26 U.S.C. § 50 (2024) — Title 26: INTERNAL REVENUE CODE / Chapter 1 / Section 50: Other special rules
Other special rules
Status: in_force

(a) Recapture in case of dispositions, etc.

Under regulations prescribed by the Secretary—

(1) Early disposition, etc.

(A) General rule

If, during any taxable year, investment credit property is disposed of, or otherwise ceases to be investment credit property with respect to the taxpayer, before the close of the recapture period, then the tax under this chapter for such taxable year shall be increased by the recapture percentage of the aggregate decrease in the credits allowed under section 38 for all prior taxable years which would have resulted solely from reducing to zero any credit determined under this subpart with respect to such property.

(B) Recapture percentage

For purposes of subparagraph (A), the recapture percentage shall be determined in accordance with the following table:

 

If the property ceases to be
 investment credit property within—
The recapture 
percentage is:

(i) One full year after placed in service 
100   

(ii) One full year after the close of the period described in clause (i) 
80   

(iii) One full year after the close of the period described in clause (ii) 
60   

(iv) One full year after the close of the period described in clause (iii) 
40   

(v) One full year after the close of the period described in clause (iv) 
20   

(2) Property ceases to qualify for progress expenditures

(A) In general

If during any taxable year any building to which section 47(d) applied ceases (by reason of sale or other disposition, cancellation or abandonment of contract, or otherwise) to be, with respect to the taxpayer, property which, when placed in service, will be a qualified rehabilitated building, then the tax under this chapter for such taxable year shall be increased by an amount equal to the aggregate decrease in the credits allowed under section 38 for all prior taxable years which would have resulted solely from reducing to zero the credit determined under this subpart with respect to such building.

(B) Certain excess credit recaptured

Any amount which would have been applied as a reduction under paragraph (2) of section 47(b) but for the fact that a reduction under such paragraph cannot reduce the amount taken into account under section 47(b)(1) below zero shall be treated as an amount required to be recaptured under subparagraph (A) for the taxable year during which the building is placed in service.

(C) Certain sales and leasebacks

Under regulations prescribed by the Secretary, a sale by, and leaseback to, a taxpayer who, when the property is placed in service, will be a lessee to whom the rules referred to in subsection (d)(5) apply shall not be treated as a cessation described in subparagraph (A) to the extent that the amount which will be passed through to the lessee under such rules with respect to such property is not less than the qualified rehabilitation expenditures properly taken into account by the lessee under section 47(d) with respect to such property.

(D) Coordination with paragraph (1)

If, after property is placed in service, there is a disposition or other cessation described in paragraph (1), then paragraph (1) shall be applied as if any credit which was allowable by reason of section 47(d) and which has not been required to be recaptured before such disposition, cessation, or change in use were allowable for the taxable year the property was placed in service.

(E) Special rules

Rules similar to the rules of this paragraph shall apply in cases where qualified progress expenditures were taken into account under the rules referred to in section 48(b), 48A(b)(3), 48B(b)(3), 48C(b)(2), 48D(b)(5), or 48E(e).

(3) Certain expansions in connection with advanced manufacturing facilities

(A) In general

If there is a an applicable transaction by an applicable taxpayer before the close of the 10-year period beginning on the date such taxpayer placed in service investment credit property which is eligible for the advanced manufacturing investment credit under section 48D(a), then the tax under this chapter for the taxable year in which such transaction occurs shall be increased by 100 percent of the aggregate decrease in the credits allowed under section 38 for all prior taxable years which would have resulted solely from reducing to zero any credit determined under section 46 which is attributable to the advanced manufacturing investment credit under section 48D(a) with respect to such property.

(B) Exception

Subparagraph (A) shall not apply if the applicable taxpayer demonstrates to the satisfaction of the Secretary that the applicable transaction has been ceased or abandoned within 45 days of a determination and notice by the Secretary.

(C) Regulations and guidance

The Secretary shall issue such regulations or other guidance as the Secretary determines necessary or appropriate to carry out the purposes of this paragraph, including regulations or other guidance which provide for requirements for recordkeeping or information reporting for purposes of administering the requirements of this paragraph.

(4) Carrybacks and carryovers adjusted

In the case of any cessation described in paragraph (1) or (2), or any applicable transaction to which paragraph (3)(A) applies, the carrybacks and carryovers under section 39 shall be adjusted by reason of such cessation or applicable transaction.

(5) Subsection not to apply in certain cases

Paragraphs (1) and (2) shall not apply to—

(A) a transfer by reason of death, or

(B) a transaction to which section 381(a) applies.

For purposes of this subsection, property shall not be treated as ceasing to be investment credit property with respect to the taxpayer by reason of a mere change in the form of conducting the trade or business so long as the property is retained in such trade or business as investment credit property and the taxpayer retains a substantial interest in such trade or business.

(6) Definitions and special rules

(A) Investment credit property

For purposes of this subsection, the term "investment credit property" means any property eligible for a credit determined under this subpart.

(B) Transfer between spouses or incident to divorce

In the case of any transfer described in subsection (a) of section 1041—

(i) the foregoing provisions of this subsection shall not apply, and

(ii) the same tax treatment under this subsection with respect to the transferred property shall apply to the transferee as would have applied to the transferor.

(C) Special rule

Any increase in tax under paragraph (1), (2), or (3) shall not be treated as tax imposed by this chapter for purposes of determining the amount of any credit allowable under this chapter.

(D) Applicable transaction

For purposes of this subsection—

(i) In general

The term "applicable transaction" means, with respect to any applicable taxpayer, any significant transaction (as determined by the Secretary, in coordination with the Secretary of Commerce and the Secretary of Defense) involving the material expansion of semiconductor manufacturing capacity of such applicable taxpayer in the People's Republic of China or a foreign country of concern (as defined in section 9901(7) of the William M. (Mac) Thornberry National Defense Authorization Act for Fiscal Year 2021).

(ii) Exception

Such term shall not include a transaction which primarily involves the expansion of manufacturing capacity for legacy semiconductors (as defined in section 9902(a)(6) of the William M. (Mac) Thornberry National Defense Authorization Act for Fiscal Year 2021).

(E) Applicable taxpayer

For purposes of this subsection, the term "applicable taxpayer" means any taxpayer who has been allowed a credit under section 48D(a) for any prior taxable year.

(b) Certain property not eligible

No credit shall be determined under this subpart with respect to—

(1) Property used outside United States

(A) In general

Except as provided in subparagraph (B), no credit shall be determined under this subpart with respect to any property which is used predominantly outside the United States.

(B) Exceptions

Subparagraph (A) shall not apply to any property described in section 168(g)(4).

(2) Property used for lodging

No credit shall be determined under this subpart with respect to any property which is used predominantly to furnish lodging or in connection with the furnishing of lodging. The preceding sentence shall not apply to—

(A) nonlodging commercial facilities which are available to persons not using the lodging facilities on the same basis as they are available to persons using the lodging facilities;

(B) property used by a hotel or motel in connection with the trade or business of furnishing lodging where the predominant portion of the accommodations is used by transients;

(C) a certified historic structure to the extent of that portion of the basis which is attributable to qualified rehabilitation expenditures; and

(D) any energy property.

(3) Property used by certain tax-exempt organization

No credit shall be determined under this subpart with respect to any property used by an organization (other than a cooperative described in section 521) which is exempt from the tax imposed by this chapter unless such property is used predominantly in an unrelated trade or business the income of which is subject to tax under section 511. If the property is debt-financed property (as defined in section 514(b)), the amount taken into account for purposes of determining the amount of the credit under this subpart with respect to such property shall be that percentage of the amount (which but for this paragraph would be so taken into account) which is the same percentage as is used under section 514(a), for the year the property is placed in service, in computing the amount of gross income to be taken into account during such taxable year with respect to such property. If any qualified rehabilitated building is used by the tax-exempt organization pursuant to a lease, this paragraph shall not apply for purposes of determining the amount of the rehabilitation credit.

(4) Property used by governmental units or foreign persons or entities

(A) In general

No credit shall be determined under this subpart with respect to any property used—

(i) by the United States, any State or political subdivision thereof, any possession of the United States, or any agency or instrumentality of any of the foregoing, or

(ii) by any foreign person or entity (as defined in section 168(h)(2)(C)), but only with respect to property to which section 168(h)(2)(A)(iii) applies (determined after the application of section 168(h)(2)(B)).

(B) Exception for short-term leases

This paragraph and paragraph (3) shall not apply to any property by reason of use under a lease with a term of less than 6 months (determined under section 168(i)(3)).

(C) Exception for qualified rehabilitated buildings leased to governments, etc.

If any qualified rehabilitated building is leased to a governmental unit (or a foreign person or entity) this paragraph shall not apply for purposes of determining the rehabilitation credit with respect to such building.

(D) Special rules for partnerships, etc.

For purposes of this paragraph and paragraph (3), rules similar to the rules of paragraphs (5) and (6) of section 168(h) shall apply.

(E) Cross reference

For special rules for the application of this paragraph and paragraph (3), see section 168(h).

(c) Basis adjustment to investment credit property

(1) In general

For purposes of this subtitle, if a credit is determined under this subpart with respect to any property, the basis of such property shall be reduced by the amount of the credit so determined.

(2) Certain dispositions

If during any taxable year there is a recapture amount determined with respect to any property the basis of which was reduced under paragraph (1), the basis of such property (immediately before the event resulting in such recapture) shall be increased by an amount equal to such recapture amount. For purposes of the preceding sentence, the term "recapture amount" means any increase in tax (or adjustment in carrybacks or carryovers) determined under subsection (a).

(3) Special rule

In the case of any energy credit or clean electricity investment credit—

(A) only 50 percent of such credit shall be taken into account under paragraph (1),

(B) only 50 percent of any recapture amount attributable to such credit shall be taken into account under paragraph (2), and

(C) paragraph (1) shall not apply for purposes of determining eligible basis under section 42.

(4) Recapture of reductions

(A) In general

For purposes of sections 1245 and 1250, any reduction under this subsection shall be treated as a deduction allowed for depreciation.

(B) Special rule for section 1250

For purposes of section 1250(b), the determination of what would have been the depreciation adjustments under the straight line method shall be made as if there had been no reduction under this section.

(5) Adjustment in basis of interest in partnership or S corporation

The adjusted basis of—

(A) a partner's interest in a partnership, and

(B) stock in an S corporation,

shall be appropriately adjusted to take into account adjustments made under this subsection in the basis of property held by the partnership or S corporation (as the case may be).

(d) Certain rules made applicable

For purposes of this subpart, rules similar to the rules of the following provisions (as in effect on the day before the date of the enactment of the Revenue Reconciliation Act of 1990) shall apply:

(1) Section 46(e) (relating to limitations with respect to certain persons).

(2) Section 46(f) (relating to limitation in case of certain regulated companies). At the election of a taxpayer, this paragraph shall not apply to any energy storage technology (as defined in section 48(c)(6)), provided—

(A) no election under this paragraph shall be permitted if the making of such election is prohibited by a State or political subdivision thereof, by any agency or instrumentality of the United States, or by a public service or public utility commission or other similar body of any State or political subdivision that regulates public utilities as described in section 7701(a)(33)(A),

(B) an election under this paragraph shall be made separately with respect to each energy storage technology by the due date (including extensions) of the Federal tax return for the taxable year in which the energy storage technology is placed in service by the taxpayer, and once made, may be revoked only with the consent of the Secretary, and

(C) an election shall not apply with respect to any energy storage technology if such energy storage technology has a maximum capacity equal to or less than 500 kilowatt hours.

(3) Section 46(h) (relating to special rules for cooperatives).

(4) Paragraphs (2) and (3) of section 48(b) (relating to special rule for sale-leasebacks).

(5) Section 48(d) (relating to certain leased property).

(6) Section 48(f) (relating to estates and trusts).

(7) Section 48(r) (relating to certain 501(d) organizations).

Paragraphs (1)(A), (2)(A), and (4) of the section 46(e) referred to in paragraph (1) of this subsection shall not apply to any taxable year beginning after December 31, 1995. In the case of a real estate investment trust making an election under section 6418, paragraphs (1)(B) and (2)(B) of the section 46(e) referred to in paragraph (1) of this subsection shall not apply to any investment credit property of such real estate investment trust to which such election applies.

(Added Pub. L. 101–508, title XI, §11813(a), Nov. 5, 1990, 104 Stat. 1388–546; amended Pub. L. 104–188, title I, §§1616(b)(1), 1702(h)(11), 1704(t)(29), Aug. 20, 1996, 110 Stat. 1856, 1874, 1889; Pub. L. 105–206, title VI, §6004(g)(7), July 22, 1998, 112 Stat. 796; Pub. L. 108–357, title III, §322(d)(2)(D), Oct. 22, 2004, 118 Stat. 1475; Pub. L. 109–135, title IV, §412(o), Dec. 21, 2005, 119 Stat. 2638; Pub. L. 113–295, div. A, title II, §220(d), Dec. 19, 2014, 128 Stat. 4036; Pub. L. 115–141, div. U, title IV, §401(a)(25), (d)(3)(B)(ii), Mar. 23, 2018, 132 Stat. 1185, 1209; Pub. L. 117–167, div. A, §107(b)(1)–(3)(B), (d)(3), Aug. 9, 2022, 136 Stat. 1397–1399; Pub. L. 117–169, title I, §§13102(f)(5), (i), 13702(b)(3), (4), 13801(c), Aug. 16, 2022, 136 Stat. 1917, 1997, 2012.)

