26 U.S.C. § 41: Credit for increasing research activities

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. in-house research expenses, and contract research expenses. 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. engaging in qualified research, or engaging in the direct supervision or direct support of research activities which constitute qualified research. land or improvements to land, and property of a character subject to the allowance for depreciation. The term “wages” has the meaning given such term by section 3401(a). In the case of an employee (within the meaning of section 401(c)(1)), the term “wages” includes the earned income (as defined in section 401(c)(2)) of such employee. The term “wages” shall not include any amount taken into account in determining the work opportunity credit under section 51(a). The term “contract research expenses” means 65 percent of any amount paid or incurred by the taxpayer to any person (other than an employee of the taxpayer) for qualified research. If any contract research expenses paid or incurred during any taxable year are attributable to qualified research to be conducted after the close of such taxable year, such amount shall be treated as paid or incurred during the period during which the qualified research is conducted. Subparagraph (A) shall be applied by substituting “75 percent” for “65 percent” with respect to amounts paid or incurred by the taxpayer to a qualified research consortium for qualified research on behalf of the taxpayer and 1 or more unrelated taxpayers. For purposes of the preceding sentence, all persons treated as a single employer under subsection (a) or (b) of section 52 shall be treated as related taxpayers. 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. an eligible small business, an institution of higher education (as defined in section 3304(f)), or an organization which is a Federal laboratory, 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. The term “small business” means, with respect to any calendar year, any person if the annual average number of employees employed by such person during either of the 2 preceding calendar years was 500 or fewer. For purposes of the preceding sentence, a preceding calendar year may be taken into account only if the person was in existence throughout the year. Rules similar to the rules of subparagraphs (B) and (D) of section 220(c)(4) shall apply for purposes of this clause. For purposes of this subparagraph, the term “Federal laboratory” has the meaning given such term by section 4(6) of the Stevenson-Wydler Technology Innovation Act of 1980 ( 15 U.S.C. 3703(6) ), as in effect on the date of the enactment of the Energy Tax Incentives Act of 2005. of the taxpayer, or of 1 or more other persons who with the taxpayer are treated as a single taxpayer under subsection (f)(1). 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”). In no event shall the base amount be less than 50 percent of the qualified research expenses for the credit year. Except as otherwise provided in this paragraph, the fixed-base percentage is the percentage which the aggregate qualified research expenses of the taxpayer for taxable years beginning after December 31, 1983 , and before January 1, 1989 , is of the aggregate gross receipts of the taxpayer for such taxable years. the first taxable year in which a taxpayer had both gross receipts and qualified research expenses begins after December 31, 1983 , or there are fewer than 3 taxable years beginning after December 31, 1983 , and before January 1, 1989 , in which the taxpayer had both gross receipts and qualified research expenses. 3 percent for each of the taxpayer’s 1st 5 taxable years beginning after December 31, 1993 , for which the taxpayer has qualified research expenses, 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. The Secretary may prescribe regulations providing that de minimis amounts of gross receipts and qualified research expenses shall be disregarded under clauses (i) and (ii). In no event shall the fixed-base percentage exceed 16 percent. The percentages determined under subparagraphs (A) and (B)(ii) shall be rounded to the nearest 1/100th of 1 percent. At the election of the taxpayer, the credit determined under subsection (a)(1) shall be equal to 14 percent of so much of the qualified research expenses for the taxable year as exceeds 50 percent of the average qualified research expenses for the 3 taxable years preceding the taxable year for which the credit is being determined. The credit under this paragraph shall be determined under this subparagraph if the taxpayer has no qualified research expenses in any one of the 3 taxable years preceding the taxable year for which the credit is being determined. The credit determined under this subparagraph shall be equal to 6 percent of the qualified research expenses for the taxable year. An election under this paragraph shall apply to the taxable year for which made and all succeeding taxable years unless revoked with the consent of the Secretary. Notwithstanding whether the period for filing a claim for credit or refund has expired for any taxable year taken into account in determining the fixed-base percentage, the qualified research expenses taken into account in computing such percentage shall be determined on a basis consistent with the determination of qualified research expenses for the credit year. The Secretary may prescribe regulations to prevent distortions in calculating a taxpayer’s qualified research expenses or gross receipts caused by a change in accounting methods used by such taxpayer between the current year and a year taken into account in computing such taxpayer’s fixed-base percentage. For purposes of this subsection, gross receipts for any taxable year shall be reduced by returns and allowances made during the taxable year. In the case of a foreign corporation, there shall be taken into account only gross receipts which are effectively connected with the conduct of a trade or business within the United States, the Commonwealth of Puerto Rico, or any possession of the United States. with respect to which expenditures are treated as domestic research or experimental expenditures under section 174A, 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). Paragraph (1) shall be applied separately with respect to each business component of the taxpayer. held for sale, lease, or license, or used by the taxpayer in a trade or business of the taxpayer. Any plant process, machinery, or technique for commercial production of a business component shall be treated as a separate business component (and not as part of the business component being produced). a new or improved function, performance, or reliability or quality. Research shall in no event be treated as conducted for a purpose described in this paragraph if it relates to style, taste, cosmetic, or seasonal design factors. Any research conducted after the beginning of commercial production of the business component. Any research related to the adaptation of an existing business component to a particular customer’s requirement or need. Any research related to the reproduction of an existing business component (in whole or in part) from a physical examination of the business component itself or from plans, blueprints, detailed specifications, or publicly available information with respect to such business component. 