13)(A), Oct. 4, 1976, 90 Stat. 1834, related to investment
    in certain depreciable property, prior to repeal by Pub. L. 98-369,
    div.  A, title IV, Sec. 474(m)(1), July 18, 1984, 98 Stat. 833.
      Another prior section 38 was renumbered section 35 of this title.

                                 AMENDMENTS

2007 - PL 110-28
SEC. 8214. WAIVER OF INDIVIDUAL AND CORPORATE ALTERNATIVE MINIMUM TAX 
            LIMITS ON WORK OPPORTUNITY CREDIT AND CREDIT FOR TAXES PAID 
            WITH RESPECT TO EMPLOYEE CASH TIPS.
    (a) Allowance Against Alternative Minimum Tax.--Subparagraph (B) of 
section 38(c)(4) is amended by striking ``and'' at the end of clause 
(i), by inserting a comma at the end of clause (ii), and by adding at 
the end the following new clauses:
                          ``(iii) the credit determined under section 
                      45B, and
                          ``(iv) the credit determined under section 
                      51.''.

2006 - Tax Relief and Health Care Act of 2006 (P.L. 109-432)
Section 405(b) Credit Made Part of General Business Credit.--Section 38(b) is 
amended by striking ``and'' at the end of paragraph (29), by striking 
the period at the end of paragraph (30) and inserting ``, plus'', and by 
adding at the end the following new paragraph:
            ``(31) the mine rescue team training credit determined under 
        section 45N(a).''.

2005 - P.L. 109-135, Section 412
(f)(1) Subclause (II) of section 38(c)(2)(A)(ii) is <<NOTE: 26 USC 
       38.>> amended by striking ``or the New York Liberty Zone business 
       employee credit or the specified credits'' and inserting ``, the New 
       York Liberty Zone business employee credit, and the specified credits''.
   (2) Subclause (II) of section 38(c)(3)(A)(ii) is amended by striking 
       ``or the specified credits'' and inserting ``and the specified 
       credits''.
   (3) Subparagraph (B) of section 38(c)(4) is amended--
            (A) by striking ``includes'' and inserting ``means'', and
            (B) by inserting ``and'' at the end of clause (i).
    
    2005 - P.L. 109-135: 
            (1) Subsection (b) of section 38, <<NOTE: 26 USC 38.>> as 
        amended by this Act, is amended by striking ``and'' at the end 
        of paragraph (26), by striking the period at the end of 
        paragraph (27) and inserting a comma, and by adding at the end 
        the following new paragraphs:
            ``(28) the Hurricane Katrina employee retention credit 
        determined under section 1400R(a),
            ``(29) the Hurricane Rita employee retention credit 
        determined under section 1400R(b), and
            ``(30) the Hurricane Wilma employee retention credit 
        determined under section 1400R(c).''.
            
    2005 - P.L. 109-135: 
        Subsection (b) of <<NOTE: 26 USC 38.>> section 38 is 
        amended by striking ``and'' at the end of paragraph (25), by 
        striking the period at the end of paragraph (26) and inserting 
        ``, and'', and by adding at the end the following new paragraph:
            ``(27) the Hurricane Katrina housing credit determined under 
        section 1400P(b).''.
    
    2005 - P. L. 109-73, 
SEC. 202. EMPLOYEE RETENTION CREDIT FOR EMPLOYERS AFFECTED BY HURRICANE 
            KATRINA.

    (a) In General.--In the case of an eligible employer, there shall be 
allowed as a credit against the tax imposed by chapter 1 of the Internal 
Revenue Code of 1986 for the taxable year an amount equal to 40 percent 
of the qualified wages with respect to each eligible employee of such 
employer for such taxable year. For purposes of the preceding sentence, 
the amount of qualified wages which may be taken into account with 
respect to any individual shall not exceed $6,000.
    (b) Definitions.--For purposes of this section--
            (1) Eligible employer.--The term ``eligible employer'' means 
        any employer--
                    (A) which conducted an active trade or business on 
                August 28, 2005, in a core disaster area, and
                    (B) with respect to whom the trade or business 
                described in subparagraph (A) is inoperable on any day 
                after August 28, 2005, and before January 1, 2006, as a 
                result of damage sustained by reason of Hurricane 
                Katrina.
            (2) Eligible employee.--The term ``eligible employee'' means 
        with respect to an eligible employer an employee whose principal 
        place of employment on August 28, 2005, with such eligible 
        employer was in a core disaster area.
            (3) Qualified wages.--The term ``qualified wages'' means 
        wages (as defined in section 51(c)(1) of such Code, but without 
        regard to section 3306(b)(2)(B) of such Code) paid or incurred 
        by an eligible employer with respect to an eligible employee on 
        any day after August 28, 2005, and before January 1, 2006, which 
        occurs during the period--
                    (A) beginning on the date on which the trade or 
                business described in paragraph (1) first became 
                inoperable
                at the principal place of employment of the employee 
                immediately before Hurricane Katrina, and
                    (B) ending on the date on which such trade or 
                business has resumed significant operations at such 
                principal place of employment.
        Such term shall include wages paid without regard to whether the 
        employee performs no services, performs services at a different 
        place of employment than such principal place of employment, or 
        performs services at such principal place of employment before 
        significant operations have resumed.

    (c) Credit not Allowed for Large Businesses.--The term ``eligible 
employer'' shall not include any trade or business for any taxable year 
if such trade or business employed an average of more than 200 employees 
on business days during the taxable year.
    (d) Certain Rules to Apply.--For purposes of this section, rules 
similar to the rules of sections 51(i)(1), 52, and 280C(a) of such Code 
shall apply.
    (e) Employee not Taken Into Account More Than Once.--An employee 
shall not be treated as an eligible employee for purposes of this 
section for any period with respect to any employer if such employer is 
allowed a credit under section 51 of such Code with respect to such 
employee for such period.
    (f) Credit to Be Part of General Business Credit.--The credit 
allowed under this section shall be added to the current year business 
credit under section 38(b) of such Code and shall be treated as a credit 
allowed under subpart D of part IV of subchapter A of chapter 1 of such 
Code.


