Credit for increasing research activities
General rule
For purposes of section 38, the research credit determined under this section for the taxable year shall be an amount equal to the sum of—
20 percent of the excess (if any) of—
the qualified research expenses for the taxable year, over
the base amount,
20 percent of the basic research payments determined under subsection (e)(1)(A), and
20 percent of the amounts paid or incurred by the taxpayer in carrying on any trade or business of the taxpayer during the taxable year (including as contributions) to an energy research consortium for energy research.
Qualified research expenses
For purposes of this section—
Qualified research expenses
The term “qualified research expenses” means the sum of the following amounts which are paid or incurred by the taxpayer during the taxable year in carrying on any trade or business of the taxpayer—
in-house research expenses, and
contract research expenses.
In-house research expenses
In general
The term “in-house research expenses” means—
any wages paid or incurred to an employee for qualified services performed by such employee,
any amount paid or incurred for supplies used in the conduct of qualified research, and
under regulations prescribed by the Secretary, any amount paid or incurred to another person for the right to use computers in the conduct of qualified research.
Clause (iii) shall not apply to any amount to the extent that the taxpayer (or any person with whom the taxpayer must aggregate expenditures under subsection (f)(1)) receives or accrues any amount from any other person for the right to use substantially identical personal property.
Qualified services
The term “qualified services” means services consisting of—
engaging in qualified research, or
engaging in the direct supervision or direct support of research activities which constitute qualified research.
If substantially all of the services performed by an individual for the taxpayer during the taxable year consists of services meeting the requirements of clause (i) or (ii), the term “qualified services” means all of the services performed by such individual for the taxpayer during the taxable year.
Supplies
The term “supplies” means any tangible property other than—
land or improvements to land, and
property of a character subject to the allowance for depreciation.
Wages
In general
Self-employed individuals and owner-employees
Exclusion for wages to which work opportunity credit applies
Contract research expenses
In general
Prepaid amounts
Amounts paid to certain research consortia
In general
Qualified research consortium
The term “qualified research consortium” means any organization which—
is described in section 501(c)(3) or 501(c)(6) and is exempt from tax under section 501(a),
is organized and operated primarily to conduct scientific research, and
is not a private foundation.
Amounts paid to eligible small businesses, universities, and Federal laboratories
In general
In the case of amounts paid by the taxpayer to—
an eligible small business,
an institution of higher education (as defined in section 3304(f)), or
an organization which is a Federal laboratory,
for qualified research which is energy research, subparagraph (A) shall be applied by substituting “100 percent” for “65 percent”.
Eligible small business
For purposes of this subparagraph, the term “eligible small business” means a small business with respect to which the taxpayer does not own (within the meaning of section 318) 50 percent or more of—
in the case of a corporation, the outstanding stock of the corporation (either by vote or value), and
in the case of a small business which is not a corporation, the capital and profits interests of the small business.
Small business
For purposes of this subparagraph—
In general
Startups, controlled groups, and predecessors
Federal laboratory
Trade or business requirement disregarded for in-house research expenses of certain startup ventures
In the case of in-house research expenses, a taxpayer shall be treated as meeting the trade or business requirement of paragraph (1) if, at the time such in-house research expenses are paid or incurred, the principal purpose of the taxpayer in making such expenditures is to use the results of the research in the active conduct of a future trade or business—
of the taxpayer, or
of 1 or more other persons who with the taxpayer are treated as a single taxpayer under subsection (f)(1).
Base amount
In general
The term “base amount” means the product of—
the fixed-base percentage, and
the average annual gross receipts of the taxpayer for the 4 taxable years preceding the taxable year for which the credit is being determined (hereinafter in this subsection referred to as the “credit year”).