Editorial Notes

References in Text

Section 9901(7) of the William M. (Mac) Thornberry National Defense Authorization Act for Fiscal Year 2021, referred to in subsec. (a)(6)(D)(i), is section 9901(7) of Pub. L. 116–283, which is classified to section 4651(7) of Title 15, Commerce and Trade.

Section 9902(a)(6) of the William M. (Mac) Thornberry National Defense Authorization Act for Fiscal Year 2021, referred to in subsec. (a)(6)(D)(ii), is section 9902(a)(6) of Pub. L. 116–283, which is classified to section 4652(a)(6) of Title 15, Commerce and Trade.

The date of the enactment of the Revenue Reconciliation Act of 1990, referred to in subsec. (d), is the date of enactment of Pub. L. 101–508, which was approved Nov. 5, 1990.

Prior Provisions

A prior section 50, Pub. L. 92–178, title I, §101(a), Dec. 10, 1971, 85 Stat. 498, related to restoration of credit for investment in certain depreciable property, prior to repeal by Pub. L. 95–600, title III, §312(c)(1), Nov. 6, 1978, 92 Stat. 2826, applicable to taxable years ending after Dec. 31, 1978.

Amendments

2022—Subsec. (a)(2)(E). Pub. L. 117–169, §13702(b)(3), substituted "48D(b)(5), or 48E(e)" for "or 48D(b)(5)".

Pub. L. 117–167, §107(d)(3), substituted "48C(b)(2), or 48D(b)(5)" for "or 48C(b)(2)".

Subsec. (a)(3). Pub. L. 117–167, §107(b)(1), added par. (3). Former par. (3) redesignated (4).

Subsec. (a)(4). Pub. L. 117–167, §107(b)(3)(A)(ii), inserted "or applicable transaction" before period at end.

Pub. L. 117–167, §107(b)(3)(A)(i), which directed the insertion of ", or any applicable transaction to which paragraph (3)(A) applies" after "paragraphs (1) and (2)", was executed by making the insertion after "paragraph (1) or (2)" to reflect the probable intent of Congress.

Pub. L. 117–167, §107(b)(1), redesignated par. (3) as (4). Former par. (4) redesignated (5).

Subsec. (a)(5), (6). Pub. L. 117–167, §107(b)(1), redesignated pars. (4) and (5) as (5) and (6), respectively.

Subsec. (a)(6)(C). Pub. L. 117–167, §107(b)(3)(B), substituted "paragraph (1), (2), or (3)" for "paragraph (1) or (2)".

Subsec. (a)(6)(D), (E). Pub. L. 117–167, §107(b)(2), added subpars. (D) and (E).

Subsec. (c)(3). Pub. L. 117–169, §13702(b)(4), inserted "or clean electricity investment credit" after "In the case of any energy credit" in introductory provisions.

Subsec. (c)(3)(C). Pub. L. 117–169, §13102(i), added subpar. (C).

Subsec. (d). Pub. L. 117–169, §13801(c), inserted "In the case of a real estate investment trust making an election under section 6418, paragraphs (1)(B) and (2)(B) of the section 46(e) referred to in paragraph (1) of this subsection shall not apply to any investment credit property of such real estate investment trust to which such election applies." at end of concluding provisions.

Subsec. (d)(2). Pub. L. 117–169, §13102(f)(5), inserted "At the election of a taxpayer, this paragraph shall not apply to any energy storage technology (as defined in section 48(c)(6)), provided—" after "companies)." and added subpars. (A) to (C).

2018—Subsec. (a)(2)(E). Pub. L. 115–141, §401(d)(3)(B)(ii), substituted "or 48C(b)(2)" for "48C(b)(2), or 48D(b)(4)".

Subsec. (b)(2)(A). Pub. L. 115–141, §401(a)(25), substituted semicolon for period at end.

2014—Subsec. (a)(2)(E). Pub. L. 113–295 inserted ", 48A(b)(3), 48B(b)(3), 48C(b)(2), or 48D(b)(4)" after "in section 48(b)".

2005—Subsec. (a)(2)(E). Pub. L. 109–135 substituted "section 48(b)" for "section 48(a)(5)".

2004—Subsec. (c)(3). Pub. L. 108–357 struck out "or reforestation credit" after "energy credit" in introductory provisions.

1998—Subsec. (a)(5)(C). Pub. L. 105–206 substituted "this chapter" for "subpart A, B, D, or G".

1996—Subsec. (a)(2)(C). Pub. L. 104–188, §1704(t)(29), substituted "subsection (d)(5)" for "subsection (c)(4)".

Subsec. (a)(2)(E). Pub. L. 104–188, §1702(h)(11), substituted "48(a)(5)" for "48(a)(5)(A)".

Subsec. (d). Pub. L. 104–188, §1616(b)(1), inserted closing provisions.

Statutory Notes and Related Subsidiaries

Effective Date of 2022 Amendment

Amendment by section 13102(f)(5), (i) of Pub. L. 117–169 applicable to property placed in service after Dec. 31, 2022, see section 13102(q)(2) of Pub. L. 117–169, set out in a note under section 45 of this title.

Amendment by section 13702(b)(3), (4) of Pub. L. 117–169 applicable to property placed in service after Dec. 31, 2024, see section 13702(c) of Pub. L. 117–169, set out as an Effective Date note under section 48E of this title.

Amendment by section 13801(c) of Pub. L. 117–169 applicable to taxable years beginning after Dec. 31, 2022, see section 13801(g) of Pub. L. 117–169, set out as an Effective Date note under section 6417 of this title.

Amendment by Pub. L. 117–167 applicable to property placed in service after Dec. 31, 2022, and, for any property the construction of which begins prior to Jan. 1, 2023, only to the extent of the basis thereof attributable to the construction, reconstruction, or erection after Aug. 9, 2022, see section 107(f) of Pub. L. 117–167, set out as a note under section 905 of Title 2, The Congress.

Effective Date of 2004 Amendment

Amendment by Pub. L. 108–357 applicable with respect to expenditures paid or incurred after Oct. 22, 2004, see section 322(e) of Pub. L. 108–357, set out as a note under section 46 of this title.

Effective Date of 1998 Amendment

Amendment by Pub. L. 105–206 effective, except as otherwise provided, as if included in the provisions of the Taxpayer Relief Act of 1997, Pub. L. 105–34, to which such amendment relates, see section 6024 of Pub. L. 105–206, set out as a note under section 1 of this title.

Effective Date of 1996 Amendment

Amendment by section 1616(b)(1) of Pub. L. 104–188 applicable to taxable years beginning after Dec. 31, 1995, see section 1616(c) of Pub. L. 104–188, set out as a note under section 593 of this title.

Amendment by section 1702(h)(11) of Pub. L. 104–188 effective, except as otherwise expressly provided, as if included in the provision of the Revenue Reconciliation Act of 1990, Pub. L. 101–508, title XI, to which such amendment relates, see section 1702(i) of Pub. L. 104–188, set out as a note under section 38 of this title.

Effective Date

Section applicable to property placed in service after Dec. 31, 1990, but not applicable to any transition property (as defined in section 49(e) of this title), any property with respect to which qualified progress expenditures were previously taken into account under section 46(d) of this title, and any property described in section 46(b)(2)(C) of this title, as such sections were in effect on Nov. 4, 1990, see section 11813(c) of Pub. L. 101–508, set out as an Effective Date of 1990 Amendment note under section 45K of this title.

Savings Provision

For provisions that amendment made by section 401(d)(3)(B)(ii) of Pub. L. 115–141 not apply to expenditures made in taxable years beginning before Jan. 1, 2011, in the case of the repeal of section 48D(e)(1) of this title, see section 401(d)(3)(C) of Pub. L. 115–141, set out as a note under section 49 of this title.

For provisions that nothing in amendment by section 401(d)(3)(B)(ii) of Pub. L. 115–141 be construed to affect treatment of certain transactions occurring, property acquired, or items of income, loss, deduction, or credit taken into account prior to Mar. 23, 2018, for purposes of determining liability for tax for periods ending after Mar. 23, 2018, see section 401(e) of Pub. L. 115–141, set out as a note under section 23 of this title.

For provisions that nothing in this section be construed to affect treatment of certain transactions occurring, property acquired, or items of income, loss, deduction, or credit taken into account prior to Nov. 5, 1990, for purposes of determining liability for tax for periods ending after Nov. 5, 1990, see section 11821(b) of Pub. L. 101–508, set out as a note under section 45K of this title.
26 U.S.C. § 4253 (2024) — Title 26: INTERNAL REVENUE CODE / Chapter 33 / Section 4253: Exemptions
Exemptions
Status: in_force

(a) Certain coin-operated service

Service paid for by inserting coins in coin-operated telephones available to the public shall not be subject to the tax imposed by section 4251 with respect to local telephone service, or with respect to toll telephone service if the charge for such toll telephone service is less than 25 cents; except that where such coin-operated telephone service is furnished for a guaranteed amount, the amounts paid under such guarantee plus any fixed monthly or other periodic charge shall be subject to the tax.

(b) News services

No tax shall be imposed under section 4251, except with respect to local telephone service, on any payment received from any person for services used in the collection of news for the public press, or a news ticker service furnishing a general news service similar to that of the public press, or radio broadcasting, or in the dissemination of news through the public press, or a news ticker service furnishing a general news service similar to that of the public press, or by means of radio broadcasting, if the charge for such service is billed in writing to such person.

(c) International, etc., organizations

No tax shall be imposed under section 4251 on any payment received for services furnished to an international organization, or to the American National Red Cross.

(d) Servicemen in combat zone

No tax shall be imposed under section 4251 on any payment received for any toll telephone service which originates within a combat zone, as defined in section 112, from a member of the Armed Forces of the United States performing service in such combat zone, as determined under such section, provided a certificate, setting forth such facts as the Secretary may by regulations prescribe, is furnished to the person receiving such payment.

(e) Items otherwise taxed

Only one payment of tax under section 4251 shall be required with respect to the tax on any service, notwithstanding the lines or stations of one or more persons are used in furnishing such service.

(f) Common carriers and communications companies

No tax shall be imposed under section 4251 on the amount paid for any toll telephone service described in section 4252(b)(2) to the extent that the amount so paid is for use by a common carrier, telephone or telegraph company, or radio broadcasting station or network in the conduct of its business as such.

(g) Installation charges

No tax shall be imposed under section 4251 on so much of any amount paid for the installation of any instrument, wire, pole, switchboard, apparatus, or equipment as is properly attributable to such installation.

(h) Nonprofit hospitals

No tax shall be imposed under section 4251 on any amount paid by a nonprofit hospital for services furnished to such organization. For purposes of this subsection, the term "nonprofit hospital" means a hospital referred to in section 170(b)(1)(A)(iii) which is exempt from income tax under section 501(a).

(i) State and local governmental exemption

Under regulations prescribed by the Secretary, no tax shall be imposed under section 4251 upon any payment received for services or facilities furnished to the government of any State, or any political subdivision thereof, or the District of Columbia.

(j) Exemption for nonprofit educational organizations

Under regulations prescribed by the Secretary, no tax shall be imposed under section 4251 on any amount paid by a nonprofit educational organization for services or facilities furnished to such organization. For purposes of this subsection, the term "nonprofit educational organization" means an educational organization described in section 170(b)(1)(A)(ii) which is exempt from income tax under section 501(a). The term also includes a school operated as an activity of an organization described in section 501(c)(3) which is exempt from income tax under section 501(a), if such school normally maintains a regular faculty and curriculum and normally has a regularly enrolled body of pupils or students in attendance at the place where its educational activities are regularly carried on.

(k) Exemption for qualified blood collector organizations

Under regulations provided by the Secretary, no tax shall be imposed under section 4251 on any amount paid by a qualified blood collector organization (as defined in section 7701(a)(49)) for services or facilities furnished to such organization.

(l) Filing of exemption certificates

(1) In general

In order to claim an exemption under subsection (c), (h), (i), (j), or (k), a person shall provide to the provider of communications services a statement (in such form and manner as the Secretary may provide) certifying that such person is entitled to such exemption.

(2) Duration of certificate

Any statement provided under paragraph (1) shall remain in effect until—

(A) the provider of communications services has actual knowledge that the information provided in such statement is false, or

(B) such provider is notified by the Secretary that the provider of the statement is no longer entitled to an exemption described in paragraph (1).