    2005 - Energy Policy Act of 2005,PL109-058, Sec. 1332(b), amends Sec. 38(b),
    by adding a new paragraph (23)"the new energy efficient home credit
     determined under section 45L(a)". Sec.1334(b) amended Sec.38(b)by
     adding a new paragraph (24) "the energy efficient appliance 
     credit determined under section 45M(a)."  Sec.1342(b)(1), 
     amends Sec. 38(b) by adding a new paragraph (26).

    2005 - Energy Policy Act of 2005, PL109-058, amended by adding new paragraph
    38(b)(21).  (d) Effective Date- The amendments made by this section
    shall apply to production in taxable years beginning after the date
    of the enactment of this Act.  Also, amended 
    Sec.38(b) by adding a new paragraph (25). 

    2005 - Transportation Equity Act of 2005 added new paragraph
    38(b)(20).  Effective Date- The amendments made by this section
    shall apply to taxable years beginning after September 30, 2005.

    2004 - Subsec.711(a),Pub.L.108-357, amended Sec.38(c) 
    by redesignating Sec.38(c), paragraph (4) as (5) and adding a 
    new paragraph (4). Subsec.711(b), amended Sec.38(c) by amending
    paragraph (2)(A)(ii)(II) and (3)(A)(ii)(II) of section 38(c)
    by inserting ``or the specified credits'' after ``employee credit''.

    2004 - Pub.L. 108-357, Sec 341(b).  Section 38(b), as amended by 
    this Act, is amended by striking ``plus'' at the end of paragraph (17), 
    by striking the period at the end of paragraph (18) and inserting 
    ``, plus'', and by inserting after paragraph (18) the following:
      (19) the marginal oil and gas well production credit 
       determined under section 45I(a).
     Effective Date.--The <<NOTE: 26 USC 38 note.>> amendments made 
     by this section shall apply to production in taxable years
     beginning after December 31, 2004.

    2004 - Pub.L. 108-357, Sec 339(b).  Section 38(b) (relating to
    general business credit), as amended by this Act, is amended by
    striking ``plus'' at the end of paragraph (16), by striking the
    period at the end of paragraph (17) and inserting ``, plus'', and by
    inserting after paragraph (17) the new paragraph (18).
    Effective Date.--The <<NOTE: 26 USC 38 note.>> amendments made 
    by this section shall apply to expenses paid or incurred after 
    December 31, 2002, in taxable years ending after such date.

    2004 - Pub.L. 108-357, Sec 302(b).  Section 38(b) (relating to current
    year business credit), is amended by striking ``plus'' at the end of
    paragraph (15), by striking the period at the end of paragraph (16)
    and inserting ``, plus'', and by inserting after paragraph (16) the
    new paragraph (17).  Sec.245(c)(1),Pub.L.108-357, added para (16).
    Effective Date:  The amendments made by this section shall apply
    to taxable years beginning after December 31, 2004.

    2004 - Pub.L. 108-357, Sec 245(c)(1).   Section 38(b)
    (relating to general business credit) is amended by striking
    ``plus'' at the end of paragraph (14), by striking the period at
    the end of paragraph (15) and inserting ``, plus'', and by adding
    at the end the following new paragraph:
       ``(16) the railroad track maintenance credit determined 
        under section 45G(a).''.
    Effective Date:  The amendments made by this section shall apply
    to taxable years beginning after December 31, 2004.


      2002 - Subsec. (b)(15). Pub. L. 107-147, Sec. 411(d), amended
       Section 38(b)(15) by striking ``45F'' and inserting ``45F(a)''.

      2002 - Subsec. (c)(3)(A). Pub. L. 107-147, Sec. 301 (b), redesignated
       sec (c)(3) as (c)(4), and inserted new sec (c)(3): Special rules for 
       New York Liberty Zone Business Employee Credit, and
       Subsec. (c)(2)((A)(ii)(II).  Pub.L. 107-147, Sec.301(b), amended
       the subclause by inserting ``or the New York Liberty Zone business
       employee credit'' after ``employment credit''.
       [<<NOTE: Applicability. 26 USC 38 note.>>  Effective 
        date.--The amendments made by this subsection shall apply to 
        taxable years ending after December 31, 2001.]