Minimum base amount
Fixed-base percentage
In general
Start-up companies
Taxpayers to which subparagraph applies
The fixed-base percentage shall be determined under this subparagraph if—
the first taxable year in which a taxpayer had both gross receipts and qualified research expenses begins after
there are fewer than 3 taxable years beginning after
Fixed-base percentage
In a case to which this subparagraph applies, the fixed-base percentage is—
3 percent for each of the taxpayer’s 1st 5 taxable years beginning after
in the case of the taxpayer’s 6th such taxable year, ⅙ of the percentage which the aggregate qualified research expenses of the taxpayer for the 4th and 5th such taxable years is of the aggregate gross receipts of the taxpayer for such years,
in the case of the taxpayer’s 7th such taxable year, ⅓ of the percentage which the aggregate qualified research expenses of the taxpayer for the 5th and 6th such taxable years is of the aggregate gross receipts of the taxpayer for such years,
in the case of the taxpayer’s 8th such taxable year, ½ of the percentage which the aggregate qualified research expenses of the taxpayer for the 5th, 6th, and 7th such taxable years is of the aggregate gross receipts of the taxpayer for such years,
in the case of the taxpayer’s 9th such taxable year, ⅔ of the percentage which the aggregate qualified research expenses of the taxpayer for the 5th, 6th, 7th, and 8th such taxable years is of the aggregate gross receipts of the taxpayer for such years,
in the case of the taxpayer’s 10th such taxable year, ⅚ of the percentage which the aggregate qualified research expenses of the taxpayer for the 5th, 6th, 7th, 8th, and 9th such taxable years is of the aggregate gross receipts of the taxpayer for such years, and
for taxable years thereafter, the percentage which the aggregate qualified research expenses for any 5 taxable years selected by the taxpayer from among the 5th through the 10th such taxable years is of the aggregate gross receipts of the taxpayer for such selected years.
Treatment of de minimis amounts of gross receipts and qualified research expenses
Maximum fixed-base percentage
Rounding
Election of alternative incremental credit
In general
At the election of the taxpayer, the credit determined under subsection (a)(1) shall be equal to the sum of—
3 percent of so much of the qualified research expenses for the taxable year as exceeds 1 percent of the average described in subsection (c)(1)(B) but does not exceed 1.5 percent of such average,
4 percent of so much of such expenses as exceeds 1.5 percent of such average but does not exceed 2 percent of such average, and
5 percent of so much of such expenses as exceeds 2 percent of such average.
Election
Election of alternative simplified credit
In general
Special rule in case of no qualified research expenses in any of 3 preceding taxable years
Taxpayers to which subparagraph applies
Credit rate
Election
Consistent treatment of expenses required
In general
Prevention of distortions
Gross receipts
Qualified research defined
For purposes of this section—
In general
The term “qualified research” means research—
with respect to which expenditures may be treated as expenses under section 174,
which is undertaken for the purpose of discovering information—
which is technological in nature, and
the application of which is intended to be useful in the development of a new or improved business component of the taxpayer, and
substantially all of the activities of which constitute elements of a process of experimentation for a purpose described in paragraph (3).
Such term does not include any activity described in paragraph (4).
Tests to be applied separately to each business component
For purposes of this subsection—
In general
Business component defined
The term “business component” means any product, process, computer software, technique, formula, or invention which is to be—
held for sale, lease, or license, or
used by the taxpayer in a trade or business of the taxpayer.
Special rule for production processes
Purposes for which research may qualify for credit
For purposes of paragraph (1)(C)—
In general
Research shall be treated as conducted for a purpose described in this paragraph if it relates to—
a new or improved function,
performance, or
reliability or quality.
Certain purposes not qualified
Activities for which credit not allowed
The term “qualified research” shall not include any of the following:
Research after commercial production
Adaptation of existing business components
Duplication of existing business component
Surveys, studies, etc.
Any—
efficiency survey,
activity relating to management function or technique,
market research, testing, or development (including advertising or promotions),
routine data collection, or
routine or ordinary testing or inspection for quality control.
Computer software
Except to the extent provided in regulations, any research with respect to computer software which is developed by (or for the benefit of) the taxpayer primarily for internal use by the taxpayer, other than for use in—
an activity which constitutes qualified research (determined with regard to this subparagraph), or
a production process with respect to which the requirements of paragraph (1) are met.
Foreign research
Social sciences, etc.