If any information provided in such statement is no longer accurate, the person providing such statement shall inform the provider of communications services within 30 days of any change of information.

(Aug. 16, 1954, ch. 736, 68A Stat. 504; Pub. L. 85–859, title I, §133(a), Sept. 2, 1958, 72 Stat. 1290; Pub. L. 86–344, §4(a), Sept. 21, 1959, 73 Stat. 619; Pub. L. 87–508, §4(b), June 28, 1962, 76 Stat. 115; Pub. L. 89–44, title III, §302, June 21, 1965, 79 Stat. 146; Pub. L. 89–368, title II, §202(b), Mar. 15, 1966, 80 Stat. 66; Pub. L. 91–172, title I, §101(j)(27), Dec. 30, 1969, 83 Stat. 529; Pub. L. 94–455, title XIX, §§1904(a)(6), 1906(b)(13)(A), Oct. 4, 1976, 90 Stat. 1811, 1834; Pub. L. 101–508, title XI, §11217(c)(1), Nov. 5, 1990, 104 Stat. 1388–438; Pub. L. 109–280, title XII, §1207(c), Aug. 17, 2006, 120 Stat. 1070.)

Editorial Notes

Codification

Section 1207(c) of Pub. L. 109–280, which directed the amendment of section 4253 without specifying the act to be amended, was executed to this section, which is section 4253 of the Internal Revenue Code of 1986, to reflect the probable intent of Congress. See 2006 Amendment notes below.

This subchapter, relating to the tax on communications, was repealed by Pub. L. 90–364, title I, §105(b)(3), June 28, 1968, 82 Stat. 266, as amended by Pub. L. 91–172, title VII, §702(b)(3), Dec. 30, 1969, 83 Stat. 660; Pub. L. 91–614, title II, §201(b)(3), Dec. 31, 1970, 84 Stat. 1843, effective with respect to amounts paid pursuant to bills first rendered on or after Jan. 1, 1982. In the case of communications services rendered before Nov. 1, 1981, for which a bill has not been rendered before Jan. 1, 1982, a bill shall be treated as having been first rendered on Dec. 31, 1981. Repeal of this subchapter was not executed in view of the amendments to section 4251 of this title by Pub. L. 96–499, Pub. L. 97–34, Pub. L. 97–248, Pub. L. 98–369, Pub. L. 99–514, Pub. L. 100–203, and Pub. L. 101–508, extending the date in (and finally eliminating) provisions which had reduced the tax to zero after a specified date.

Amendments

2006—Subsec. (k). Pub. L. 109–280, §1207(c)(1), added subsec. (k). Former subsec. (k) redesignated (l). See Codification note above.

Subsec. (l). Pub. L. 109–280, §1207(c)(1), redesignated subsec. (k) as (l). See Codification note above.

Subsec. (l)(1). Pub. L. 109–280, §1207(c)(2), substituted "(j), or (k)" for "or (j)". See Codification note above.

1990—Subsec. (k). Pub. L. 101–508 added subsec. (k).

1976—Subsec. (d). Pub. L. 94–455, §1906(b)(13)(A), struck out "or his delegate" after "Secretary".

Subsecs. (i), (j). Pub. L. 94–455, §1904(a)(6), added subsecs. (i) and (j).

1969—Subsec. (h). Pub. L. 91–172 substituted "section 170(b)(1)(A)(iii)" for "section 503(b)(5)".

1966—Subsec. (h). Pub. L. 89–368 added subsec. (h).

1965—Subsec. (a). Pub. L. 89–44 substituted "with respect to local telephone service, or with respect to toll telephone service if the charge for such toll telephone service is less than 25 cents", for "with respect to general telephone service, or with respect to toll telephone service or telegraph service if the charge for such toll telephone service or telegraph service is less than 25 cents".

Subsec. (b). Pub. L. 89–44 substituted "local telephone service" for "general telephone service" and "such service" for "such services".

Subsec. (c). Pub. L. 89–44 substituted "International, etc., organizations" for "Certain organizations" in heading.

Subsec. (d). Pub. L. 89–44 reenacted subsec. (d) without change.

Subsec. (e). Pub. L. 89–44 substituted "any service" for "toll telephone service, telegraph service, or teletypewriter exchange service".

Subsec. (f). Pub. L. 89–44 substituted amounts paid for any toll telephone service for amounts paid for wire mileage service, wire and equipment service, and use of any telephone or radiotelephone line or channel which constitutes general telephone service if such line or channel connects stations between any two of which there would otherwise be a toll charge.

Subsec. (g). Pub. L. 89–44 reenacted subsec. (g) without change.

Subsecs. (h) to (j). Pub. L. 89–44 struck out subsecs. (h) to (j), which related to terminal facilities in case of wire mileage service and to certain interior and private communications services.

1962—Subsec. (j). Pub. L. 87–508 added subsec. (j).

1959—Subsec. (f). Pub. L. 86–344 substituted "Common carriers and communications companies" for "Special wire service in company business" in heading, incorporated existing provisions in opening and closing statements and par. (1) and added par. (2).

1958—Subsec. (a). Pub. L. 85–859 substituted "general telephone service, or with respect to toll telephone service or telegraph service if the charge for such toll telephone service or telegraph service is less than 25 cents" for "local telephone service".

Subsec. (b). Pub. L. 85–859 substituted "general telephone service, on any payment received from any person for services used" for "local telephone service, upon any payment received from any person for services or facilities utilized".

Subsec. (c). Pub. L. 85–859 substituted "on any payment received for services furnished to an international organization, or to the American National Red Cross" for "upon any payment received for services or facilities furnished to an international organization, or any organization created by act of Congress to act in matters of relief under the treaty of Geneva of August 22, 1864".

Subsec. (d). Pub. L. 85–859 substituted "on any payment received for any toll telephone service" for "with respect to long distance telephone service upon any payment received for any telephone or radio telephone message".

Subsec. (e). Pub. L. 85–859 substituted "toll telephone service, telegraph service, or teletypewriter exchange service" for "long distance telephone service or telegraph service" and "in furnishing such service" for "in the transmission of such dispatch, message or conversation".

Subsec. (f). Pub. L. 85–859 substituted "any wire mileage service or wire and equipment service as is used in the conduct" for "the service described in sections 4252(d) and (e) as is utilized in the conduct".

Subsecs. (g) to (i). Pub. L. 85–859 added subsecs. (g) to (i).

Statutory Notes and Related Subsidiaries

Effective Date of 2006 Amendment

Amendment by Pub. L. 109–280 effective Jan. 1, 2007, see section 1207(g)(1) of Pub. L. 109–280, set out as a note under section 4041 of this title.

Effective Date of 1990 Amendment

Pub. L. 101–508, title XI, §11217(c)(2), Nov. 5, 1990, 104 Stat. 1388–438, provided that:

"(A) In general.—The amendment made by paragraph (1) [amending this section] shall apply to any claim for exemption made after the date of the enactment of this Act [Nov. 5, 1990].

"(B) Duration of existing certificates.—Any annual certificate of exemption effective on the date of the enactment of this Act [Nov. 5, 1990] shall remain effective until the end of the annual period."

Effective Date of 1976 Amendment

Amendment by section 1904(a)(6) of Pub. L. 94–455 effective on first day of first month which begins more than 90 days after Oct. 4, 1976, see section 1904(d) of Pub. L. 94–455, set out as a note under section 4041 of this title.

Effective Date of 1969 Amendment

Amendment by Pub. L. 91–172 effective Jan. 1, 1970, see section 101(k)(1) of Pub. L. 91–172, set out as an Effective Date note under section 4940 of this title.

Effective Date of 1966 Amendment

Amendment by Pub. L. 89–368 applicable to amounts paid pursuant to bills first rendered on or after April 1, 1966, for services rendered on or after such date and to amounts paid pursuant to bills rendered on or after such date for services which were rendered before such date and for which no previous bill was rendered except with respect to such services as were rendered more than two months before such date and, as to services rendered more than 2 months before such date, direction that the provisions of subchapter B of chapter 33 of the Code in effect at the time such services were rendered, be applied, subject to the provision of section 701(b)(2) of the Excise Tax Reduction Act of 1965.

Effective Date of 1965 Amendment

Amendment by Pub. L. 89–44 applicable to amounts paid pursuant to bills rendered on or after January 1, 1966, for services rendered on or after such date, but, in the case of amounts paid pursuant to bills rendered after January 1, 1966, for services rendered before such date for which no previous bill had been rendered, applicable except with respect to such services as were rendered more than two months before such date, see section 701(b)(2)(A) of Pub. L. 89–44, set out as a note under section 4251 of this title.

Effective Date of 1962 Amendment

Amendment by Pub. L. 87–508 applicable with respect to services furnished on or after Jan. 1, 1963, see section 4(c) of Pub. L. 87–508, set out as a note under section 4252 of this title.

Effective Date of 1959 Amendment

Pub. L. 86–344, §4(b), Sept. 21, 1959, 73 Stat. 619, as amended by Pub. L. 99–514, §2, Oct. 22, 1986, 100 Stat. 2095, provided that:

"(1) Subject to the provisions of paragraph (2), the amendment made by subsection (a) [amending this section] shall apply with respect to amounts paid on or after January 1, 1959, for services rendered on or after such date.

"(2) The amendment made by subsection (a) [amending this section] shall not apply with respect to amounts paid pursuant to bills rendered before January 1, 1959. In the case of amounts paid pursuant to bills rendered on or after such date for services for which no bill was rendered before such date, such amendment shall apply except with respect to such services as were rendered more than 2 months before such date. In the case of services rendered more than 2 months before such date, the provisions of subchapter B of chapter 33 of the Internal Revenue Code of 1986 [formerly I.R.C. 1954] in effect at the time such services were rendered shall apply to the amounts paid for such services."

Effective Date of 1958 Amendment

For effective date of amendment made by Pub. L. 85–859, see section 133(b) of Pub. L. 85–859, set out as a note under section 4251 of this title.
26 U.S.C. § 5721 (2024) — Title 26: INTERNAL REVENUE CODE / Chapter 52 / Subchapter C / Section 5721: Inventories
Inventories
Status: in_force

Every manufacturer or importer of tobacco products, processed tobacco, or cigarette papers and tubes, and every export warehouse proprietor, shall make a true and accurate inventory at the time of commencing business, at the time of concluding business, and at such other times, in such manner and form, and to include such items, as the Secretary shall by regulation prescribe. Such inventories shall be subject to verification by any internal revenue officer.

(Aug. 16, 1954, ch. 736, 68A Stat. 713; Pub. L. 85–859, title II, §202, Sept. 2, 1958, 72 Stat. 1422; Pub. L. 94–455, title XIX, §1906(b)(13)(A), Oct. 4, 1976, 90 Stat. 1834; Pub. L. 105–33, title IX, §9302(h)(2)(A), Aug. 5, 1997, 111 Stat. 674; Pub. L. 111–3, title VII, §702(a)(2)(A), Feb. 4, 2009, 123 Stat. 108.)

Editorial Notes

Amendments

2009—Pub. L. 111–3 inserted ", processed tobacco," after "tobacco products".

1997—Pub. L. 105–33 inserted "or importer" after "manufacturer".

1976—Pub. L. 94–455 struck out "or his delegate" after "Secretary".

1958—Pub. L. 85–859 substituted "manufacturer of tobacco products or cigarette papers and tubes" for "manufacturer of articles" and "internal revenue officer" for "revenue officer", and inserted provisions to include export warehouse proprietors.

Statutory Notes and Related Subsidiaries

Effective Date of 2009 Amendment

Amendment by Pub. L. 111–3 effective Apr. 1, 2009, see section 702(a)(6) of Pub. L. 111–3, set out as a note under section 5702 of this title.

Effective Date of 1997 Amendment

Amendment by Pub. L. 105–33 applicable to articles removed, as defined in section 5702(j) of this title, after Dec. 31, 1999, with transition rule, see section 9302(i) of Pub. L. 105–33, set out as a note under section 5701 of this title.

Effective Date of 1958 Amendment

Amendment by Pub. L. 85–859 effective Sept. 3, 1958, see section 210(a)(1) of Pub. L. 85–859, set out as an Effective Date note under section 5001 of this title.
26 U.S.C. § 151 (2024) — Title 26: INTERNAL REVENUE CODE / Chapter 1 / Section 151: Allowance of deductions for personal exemptions
Allowance of deductions for personal exemptions
Status: in_force

(a) Allowance of deductions

In the case of an individual, the exemptions provided by this section shall be allowed as deductions in computing taxable income.

(b) Taxpayer and spouse

An exemption of the exemption amount for the taxpayer; and an additional exemption of the exemption amount for the spouse of the taxpayer if a joint return is not made by the taxpayer and his spouse, and if the spouse, for the calendar year in which the taxable year of the taxpayer begins, has no gross income and is not the dependent of another taxpayer.

(c) Additional exemption for dependents

An exemption of the exemption amount for each individual who is a dependent (as defined in section 152) of the taxpayer for the taxable year.