      2001 - Subsec. (b)(12). Pub. L. 107-16, Sec. 619(b), 901,
    temporarily struck out ''plus'' at end.  See Effective and
    Termination Dates of 2001 Amendment note below.
      Subsec. (b)(13). Pub. L. 107-16, Sec. 619(b), 901, temporarily
    substituted '', plus'' for period at end.  See Effective and
    Termination Dates of 2001 Amendment note below.
      Pub. L. 107-16, Sec. 205(b)(1), 901, temporarily struck out
    ''plus'' at end.  See Effective and Termination Dates of 2001
    Amendment note below.
      Subsec. (b)(14). Pub. L. 107-16, Sec. 619(b), 901, temporarily
    added par. (14). See Effective and Termination Dates of 2001
    Amendment note below.
      Pub. L. 107-16, Sec. 205(b)(1), 901, temporarily substituted '',
    plus'' for period at end.  See Effective and Termination Dates of
    2001 Amendment note below.
      Subsec. (b)(15). Pub. L. 107-16, Sec. 205(b)(1), 901, temporarily
    added par. (15). See Effective and Termination Dates of 2001
    Amendment note below.
      2000 - Subsec. (b)(13). Pub. L. 106-554 added par. (13).
      1996 - Subsec. (b)(2). Pub. L. 104-188, Sec. 1201(e)(1),
    substituted ''work opportunity credit'' for ''targeted jobs
    credit''.
      Subsec. (b)(12). Pub. L. 104-188, Sec. 1205(a)(2), added par.
    (12).
      Subsec. (c)(2)(C). Pub. L. 104-188, Sec. 1702(e)(4), amended
    subpar. (C), as in effect on day before date of enactment of the
    Revenue Reconciliation Act of 1990 (title XI of Pub. L. 101-508,
    approved Nov. 5, 1990), by inserting before period at end of first
    sentence ''and without regard to the deduction under section
    56(h)''.
      1993 - Subsec. (b)(7). Pub. L. 103-66, Sec. 13302(a)(1), struck
    out ''plus'' at end.
      Subsec. (b)(8). Pub. L. 103-66, Sec. 13322(a), which directed
    amendment of par. (8) by striking ''plus'' at end, was executed by
    striking ''and'' at end to reflect the probable intent of Congress.
      Pub. L. 103-66, Sec. 13302(a)(1), substituted '', and'' for
    period at end.
      Subsec. (b)(9). Pub. L. 103-66, Sec. 13443(b)(1), struck out
    ''plus'' at end.
      Pub. L. 103-66, Sec. 13322(a), substituted '', plus'' for period
    at end.
      Pub. L. 103-66, Sec. 13302(a)(1), added par. (9).
      Subsec. (b)(10). Pub. L. 103-66, Sec. 13443(b)(1), substituted
    '', plus'' for period at end.
      Pub. L. 103-66, Sec. 13322(a), added par. (10).
      Subsec. (b)(11). Pub. L. 103-66, Sec. 13443(b)(1), added par.
    (11).
      Subsec. (c)(2), (3). Pub. L. 103-66, Sec. 13302(c)(1), added par.
    (2) and redesignated former par. (2) as (3).
      1992 - Subsec. (b)(6) to (8). Pub. L. 102-486 struck out ''plus''
    at end of par. (6), substituted ''; plus'' for period at end of
    par. (7), and added par. (8).
      1990 - Subsec. (b)(1). Pub. L. 101-508, Sec. 11813(b)(2)(A),
    substituted ''section 46'' for ''section 46(a)''.
      Subsec. (b)(4). Pub. L. 101-508, Sec. 11511(b)(1), struck out
    ''plus'' at end.
      Subsec. (b)(5). Pub. L. 101-508, Sec. 11611(b)(1), struck out
    ''plus'' at end.
      Pub. L. 101-508, Sec. 11511(b)(1), substituted '', plus'' for
    period at end.
      Subsec. (b)(6). Pub. L. 101-508, Sec. 11611(b)(1), substituted
    '', plus'' for period at end.
      Pub. L. 101-508, Sec. 11511(b)(1), added par. (6).
      Subsec. (b)(7). Pub. L. 101-508, Sec. 11611(b)(1), added par.
    (7).
      Subsec. (c)(2). Pub. L. 101-508, Sec. 11813(b)(2)(B),
    redesignated par. (3) as (2) and struck out former par. (2) which
    permitted an offset of regular investment tax credit against 25
    percent of minimum tax.
      Subsec. (c)(2)(C). Pub. L. 101-508, Sec. 11813(b)(2)(C), inserted
    ''(as in effect on the day before the date of the enactment of the
    Revenue Reconciliation Act of 1990)'' after ''46(e)(1)'' and ''(as
    so in effect)'' after ''46(e)(2)''.
      Subsec. (c)(3). Pub. L. 101-508, Sec. 11813(b)(2)(B),
    redesignated par. (3) as (2).
      Subsec. (d). Pub. L. 101-508, Sec. 11813(b)(2)(D)(i), substituted
    ''any provision'' for ''sections 46(f), 47(a), 196(a), and any
    other provision'' in introductory provisions.
      Subsec. (d)(2). Pub. L. 101-508, Sec. 11813(b)(2)(D)(ii), amended
    par. (2) generally.  Prior to amendment, par. (2) read as follows:
    ''The order in which credits attributable to a percentage referred
    to in section 46(a) are used shall be determined on the basis of
    the order in which such percentages are listed in section 46(a) as
    of the close of the taxable year in which the credit is used.''
      Subsec. (d)(3)(B). Pub. L. 101-508, Sec. 11813(b)(2)(D)(iii),
    amended subpar. (B) generally.  Prior to amendment, subpar. (B)
    read as follows: ''the employee plan percentage (as defined in
    section 46(a)(2)(E), as in effect on the day before the date of the
    enactment of the Tax Reform Act of 1984) shall be treated as
    referred to after section 46(a)(2).''
      1988 - Subsec. (c). Pub. L. 100-647, Sec. 1007(g)(2), amended
    pars. (1) to (3) generally, substituting pars. (1) and (2) for
    former pars. (1) to (3), redesignating former par. (4) as (3), and
    substituting ''subparagraph (B) of paragraph (1)'' for
    ''subparagraphs (A) and (B) of paragraph (1)'' in subpars. (A),
    (B), (C), and (D).
      Pub. L. 100-647, Sec. 1007(g)(8), made technical correction to
    directory language of Pub. L. 99-514, Sec. 701(c)(4), see 1986
    Amendment note below.
      Subsec. (d). Pub. L. 100-647, Sec. 1002(e)(8)(A), substituted
    ''Ordering rules'' for ''Special rules for certain regulated
    companies'' in heading and amended text generally.  Prior to
    amendment, text read as follows: ''In the case of any taxpayer to
    which section 46(f) applies, for purposes of sections 46(f), 47(a),
    and 196(a) and any other provision of this title where it is
    necessary to ascertain the extent to which the credits determined
    under section 40(a), 41(a), 42(a), 46(a), or 51(a) are used in a
    taxable year or as a carryback or carryforward, the order in which
    such credits are used shall be determined on the basis of the order
    in which they are listed in subsection (b).''
      1986 - Subsec. (b)(4). Pub. L. 99-514, Sec. 231(d)(1), added par.
    (4).
      Pub. L. 99-514, Sec. 1171(b)(1), struck out former par. (4) which
    read as follows: ''the employee stock ownership credit determined
    under section 41(a)''.
      Subsec. (b)(5). Pub. L. 99-514, Sec. 252(b)(1), added par. (5).
      Subsec. (c). Pub. L. 99-514, Sec. 701(c)(4), as amended by Pub.
    L. 100-647, Sec. 1007(g)(8), added pars. (1) to (3), redesignated
    former par. (3) as (4), and struck out former par. (1) ''In
    general'' which provided: ''The credit allowed under subsection (a)
    for any taxable year shall not exceed the sum of -
        ''(A) so much of the taxpayer's net tax liability for the
      taxable year as does not exceed $25,000, plus
        ''(B) 75 percent of so much of the taxpayer's net tax liability
      for the taxable year as exceeds $25,000.''
    and former par. (2) ''Net tax liability'', which provided: ''For
    purposes of paragraph (1), the term 'net tax liability' means the
    tax liability (as defined in section 26(b)), reduced by the sum of
    the credits allowable under subparts A and B of this part.''
      Subsec. (c)(1)(B). Pub. L. 99-514, Sec. 221(a), substituted ''75
    percent'' for ''85 percent''.
      Subsec. (d). Pub. L. 99-514, Sec. 252(b)(2), inserted ''42(a),''.
      Pub. L. 99-514, Sec. 1171(b)(2), substituted ''and 196(a)'' for
    ''196(a), and 404(i)'' and struck out ''41(a),'' after ''40(a)''.
      Pub. L. 99-514, Sec. 231(d)(3)(B), inserted ''41(a),'' after
    ''40(a),''.
      1984 - Subsec. (c)(2). Pub. L. 98-369, Sec. 612(e)(1),
    substituted ''section 26(b)'' for ''section 25(b)''.