Funded research
Credit allowable with respect to certain payments to qualified organizations for basic research
For purposes of this section—
In general
In the case of any taxpayer who makes basic research payments for any taxable year—
the amount of basic research payments taken into account under subsection (a)(2) shall be equal to the excess of—
such basic research payments, over
the qualified organization base period amount, and
that portion of such basic research payments which does not exceed the qualified organization base period amount shall be treated as contract research expenses for purposes of subsection (a)(1).
Basic research payments defined
For purposes of this subsection—
In general
The term “basic research payment” means, with respect to any taxable year, any amount paid in cash during such taxable year by a corporation to any qualified organization for basic research but only if—
such payment is pursuant to a written agreement between such corporation and such qualified organization, and
such basic research is to be performed by such qualified organization.
Exception to requirement that research be performed by the organization
Qualified organization base period amount
For purposes of this subsection, the term “qualified organization base period amount” means an amount equal to the sum of—
the minimum basic research amount, plus
the maintenance-of-effort amount.
Minimum basic research amount
For purposes of this subsection—
In general
The term “minimum basic research amount” means an amount equal to the greater of—
1 percent of the average of the sum of amounts paid or incurred during the base period for—
any in-house research expenses, and
any contract research expenses, or
the amounts treated as contract research expenses during the base period by reason of this subsection (as in effect during the base period).
Floor amount
Maintenance-of-effort amount
For purposes of this subsection—
In general
The term “maintenance-of-effort amount” means, with respect to any taxable year, an amount equal to the excess (if any) of—
an amount equal to—
the average of the nondesignated university contributions paid by the taxpayer during the base period, multiplied by
the cost-of-living adjustment for the calendar year in which such taxable year begins, over
the amount of nondesignated university contributions paid by the taxpayer during such taxable year.
Nondesignated university contributions
For purposes of this paragraph, the term “nondesignated university contribution” means any amount paid by a taxpayer to any qualified organization described in paragraph (6)(A)—
for which a deduction was allowable under section 170, and
which was not taken into account—
in computing the amount of the credit under this section (as in effect during the base period) during any taxable year in the base period, or
as a basic research payment for purposes of this section.
Cost-of-living adjustment defined
In general
Special rule where base period ends in a calendar year other than 1983 or 1984
Qualified organization
For purposes of this subsection, the term “qualified organization” means any of the following organizations:
Educational institutions
Any educational organization which—
is an institution of higher education (within the meaning of section 3304(f)), and
is described in section 170(b)(1)(A)(ii).
Certain scientific research organizations
Any organization not described in subparagraph (A) which—
is described in section 501(c)(3) and is exempt from tax under section 501(a),
is organized and operated primarily to conduct scientific research, and
is not a private foundation.
Scientific tax-exempt organizations
Any organization which—
is described in—
section 501(c)(3) (other than a private foundation), or
section 501(c)(6),
is exempt from tax under section 501(a),
is organized and operated primarily to promote scientific research by qualified organizations described in subparagraph (A) pursuant to written research agreements, and
currently expends—
substantially all of its funds, or
substantially all of the basic research payments received by it,
for grants to, or contracts for basic research with, an organization described in subparagraph (A).
Certain grant organizations
Any organization not described in subparagraph (B) or (C) which—
is described in section 501(c)(3) and is exempt from tax under section 501(a) (other than a private foundation),
is established and maintained by an organization established before
is organized and operated exclusively for the purpose of making grants to organizations described in subparagraph (A) pursuant to written research agreements for purposes of basic research, and
makes an election, revocable only with the consent of the Secretary, to be treated as a private foundation for purposes of this title (other than section 4940, relating to excise tax based on investment income).
Definitions and special rules
For purposes of this subsection—
Basic research
The term “basic research” means any original investigation for the advancement of scientific knowledge not having a specific commercial objective, except that such term shall not include—
basic research conducted outside of the United States, and
basic research in the social sciences, arts, or humanities.
Base period
Exclusion from incremental credit calculation
For purposes of determining the amount of credit allowable under subsection (a)(1) for any taxable year, the amount of the basic research payments taken into account under subsection (a)(2)—
shall not be treated as qualified research expenses under subsection (a)(1)(A), and
shall not be included in the computation of base amount under subsection (a)(1)(B).