(d) Exemption amount

For purposes of this section—

(1) In general

Except as otherwise provided in this subsection, the term "exemption amount" means $2,000.

(2) Exemption amount disallowed in case of certain dependents

In the case of an individual with respect to whom a deduction under this section is allowable to another taxpayer for a taxable year beginning in the calendar year in which the individual's taxable year begins, the exemption amount applicable to such individual for such individual's taxable year shall be zero.

(3) Phaseout

(A) In general

In the case of any taxpayer whose adjusted gross income for the taxable year exceeds the applicable amount in effect under section 68(b), the exemption amount shall be reduced by the applicable percentage.

(B) Applicable percentage

For purposes of subparagraph (A), the term "applicable percentage" means 2 percentage points for each $2,500 (or fraction thereof) by which the taxpayer's adjusted gross income for the taxable year exceeds the applicable amount in effect under section 68(b). In the case of a married individual filing a separate return, the preceding sentence shall be applied by substituting "$1,250" for "$2,500". In no event shall the applicable percentage exceed 100 percent.

(C) Coordination with other provisions

The provisions of this paragraph shall not apply for purposes of determining whether a deduction under this section with respect to any individual is allowable to another taxpayer for any taxable year.

(4) Inflation adjustment

Except as provided in paragraph (5), in the case of any taxable year beginning in a calendar year after 1989, the dollar amount contained in paragraph (1) shall be increased by an amount equal to—

(A) such dollar amount, multiplied by

(B) the cost-of-living adjustment determined under section 1(f)(3) for the calendar year in which the taxable year begins, by substituting "calendar year 1988" for "calendar year 2016" in subparagraph (A)(ii) thereof.

(5) Special rules for taxable years 2018 through 2025

In the case of a taxable year beginning after December 31, 2017, and before January 1, 2026—

(A) Exemption amount

The term "exemption amount" means zero.

(B) References

For purposes of any other provision of this title, the reduction of the exemption amount to zero under subparagraph (A) shall not be taken into account in determining whether a deduction is allowed or allowable, or whether a taxpayer is entitled to a deduction, under this section.

(e) Identifying information required

No exemption shall be allowed under this section with respect to any individual unless the TIN of such individual is included on the return claiming the exemption.

(Aug. 16, 1954, ch. 736, 68A Stat. 42; Pub. L. 91–172, title VIII, §801(a)(1), (b)(1), (c)(1), (d)(1), title IX, §941(b), Dec. 30, 1969, 83 Stat. 675, 676, 726; Pub. L. 92–178, title II, §201(a)(1), (b)(1), (c), Dec. 10, 1971, 85 Stat. 510, 511; Pub. L. 94–455, title XIX, §1901(a)(23), Oct. 4, 1976, 90 Stat. 1767; Pub. L. 95–600, title I, §102(a), Nov. 6, 1978, 92 Stat. 2771; Pub. L. 97–34, title I, §104(c), Aug. 13, 1981, 95 Stat. 189; Pub. L. 98–369, div. A, title IV, §426(a), July 18, 1984, 98 Stat. 804; Pub. L. 99–514, title I, §103, title XVIII, §1847(b)(3), Oct. 22, 1986, 100 Stat. 2102, 2856; Pub. L. 100–647, title VI, §6010(a), Nov. 10, 1988, 102 Stat. 3691; Pub. L. 101–508, title XI, §§11101(d)(1)(F), 11104(a), Nov. 5, 1990, 104 Stat. 1388–405, 1388–407; Pub. L. 102–318, title V, §511, July 3, 1992, 106 Stat. 300; Pub. L. 103–66, title XIII, §§13201(b)(3)(G), 13205, Aug. 10, 1993, 107 Stat. 459, 462; Pub. L. 104–188, title I, §§1615(a)(1), 1702(a)(2), Aug. 20, 1996, 110 Stat. 1853, 1868; Pub. L. 106–554, §1(a)(7) [title III, §306(a)], Dec. 21, 2000, 114 Stat. 2763, 2763A–634; Pub. L. 107–16, title I, §102(a), June 7, 2001, 115 Stat. 44; Pub. L. 107–147, title IV, §§412(b), 417(6), Mar. 9, 2002, 116 Stat. 53, 56; Pub. L. 108–311, title II, §206, Oct. 4, 2004, 118 Stat. 1176; Pub. L. 112–240, title I, §101(b)(2)(B), Jan. 2, 2013, 126 Stat. 2317; Pub. L. 115–97, title I, §§11002(d)(1)(Q), 11041(a), Dec. 22, 2017, 131 Stat. 2060, 2082.)

Inflation Adjusted Items for Certain Years

For inflation adjustment of certain items in this section, see Revenue Procedures listed in a table under section 1 of this title.

Editorial Notes

Amendments

2017—Subsec. (d)(4). Pub. L. 115–97, §11041(a)(1), substituted "Except as provided in paragraph (5), in the case of" for "In the case of" in introductory provisions.

Subsec. (d)(4)(B). Pub. L. 115–97, §11002(d)(1)(Q), substituted "for 'calendar year 2016' in subparagraph (A)(ii)" for "for 'calendar year 1992' in subparagraph (B)".

Subsec. (d)(5). Pub. L. 115–97, §11041(a)(2), added par. (5).

2013—Subsec. (d)(3)(A), (B). Pub. L. 112–240, §101(b)(2)(B)(i)(I), substituted "the applicable amount in effect under section 68(b)" for "the threshold amount".

Subsec. (d)(3)(C), (D). Pub. L. 112–240, §101(b)(2)(B)(i)(II), redesignated subpar. (D) as (C) and struck out former subpar. (C) which related to threshold amount.

Subsec. (d)(3)(E), (F). Pub. L. 112–240, §101(b)(2)(B)(i)(III), struck out subpars. (E) and (F) which related to reduction of phaseout and termination of applicability of subsec. (d)(3), respectively.

Subsec. (d)(4). Pub. L. 112–240, §101(b)(2)(B)(ii), in par. heading, substituted "Inflation adjustment" for "Inflation adjustments", in subpar. (A), struck out "(A) Adjustment to basic amount of exemption" before "In the case of", redesignated cls. (i) and (ii) as subpars. (A) and (B), respectively, and realigned margins, and struck out former subpar. (B). Prior to amendment, text of former subpar. (B) read as follows: "In the case of any taxable year beginning in a calendar year after 1991, each dollar amount contained in paragraph (3)(C) shall be increased by an amount equal to—

"(i) such dollar amount, multiplied by

"(ii) the cost-of-living adjustment determined under section 1(f)(3) for the calendar year in which the taxable year begins, by substituting 'calendar year 1990' for 'calendar year 1992' in subparagraph (B) thereof."

2004—Subsec. (c). Pub. L. 108–311 reenacted heading without change and amended text generally. Prior to amendment, text consisted of pars. (1) to (6) relating to additional exemption for dependents in general, exemption denied in case of certain married dependents, child defined, student defined, certain income of handicapped dependents not taken into account, and treatment of missing children, respectively.

2002—Subsec. (c)(6)(B)(iii). Pub. L. 107–147, §417(6), inserted "as" before "such terms".

Subsec. (c)(6)(C). Pub. L. 107–147, §412(b), substituted "for principal place of abode requirements" for "for earned income credit" in heading, "An" for "For purposes of section 32, an" in introductory provisions, and "principal place of abode requirements of section 2(a)(1)(B), section 2(b)(1)(A), and section 32(c)(3)(A)(ii)" for "requirement of section 32(c)(3)(A)(ii)" in concluding provisions.

2001—Subsec. (d)(3)(E), (F). Pub. L. 107—16 added subpars. (E) and (F).

2000—Subsec. (c)(6). Pub. L. 106–554 added par. (6).

1996—Subsec. (d)(3)(C)(i). Pub. L. 104–188, §1702(a)(2), substituted "joint return" for "joint of a return".

Subsec. (e). Pub. L. 104–188, §1615(a)(1), added subsec. (e).

1993—Subsec. (d)(3)(E). Pub. L. 103–66, §13205, struck out heading and text of subpar. (E). Text read as follows: "This paragraph shall not apply to any taxable year beginning after December 31, 1996."

Subsec. (d)(4)(A)(ii), (B)(ii). Pub. L. 103–66, §13201(b)(3)(G), substituted "1992" for "1989".

1992—Subsec. (d)(3)(E). Pub. L. 102–318 substituted "1996" for "1995".

1990—Subsec. (d). Pub. L. 101–508, §11104(a), amended subsec. (d) generally. Prior to amendment, subsec. (d) read as follows: "For purposes of this section—

"(1) In general.—Except as provided in paragraph (2), the term 'exemption amount' means—

"(A) $1,900 for taxable years beginning during 1987,

"(B) $1,950 for taxable years beginning during 1988, and

"(C) $2,000 for taxable years beginning after December 31, 1988.

"(2) Exemption amount disallowed in the case of certain dependents.—In the case of an individual with respect to whom a deduction under this section is allowable to another taxpayer for a taxable year beginning in the calendar year in which the individual's taxable year begins, the exemption amount applicable to such individual for such individual's taxable year shall be zero.

"(3) Inflation adjustment for years after 1989.—In the case of any taxable year beginning in a calendar year after 1989, the dollar amount contained in paragraph (1)(C) shall be increased by an amount equal to—

"(A) such dollar amount, multiplied by

"(B) the cost-of-living adjustment determined under section 1(f)(3), for the calendar year in which the taxable year begins, by substituting 'calendar year 1988' for 'calendar year 1987' in subparagraph (B) thereof."

Subsec. (d)(3)(B). Pub. L. 101–508, §11101(d)(1)(F), substituted "1989" for "1987".

1988—Subsec. (c)(1)(B)(ii). Pub. L. 100–647 inserted "who has not attained the age of 24 at the close of such calendar year" after "student".

1986—Subsec. (c). Pub. L. 99–514, §103(b), redesignated subsec. (e) as (c) and struck out former subsec. (c) which provided for an additional exemption for taxpayer or spouse aged 65 or more.

Subsec. (d). Pub. L. 99–514, §103(b), redesignated subsec. (f) as (d) and struck out former subsec. (d) which provided for an additional exemption for blindness of taxpayer or spouse.

Subsec. (e). Pub. L. 99–514, §103(b), redesignated subsec. (e) as (c).

Pub. L. 99–514, §1847(b)(3), substituted "section 22(e)" for "section 37(e)" in par. (5)(C).

Subsec. (f). Pub. L. 99–514, §103(b), redesignated subsec. (f) as (d).

Pub. L. 99–514, §103(a), amended subsec. (f) generally. Prior to amendment, subsec. (f) read as follows: "For purposes of this section, the term 'exemption amount' means, with respect to any taxable year, $1,000 increased by an amount equal to $1,000 multiplied by the cost-of-living adjustment (as defined in section 1(f)(3)) for the calendar year in which the taxable year begins. If the amount determined under the preceding sentence is not a multiple of $10, such amount shall be rounded to the nearest multiple of $10 (or if such amount is a multiple of $5, such amount shall be increased to the next highest multiple of $10)."

1984—Subsec. (e)(5). Pub. L. 98–369 added par. (5).

1981—Subsecs. (b), (c), (d)(1), (2), (e)(1). Pub. L. 97–34, §104(c)(1), substituted "the exemption amount" for "$1,000" wherever appearing.

Subsec. (f). Pub. L. 97–34, §104(c)(2), added subsec. (f).

1978—Pub. L. 95–600 increased exemption from $750 to $1,000 with respect to taxable years beginning after Dec. 31, 1978.

1976—Subsec. (e)(4). Pub. L. 94–455 struck out "and educational institution" after "Student" in heading, substituted in subpars. (A) and (B) "organization described in section 170(b)(1)(A)(ii)" for "institution", and struck out provisions following subpar. (B) defining educational institution.

1971—Pub. L. 92–178 increased exemption from $650 to $675 with respect to taxable years beginning after Dec. 31, 1970, and before Jan. 1, 1972, and from $675 to $750 with respect to taxable years beginning after Dec. 31, 1971.

1969—Pub. L. 91–172, §801(a)(1), (b)(1), (c)(1), (d)(1), increased exemption from $600 to $625 with respect to taxable years beginning after Dec. 31, 1969, and before Jan. 1, 1971, from $625 to $650 for taxable years beginning after Dec. 31, 1970, and before Jan. 1, 1972, from $650 to $700 for taxable years beginning after Dec. 31, 1971, and before Jan. 1, 1973, and from $700 to $750 for taxable years beginning after Dec. 31, 1972.

Subsecs. (b), (c), Pub. L. 91–172, §941(b), substituted "if a joint return is not made by the taxpayer and his spouse" for "if a separate return is made by the taxpayer".

Statutory Notes and Related Subsidiaries

Effective Date of 2017 Amendment

Amendment by section 11002(d)(1)(Q) of Pub. L. 115–97 applicable to taxable years beginning after Dec. 31, 2017, see section 11002(e) of Pub. L. 115–97, set out as a note under section 1 of this title.