                    EFFECTIVE DATE OF 2007 AMENDMENT
2007 - PL 110-28
SEC. 8214. WAIVER OF INDIVIDUAL AND CORPORATE ALTERNATIVE MINIMUM TAX 
            LIMITS ON WORK OPPORTUNITY CREDIT AND CREDIT FOR TAXES PAID 
            WITH RESPECT TO EMPLOYEE CASH TIPS.
    (b) <<NOTE: 26 USC 38 note.>>  Effective Date.--The amendments made 
by this section shall apply to credits determined under sections 45B and 
51 of the Internal Revenue Code of 1986 in taxable years beginning after 
December 31, 2006, and to carrybacks of such credits.

                    EFFECTIVE DATES OF 2005 AMENDMENT
     Amendment by Energy Policy Act of 2005, Sec. 1332(b), shall apply to 
      qualified new energy efficient homes acquired after December 31, 2005, 
      in taxable years ending after such date.  Sec.1334(b) amendments
      shall apply to appliances produced after December 31, 2005.
     Sec.1342(b)(1) amendments shall apply to property placed in
     service after December 31, 2005, in taxable years ending
     after such date. Amendments by Sec.1341(b) shall apply to
     property placed in service after December 31, 2005, in 
     taxable years ending after such date.
                    EFFECTIVE DATES OF 2004 AMENDMENT
     Amendment by Pub.L.108-357,Sec.711, except as otherwise 
     provided, the amendments made by this section shall apply to
     taxable years ending after the date of the enactment of this Act.

     Amendment by Pub.L.108-357, Sec.245(c)(1), shall apply
    to taxable years beginning after December 31, 2004.
             EFFECTIVE AND TERMINATION DATES OF 2001 AMENDMENT
      Pub. L. 107-16, title II, Sec. 205(c), June 7, 2001, 115 Stat.
    53, provided that: ''The amendments made by this section (enacting
    section 45F of this title and amending this section and section
    1016 of this title) shall apply to taxable years beginning after
    December 31, 2001.''
      Pub. L. 107-16, title VI, Sec. 619(d), June 7, 2001, 115 Stat.
    110, provided that: ''The amendments made by this section (enacting
    section 45E of this title and amending this section and sections 39
    and 196 of this title) shall apply to costs paid or incurred in
    taxable years beginning after December 31, 2001, with respect to
    qualified employer plans first effective after such date.''  
    (NOTE: PL 107-147, Sec. 411(n)(2), amended this article to replace 
     the word "established" with the words "first effective")