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. 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. Any research conducted outside the United States, the Commonwealth of Puerto Rico, or any possession of the United States. Any research in the social sciences, arts, or humanities. Any research to the extent funded by any grant, contract, or otherwise by another person (or governmental entity). 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). 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. In the case of a qualified organization described in subparagraph (C) or (D) of paragraph (6), clause (ii) of subparagraph (A) shall not apply. the minimum basic research amount, plus the maintenance-of-effort amount. 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). Except in the case of a taxpayer which was in existence during a taxable year (other than a short taxable year) in the base period, the minimum basic research amount for any base period shall not be less than 50 percent of the basic research payments for the taxable year for which a determination is being made under this subsection. 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. for which a deduction was allowable under section 170, and 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. The cost-of-living adjustment for any calendar year is the cost-of-living adjustment for such calendar year determined under section 1(f)(3), by substituting “calendar year 1987” for “calendar year 2016” in subparagraph (A)(ii) thereof. If the base period of any taxpayer does not end in 1983 or 1984, section 1(f)(3)(A)(ii) shall, for purposes of this paragraph, be applied by substituting the calendar year in which such base period ends for 2016. Such substitution shall be in lieu of the substitution under clause (i). is an institution of higher education (within the meaning of section 3304(f)), and is described in section 170(b)(1)(A)(ii). 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. 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 substantially all of its funds, or substantially all of the basic research payments received by it, 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 July 10, 1981 , which meets the requirements of clause (i), 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). basic research conducted outside of the United States, and basic research in the social sciences, arts, or humanities. The term “base period” means the 3-taxable-year period ending with the taxable year immediately preceding the 1st taxable year of the taxpayer beginning after December 31, 1983 . 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). For purposes of applying subsection (b)(1) to this subsection, any basic research payments shall be treated as an amount paid in carrying on a trade or business of the taxpayer in the taxable year in which it is paid (without regard to the provisions of subsection (b)(3)(B)). an S corporation, a personal holding company (as defined in section 542), or a service organization (as defined in section 414(m)(3)). 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. 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. Under regulations prescribed by the Secretary, rules similar to the rules of subsection (d) of section 52 shall apply. In the case of partnerships, the credit shall be allocated among partners under regulations prescribed by the Secretary. If a person acquires the major portion of either a trade or business or a separate unit of a trade or business (hereinafter in this paragraph referred to as the “acquired business”) of another person (hereinafter in this paragraph referred to as the “predecessor”), then the amount of qualified research expenses paid or incurred by the acquiring person during the measurement period shall be increased by the amount determined under clause (ii), and the gross receipts of the acquiring person for such period shall be increased by the amount determined under clause (iii). 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. The amount determined under this clause is the amount which would be determined under clause (ii) if “the gross receipts of” were substituted for “the qualified research expenses paid or incurred by” each place it appears in clauses (ii) and (iv). 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, 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. For purposes of this subparagraph, the term “measurement period” means, with respect to the taxable year of the acquiring person for which the credit is determined, any period of the acquiring person preceding such taxable year which is taken into account for purposes of determining the credit for such year. 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, 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). 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. In the case of any short taxable year, qualified research expenses and gross receipts shall be annualized in such circumstances and under such methods as the Secretary may prescribe by regulation. “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. 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. All persons treated as a single employer under subsection (a) or (b) of section 52 shall be treated as related persons for purposes of subparagraph (A)(iii) and as a single person for purposes of subparagraph (A)(iv). For purposes of subsection (a)(3), amounts paid or incurred for any energy research conducted outside the United States, the Commonwealth of Puerto Rico, or any possession of the United States shall not be taken into account. Any amount taken into account under subsection (a)(3) shall not be taken into account under paragraph (1) or (2) of subsection (a). The term “energy research” does not include any research which is not qualified research. 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, At the election of a qualified small business for any taxable year, section 3111(f) shall apply to the payroll tax credit portion of the credit otherwise determined under subsection (a) for the taxable year and such portion shall not be treated (other than for purposes of section 280C) as a credit determined under subsection (a). the amount specified in the election made under this subsection, the credit determined under subsection (a) for the taxable year (determined before the application of this subsection), or in the case of a qualified small business other than a partnership or S corporation, the amount of the business credit carryforward under section 39 carried from the taxable year (determined before the application of this subsection to the taxable year). the gross receipts (as determined under the rules of section 448(c)(3), without regard to subparagraph (A) thereof) of such entity for the taxable year is less than $5,000,000, and such entity did not have gross receipts (as so determined) for any taxable year preceding the 5-taxable-year period ending with such taxable year, and by substituting “person” for “entity” each place it appears, and by only taking into account the aggregate gross receipts