Pub. L. 115–97, title I, §11041(f), Dec. 22, 2017, 131 Stat. 2085, provided that:

"(1) In general.—Except as provided in paragraph (2), the amendments made by this section [amending this section and sections 642, 3401, 3402, 3405, 6012, and 6334 of this title] shall apply to taxable years beginning after December 31, 2017.

"(2) Wage withholding.—The Secretary of the Treasury may administer section 3402 for taxable years beginning before January 1, 2019, without regard to the amendments made by subsections (a) and (c) [amending this section and sections 3401, 3402, 3405, 6012, and 6334 of this title]."

Effective Date of 2013 Amendment

Amendment by Pub. L. 112–240 applicable to taxable years beginning after Dec. 31, 2012, see section 101(b)(3) of Pub. L. 112–240, set out as a note under section 1 of this title.

Effective Date of 2004 Amendment

Amendment by Pub. L. 108–311 applicable to taxable years beginning after Dec. 31, 2004, see section 208 of Pub. L. 108–311, set out as a note under section 2 of this title.

Effective Date of 2002 Amendment

Pub. L. 107–147, title IV, §412(e), Mar. 9, 2002, 116 Stat. 54, provided that: "The amendments made by this section [amending this section and sections 358, 469, 1091, 1233, 1234A, and 1234B of this title] shall take effect as if included in the provisions of the Community Renewal Tax Relief Act of 2000 [H.R. 5662, as enacted by section 1(a)(7) of Pub. L. 106–554, Dec. 21, 2000, 114 Stat. 2763, 2763A–587] to which they relate."

Effective Date of 2001 Amendment

Pub. L. 107–16, title I, §102(b), June 7, 2001, 115 Stat. 44, provided that: "The amendment made by this section [amending this section] shall apply to taxable years beginning after December 31, 2005."

Effective Date of 2000 Amendment

Pub. L. 106–554, §1(a)(7) [title III, §306(b)], Dec. 21, 2000, 114 Stat. 2763, 2763A–635, provided that: "The amendment made by this section [amending this section] shall apply to taxable years ending after the date of the enactment of this Act [Dec. 21, 2000]."

Effective Date of 1996 Amendment

Amendment by section 1615(a)(1) of Pub. L. 104–188 applicable with respect to returns the due date for which, without regard to extensions, is on or after the 30th day after Aug. 20, 1996, with special rule for 1995 and 1996, see section 1615(d) of Pub. L. 104–188, set out as a note under section 21 of this title.

Amendment by section 1702(a)(2) of Pub. L. 104–188 effective, except as otherwise expressly provided, as if included in the provision of the Revenue Reconciliation Act of 1990, Pub. L. 101–508, title XI, to which such amendment relates, see section 1702(i) of Pub. L. 104–188, set out as a note under section 38 of this title.

Effective Date of 1993 Amendment

Amendment by section 13201(b)(3)(G) of Pub. L. 103–66 applicable to taxable years beginning after Dec. 31, 1992, see section 13201(c) of Pub. L. 103–66, set out as a note under section 1 of this title.

Effective Date of 1990 Amendment

Amendment by section 11101(d)(1)(F) of Pub. L. 101–508 applicable to taxable years beginning after Dec. 31, 1990, see section 11101(e) of Pub. L. 101–508, set out as a note under section 1 of this title.

Amendment by section 11104(a) of Pub. L. 101–508 applicable to taxable years beginning after Dec. 31, 1990, see section 11104(c) of Pub. L. 101–508, set out as a note under section 1 of this title.

Effective Date of 1988 Amendment

Pub. L. 100–647, title VI, §6010(b), Nov. 10, 1988, 102 Stat. 3691, provided that: "The amendment made by subsection (a) [amending this section] shall apply to taxable years beginning after December 31, 1988."

Effective Date of 1986 Amendment

Amendment by section 103 of Pub. L. 99–514 applicable to taxable years beginning after Dec. 31, 1986, see section 151(a) of Pub. L. 99–514, set out as a note under section 1 of this title.

Amendment by section 1847(b)(3) of Pub. L. 99–514 effective, except as otherwise provided, as if included in the provisions of the Tax Reform Act of 1984, Pub. L. 98–369, div. A, to which such amendment relates, see section 1881 of Pub. L. 99–514, set out as a note under section 48 of this title.

Effective Date of 1984 Amendment

Pub. L. 98–369, div. A, title IV, §426(b), July 18, 1984, 98 Stat. 805, provided that: "The amendment made by subsection (a) [amending this section] shall apply to taxable years beginning after December 31, 1984."

Effective Date of 1981 Amendment

Amendment by Pub. L. 97–34 applicable to taxable years beginning after Dec. 31, 1984, see section 104(e) of Pub. L. 97–34, set out as a note under section 1 of this title.

Effective Date of 1978 Amendment

Pub. L. 95–600, title I, §102(d)(1), Nov. 6, 1978, 92 Stat. 2771, provided that: "The amendments made by subsections (a) and (b) [amending this section and sections 6012 and 6013 of this title] shall apply to taxable years beginning after December 31, 1978."

Effective Date of 1976 Amendment

Amendment by Pub. L. 94–455 applicable with respect to taxable years beginning after Dec. 31, 1976, see section 1901(d) of Pub. L. 94–455, set out as a note under section 2 of this title.

Effective Date of 1971 Amendment

Pub. L. 92–178, title II, §201(a), (b), Dec. 10, 1971, 85 Stat. 510, provided in part that the increase in exemption from $650 to $675 was effective with respect to taxable years beginning after Dec. 31, 1970, and before Jan. 1, 1972, and from $675 to $750 was effective with respect to taxable years beginning after Dec. 31, 1971.

Effective Date of 1969 Amendment

Pub. L. 91–172, title VIII, §801(a)(1), Dec. 30, 1969, 83 Stat. 675, provided in part that the increase in exemption from $600 to $625 is effective with respect to taxable years beginning after Dec. 31, 1969, and before Jan. 1, 1971.

Pub. L. 91–172, title VIII, §801(b)(1), Dec. 30, 1969, 83 Stat. 676, provided in part that the increase in the exemption from $625 to $650 is effective with respect to taxable years beginning after Dec. 31, 1970, and before Jan. 1, 1972.

Pub. L. 91–172, title IX, §941(c), Dec. 30, 1969, 83 Stat. 726, provided that: "The amendments made by subsections (a) [amending section 6012 of this title] and (b) [amending this section] shall apply to taxable years beginning after December 31, 1969."

Repeals

Pub. L. 91–172, title VIII, §801(c)(1), (d)(1), Dec. 30, 1969, 83 Stat. 676, provided for an increase in the personal exemption to $700, effective with respect to taxable years beginning after Dec. 31, 1971, and before Jan. 1, 1973, and to $750, effective with respect to taxable years beginning after Dec. 31, 1972, prior to repeal by section 201(c) of Pub. L. 92–178.

Plan Amendments Not Required Until January 1, 1989

For provisions directing that if any amendments made by subtitle A or subtitle C of title XI [§§1101–1147 and 1171–1177] or title XVIII [§§1800–1899A] of Pub. L. 99–514 require an amendment to any plan, such plan amendment shall not be required to be made before the first plan year beginning on or after Jan. 1, 1989, see section 1140 of Pub. L. 99–514, as amended, set out as a note under section 401 of this title.
26 U.S.C. § 4042 (2024) — Title 26: INTERNAL REVENUE CODE / Chapter 31 / Section 4042: Tax on fuel used in commercial transportation on inland waterways
Tax on fuel used in commercial transportation on inland waterways
Status: in_force

(a) In general

There is hereby imposed a tax on any liquid used during any calendar quarter by any person as a fuel in a vessel in commercial waterway transportation.

(b) Amount of tax

(1) In general

The rate of the tax imposed by subsection (a) is the sum of—

(A) the Inland Waterways Trust Fund financing rate, and

(B) the Leaking Underground Storage Tank Trust Fund financing rate.

(2) Rates

For purposes of paragraph (1)—

(A) The Inland Waterways Trust Fund financing rate is 29 cents per gallon.

(B) The Leaking Underground Storage Tank Trust Fund financing rate is 0.1 cent per gallon.

(3) Exception for fuel on which Leaking Underground Storage Tank Trust Fund financing rate separately imposed

The Leaking Underground Storage Tank Trust Fund financing rate under paragraph (2)(B) shall not apply to the use of any fuel if tax was imposed with respect to such fuel under section 4041(d) or 4081 at the Leaking Underground Storage Tank Trust Fund financing rate.

(4) Termination of Leaking Underground Storage Tank Trust Fund financing rate

The Leaking Underground Storage Tank Trust Fund financing rate under paragraph (2)(B) shall not apply during any period during which the Leaking Underground Storage Tank Trust Fund financing rate under section 4081 does not apply.

(c) Exemptions

(1) Deep-draft ocean-going vessels

The tax imposed by subsection (a) shall not apply with respect to any vessel designed primarily for use on the high seas which has a draft of more than 12 feet.

(2) Passenger vessels

The tax imposed by subsection (a) shall not apply with respect to any vessel used primarily for the transportation of persons.

(3) Use by State or local government in transporting property in a state or local business

Subparagraph (B) of subsection (d)(1) shall not apply with respect to use by a State or political subdivision thereof.

(4) Use in moving lash and seabee ocean-going barges

The tax imposed by subsection (a) shall not apply with respect to use for movement by tug of exclusively LASH (Lighter-aboard-ship) and SEABEE ocean-going barges released by their ocean-going carriers solely to pick up or deliver international cargoes.

(d) Definitions

For purposes of this section—

(1) Commercial waterway transportation

The term "commercial waterway transportation" means any use of a vessel on any inland or intracoastal waterway of the United States—

(A) in the business of transporting property for compensation or hire, or

(B) in transporting property in the business of the owner, lessee, or operator of the vessel (other than fish or other aquatic animal life caught on the voyage).

(2) Inland or intracoastal waterway of the United States

The term "inland or intracoastal waterway of the United States" means any inland or intracoastal waterway of the United States which is described in section 206 of the Inland Waterways Revenue Act of 1978.

(3) Person

The term "person" includes the United States, a State, a political subdivision of a State, or any agency or instrumentality of any of the foregoing.

(e) Date for filing return

The date for filing the return of the tax imposed by this section for any calendar quarter shall be the last day of the first month following such quarter.

(Added Pub. L. 95–502, title II, §202(a), Oct. 21, 1978, 92 Stat. 1696; amended Pub. L. 99–499, title V, §521(a)(3), Oct. 17, 1986, 100 Stat. 1777; Pub. L. 99–662, title XIV, §1404(a), Nov. 17, 1986, 100 Stat. 4270; Pub. L. 100–647, title II, §2002(a)(2), Nov. 10, 1988, 102 Stat. 3597; Pub. L. 103–66, title XIII, §13241(d), Aug. 10, 1993, 107 Stat. 510; Pub. L. 108–357, title II, §241(b), Oct. 22, 2004, 118 Stat. 1438; Pub. L. 110–172, §6(d)(1)(B), Dec. 29, 2007, 121 Stat. 2480; Pub. L. 113–295, div. B, title II, §205(a), Dec. 19, 2014, 128 Stat. 4065; Pub. L. 115–141, div. U, title IV, §401(b)(40), (41), Mar. 23, 2018, 132 Stat. 1204.)

Editorial Notes

References in Text

Section 206 of the Inland Waterways Revenue Act of 1978, referred to in subsec. (d)(2), is section 206 of Pub. L. 95–502, title II, Oct. 21, 1978, 92 Stat. 1700, which is classified to section 1804 of Title 33, Navigation and Navigable Waters.

Prior Provisions

A prior section 4042, act Aug. 16, 1954, ch. 736, 68A Stat. 478, provided a cross reference to section 4222 of this title for exemption from tax where special motor fuels are sold for use for certain vessels, prior to repeal by Pub. L. 94–455, title XIX, §1904(a)(1)(D), Oct. 4, 1976, 90 Stat. 1811.

Amendments

2018—Subsec. (b)(1)(C). Pub. L. 115–141, §401(b)(40), struck out subpar. (C) which read as follows: "the deficit reduction rate."

Subsec. (b)(2)(C). Pub. L. 115–141, §401(b)(41), struck out subpar. (C) which read as follows: "The deficit reduction rate is—

"(i) 3.3 cents per gallon after December 31, 2004, and before July 1, 2005,

"(ii) 2.3 cents per gallon after June 30, 2005, and before January 1, 2007, and

"(iii) 0 after December 31, 2006."

2014—Subsec. (b)(2)(A). Pub. L. 113–295 amended subpar. (A) generally, substituting "The Inland Waterways Trust Fund financing rate is 29 cents per gallon." for "The Inland Waterways Trust Fund financing rate is the rate determined in accordance with the following table:" and accompanying table of rates.