      Amendment by Pub. L. 107-16 inapplicable to taxable, plan, or
    limitation years beginning after Dec. 31, 2010, and the Internal
    Revenue Code of 1986 to be applied and administered to such years
    as if such amendment had never been enacted, see section 901 of
    Pub. L. 107-16, set out as a note under section 1 of this title.
                      EFFECTIVE DATE OF 2000 AMENDMENT
      Pub. L. 106-554, Sec. 1(a)(7) (title I, Sec. 121(e)), Dec. 21,
    2000, 114 Stat. 2763, 2763A-610, provided that: ''The amendments
    made by this section (enacting section 45D of this title, amending
    this section and sections 39 and 196 of this title, and enacting
    provisions set out as notes under section 45D of this title) shall
    apply to investments made after December 31, 2000.''
                      EFFECTIVE DATE OF 1996 AMENDMENT
      Section 1201(g) of Pub. L. 104-188 provided that: ''The
    amendments made by this section (amending this section and sections
    41, 45A, 51, 196, and 1396 of this title) shall apply to
    individuals who begin work for the employer after September 30,
    1996.''
      Amendment by section 1205(a)(2) of Pub. L. 104-188 applicable to
    amounts paid or incurred in taxable years ending after June 30,
    1996, see section 1205(e) of Pub. L. 104-188, set out as a note
    under section 29 of this title.
      Section 1702(i) of Pub. L. 104-188 provided that: ''Except as
    otherwise expressly provided, any amendment made by this section
    (amending this section, sections 50, 56, 59, 143, 151, 168, 172,
    179, 243, 280F, 341, 424, 460, 613A, 805, 832, 861, 897, 1248,
    1250, 1367, 1504, 2701, 2702, 2704, 4093, 4975, 5041, 5061, 5354,
    6038A, 6302, 6416, 6427, 6501, 6503, 6621, 6724, and 7012 of this
    title, and provisions set out as a note under section 42 of this
    title) shall take effect as if included in the provision of the
    Revenue Reconciliation Act of 1990 (Pub. L. 101-508, title XI) to
    which such amendment relates.''
                      EFFECTIVE DATE OF 1993 AMENDMENT
      Section 13303 of Pub. L. 103-66 provided that: ''The amendments
    made by this part (part I (Sec. 13301-13303) of subchapter C of
    chapter 1 of title XIII of Pub. L. 103-66, enacting sections 1391
    to 1394 and 1396 to 1397D of this title and amending this section
    and sections 39, 51, 196, 280C, and 381 of this title) shall take
    effect on the date of the enactment of this Act (Aug. 10, 1993).''
      Section 13322(f) of Pub. L. 103-66 provided that: ''The
    amendments made by this section (enacting section 45A of this title
    and amending this section and sections 39, 196, and 280C of this
    title) shall apply to wages paid or incurred after December 31,
    1993.''
      Section 13443(d) of Pub. L. 103-66, as amended by Pub. L.
    104-188, title I, Sec. 1112(a)(2), Aug. 20, 1996, 110 Stat. 1759,
    provided that: ''The amendments made by this section (enacting
    section 45B of this title and amending this section and section 39
    of this title) shall apply with respect to taxes paid after
    December 31, 1993, with respect to services performed before, on,
    or after such date.''
                      EFFECTIVE DATE OF 1992 AMENDMENT
      Section 1914(e) of Pub. L. 102-486 provided that: ''The
    amendments made by this section (enacting section 45 of this title
    and amending this section and section 39 of this title) shall apply
    to taxable years ending after December 31, 1992.''
                      EFFECTIVE DATE OF 1990 AMENDMENT
      Amendment by section 11511(b)(1) of Pub. L. 101-508 applicable to
    costs paid or incurred in taxable years beginning after Dec. 31,
    1990, see section 11511(d)(1) of Pub. L. 101-508, set out as an
    Effective Date note under section 43 of this title.
      Section 11611(e) of Pub. L. 101-508 provided that:
      ''(1) In general. - Except as provided in paragraph (2), the
    amendments made by this section (enacting section 44 of this title
    and amending this section and sections 39 and 190 of this title)
    shall apply to expenditures paid or incurred after the date of the
    enactment of this Act (Nov. 5, 1990).
      ''(2) Subsection (c). - The amendment made by subsection (c)
    (amending section 190 of this title) shall apply to taxable years
    beginning after the date of the enactment of this Act.''
      Amendment by section 11813(b)(2) of Pub. L. 101-508 applicable to
    property placed in service after Dec. 31, 1990, but not applicable
    to any transition property (as defined in section 49(e) of this
    title), any property with respect to which qualified progress
    expenditures were previously taken into account under section 46(d)
    of this title, and any property described in section 46(b)(2)(C) of
    this title, as such sections were in effect on Nov. 4, 1990, see
    section 11813(c) of Pub. L. 101-508, set out as a note under
    section 29 of this title.
                      EFFECTIVE DATE OF 1988 AMENDMENT
      Section 1002(e)(8)(C) of Pub. L. 100-647 provided that: ''The
    amendments made by this paragraph (amending this section and
    section 49 of this title) shall apply to taxable years beginning
    after December 31, 1983, and to carrybacks from such years.''
      Amendment by section 1007(g)(2), (8) of Pub. L. 100-647
    effective, except as otherwise provided, as if included in the
    provision of the Tax Reform Act of 1986, Pub. L. 99-514, to which
    such amendment relates, see section 1019(a) of Pub. L. 100-647, set
    out as a note under section 1 of this title.
                      EFFECTIVE DATE OF 1986 AMENDMENT
      Section 221(b) of Pub. L. 99-514 provided that: ''The amendment
    made by subsection (a) (amending this section) shall apply to
    taxable years beginning after December 31, 1985.''
      Amendment by section 231(d)(1), (3)(B) of Pub. L. 99-514
    applicable to taxable years beginning after Dec. 31, 1985, see
    section 231(g) of Pub. L. 99-514, set out as a note under section
    41 of this title.
      Amendment by section 252(b) of Pub. L. 99-514 applicable to
    buildings placed in service after Dec. 31, 1986, in taxable years
    ending after such date, see section 252(e) of Pub. L. 99-514, set
    out as an Effective Date note under section 42 of this title.
      Amendment by section 701(c)(4) of Pub. L. 99-514 applicable to
    taxable years beginning after Dec. 31, 1986, with certain
    exceptions and qualifications, see section 701(f) of Pub. L.
    99-514, set out as an Effective Date note under section 55 of this
    title.
      Section 1171(c) of Pub. L. 99-514 provided that:
      ''(1) In general. - Except as provided in paragraph (2), the
    amendments made by this section (amending this section and sections
    56, 108, 401, and 404 of this title and repealing sections 41 and
    6699 of this title) shall apply to compensation paid or accrued
    after December 31, 1986, in taxable years ending after such date.
      ''(2) Sections 404(i) and 6699 to continue to apply to pre-1987
    credits. - The provisions of sections 404(i) and 6699 of the
    Internal Revenue Code of 1986 shall continue to apply with respect
    to credits under section 41 of such Code attributable to
    compensation paid or accrued before January 1, 1987 (or under
    section 38 of such Code with respect to qualified investment before
    January 1, 1983).''
                      EFFECTIVE DATE OF 1984 AMENDMENT
      Amendment by Pub. L. 98-369 applicable to interest paid or
    accrued after December 31, 1984, on indebtedness incurred after
    December 31, 1984, see section 612(g) of Pub. L. 98-369, set out as
    an Effective Date note under section 25 of this title.
                               EFFECTIVE DATE
      Section applicable to taxable years beginning after Dec. 31,