Trade or business qualification
Certain corporations not eligible
The term “corporation” shall not include—
an S corporation,
a personal holding company (as defined in section 542), or
a service organization (as defined in section 414(m)(3)).
Special rules
For purposes of this section—
Aggregation of expenditures
Controlled group of corporations
In determining the amount of the credit under this section—
all members of the same controlled group of corporations shall be treated as a single taxpayer, and
the credit (if any) allowable by this section to each such member shall be determined on a proportionate basis to its share of the aggregate of the qualified research expenses, basic research payments, and amounts paid or incurred to energy research consortiums, taken into account by such controlled group for purposes of this section.
Common control
Under regulations prescribed by the Secretary, in determining the amount of the credit under this section—
all trades or businesses (whether or not incorporated) which are under common control shall be treated as a single taxpayer, and
the credit (if any) allowable by this section to each such person shall be determined on a proportionate basis to its share of the aggregate of the qualified research expenses, basic research payments, and amounts paid or incurred to energy research consortiums, taken into account by all such persons under common control for purposes of this section.
The regulations prescribed under this subparagraph shall be based on principles similar to the principles which apply in the case of subparagraph (A).
Allocations
Pass-thru in the case of estates and trusts
Allocation in the case of partnerships
Adjustments for certain acquisitions, etc.
Under regulations prescribed by the Secretary—
Acquisitions
In general
Amount determined with respect to qualified research expenses
The amount determined under this clause is—
for purposes of applying this section for the taxable year in which such acquisition is made, the acquisition year amount, and
for purposes of applying this section for any taxable year after the taxable year in which such acquisition is made, the qualified research expenses paid or incurred by the predecessor with respect to the acquired business during the measurement period.
Amount determined with respect to gross receipts
Acquisition year amount
For purposes of clause (ii), the acquisition year amount is the amount equal to the product of—
the qualified research expenses paid or incurred by the predecessor with respect to the acquired business during the measurement period, and
the number of days in the period beginning on the date of the acquisition and ending on the last day of the taxable year in which the acquisition is made,
divided by the number of days in the acquiring person’s taxable year.
Special rules for coordinating taxable years
In the case of an acquiring person and a predecessor whose taxable years do not begin on the same date—
each reference to a taxable year in clauses (ii) and (iv) shall refer to the appropriate taxable year of the acquiring person,
the qualified research expenses paid or incurred by the predecessor, and the gross receipts of the predecessor, during each taxable year of the predecessor any portion of which is part of the measurement period shall be allocated equally among the days of such taxable year,
the amount of such qualified research expenses taken into account under clauses (ii) and (iv) with respect to a taxable year of the acquiring person shall be equal to the total of the expenses attributable under subclause (II) to the days occurring during such taxable year, and
the amount of such gross receipts taken into account under clause (iii) with respect to a taxable year of the acquiring person shall be equal to the total of the gross receipts attributable under subclause (II) to the days occurring during such taxable year.
Measurement period
Dispositions
If the predecessor furnished to the acquiring person such information as is necessary for the application of subparagraph (A), then, for purposes of applying this section for any taxable year ending after such disposition, the amount of qualified research expenses paid or incurred by, and the gross receipts of, the predecessor during the measurement period (as defined in subparagraph (A)(vi), determined by substituting “predecessor” for “acquiring person” each place it appears) shall be reduced by—
in the case of the taxable year in which such disposition is made, an amount equal to the product of—
the qualified research expenses paid or incurred by, or gross receipts of, the predecessor with respect to the acquired business during the measurement period (as so defined and so determined), and
the number of days in the period beginning on the date of acquisition (as determined for purposes of subparagraph (A)(iv)(II)) and ending on the last day of the taxable year of the predecessor in which the disposition is made,
divided by the number of days in the taxable year of the predecessor, and
in the case of any taxable year ending after the taxable year in which such disposition is made, the amount described in clause (i)(I).
