26 U.S.C. § 38: General business credit

the business credit carryforwards carried to such taxable year, the amount of the current year business credit, plus the business credit carrybacks carried to such taxable year. the investment credit determined under section 46, the work opportunity credit determined under section 51(a), the alcohol fuels credit determined under section 40(a), the research credit determined under section 41(a), the low-income housing credit determined under section 42(a), the enhanced oil recovery credit under section 43(a), in the case of an eligible small business (as defined in section 44(b)), the disabled access credit determined under section 44(a), the renewable electricity production credit under section 45(a), the empowerment zone employment credit determined under section 1396(a), the Indian employment credit as determined under section 45A(a), the employer social security credit determined under section 45B(a), the orphan drug credit determined under section 45C(a), the new markets tax credit determined under section 45D(a), 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), the employer-provided child care credit determined under section 45F(a), the railroad track maintenance credit determined under section 45G(a), the biodiesel fuels credit determined under section 40A(a), the low sulfur diesel fuel production credit determined under section 45H(a), the marginal oil and gas well production credit determined under section 45I(a), the distilled spirits credit determined under section 5011(a), the advanced nuclear power facility production credit determined under section 45J(a), the nonconventional source production credit determined under section 45K(a), the new energy efficient home credit determined under section 45L(a), the portion of the alternative motor vehicle credit to which section 30B(g)(1) applies, the portion of the alternative fuel vehicle refueling property credit to which section 30C(d)(1) applies, the mine rescue team training credit determined under section 45N(a), in the case of an eligible agricultural business (as defined in section 45O(e)), the agricultural chemicals security credit determined under section 45O(a), the differential wage payment credit determined under section 45P(a), the carbon dioxide sequestration credit determined under section 45Q(a), the portion of the new clean vehicle credit to which section 30D(c)(1) applies, the small employer health insurance credit determined under section 45R, in the case of an eligible employer (as defined in section 45S(c)), the paid family and medical leave credit determined under section 45S(a), in the case of an eligible employer (as defined in section 45T(c)), the retirement auto-enrollment credit determined under section 45T(a), plus the zero-emission nuclear power production credit determined under section 45U(a). the sustainable aviation fuel credit determined under section 40B, the clean hydrogen production credit determined under section 45V(a), the qualified commercial clean vehicle credit determined under section 45W, the advanced manufacturing production credit determined under section 45X(a), the clean electricity production credit determined under section 45Y(a), the clean fuel production credit determined under section 45Z(a), plus in the case of an eligible small employer (as defined in section 45AA(c)), the military spouse retirement plan eligibility credit determined under section 45AA(a). the tentative minimum tax for the taxable year, or 25 percent of so much of the taxpayer’s net regular tax liability as exceeds $25,000. this section and section 39 shall be applied separately with respect to such credit, and 75 percent of the tentative minimum tax shall be substituted for the tentative minimum tax under subparagraph (A) thereof, and the limitation under paragraph (1) (as modified by subclause (I)) shall be reduced by the credit allowed under subsection (a) for the taxable year (other than the empowerment zone employment credit and the specified credits). 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). this section and section 39 shall be applied separately with respect to such credits, and the tentative minimum tax shall be treated as being zero, and the limitation under paragraph (1) (as modified by subclause (I)) shall be reduced by the credit allowed under subsection (a) for the taxable year (other than the specified credits). for taxable years beginning after December 31, 2004 , the credit determined under section 40, the credit determined under section 41 for the taxable year with respect to an eligible small business (as defined in paragraph (5)(A) after application of the rules of paragraph (5)(B)), the credit determined under section 42 to the extent attributable to buildings placed in service after December 31, 2007 , at a facility which is originally placed in service after the date of the enactment of this paragraph, and during the 4-year period beginning on the date that such facility was originally placed in service, the credit determined under section 45 to the extent that such credit is attributable to section 45(e)(10) (relating to Indian coal production facilities), the credit determined under section 45B, the credit determined under section 45G, the credit determined under section 45R, the credit determined under section 45S, the credit determined under section 46 to the extent that such credit is attributable to the energy credit determined under section 48, the credit determined under section 46 to the extent that such credit is attributable to the rehabilitation credit under section 47, but only with respect to qualified rehabilitation expenditures properly taken into account for periods after December 31, 2007 , and the credit determined under section 51. a corporation the stock of which is not publicly traded, a partnership, or a sole proprietorship, For purposes of paragraph (4)(B)(ii), any credit determined under section 41 with respect to a partnership or S corporation shall not be treated as a specified credit by any partner or shareholder unless such partner or shareholder meets the gross receipts test under subparagraph (A) for the taxable year in which such credit is treated as a current year business credit. 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. 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). 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. 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. the first sentence of paragraph (1) shall be applied by substituting “25 percent of the taxpayer’s net income tax as exceeds $25,000” for “the greater of” and all that follows, paragraph (2)(A) shall be applied without regard to clause (ii)(I) thereof, and paragraph (4)(A) shall be applied without regard to clause (ii)(I) thereof. 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. 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. The amendments made by subsection (a) [amending sections 41 and 45C of this title] shall apply to shall apply to [sic] amounts paid or incurred after December 31, 2014 . The amendments made by subsection (b) [amending this section] shall apply to credits determined for taxable years beginning after December 31, 2015 . The amendments made by subsection (c) [amending sections 41 and 3111 of this title] shall apply to taxable years beginning after December 31, 2015 .” The amendments made by this section [enacting section 45R of this title and amending this section and sections 196 and 280C of this title] shall apply to amounts paid or incurred in taxable years beginning after December 31, 2009 . The amendments made by subsection (c) [amending this section] shall apply to credits determined under section 45R of the Internal Revenue Code of 1986 in taxable years beginning after December 31, 2009 , and to carrybacks of such credits.” The amendments made by subsection (b) [amending this section] shall apply to credits determined under section 42 of the Internal Revenue Code of 1986 to the extent attributable to buildings placed in service after December 31, 2007 . The amendments made by subsection (c) [amending this section] shall apply to credits determined under section 47 of the Internal Revenue Code of 1986 to the extent attributable to qualified rehabilitation expenditures properly taken into account for periods after December 31, 2007 .” 