    1983, and to carrybacks from such years, see section 475(a) of Pub.
    L. 98-369, set out as an Effective Date of 1984 Amendment note
    under section 21 of this title.
                             SAVINGS PROVISION
      For provisions that nothing in amendment by section 11813(b)(2)
    of Pub. L. 101-508 be construed to affect treatment of certain
    transactions occurring, property acquired, or items of income,
    loss, deduction, or credit taken into account prior to Nov. 5,
    1990, for purposes of determining liability for tax for periods
    ending after Nov. 5, 1990, see section 11821(b) of Pub. L. 101-508,
    set out as a note under section 29 of this title.
         CREDIT FOR CONTRIBUTIONS TO CERTAIN COMMUNITY DEVELOPMENT
                                CORPORATIONS
      Section 13311 of Pub. L. 103-66, as amended by Pub. L. 104-188,
    title I, Sec. 1703(n)(13), Aug. 20, 1996, 110 Stat. 1877, provided
    that:
      ''(a) In General. - For purposes of section 38 of the Internal
    Revenue Code of 1986, the current year business credit shall
    include the credit determined under this section.
      ''(b) Determination of Credit. - The credit determined under this
    section for each taxable year in the credit period with respect to
    any qualified CDC contribution made by the taxpayer is an amount
    equal to 5 percent of such contribution.
      ''(c) Credit Period. - For purposes of this section, the credit
    period with respect to any qualified CDC contribution is the period
    of 10 taxable years beginning with the taxable year during which
    such contribution was made.
      ''(d) Qualified CDC Contribution. - For purposes of this section
    -
        ''(1) In general. - The term 'qualified CDC contribution' means
      any transfer of cash -
          ''(A) which is made to a selected community development
        corporation during the 5-year period beginning on the date such
        corporation was selected for purposes of this section,
          ''(B) the amount of which is available for use by such
        corporation for at least 10 years,
          ''(C) which is to be used by such corporation for qualified
        low-income assistance within its operational area, and
          ''(D) which is designated by such corporation for purposes of
        this section.
        ''(2) Limitations on amount designated. - The aggregate amount
      of contributions to a selected community development corporation
      which may be designated by such corporation shall not exceed
      $2,000,000.
      ''(e) Selected Community Development Corporations. -
        ''(1) In general. - For purposes of this section, the term
      'selected community development corporation' means any
      corporation -
          ''(A) which is described in section 501(c)(3) of such Code
        and exempt from tax under section 501(a) of such Code,
          ''(B) the principal purposes of which include promoting
        employment of, and business opportunities for, low-income
        individuals who are residents of the operational area, and
          ''(C) which is selected by the Secretary of Housing and Urban
        Development for purposes of this section.
        ''(2) Only 20 corporations may be selected. - The Secretary of
      Housing and Urban Development may select 20 corporations for
      purposes of this section, subject to the availability of eligible
      corporations.  Such selections may be made only before July 1,
      1994. At least 8 of the operational areas of the corporations
      selected must be rural areas (as defined by section 1393(a)(2) of
      such Code).
        ''(3) Operational areas must have certain characteristics. - A
      corporation may be selected for purposes of this section only if
      its operational area meets the following criteria:
          ''(A) The area meets the size requirements under section
        1392(a)(3).
          ''(B) The unemployment rate (as determined by the appropriate
        available data) is not less than the national unemployment
        rate.
          ''(C) The median family income of residents of such area does
        not exceed 80 percent of the median gross income of residents
        of the jurisdiction of the local government which includes such
        area.
      ''(f) Qualified Low-Income Assistance. - For purposes of this
    section, the term 'qualified low-income assistance' means
    assistance -
        ''(1) which is designed to provide employment of, and business
      opportunities for, low-income individuals who are residents of
      the operational area of the community development corporation,
      and
        ''(2) which is approved by the Secretary of Housing and Urban
      Development.''
        APPLICABILITY OF CERTAIN AMENDMENTS BY PUBLIC LAW 99-514 IN
              RELATION TO TREATY OBLIGATIONS OF UNITED STATES
      For applicability of amendment by section 701(c)(4) of Pub. L.
    99-514 notwithstanding any treaty obligation of the United States
    in effect on Oct. 22, 1986, with provision that for such purposes
    any amendment by title I of Pub. L. 100-647 be treated as if it had
    been included in the provision of Pub. L. 99-514 to which such
    amendment relates, see section 1012(aa)(2), (4) of Pub. L. 100-647,
    set out as a note under section 861 of this title.
       EFFECTIVE 15-YEAR CARRYBACK OF EXISTING CARRYFORWARDS OF STEEL
                                 COMPANIES
      Section 212 of Pub. L. 99-514, as amended by Pub. L. 100-647,
    title I, Sec. 1002(f), Nov. 10, 1988, 102 Stat. 3369, provided
    that:
      ''(a) General Rule. - If a qualified corporation makes an
    election under this section for its 1st taxable year beginning
    after December 31, 1986, with respect to any portion of its
    existing carryforwards, the amount determined under subsection (b)
    shall be treated as a payment against the tax imposed by chapter 1
    of the Internal Revenue Code of 1986 made by such corporation on
    the last day prescribed by law (without regard to extensions) for
    filing its return of tax under chapter 1 of such Code for such 1st
    taxable year.
      ''(b) Amount. - For purposes of subsection (a), the amount
    determined under this subsection shall be the lesser of -
        ''(1) 50 percent of the portion of the corporation's existing
      carryforwards to which the election under subsection (a) applies,
      or
        ''(2) the corporation's net tax liability for the carryback
      period.
      ''(c) Corporation Making Election May Not Use Same Amounts Under
    Section 38. - In the case of a qualified corporation which makes an
    election under subsection (a), the portion of such corporation's
    existing carryforwards to which such an election applies shall not
    be taken into account under section 38 of the Internal Revenue Code
    of 1986 for any taxable year beginning after December 31, 1986.
      ''(d) Net Tax Liability for Carryback Period. - For purposes of
    this section -
        ''(1) In general. - A corporation's net tax liability for the
      carryback period is the aggregate of such corporation's net tax
      liability for taxable years in the carryback period.
        ''(2) Net tax liability. - The term 'net tax liability' means,
      with respect to any taxable year, the amount of the tax imposed
      by chapter 1 of the Internal Revenue Code of 1954 (now 1986) for
      such taxable year, reduced by the sum of the credits allowable
      under part IV of subchapter A of such chapter 1 (other than
      section 34 thereof).  For purposes of the preceding sentence, any
      tax treated as not imposed by chapter 1 of such Code under
      section 26(b)(2) of such Code shall not be treated as tax imposed
      by such chapter 1.
        ''(3) Carryback period. - The term 'carryback period' means the
      period -