Certain reimbursements taken into account in determining fixed-base percentage
If during any of the 3 taxable years following the taxable year in which a disposition to which subparagraph (B) applies occurs, the disposing taxpayer (or a person with whom the taxpayer is required to aggregate expenditures under paragraph (1)) reimburses the acquiring person (or a person required to so aggregate expenditures with such person) for research on behalf of the taxpayer, then the amount of qualified research expenses of the taxpayer for the taxable years taken into account in computing the fixed-base percentage shall be increased by the lesser of—
the amount of the decrease under subparagraph (B) which is allocable to taxable years so taken into account, or
the product of the number of taxable years so taken into account, multiplied by the amount of the reimbursement described in this subparagraph.
Short taxable years
Controlled group of corporations
The term “controlled group of corporations” has the same meaning given to such term by section 1563(a), except that—
“more than 50 percent” shall be substituted for “at least 80 percent” each place it appears in section 1563(a)(1), and
the determination shall be made without regard to subsections (a)(4) and (e)(3)(C) of section 1563.
Energy research consortium
In general
The term “energy research consortium” means any organization—
which is—
described in section 501(c)(3) and is exempt from tax under section 501(a) and is organized and operated primarily to conduct energy research, or
organized and operated primarily to conduct energy research in the public interest (within the meaning of section 501(c)(3)),
which is not a private foundation,
to which at least 5 unrelated persons paid or incurred during the calendar year in which the taxable year of the organization begins amounts (including as contributions) to such organization for energy research, and
to which no single person paid or incurred (including as contributions) during such calendar year an amount equal to more than 50 percent of the total amounts received by such organization during such calendar year for energy research.
Treatment of persons
Foreign research
Denial of double benefit
Energy research
Special rule for pass-thru of credit
In the case of an individual who—
owns an interest in an unincorporated trade or business,
is a partner in a partnership,
is a beneficiary of an estate or trust, or
is a shareholder in an S corporation,
the amount determined under subsection (a) for any taxable year shall not exceed an amount (separately computed with respect to such person’s interest in such trade or business or entity) equal to the amount of tax attributable to that portion of a person’s taxable income which is allocable or apportionable to the person’s interest in such trade or business or entity. If the amount determined under subsection (a) for any taxable year exceeds the limitation of the preceding sentence, such amount may be carried to other taxable years under the rules of section 39; except that the limitation of the preceding sentence shall be taken into account in lieu of the limitation of section 38(c) in applying section 39.
Termination
In general
This section shall not apply to any amount paid or incurred—
after
after
Termination of alternative incremental credit
11 So in original. Probably should be “(3)”. Computation for taxable year in which credit terminates
In the case of any taxable year with respect to which this section applies to a number of days which is less than the total number of days in such taxable year—
the amount determined under subsection (c)(1)(B) with respect to such taxable year shall be the amount which bears the same ratio to such amount (determined without regard to this paragraph) as the number of days in such taxable year to which this section applies bears to the total number of days in such taxable year, and
for purposes of subsection (c)(5), the average qualified research expenses for the preceding 3 taxable years shall be the amount which bears the same ratio to such average qualified research expenses (determined without regard to this paragraph) as the number of days in such taxable year to which this section applies bears to the total number of days in such taxable year.