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 ]. 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.” 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. 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 ).” $1,000, or 6.2 percent of the wages (as defined in section 3401(a) [probably means section 3401(a) of the Internal Revenue Code of 1986]) paid by the taxpayer to such retained worker during the 52 consecutive week period referred to in subsection (b)(2). who was employed by the taxpayer on any date during the taxable year, who was so employed by the taxpayer for a period of not less than 52 consecutive weeks, and whose wages (as defined in section 3401(a) [probably means section 3401(a) of the Internal Revenue Code of 1986]) for such employment during the last 26 weeks of such period equaled at least 80 percent of such wages for the first 26 weeks of such period. No portion of the unused business credit under section 38 of the Internal Revenue Code of 1986 for any taxable year which is attributable to the increase in the current year business credit under this section may be carried to a taxable year beginning before the date of the enactment of this section [ Mar. 18, 2010 ]. The Secretary of the Treasury shall pay to each possession of the United States with a mirror code tax system amounts equal to the loss to that possession by reason of the application of this section (other than this subsection). Such amounts shall be determined by the Secretary of the Treasury based on information provided by the government of the respective possession. The Secretary of the Treasury shall pay to each possession of the United States which does not have a mirror code tax system amounts estimated by the Secretary of the Treasury as being equal to the aggregate benefits that would have been provided to residents of such possession by reason of the application of this section (other than this subsection) if a mirror code tax system had been in effect in such possession. The preceding sentence shall not apply with respect to any possession of the United States unless such possession has a plan, which has been approved by the Secretary of the Treasury, under which such possession will promptly distribute such payments to the residents of such possession. to whom a credit is allowed against taxes imposed by the possession by reason of this section for such taxable year, or who is eligible for a payment under a plan described in paragraph (1)(B) with respect to such taxable year. For purposes of this subsection, the term ‘possession of the United States’ includes the Commonwealth of Puerto Rico and the Commonwealth of the Northern Mariana Islands. For purposes of this subsection, the term ‘mirror code tax system’ means, with respect to any possession of the United States, the income tax system of such possession if the income tax liability of the residents of such possession under such system is determined by reference to the income tax laws of the United States as if such possession were the United States. For purposes of section 1324(b)(2) of title 31 , United States Code, rules similar to the rules of section 1001(b)(3)(C) of the American Recovery and Reinvestment Tax Act of 2009 [ section 1001(b)(3)(C) of Pub. L. 111–5 , formerly set out as a note under section 36A of this title ] shall apply.” 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. 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. 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. 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, the amount of which is available for use by such corporation for at least 10 years, which is to be used by such corporation for qualified low-income assistance within its operational area, and which is designated by such corporation for purposes of this section. The aggregate amount of contributions to a selected community development corporation which may be designated by such corporation shall not exceed $2,000,000. which is described in section 501(c)(3) of such Code and exempt from tax under section 501(a) of such Code, the principal purposes of which include promoting employment of, and business opportunities for, low-income individuals who are residents of the operational area, and which is selected by the Secretary of Housing and Urban Development for purposes of this section. 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). The area meets the size requirements under section 1392(a)(3). The unemployment rate (as determined by the appropriate available data) is not less than the national unemployment rate. 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. 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 which is approved by the Secretary of Housing and Urban Development.” 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. 50 percent of the portion of the corporation’s existing carryforwards to which the election under subsection (a) applies, or the corporation’s net tax liability for the carryback period. 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 . 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. 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. 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 which ends with the corporation’s last taxable year beginning before January 1, 1986 . the amount of the tax imposed by section 56 of the Internal Revenue Code of 1986, or the amount of any credit allowable under such Code, 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. such corporation shall place such refund in a separate account; and 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 directly in connection with the trade or business of the corporation in the manufacturer or production of steel; and shall be used (or obligated) for purposes described in clause (i) not later than 3 months after the corporation receives the refund. 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. 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. 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). 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 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. 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. 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.” 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. 50 percent of the portion of the taxpayer’s existing carryforwards to which the election under subsection (a) applies, 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 $750. 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 . the amount of the tax imposed by section 56 of the Internal Revenue Code of 1954 [now 1986], or the amount of any credit allowable under such Code, 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. 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 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. The term ‘farming’ has the meaning given such term by section 2032A(e)(4) and (5) of such Code.” such plan was favorably approved on September 23, 1983 , by employees, and not later than January 11, 1984 , the employer of such employees was 100 percent owned by such plan. which was first published on December 17, 1855 , and which began publication under its current name in 1954, and 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.” 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 a taxpayer shall disclose, in any such report, the method of accounting for such credit used by him for purposes of such report. 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].” 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 in the case of any other property, any credit against tax allowed by section 38 of such Code,