received by such person in carrying on all trades or businesses of such person. Such term shall not include an organization which is exempt from taxation under section 501. shall specify the amount of the credit to which such election applies, in the case of a qualified small business which is a partnership, the return required to be filed under section 6031, in the case of a qualified small business which is an S corporation, the return required to be filed under section 6037, and in the case of any other qualified small business, the return of tax for the taxable year, and may be revoked only with the consent of the Secretary. The amount specified in any election made under this subsection shall not exceed $250,000. In the case of taxable years beginning after December 31, 2022 , the amount in subclause (I) shall be increased by $250,000. A person may not make an election under this subsection if such person (or any other person treated as a single taxpayer with such person under paragraph (5)(A)) has made an election under this subsection for 5 or more preceding taxable years. In the case of a qualified small business which is a partnership or S corporation, the election made under this subsection shall be made at the entity level. Except as provided in subparagraph (B), all persons or entities treated as a single taxpayer under subsection (f)(1) shall be treated as a single taxpayer for purposes of this subsection. each of the persons treated as a single taxpayer under subparagraph (A) may separately make the election under paragraph (1) for any taxable year, and each of the $250,000 amounts under paragraph (4)(B)(i) shall be allocated among all persons treated as a single taxpayer under subparagraph (A) in the same manner as under subparagraph (A)(ii) or (B)(ii) of subsection (f)(1), whichever is applicable. regulations to prevent the avoidance of the purposes of the limitations and aggregation rules under this subsection through the use of successor companies or other means, regulations to minimize compliance and record-keeping burdens under this subsection, and regulations for recapturing the benefit of credits determined under section 3111(f) in cases where there is a subsequent adjustment to the payroll tax credit portion of the credit determined under subsection (a), including requiring amended income tax returns in the cases where there is such an adjustment. The amendments made by subsection (a) [amending this section and section 45C of this title ] shall apply to amounts paid or incurred after December 31, 2011 . The amendments made by subsections (b) and (c) [amending this section] shall apply to taxable years beginning after December 31, 2011 .” 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 December 31, 2007 . The amendments made by subsection (a) [amending this section and section 45C of this title ] shall apply to amounts paid or incurred after December 31, 2007 .” Except as provided in paragraph (3), the amendments made by this subsection [amending this section] shall apply to taxable years ending after December 31, 2006 . 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 December 31, 2006 ), plus 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 January 1, 2007 ). The term ‘specified transitional taxable year’ means any taxable year which ends after December 31, 2006 , and which includes such date. The term ‘applicable 2006 percentage’ means the number of days in the specified transitional taxable year before January 1, 2007 , divided by the number of days in such taxable year. The term ‘applicable 2007 percentage’ means the number of days in the specified transitional taxable year after December 31, 2006 , divided by the number of days in such taxable year.” 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 January 1, 2007 , such election shall be treated as revoked with the consent of the Secretary of the Treasury if the taxpayer makes an election under section 41(c)(5) of such Code (as added by this subsection) for such year. Except as provided in paragraph (4), the amendments made by this subsection [amending this section] shall apply to taxable years ending after December 31, 2006 . 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 December 31, 2006 ), plus 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 January 1, 2007 ). 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. Elections under paragraphs (4) and (5) of section 41(c) of such Code may both apply for the specified transitional taxable year. 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.” 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 June 30, 1996 . The amendments made by subsections (c) and (d) [amending this section] shall apply to taxable years beginning after June 30, 1996 . 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.” 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 December 31, 1985 . 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 December 31, 1985 . 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 December 31, 1986 .” 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 June 30, 1981 . 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. 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).” In the case of any taxable year ending after December 31, 2005 , and before the date of the enactment of this Act [ Dec. 20, 2006 ], any election under section 41(c)(4) or section 280C(c)(3)(C) [now 280C(c)(2)(C)] of the Internal Revenue Code of 1986 shall be treated as having been timely made for such taxable year if such election is made not later than the later of April 15, 2007 , or such time as the Secretary of the Treasury, or his designee, may specify. Such election shall be made in the manner prescribed by such Secretary or designee. 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 ].” shall not be taken into account prior to October 1, 2000 , to the extent such credit is attributable to the first suspension period; and shall not be taken into account prior to October 1, 2001 , to the extent such credit is attributable to the second suspension period. the first suspension period is the period beginning on July 1, 1999 , and ending on September 30, 2000 ; and the second suspension period is the period beginning on October 1, 2000 , and ending on September 30, 2001 . 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. 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. review the application; determine the amount of the overpayment; and apply, credit, or refund such overpayment, 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. 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. No addition to tax shall be made under section 6654 or 6655 of such Code for any period before July 1, 1999 , with respect to any underpayment of tax imposed by such Code to the extent such underpayment was created or increased by reason of subparagraph (A). For purposes of this subsection, the term ‘Secretary’ means the Secretary of the Treasury (or such Secretary’s delegate).” whether any excess credit under old section 44F [now 41] for a taxable year beginning before January 1, 1984 , is allowable as a carryover under new section 30 [now 41], and the period during which new section 30 [now 41] is in effect,