Source
(Added Pub. L. 97–34, title II, § 221(a),Notes
References in Text
Prior Provisions
Amendments
Effective Date of 2013 Amendment
Extension.—
The amendments made by subsection (a) [amending this section and section 45C of this title] shall apply to amounts paid or incurred after
Modifications.—
The amendments made by subsections (b) and (c) [amending this section] shall apply to taxable years beginning after
Effective Date of 2010 Amendment
Effective Date of 2008 Amendment
In general.—
Except as provided in paragraph (2), the amendments made by this section [amending this section and section 45C of this title] shall apply to taxable years beginning after
Extension.—
The amendments made by subsection (a) [amending this section and section 45C of this title] shall apply to amounts paid or incurred after
Effective Date of 2007 Amendment
Effective Date of 2006 Amendment
Effective date.—
Except as provided in paragraph (3), the amendments made by this subsection [amending this section] shall apply to taxable years ending after
Transition rule.—
In general.—
In the case of a specified transitional taxable year for which an election under section 41(c)(4) of the Internal Revenue Code of 1986 applies, the credit determined under section 41(a)(1) of such Code shall be equal to the sum of—
the applicable 2006 percentage multiplied by the amount determined under section 41(c)(4)(A) of such Code (as in effect for taxable years ending on
the applicable 2007 percentage multiplied by the amount determined under section 41(c)(4)(A) of such Code (as in effect for taxable years ending on
Definitions.—
For purposes of subparagraph (A)—
Specified transitional taxable year.—
The term ‘specified transitional taxable year’ means any taxable year which ends after
Applicable 2006 percentage.—
The term ‘applicable 2006 percentage’ means the number of days in the specified transitional taxable year before
Applicable 2007 percentage.—
The term ‘applicable 2007 percentage’ means the number of days in the specified transitional taxable year after
Transition rule for deemed revocation of election of alternative incremental credit.—
In the case of an election under section 41(c)(4) of the Internal Revenue Code of 1986 which applies to the taxable year which includes
Effective date.—
Except as provided in paragraph (4), the amendments made by this subsection [amending this section] shall apply to taxable years ending after
Transition rule for noncalendar taxable years.—
In general.—
In the case of a specified transitional taxable year for which an election under section 41(c)(5) of the Internal Revenue Code of 1986 (as added by this subsection) applies, the credit determined under section 41(a)(1) of such Code shall be equal to the sum of—
the applicable 2006 percentage multiplied by the amount determined under section 41(a)(1) of such Code (as in effect for taxable years ending on
the applicable 2007 percentage multiplied by the amount determined under section 41(c)(5) of such Code (as in effect for taxable years ending on
Definitions and special rules.—
For purposes of subparagraph (A)—
Definitions.—
Terms used in this paragraph which are also used in subsection (b)(3) [set out above] shall have the respective meanings given such terms in such subsection.
Dual elections permitted.—
Elections under paragraphs (4) and (5) of section 41(c) of such Code may both apply for the specified transitional taxable year.
Deferral of deemed election revocation.—
Any election under section 41(c)(4) of the Internal Revenue Code of 1986 treated as revoked under paragraph (2) shall be treated as revoked for the taxable year after the specified transitional taxable year.”
Effective Date of 2005 Amendments
Effective Date of 2004 Amendment
Effective Date of 1999 Amendment
Effective Date of 1998 Amendment
Effective Date of 1997 Amendment
Effective Date of 1996 Amendment
In general.—
Except as provided in paragraph (2), the amendments made by this section [amending this section and section 28 [now 45C] of this title] shall apply to taxable years ending after
Subsections (c) and (d).—
The amendments made by subsections (c) and (d) [amending this section] shall apply to taxable years beginning after
Estimated tax.—
The amendments made by this section shall not be taken into account under section 6654 or 6655 of the Internal Revenue Code of 1986 (relating to failure to pay estimated tax) in determining the amount of any installment required to be paid for a taxable year beginning in 1997.”
Effective Date of 1993 Amendment
Effective Date of 1991 Amendment
Effective Date of 1990 Amendment
Effective Date of 1989 Amendment
Effective Date of 1988 Amendment
Effective Date of 1986 Amendment
In general.—
Except as provided in this subsection (2), the amendments made by this section [amending this section and sections 28, 38, 39, 108, 170, 280C, 381, 936, 6411, and 6511 of this title, renumbering former section 30 of this title as this section, and enacting and amending provisions set out as notes under this section] shall apply to taxable years beginning after
Subsection (a).—
The amendments made by subsection (a) [amending this section and provisions set out as a note under this section] shall apply to taxable years ending after
Basic research.—
Section 41(a)(2) of the Internal Revenue Code of 1986 (as added by this section), and the amendments made by subsection (c)(2) [amending this section], shall apply to taxable years beginning after
Effective Date of 1984 Amendment
Effective Date of 1983 Amendment
Effective Date of 1982 Amendment
Effective Date
In general.—
The amendments made by this section [enacting this section and amending sections 55, 381, 383, 6096, 6411, and 6511 of this title] shall apply to amounts paid or incurred after
Transitional rule.—
In general.—
If, with respect to the first taxable year to which the amendments made by this section apply and which ends in 1981 or 1982, the taxpayer may only take into account qualified research expenses paid or incurred during a portion of such taxable year, the amount of the qualified research expenses taken into account for the base period of such taxable year shall be the amount which bears the same ratio to the total qualified research expenses for such base period as the number of months in such portion of such taxable year bears to the total number of months in such taxable year.