2007—Subsec. (b)(3). Pub. L. 110–172 amended heading and text of par. (3) generally. Prior to amendment, text read as follows: "The Leaking Underground Storage Tank Trust Fund financing rate under paragraph (2)(B) shall not apply to the use of any fuel if tax under section 4041(d) was imposed on the sale of such fuel or is imposed on such use."

2004—Subsec. (b)(2)(C). Pub. L. 108–357 amended subpar. (C) generally. Prior to amendment, subpar. (C) read as follows: "The deficit reduction rate is 4.3 cents per gallon."

1993—Subsec. (b)(1)(C). Pub. L. 103–66, §13241(d)(1), added subpar. (C).

Subsec. (b)(2)(C). Pub. L. 103–66, §13241(d)(2), added subpar. (C).

1988—Subsec. (b)(2). Pub. L. 100–647 amended par. (2) generally. Prior to amendment, par. (2) read as follows: "For purposes of paragraph (1)—

"(A) the Inland Waterways Trust Fund financing rate is 10 cents a gallon, and

"(B) the Leaking Underground Storage Tank Trust Fund financing rate is 0.1 cents a gallon."

1986—Subsec. (b). Pub. L. 99–499 and Pub. L. 99–662 both amended subsec. (b) generally, effective Jan. 1, 1987. Pub. L. 100–647, §2002(a)(1) (see Construction of 1986 Amendments note below), provided that for purposes of this section, the amendment made by Pub. L. 99–499 be treated as enacted after the amendment made by Pub. L. 99–662. Prior to amendment by Pub. L. 99–499 and Pub. L. 99–662, subsec. (b) read as follows:

 

"If the use occurs—The tax is—

After September 30, 1980 and before October 1, 1981
4 cents a gallon  

After September 30, 1981 and before October 1, 1983
6 cents a gallon  

After September 30, 1983 and before October 1, 1985
8 cents a gallon  

After September 30, 1985
10 cents a gallon".

Statutory Notes and Related Subsidiaries

Effective Date of 2014 Amendment

Pub. L. 113–295, div. B, title II, §205(b), Dec. 19, 2014, 128 Stat. 4065, provided that: "The amendment made by this section [amending this section] shall apply to fuel used after March 31, 2015."

Effective Date of 2007 Amendment

Amendment by Pub. L. 110–172 effective as if included in the provisions of the Energy Policy Act of 2005, Pub. L. 109–58, to which such amendment relates, see section 6(e) of Pub. L. 110–172, set out as a note under section 30C of this title.

Effective Date of 2004 Amendment

Amendment by Pub. L. 108–357 effective Jan. 1, 2005, see section 241(c) of Pub. L. 108–357, set out as a note under section 4041 of this title.

Effective Date of 1993 Amendment

Amendment by Pub. L. 103–66 effective Oct. 1, 1993, see section 13241(g) of Pub. L. 103–66, set out as a note under section 4041 of this title.

Effective Date of 1988 Amendment

Pub. L. 100–647, title II, §2002(d), Nov. 10, 1988, 102 Stat. 3597, as amended by Pub. L. 101–239, title VII, §7812(b), Dec. 19, 1989, 103 Stat. 2412, provided that: "The amendments made by subsections (b) and (c) [amending section 4462 of this title and provisions set out as a note under section 4461 of this title] shall take effect as if included in the provision of the Harbor Maintenance Revenue Act of 1986 [Pub. L. 99–662, title XIV] to which it relates, and the amendment made by subsection (a)(2) [amending this section] shall take effect as if included in the amendment made by section 521(a)(3) of the Superfund Revenue Act of 1986 [Pub. L. 99–499, title V]."

Effective Date of 1986 Amendments

Pub. L. 99–662, title XIV, §1404(c), Nov. 17, 1986, 100 Stat. 4271, provided that: "The amendments made by this section [amending this section and section 1804 of Title 33, Navigation and Navigable Waters] shall take effect on January 1, 1987."

Amendment by Pub. L. 99–499 effective Jan. 1, 1987, see section 521(e) of Pub. L. 99–499, set out as a note under section 4041 of this title.

Effective Date

Pub. L. 95–502, title II, §202(d), Oct. 21, 1978, 92 Stat. 1697, provided that: "The amendments made by this section [enacting this section and amending section 4293 of this title] shall take effect on October 1, 1980."

Savings Provision

For provisions that nothing in amendment by Pub. L. 115–141 be construed to affect treatment of certain transactions occurring, property acquired, or items of income, loss, deduction, or credit taken into account prior to Mar. 23, 2018, for purposes of determining liability for tax for periods ending after Mar. 23, 2018, see section 401(e) of Pub. L. 115–141, set out as a note under section 23 of this title.

Construction of 1986 Amendments

Pub. L. 100–647, title II, §2002(a)(1), Nov. 10, 1988, 102 Stat. 3597, provided that: "For purposes of section 4042 of the 1986 Code, the amendment made by section 521(a)(3) of the Superfund Revenue Act of 1986 [Pub. L. 99–499, amending this section] shall be treated as enacted after the amendment made by section 1404(a) of the Harbor Maintenance Revenue Act of 1986 [Pub. L. 99–662, amending this section]."
26 U.S.C. § 104 (2024) — Title 26: INTERNAL REVENUE CODE / Chapter 1 / Section 104: Compensation for injuries or sickness
Compensation for injuries or sickness
Status: in_force

(a) In general

Except in the case of amounts attributable to (and not in excess of) deductions allowed under section 213 (relating to medical, etc., expenses) for any prior taxable year, gross income does not include—

(1) amounts received under workmen's compensation acts as compensation for personal injuries or sickness;

(2) the amount of any damages (other than punitive damages) received (whether by suit or agreement and whether as lump sums or as periodic payments) on account of personal physical injuries or physical sickness;

(3) amounts received through accident or health insurance (or through an arrangement having the effect of accident or health insurance) for personal injuries or sickness (other than amounts received by an employee, to the extent such amounts (A) are attributable to contributions by the employer which were not includible in the gross income of the employee, or (B) are paid by the employer);

(4) amounts received as a pension, annuity, or similar allowance for personal injuries or sickness resulting from active service in the armed forces of any country or in the Coast and Geodetic Survey or the Public Health Service, or as a disability annuity payable under the provisions of section 808 of the Foreign Service Act of 1980;

(5) amounts received by an individual as disability income attributable to injuries incurred as a direct result of a terroristic or military action (as defined in section 692(c)(2)); and

(6) amounts received pursuant to—

(A) section 1201 of the Omnibus Crime Control and Safe Streets Act of 1968 (42 U.S.C. 3796); 1 or

(B) a program established under the laws of any State which provides monetary compensation for surviving dependents of a public safety officer who has died as the direct and proximate result of a personal injury sustained in the line of duty,

except that subparagraph (B) shall not apply to any amounts that would have been payable if death of the public safety officer had occurred other than as the direct and proximate result of a personal injury sustained in the line of duty.

For purposes of paragraph (3), in the case of an individual who is, or has been, an employee within the meaning of section 401(c)(1) (relating to self-employed individuals), contributions made on behalf of such individual while he was such an employee to a trust described in section 401(a) which is exempt from tax under section 501(a), or under a plan described in section 403(a), shall, to the extent allowed as deductions under section 404, be treated as contributions by the employer which were not includible in the gross income of the employee. For purposes of paragraph (2), emotional distress shall not be treated as a physical injury or physical sickness. The preceding sentence shall not apply to an amount of damages not in excess of the amount paid for medical care (described in subparagraph (A) or (B) of section 213(d)(1)) attributable to emotional distress.

(b) Termination of application of subsection (a)(4) in certain cases

(1) In general

Subsection (a)(4) shall not apply in the case of any individual who is not described in paragraph (2).

(2) Individuals to whom subsection (a)(4) continues to apply

An individual is described in this paragraph if—

(A) on or before September 24, 1975, he was entitled to receive any amount described in subsection (a)(4),

(B) on September 24, 1975, he was a member of any organization (or reserve component thereof) referred to in subsection (a)(4) or under a binding written commitment to become such a member,

(C) he receives an amount described in subsection (a)(4) by reason of a combat-related injury, or

(D) on application therefor, he would be entitled to receive disability compensation from the Department of Veterans Affairs.

(3) Special rules for combat-related injuries

For purposes of this subsection, the term "combat-related injury" means personal injury or sickness—

(A) which is incurred—

(i) as a direct result of armed conflict,

(ii) while engaged in extrahazardous service, or

(iii) under conditions simulating war; or

(B) which is caused by an instrumentality of war.

In the case of an individual who is not described in subparagraph (A) or (B) of paragraph (2), except as provided in paragraph (4), the only amounts taken into account under subsection (a)(4) shall be the amounts which he receives by reason of a combat-related injury.

(4) Amount excluded to be not less than veterans' disability compensation

In the case of any individual described in paragraph (2), the amounts excludable under subsection (a)(4) for any period with respect to any individual shall not be less than the maximum amount which such individual, on application therefor, would be entitled to receive as disability compensation from the Veterans' Administration.

(c) Application of prior law in certain cases

The phrase "(other than punitive damages)" shall not apply to punitive damages awarded in a civil action—

(1) which is a wrongful death action, and

(2) with respect to which applicable State law (as in effect on September 13, 1995 and without regard to any modification after such date) provides, or has been construed to provide by a court of competent jurisdiction pursuant to a decision issued on or before September 13, 1995, that only punitive damages may be awarded in such an action.

This subsection shall cease to apply to any civil action filed on or after the first date on which the applicable State law ceases to provide (or is no longer construed to provide) the treatment described in paragraph (2).

(d) Cross references

(1) For exclusion from employee's gross income of employer contributions to accident and health plans, see section 106.

(2) For exclusion of part of disability retirement pay from the application of subsection (a)(4) of this section, see section 1403 of title 10, United States Code (relating to career compensation laws).

(Aug. 16, 1954, ch. 736, 68A Stat. 30; Pub. L. 86–723, §51, Sept. 8, 1960, 74 Stat. 847; Pub. L. 87–792, §7(d), Oct. 10, 1962, 76 Stat. 829; Pub. L. 94–455, title V, §505(b), (e)(1), title XIX, §1901(a)(18), Oct. 4, 1976, 90 Stat. 1567, 1568, 1766; Pub. L. 96–465, title II, §2206(e)(1), Oct. 17, 1980, 94 Stat. 2162; Pub. L. 97–473, title I, §101(a), Jan. 14, 1983, 96 Stat. 2605; Pub. L. 101–239, title VII, §7641(a), Dec. 19, 1989, 103 Stat. 2379; Pub. L. 104–188, title I, §1605(a)–(c), Aug. 20, 1996, 110 Stat. 1838; Pub. L. 104–191, title III, §311(b), Aug. 21, 1996, 110 Stat. 2053; Pub. L. 107–134, title I, §113(a), Jan. 23, 2002, 115 Stat. 2435; Pub. L. 114–14, §2, May 22, 2015, 129 Stat. 198; Pub. L. 115–141, div. U, title IV, §401(a)(2)(A), Mar. 23, 2018, 132 Stat. 1184.)

Editorial Notes

References in Text

Section 808 of the Foreign Service Act of 1980, referred to in subsec. (a)(4), is Pub. L. 96–465, title I, §808, Oct. 17, 1980, 94 Stat. 2110, which is classified to section 4048 of Title 22, Foreign Relations and Intercourse.

Section 1201 of the Omnibus Crime Control and Safe Streets Act of 1968, referred to in subsec. (a)(6)(A), was classified to section 3796 of Title 42, The Public Health and Welfare, prior to editorial reclassification and renumbering as section 10281 of Title 34, Crime Control and Law Enforcement.

Amendments

2018—Subsec. (b)(2)(D). Pub. L. 115–141 substituted "Department of Veterans Affairs" for "Veterans' Administration".

2015—Subsec. (a)(6). Pub. L. 114–14 added par. (6).

2002—Subsec. (a)(5). Pub. L. 107–134 substituted "a terroristic or military action (as defined in section 692(c)(2))." for "a violent attack which the Secretary of State determines to be a terrorist attack and which occurred while such individual was an employee of the United States engaged in the performance of his official duties outside the United States."

1996—Subsec. (a). Pub. L. 104–188, §1605(b), in closing provisions, substituted "For purposes of paragraph (2), emotional distress shall not be treated as a physical injury or physical sickness. The preceding sentence shall not apply to an amount of damages not in excess of the amount paid for medical care (described in subparagraph (A) or (B) of section 213(d)(1)) attributable to emotional distress." for "Paragraph (2) shall not apply to any punitive damages in connection with a case not involving physical injury or physical sickness."

Subsec. (a)(2). Pub. L. 104–188, §1605(a), amended par. (2) generally. Prior to amendment, par. (2) read as follows: "the amount of any damages received (whether by suit or agreement and whether as lump sums or as periodic payments) on account of personal injuries or sickness;".

Subsec. (a)(3). Pub. L. 104–191 inserted "(or through an arrangement having the effect of accident or health insurance)" after "accident or health insurance".