          ''(A) which begins with the corporation's 15th taxable year
        preceding the 1st taxable year from which there is an unused
        credit included in such corporation's existing carryforwards
        (but in no event shall such period begin before the
        corporation's 1st taxable year ending after December 31, 1961),
        and
          ''(B) which ends with the corporation's last taxable year
        beginning before January 1, 1986.
      ''(e) No Recomputation of Minimum Tax, Etc. - Nothing in this
    section shall be construed to affect -
        ''(1) the amount of the tax imposed by section 56 of the
      Internal Revenue Code of 1986, or
        ''(2) the amount of any credit allowable under such Code,
    for any taxable year in the carryback period.
      ''(f) Reinvestment Requirement. -
        ''(1) In general. - Any amount determined under this section
      must be committed to reinvestment in, and modernization of the
      steel industry through investment in modern plant and equipment,
      research and development, and other appropriate projects, such as
      working capital for steel operations and programs for the
      retraining of steel workers.
        ''(2) Special rule. - In the case of the LTV Corporation, in
      lieu of the requirements of paragraph (1) -
          ''(A) such corporation shall place such refund in a separate
        account; and
          ''(B) amounts in such separate account -
            ''(i) shall only be used by the corporation -
     ''(I) to purchase an insurance policy which provides that, in the
            event the corporation becomes involved in a title 11 or
            similar case (as defined in section 368(a)(3)(A) of the
            Internal Revenue Code of 1954 (now 1986)), the insurer will
            provide life and health insurance coverage during the
            1-year period beginning on the date when the corporation
            receives the refund to any individual with respect to whom
            the corporation would (but for such involvement) have been
            obligated to provide such coverage the coverage provided by
            the insurer will be identical to the coverage which the
            corporation would (but for such involvement) have been
            obligated to provide, and provides that the payment of
            insurance premiums will not be required during such 1-year
            period to keep such policy in force, or
     ''(II) directly in connection with the trade or business of the
            corporation in the manufacturer or production of steel; and
            ''(ii) shall be used (or obligated) for purposes described
          in clause (i) not later than 3 months after the corporation
          receives the refund.
        ''(3) In the case of a qualified corporation, no offset to any
      refund under this section may be made by reason of any tax
      imposed by section 4971 of the Internal Revenue Code of 1986 (or
      any interest or penalty attributable to any such tax), and the
      date on which any such refund is to be paid shall be determined
      without regard to such corporation's status under title 11,
      United States Code.
      ''(g) Definitions. - For purposes of this section -
        ''(1) Qualified corporation. -
          ''(A) In general. - The term 'qualified corporation' means
        any corporation which is described in section 806(b) of the
        Steel Import Stabilization Act (19 U.S.C. 2253 note) and a
        company which was incorporated on February 11, 1983, in
        Michigan.
          ''(B) Certain predecessors included. - In the case of any
        qualified corporation which has carryforward attributable to a
        predecessor corporation described in such section 806(b), the
        qualified corporation and the predecessor corporation shall be
        treated as 1 corporation for purposes of subsections (d) and
        (e).
        ''(2) Existing carryforwards. - The term 'existing
      carryforward' means the aggregate of the amounts which -
          ''(A) are unused business credit carryforwards to the
        taxpayer's 1st taxable year beginning after December 31, 1986
        (determined without regard to the limitations of section 38(c)
        and any reduction under section 49 of the Internal Revenue Code
        of 1986), and
          ''(B) are attributable to the amount of the regular
        investment credit determined for periods before January 1,
        1986, under section 46(a)(1) of such Code (relating to regular
        percentage), or any corresponding provision of prior law,
        determined on the basis that the regular investment credit was
        used first.
        ''(3) Special rule for restructuring. - In the case of any
      corporation, any restructuring shall not limit, increase, or
      otherwise affect the benefits which would have been available
      under this section but for such restructuring.
      ''(h) Tentative Refunds. - Rules similar to the rules of section
    6425 of the Internal Revenue Code of 1986 shall apply to any
    overpayment resulting from the application of this section.''
     EFFECTIVE 15-YEAR CARRYBACK OF EXISTING CARRYFORWARDS OF QUALIFIED
                                  FARMERS
      Section 213 of Pub. L. 99-514, as amended by Pub. L. 100-647,
    title I, Sec. 1002(g), Nov. 10, 1988, 102 Stat. 3369, provided
    that:
      ''(a) General Rule. - If a taxpayer who is a qualified farmer
    makes an election under this section for its 1st taxable year
    beginning after December 31, 1986, with respect to any portion of
    its existing carryforwards, the amount determined under subsection
    (b) shall be treated as a payment against the tax imposed by
    chapter 1 of the Internal Revenue Code of 1986 made by such
    taxpayer on the last day prescribed by law (without regard to
    extensions) for filing its return of tax under chapter 1 of such
    Code for such 1st taxable year.
      ''(b) Amount. - For purposes of subsection (a), the amount
    determined under this subsection shall be equal to the smallest of
    -
        ''(1) 50 percent of the portion of the taxpayer's existing
      carryforwards to which the election under subsection (a) applies,
        ''(2) the taxpayer's net tax liability for the carryback period
      (within the meaning of section 212(d) of this Act (set out as a
      note above)), or
        ''(3) $750.
      ''(c) Taxpayer Making Election May Not Use Same Amounts Under
    Section 38. - In the case of a qualified farmer who makes an
    election under subsection (a), the portion of such farmer's
    existing carryforwards to which such an election applies shall not
    be taken into account under section 38 of the Internal Revenue Code
    of 1986 for any taxable year beginning after December 31, 1986.
      ''(d) No Recomputation of Minimum Tax, Etc. - Nothing in this
    section shall be construed to affect -
        ''(1) the amount of the tax imposed by section 56 of the
      Internal Revenue Code of 1954 (now 1986), or
        ''(2) the amount of any credit allowable under such Code,
    for any taxable year in the carryback period (within the meaning of
    section 212(d)(3) of this Act (set out as a note above)).
      ''(e) Definitions and Special Rules. - For purposes of this
    section -
        ''(1) Qualified farmer. - The term 'qualified farmer' means any
      taxpayer who, during the 3-taxable year period preceding the
      taxable year for which an election is made under subsection (a),
      derived 50 percent or more of the taxpayer's gross income from
      the trade or business of farming.
        ''(2) Existing carryforward. - The term 'existing carryforward'
      means the aggregate of the amounts which -
          ''(A) are unused business credit carryforwards to the