Definitions.—
For purposes of the preceding sentence, the terms ‘qualified research expenses’ and ‘base period’ have the meanings given to such terms by section 44F [now 41] of the Internal Revenue Code of 1986 [formerly I.R.C. 1954] (as added by this section).”
Special Rule for Elections Under Expired Provisions
Research Credit Elections.—
In the case of any taxable year ending after
Other Elections.—
Except as otherwise provided by such Secretary or designee, a rule similar to the rule of subsection (a) shall apply with respect to elections under any other expired provision of the Internal Revenue Code of 1986 the applicability of which is extended by reason of the amendments made by this title [amending this section and sections 32, 45A, 45C, 45D, 51, 54, 62, 164, 168, 170, 198, 220, 222, 613A, 1397E, 1400, 1400A to 1400C, 1400F, 1400N, 6103, 7608, 7652, and 9812 of this title, section 1185a of Title 29, Labor, and section 300gg–5 of Title 42, The Public Health and Welfare, and repealing section 51A of this title].”
Special Rule for Credit Attributable to Suspension Periods
In general.—
For purposes of the Internal Revenue Code of 1986, the credit determined under section 41 of such Code which is otherwise allowable under such Code—
shall not be taken into account prior to
shall not be taken into account prior to
On or after the earliest date that an amount of credit may be taken into account, such amount may be taken into account through the filing of an amended return, an application for expedited refund, an adjustment of estimated taxes, or other means allowed by such Code.
Suspension periods.—
For purposes of this subsection—
the first suspension period is the period beginning on
the second suspension period is the period beginning on
Expedited refunds.—
In general.—
If there is an overpayment of tax with respect to a taxable year by reason of paragraph (1), the taxpayer may file an application for a tentative refund of such overpayment. Such application shall be in such manner and form, and contain such information, as the Secretary may prescribe.
Deadline for applications.—
Subparagraph (A) shall apply only to an application filed before the date which is 1 year after the close of the suspension period to which the application relates.
Allowance of adjustments.—
Not later than 90 days after the date on which an application is filed under this paragraph, the Secretary shall—
review the application;
determine the amount of the overpayment; and
apply, credit, or refund such overpayment,
in a manner similar to the manner provided in section 6411(b) of such Code.
Consolidated returns.—
The provisions of section 6411(c) of such Code shall apply to an adjustment under this paragraph in such manner as the Secretary may provide.
Credit attributable to suspension period.—
In general.—
For purposes of this subsection, in the case of a taxable year which includes a portion of the suspension period, the amount of credit determined under section 41 of such Code for such taxable year which is attributable to such period is the amount which bears the same ratio to the amount of credit determined under such section 41 for such taxable year as the number of months in the suspension period which are during such taxable year bears to the number of months in such taxable year.
Waiver of estimated tax penalties.—
No addition to tax shall be made under section 6654 or 6655 of such Code for any period before
Secretary.—
For purposes of this subsection, the term ‘Secretary’ means the Secretary of the Treasury (or such Secretary’s delegate).”
Special Rules for Taxable Years Beginning Before Oct. 1, 1990, and Ending After Sept. 30, 1990
Study and Report on Credit Provided by This Section
Plan Amendments Not Required Until January 1, 1989
New Section 41 Treated as Continuation of Old Section 44F
whether any excess credit under old section 44F [now 41] for a taxable year beginning before
the period during which new section 30 [now 41] is in effect,
new section 30 [now 41] shall be treated as a continuation of old section 44F (and shall apply only to the extent old section 44F would have applied).”