Subsecs. (c), (d). Pub. L. 104–188, §1605(c), added subsec. (c) and redesignated former subsec. (c) as (d).

1989—Subsec. (a). Pub. L. 101–239 inserted at end "Paragraph (2) shall not apply to any punitive damages in connection with a case not involving physical injury or physical sickness."

1983—Subsec. (a)(2). Pub. L. 97–473 substituted "whether by suit or agreement and whether as lump sums or as periodic payments" for "whether by suit or agreement".

1980—Subsec. (a)(4). Pub. L. 96–465 substituted reference to section 808 of the Foreign Service Act of 1980 for reference to section 831 of the Foreign Service Act of 1946.

1976—Subsec. (a)(4). Pub. L. 94–455, §1901(a)(18)(A), struck out "; 60 Stat. 1021" after "(22 U.S.C. 1081".

Subsec. (a)(5). Pub. L. 94–455, §505(e)(1), added par. (5).

Subsecs. (b), (c). Pub. L. 94–455, §505(b), added subsec. (b), redesignated former subsec. (b) as (c) and, as so redesignated, §1901(a)(18)(B), substituted "1403 of title 10, United States Code (relating to career compensation laws)" for "402(h) of the Career Compensation Act of 1949 (37 U.S.C. 272(h))".

1962—Subsec. (a). Pub. L. 87–792 inserted sentence requiring contributions made on behalf of an individual who is, or has been, an employee within the meaning of section 401(c)(1), while he was such an employee to a trust which is exempt from tax, or under a plan described in section 403(a), to be treated as contributions by the employer which were not includible in the gross income of the employee.

1960—Subsec. (a)(4). Pub. L. 86–723 provided for exclusion from gross income of amounts received as a disability annuity payable under the provisions of section 831 of the Foreign Service Act of 1946, as amended.

Statutory Notes and Related Subsidiaries

Change of Name

Reference to Veterans' Administration deemed to refer to Department of Veterans Affairs pursuant to section 10 of Pub. L. 100–527, set out as a Department of Veterans Affairs Act note under section 301 of Title 38, Veterans' Benefits.

Secretary of Health, Education, and Welfare redesignated Secretary of Health and Human Services by section 3508 of Title 20, Education.

Effective Date of 2002 Amendment

Pub. L. 107–134, title I, §113(c), Jan. 23, 2002, 115 Stat. 2435, provided that: "The amendments made by this section [amending this section and section 692 of this title] shall apply to taxable years ending on or after September 11, 2001."

Effective Date of 1996 Amendment

Pub. L. 104–191, title III, §311(c), Aug. 21, 1996, 110 Stat. 2053, provided that: "The amendments made by this section [amending this section and section 162 of this title] shall apply to taxable years beginning after December 31, 1996."

Pub. L. 104–188, title I, §1605(d), Aug. 20, 1996, 110 Stat. 1839, provided that:

"(1) In general.—Except as provided in paragraph (2), the amendments made by this section [amending this section] shall apply to amounts received after the date of the enactment of this Act [Aug. 20, 1996], in taxable years ending after such date.

"(2) Exception.—The amendments made by this section shall not apply to any amount received under a written binding agreement, court decree, or mediation award in effect on (or issued on or before) September 13, 1995."

Effective Date of 1989 Amendment

Pub. L. 101–239, title VII, §7641(b), Dec. 19, 1989, 103 Stat. 2379, provided that:

"(1) In general.—Except as provided in paragraph (2), the amendment made by subsection (a) [amending this section] shall apply to amounts received after July 10, 1989, in taxable years ending after such date.

"(2) Exception.—The amendment made by subsection (a) shall not apply to any amount received—

"(A) under any written binding agreement, court decree, or mediation award in effect on (or issued on or before) July 10, 1989, or

"(B) pursuant to any suit filed on or before July 10, 1989."

Effective Date of 1980 Amendment

Amendment by Pub. L. 96–465 effective Feb. 15, 1981, except as otherwise provided, see section 2403 of Pub. L. 96–465, set out as an Effective Date note under section 3901 of Title 22, Foreign Relations and Intercourse.

Effective Date of 1976 Amendment

Amendment by section 505(b) of Pub. L. 94–455 applicable to taxable years beginning after Dec. 31, 1975, see section 508 of Pub. L. 94–455, set out as a note under section 3 of this title.

Pub. L. 94–455, title V, §505(e)(2), Oct. 4, 1976, 90 Stat. 1568, provided that: "The amendments made by this subsection [amending this section] shall apply to taxable years beginning after December 31, 1976."

Amendment by section 1901(a)(18)(A) of Pub. L. 94–455 applicable with respect to taxable years beginning after Dec. 31, 1976, see section 1901(d) of Pub. L. 94–455, set out as a note under section 2 of this title.

Effective Date of 1962 Amendment

Amendment by Pub. L. 87–792 applicable to taxable years beginning after Dec. 31, 1962, see section 8 of Pub. L. 87–792, set out as a note under section 22 of this title.

Effective Date of 1960 Amendment

Pub. L. 86–723, §56(e), Sept. 8, 1960, 74 Stat. 848, provided that: "The amendment made by section 51 of this Act [amending this section] shall be effective with respect to taxable years ending after the date of enactment of this Act [Sept. 8, 1960]."

Executive Documents

Change of Name

Coast and Geodetic Survey consolidated with National Weather Bureau in 1965 to form Environmental Science Services Administration by Reorg. Plan No. 2 of 1965, eff. July 13, 1965, 30 FR 8819, 79 Stat. 1318. Environmental Science Services Administration abolished in 1970 and its personnel, property, records, etc., transferred to National Oceanic and Atmospheric Administration by Reorg. Plan No. 4 of 1970, eff. Oct. 3, 1970, 35 FR 15627, 84 Stat. 2090. By order of Acting Associate Administrator of National Oceanic and Atmospheric Administration, 35 FR 19249, Dec. 19, 1970, Coast and Geodetic Survey redesignated National Ocean Survey. See notes under section 311 of Title 15, Commerce and Trade.

Transfer of Functions

Functions of Public Health Service, Surgeon General of Public Health Service, and all other officers and employees of Public Health Service, and functions of all agencies of or in Public Health Service transferred to Secretary of Health, Education, and Welfare by 1966 Reorg. Plan No. 3, 31 F.R. 8855, 80 Stat. 1610, effective June 25, 1966, set out in the Appendix to Title 5, Government Organization and Employees.

1 See References in Text note below.
26 U.S.C. § 121 (2024) — Title 26: INTERNAL REVENUE CODE / Chapter 1 / Section 121: Exclusion of gain from sale of principal residence
Exclusion of gain from sale of principal residence
Status: in_force

(a) Exclusion

Gross income shall not include gain from the sale or exchange of property if, during the 5-year period ending on the date of the sale or exchange, such property has been owned and used by the taxpayer as the taxpayer's principal residence for periods aggregating 2 years or more.

(b) Limitations

(1) In general

The amount of gain excluded from gross income under subsection (a) with respect to any sale or exchange shall not exceed $250,000.

(2) Special rules for joint returns

In the case of a husband and wife who make a joint return for the taxable year of the sale or exchange of the property—

(A) $500,000 Limitation for certain joint returns

Paragraph (1) shall be applied by substituting "$500,000" for "$250,000" if—

(i) either spouse meets the ownership requirements of subsection (a) with respect to such property;

(ii) both spouses meet the use requirements of subsection (a) with respect to such property; and

(iii) neither spouse is ineligible for the benefits of subsection (a) with respect to such property by reason of paragraph (3).

(B) Other joint returns

If such spouses do not meet the requirements of subparagraph (A), the limitation under paragraph (1) shall be the sum of the limitations under paragraph (1) to which each spouse would be entitled if such spouses had not been married. For purposes of the preceding sentence, each spouse shall be treated as owning the property during the period that either spouse owned the property.

(3) Application to only 1 sale or exchange every 2 years

Subsection (a) shall not apply to any sale or exchange by the taxpayer if, during the 2-year period ending on the date of such sale or exchange, there was any other sale or exchange by the taxpayer to which subsection (a) applied.

(4) Special rule for certain sales by surviving spouses

In the case of a sale or exchange of property by an unmarried individual whose spouse is deceased on the date of such sale, paragraph (1) shall be applied by substituting "$500,000" for "$250,000" if such sale occurs not later than 2 years after the date of death of such spouse and the requirements of paragraph (2)(A) were met immediately before such date of death.

(5) Exclusion of gain allocated to nonqualified use

(A) In general

Subsection (a) shall not apply to so much of the gain from the sale or exchange of property as is allocated to periods of nonqualified use.

(B) Gain allocated to periods of nonqualified use

For purposes of subparagraph (A), gain shall be allocated to periods of nonqualified use based on the ratio which—

(i) the aggregate periods of nonqualified use during the period such property was owned by the taxpayer, bears to

(ii) the period such property was owned by the taxpayer.

(C) Period of nonqualified use

For purposes of this paragraph—

(i) In general

The term "period of nonqualified use" means any period (other than the portion of any period preceding January 1, 2009) during which the property is not used as the principal residence of the taxpayer or the taxpayer's spouse or former spouse.

(ii) Exceptions

The term "period of nonqualified use" does not include—

(I) any portion of the 5-year period described in subsection (a) which is after the last date that such property is used as the principal residence of the taxpayer or the taxpayer's spouse,

(II) any period (not to exceed an aggregate period of 10 years) during which the taxpayer or the taxpayer's spouse is serving on qualified official extended duty (as defined in subsection (d)(9)(C)) described in clause (i), (ii), or (iii) of subsection (d)(9)(A), and

(III) any other period of temporary absence (not to exceed an aggregate period of 2 years) due to change of employment, health conditions, or such other unforeseen circumstances as may be specified by the Secretary.

(D) Coordination with recognition of gain attributable to depreciation

For purposes of this paragraph—

(i) subparagraph (A) shall be applied after the application of subsection (d)(6), and

(ii) subparagraph (B) shall be applied without regard to any gain to which subsection (d)(6) applies.

(c) Exclusion for taxpayers failing to meet certain requirements

(1) In general

In the case of a sale or exchange to which this subsection applies, the ownership and use requirements of subsection (a), and subsection (b)(3), shall not apply; but the dollar limitation under paragraph (1) or (2) of subsection (b), whichever is applicable, shall be equal to—

(A) the amount which bears the same ratio to such limitation (determined without regard to this paragraph) as

(B)(i) the shorter of—

(I) the aggregate periods, during the 5-year period ending on the date of such sale or exchange, such property has been owned and used by the taxpayer as the taxpayer's principal residence; or

(II) the period after the date of the most recent prior sale or exchange by the taxpayer to which subsection (a) applied and before the date of such sale or exchange, bears to

(ii) 2 years.

(2) Sales and exchanges to which subsection applies

This subsection shall apply to any sale or exchange if—

(A) subsection (a) would not (but for this subsection) apply to such sale or exchange by reason of—

(i) a failure to meet the ownership and use requirements of subsection (a), or

(ii) subsection (b)(3), and

(B) such sale or exchange is by reason of a change in place of employment, health, or, to the extent provided in regulations, unforeseen circumstances.

(d) Special rules

(1) Joint returns

If a husband and wife make a joint return for the taxable year of the sale or exchange of the property, subsections (a) and (c) shall apply if either spouse meets the ownership and use requirements of subsection (a) with respect to such property.

(2) Property of deceased spouse

For purposes of this section, in the case of an unmarried individual whose spouse is deceased on the date of the sale or exchange of property, the period such unmarried individual owned and used such property shall include the period such deceased spouse owned and used such property before death.

(3) Property owned by spouse or former spouse

For purposes of this section—

(A) Property transferred to individual from spouse or former spouse

In the case of an individual holding property transferred to such individual in a transaction described in section 1041(a), the period such individual owns such property shall include the period the transferor owned the property.

(B) Property used by former spouse pursuant to divorce decree, etc.

Solely for purposes of this section, an individual shall be treated as using property as such individual's principal residence during any period of ownership while such individual's spouse or former spouse is granted use of the property under a divorce or separation instrument.

(C) Divorce or separation instrument

For purposes of this paragraph, the term "divorce or separation instrument" means—

(i) a decree of divorce or separate maintenance or a written instrument incident to such a decree,

(ii) a written separation agreement, or

(iii) a decree (not described in clause (i)) requiring a spouse to make payments for the support or maintenance of the other spouse.

(4) Tenant-stockholder in cooperative housing corporation

For purposes of this section, if the taxpayer holds stock as a tenant-stockholder (as defined in section 216) in a cooperative housing corporation (as defined in such section), then—

(A) the holding requirements of subsection (a) shall be applied to the holding of such stock, and

(B) the use requirements of subsection (a) shall be applied to the house or apartment which the taxpayer was entitled to occupy as such stockholder.

(5) Involuntary conversions

(A) In general

For purposes of this section, the destruction, theft, seizure, requisition, or condemnation of property shall be treated as the sale of such property.