        taxpayer's 1st taxable year beginning after December 31, 1986
        (determined without regard to the limitations of section 38(c)
        of the Internal Revenue Code of 1986), and
          ''(B) are attributable to the amount of the investment credit
        determined for periods before January 1, 1986, under section
        46(a) of such Code (or any corresponding provision of prior
        law) with respect to section 38 property which was used by the
        taxpayer in the trade or business of farming, determined on the
        basis that such credit was used first.
        ''(3) Farming. - The term 'farming' has the meaning given such
      term by section 2032A(e)(4) and (5) of such Code.''
     TREATMENT OF INVESTMENT TAX CREDITS WITH RESPECT TO CERTAIN PUBLIC
                                 UTILITIES
      For provisions requiring different applications of subsec. (c) of
    this section to certain public utilities by making substitutions in
    the percentages of the tentative minimum tax referred to in subsec.
    (c)(3)(A)(ii), (B), under certain circumstances, see section
    701(f)(6) of Pub. L. 99-514, set out as an Effective Date note
    under section 55 of this title.
             PLAN AMENDMENTS NOT REQUIRED UNTIL JANUARY 1, 1989
      For provisions directing that if any amendments made by subtitle
    A or subtitle C of title XI (Sec. 1101-1147 and 1171-1177) or title
    XVIII (Sec. 1800-1899A) of Pub. L. 99-514 require an amendment to
    any plan, such plan amendment shall not be required to be made
    before the first plan year beginning on or after Jan. 1, 1989, see
    section 1140 of Pub. L. 99-514, as amended, set out as a note under
    section 401 of this title.
                              TRANSITION RULES
      Section 1177 of subtitle C (Sec. 1171-1177) of title XI of Pub.
    L. 99-514, as amended by Pub. L. 100-647, title I, Sec.
    1011B(l)(1), (2), Nov. 10, 1988, 102 Stat. 3493, provided that:
      ''(a) Section 1171. - The amendments made by section 1171
    (amending this section and sections 56, 108, 401, and 404 of this
    title and repealing sections 41 and 6699 of this title) shall not
    apply in the case of a tax credit employee stock ownership plan if
    -
        ''(1) such plan was favorably approved on September 23, 1983,
      by employees, and
        ''(2) not later than January 11, 1984, the employer of such
      employees was 100 percent owned by such plan.
      ''(b) Subtitle Not To Apply to Certain Newspaper. - The
    amendments made by section 1175 (amending section 401 of this
    title) shall not apply to any daily newspaper -
        ''(1) which was first published on December 17, 1855, and which
      began publication under its current name in 1954, and
        ''(2) which is published in a constitutional home rule city
      (within the meaning of section 146(d)(3)(C) of the Internal
      Revenue Code of 1986) which has a population of less than
      2,500,000.''
      Section 1011B(l)(3) of Pub. L. 100-647 provided that: ''If any
    newspaper corporation described in section 1177(b) of the Reform
    Act (section 1177(b) of Pub. L. 99-514, set out above), as amended
    by this subsection, pays in cash a dividend within 60 days after
    the date of the enactment of this Act (Nov. 10, 1988) to the
    corporation's employee stock ownership plans and if a corporate
    resolution declaring such dividend was adopted before November 30,
    1987, and such resolution specifies that such dividend shall be
    contingent upon passage by the Congress of technical corrections,
    then such dividend (to the extent the aggregate amount so paid does
    not exceed $3,500,000) shall be treated as if it had been declared
    and paid in 1987 for all purposes of the Internal Revenue Code of
    1986.''
     ACCOUNTING FOR INVESTMENT CREDIT IN CERTAIN FINANCIAL REPORTS AND
                        REPORTS TO FEDERAL AGENCIES
      Pub. L. 92-178, title I, Sec. 101(c), Dec. 10, 1971, 85 Stat.
    499, as amended by Pub. L. 98-369, div.  A, title IV, Sec. 450(a),
    July 18, 1984, 98 Stat. 818; Pub. L. 99-514, Sec. 2, Oct. 22, 1986,
    100 Stat. 2095, provided that:
        ''(1) In general. - It was the intent of Congress in enacting,
      in the Revenue Act of 1962 (see Short Title of 1962 Amendment
      note set out under section 1 of this title), the investment
      credit allowed by section 38 of the Internal Revenue Code of 1986
      (formerly I.R.C. 1954), and it is the intent of the Congress in
      restoring that credit in this Act (section 50 of this title), to
      provide an incentive for modernization and growth of private
      industry.  Accordingly, notwithstanding any other provision of
      law, on and after the date of the enactment of this Act (Dec. 10,
      1971) -
          ''(A) no taxpayer shall be required to use, for purposes of
        financial reports subject to the jurisdiction of any Federal
        agency or reports made to any Federal agency, any particular
        method of accounting for the credit allowed by such section 38
        (this section), and
          ''(B) a taxpayer shall disclose, in any such report, the
        method of accounting for such credit used by him for purposes
        of such report.
        ''(2) Exceptions. - Paragraph (1) shall not apply to taxpayers
      who are subject to the provisions of section 46(e) of the
      Internal Revenue Code of 1986 (as added by section 105(c) of this
      Act) or to section 203(e) of the Revenue Act of 1964 (as modified
      by section 105(e) of this Act) (set out as note below).''
      (Section 450(b) of Pub. L. 98-369 provided that: ''The amendments
    made by this section (amending this note) shall take effect as if
    included in the Revenue Act of 1971.'')
       TREATMENT OF INVESTMENT CREDIT BY FEDERAL REGULATORY AGENCIES
      Pub. L. 88-272, title II, Sec. 203(e), Feb. 26, 1964, 78 Stat.
    35, as amended by Pub. L. 99-514, Sec. 2, Oct. 22, 1986, 100 Stat.
    2095, provided that: ''It was the intent of the Congress in
    providing an investment credit under section 38 of the Internal
    Revenue Code of 1986 (formerly I.R.C. 1954) and it is the intent of
    the Congress in repealing the reduction in basis required by
    section 48(g) of such Code to provide an incentive for
    modernization and growth of private industry (including that
    portion thereof which is regulated).  Accordingly, Congress does
    not intend that any agency or instrumentality of the United States
    having jurisdiction with respect to a taxpayer shall, without the
    consent of the taxpayer, use -
        ''(1) in the case of public utility property (as defined in
      section 46(c)(3)(B) of the Internal Revenue Code of 1986, more
      than a proportionate part (determined with reference to the
      average useful life of the property with respect to which the
      credit was allowed) of the credit against tax allowed for any
      taxable year by section 38 of such Code, or
        ''(2) in the case of any other property, any credit against tax
      allowed by section 38 of such Code,
    to reduce such taxpayer's Federal income taxes for the purpose of
    establishing the cost of service of the taxpayer or to accomplish a
    similar result by any other method.''
      Section 203(e) of Pub. L. 88-272, not applicable to public
    utility property to which section 46(e) of this title applies, see
    section 105(e) of Pub. L. 92-178, set out as a note under section
    46 of this title.
 

References

                   SECTION REFERRED TO IN OTHER SECTIONS
      This section is referred to in sections 29, 39, 40, 41, 42, 43,
    44, 45, 45A, 45B, 45C, 45D, 45E, 45F, 46, 49, 50, 51, 51A, 52, 55,
    108, 179, 196, 280C, 381, 877, 1274A, 1351, 1396, 4612 of this
    title.
 

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