(B) Application of section 1033

In applying section 1033 (relating to involuntary conversions), the amount realized from the sale or exchange of property shall be treated as being the amount determined without regard to this section, reduced by the amount of gain not included in gross income pursuant to this section.

(C) Property acquired after involuntary conversion

If the basis of the property sold or exchanged is determined (in whole or in part) under section 1033(b) (relating to basis of property acquired through involuntary conversion), then the holding and use by the taxpayer of the converted property shall be treated as holding and use by the taxpayer of the property sold or exchanged.

(6) Recognition of gain attributable to depreciation

Subsection (a) shall not apply to so much of the gain from the sale of any property as does not exceed the portion of the depreciation adjustments (as defined in section 1250(b)(3)) attributable to periods after May 6, 1997, in respect of such property.

(7) Determination of use during periods of out-of-residence care

In the case of a taxpayer who—

(A) becomes physically or mentally incapable of self-care, and

(B) owns property and uses such property as the taxpayer's principal residence during the 5-year period described in subsection (a) for periods aggregating at least 1 year,

then the taxpayer shall be treated as using such property as the taxpayer's principal residence during any time during such 5-year period in which the taxpayer owns the property and resides in any facility (including a nursing home) licensed by a State or political subdivision to care for an individual in the taxpayer's condition.

(8) Sales of remainder interests

For purposes of this section—

(A) In general

At the election of the taxpayer, this section shall not fail to apply to the sale or exchange of an interest in a principal residence by reason of such interest being a remainder interest in such residence, but this section shall not apply to any other interest in such residence which is sold or exchanged separately.

(B) Exception for sales to related parties

Subparagraph (A) shall not apply to any sale to, or exchange with, any person who bears a relationship to the taxpayer which is described in section 267(b) or 707(b).

(9) Uniformed services, Foreign Service, and intelligence community

(A) In general

At the election of an individual with respect to a property, the running of the 5-year period described in subsections (a) and (c)(1)(B) and paragraph (7) of this subsection with respect to such property shall be suspended during any period that such individual or such individual's spouse is serving on qualified official extended duty—

(i) as a member of the uniformed services,

(ii) as a member of the Foreign Service of the United States, or

(iii) as an employee of the intelligence community.

(B) Maximum period of suspension

The 5-year period described in subsection (a) shall not be extended more than 10 years by reason of subparagraph (A).

(C) Qualified official extended duty

For purposes of this paragraph—

(i) In general

The term "qualified official extended duty" means any extended duty while serving at a duty station which is at least 50 miles from such property or while residing under Government orders in Government quarters.

(ii) Uniformed services

The term "uniformed services" has the meaning given such term by section 101(a)(5) of title 10, United States Code, as in effect on the date of the enactment of this paragraph.

(iii) Foreign Service of the United States

The term "member of the Foreign Service of the United States" has the meaning given the term "member of the Service" by paragraph (1), (2), (3), (4), or (5) of section 103 of the Foreign Service Act of 1980, as in effect on the date of the enactment of this paragraph.

(iv) Employee of intelligence community

The term "employee of the intelligence community" means an employee (as defined by section 2105 of title 5, United States Code) of—

(I) the Office of the Director of National Intelligence,

(II) the Central Intelligence Agency,

(III) the National Security Agency,

(IV) the Defense Intelligence Agency,

(V) the National Geospatial-Intelligence Agency,

(VI) the National Reconnaissance Office,

(VII) any other office within the Department of Defense for the collection of specialized national intelligence through reconnaissance programs,

(VIII) any of the intelligence elements of the Army, the Navy, the Air Force, the Marine Corps, the Federal Bureau of Investigation, the Department of Treasury, the Department of Energy, and the Coast Guard,

(IX) the Bureau of Intelligence and Research of the Department of State, or

(X) any of the elements of the Department of Homeland Security concerned with the analyses of foreign intelligence information.

(v) Extended duty

The term "extended duty" means any period of active duty pursuant to a call or order to such duty for a period in excess of 90 days or for an indefinite period.

(D) Special rules relating to election

(i) Election limited to 1 property at a time

An election under subparagraph (A) with respect to any property may not be made if such an election is in effect with respect to any other property.

(ii) Revocation of election

An election under subparagraph (A) may be revoked at any time.

(10) Property acquired in like-kind exchange

If a taxpayer acquires property in an exchange with respect to which gain is not recognized (in whole or in part) to the taxpayer under subsection (a) or (b) of section 1031, subsection (a) shall not apply to the sale or exchange of such property by such taxpayer (or by any person whose basis in such property is determined, in whole or in part, by reference to the basis in the hands of such taxpayer) during the 5-year period beginning with the date of such acquisition.

[(11) Repealed. Pub. L. 111–312, title III, §301(a), Dec. 17, 2010, 124 Stat. 3300]

(12) Peace Corps

(A) In general

At the election of an individual with respect to a property, the running of the 5-year period described in subsections (a) and (c)(1)(B) and paragraph (7) of this subsection with respect to such property shall be suspended during any period that such individual or such individual's spouse is serving outside the United States—

(i) on qualified official extended duty (as defined in paragraph (9)(C)) as an employee of the Peace Corps, or

(ii) as an enrolled volunteer or volunteer leader under section 5 or 6 (as the case may be) of the Peace Corps Act (22 U.S.C. 2504, 2505).

(B) Applicable rules

For purposes of subparagraph (A), rules similar to the rules of subparagraphs (B) and (D) of paragraph (9) shall apply.

(e) Denial of exclusion for expatriates

This section shall not apply to any sale or exchange by an individual if the treatment provided by section 877(a)(1) applies to such individual.

(f) Election to have section not apply

This section shall not apply to any sale or exchange with respect to which the taxpayer elects not to have this section apply.

(g) Residences acquired in rollovers under section 1034

For purposes of this section, in the case of property the acquisition of which by the taxpayer resulted under section 1034 1 (as in effect on the day before the date of the enactment of this section) in the nonrecognition of any part of the gain realized on the sale or exchange of another residence, in determining the period for which the taxpayer has owned and used such property as the taxpayer's principal residence, there shall be included the aggregate periods for which such other residence (and each prior residence taken into account under section 1223(6) 1 in determining the holding period of such property) had been so owned and used.

(Added Pub. L. 88–272, title II, §206(a), Feb. 26, 1964, 78 Stat. 38; amended Pub. L. 94–455, title XIV, §1404(a), title XIX, §1906(b)(13)(A), Oct. 4, 1976, 90 Stat. 1733, 1834; Pub. L. 95–600, title IV, §404(a)–(c)(2), Nov. 6, 1978, 92 Stat. 2869, 2870; Pub. L. 97–34, title I, §123(a), Aug. 13, 1981, 95 Stat. 197; Pub. L. 100–647, title VI, §6011(a), Nov. 10, 1988, 102 Stat. 3691; Pub. L. 105–34, title III, §312(a), Aug. 5, 1997, 111 Stat. 836; Pub. L. 105–206, title VI, §6005(e)(1), (2), July 22, 1998, 112 Stat. 805; Pub. L. 107–16, title V, §542(c), June 7, 2001, 115 Stat. 84; Pub. L. 108–121, title I, §101(a), Nov. 11, 2003, 117 Stat. 1336; Pub. L. 108–357, title VIII, §840(a), Oct. 22, 2004, 118 Stat. 1597; Pub. L. 109–135, title IV, §§402(a)(3), 403(ee), Dec. 21, 2005, 119 Stat. 2610, 2631; Pub. L. 109–432, div. A, title IV, §417(a)–(d), Dec. 20, 2006, 120 Stat. 2965, 2966; Pub. L. 110–142, §7(a), Dec. 20, 2007, 121 Stat. 1806; Pub. L. 110–172, §11(a)(11)(A), Dec. 29, 2007, 121 Stat. 2485; Pub. L. 110–245, title I, §§110(a), 113(a), (b), June 17, 2008, 122 Stat. 1633, 1635; Pub. L. 110–289, div. C, title III, §3092(a), July 30, 2008, 122 Stat. 2911; Pub. L. 111–312, title III, §301(a), Dec. 17, 2010, 124 Stat. 3300; Pub. L. 113–295, div. A, title II, §§212(c), 213(c)(1), 221(a)(20), Dec. 19, 2014, 128 Stat. 4033, 4040; Pub. L. 115–97, title I, §11051(b)(3)(A), Dec. 22, 2017, 131 Stat. 2089.)

Editorial Notes

References in Text

The date of the enactment of this paragraph, referred to in subsec. (d)(9)(C)(ii), (iii), is the date of enactment of Pub. L. 108–121, which was approved Nov. 11, 2003.

Section 103 of the Foreign Service Act of 1980, referred to in subsec. (d)(9)(C)(iii), is classified to section 3903 of Title 22, Foreign Relations and Intercourse.

Section 1034 (as in effect on the day before the date of the enactment of this section), referred to in subsec. (g), probably means section 1034 of this title as in effect on the day before the date of enactment of Pub. L. 105–34 which amended this section generally and was approved Aug. 5, 1997. Section 1034 was repealed by Pub. L. 105–34, title III, §312(b), Aug. 5, 1997, 111 Stat. 839.

Section 1223(6), referred to in subsec. (g), was repealed by Pub. L. 113–295, div. A, title II, §221(a)(80)(C), Dec. 19, 2014, 128 Stat. 4049.

Codification

Pub. L. 109–135, title IV, §403(ee)(1), (nn), Dec. 21, 2005, 119 Stat. 2631, 2632, which directed that subsec. (d) of this section be amended by redesignating the paragraph (10) relating to property acquired from a decedent as paragraph (11), effective as if included in the provisions to which such amendment relates of the American Jobs Creation Act of 2004, Pub. L. 108–357, was executed as the probable intent of Congress by redesignating as paragraph (11) the paragraph (10) directed to be added to subsec. (d) of this section by Pub. L. 107–16, §542(c), (f)(1), applicable to estates of decedents dying after Dec. 31, 2009. See Codification note, 2001, 2003, and 2005 Amendment notes, and Effective Date of 2005 Amendment note below.

Pub. L. 108–121, title I, §101(a), (b)(1), Nov. 11, 2003, 117 Stat. 1336, which directed that subsec. (d) of this section be amended by redesignating paragraph (9) as (10) and adding a new paragraph (9), effective as if included in the amendments made by section 312 of the Taxpayer Relief Act of 1997, Pub. L. 105–34, could not literally be executed insofar as it directed the redesignation because subsec. (d), as amended by Pub. L. 105–34, did not contain a paragraph (9). However, to reflect the probable intent of Congress, the amendment was executed by redesignating as paragraph (10) the paragraph (9) directed to be added to subsec. (d) of this section by Pub. L. 107–16, §542(c), (f)(1), applicable to estates of decedents dying after Dec. 31, 2009. See Codification note above and 2001, 2003, and 2005 Amendment notes and Effective Date of 2003 Amendment note below.

Prior Provisions

A prior section 121 was renumbered section 140 of this title.

Amendments

2017—Subsec. (d)(3)(B). Pub. L. 115–97, §11051(b)(3)(A)(i), struck out "(as defined in section 71(b)(2))" after "divorce or separation instrument".

Subsec. (d)(3)(C). Pub. L. 115–97, §11051(b)(3)(A)(ii), added subpar. (C).

2014—Subsec. (b)(3). Pub. L. 113–295, §221(a)(20), struck out subpar. (A) designation and heading and subpar. (B) and realigned margins. Prior to amendment, text of subpar. (B) read as follows: "Subparagraph (A) shall be applied without regard to any sale or exchange before May 7, 1997."

Subsec. (b)(4), (5). Pub. L. 113–295, §212(c), redesignated par. (4), relating to exclusion of gain allocated to nonqualified use, as (5).

Subsec. (d)(12)(B). Pub. L. 113–295, §213(c)(1), inserted "of paragraph (9)" after "and (D)".

2010—Subsec. (d)(11). Pub. L. 111–312 amended subsec. (d) to read as if amendment by Pub. L. 107–16, §542(c), which originally added par. (9), had never been enacted. See Codification notes above and 2001 Amendment note and Effective Date of 2010 Amendment note below. Prior to amendment, par. (11) read as follows: "Property acquired from a decedent.—The exclusion under this section shall apply to property sold by—

"(A) the estate of a decedent,

"(B) any individual who acquired such property from the decedent (within the meaning of section 1022), and

"(C) a trust which, immediately before the death of the decedent, was a qualified revocable trust (as defined in section 645(b)(1)) established by the decedent,

determined by taking into account the ownership and use by the decedent."

2008—Subsec. (b)(4). Pub. L. 110–289 added par. (4) relating to exclusion of gain allocated to nonqualified use.

Subsec. (d)(9)(C)(vi). Pub. L. 110–245, §113(b), struck out heading and text of cl. (vi). Text read as follows: "An employee of the intelligence community shall not be treated as serving on qualified extended duty unless such duty is at a duty station located outside the United States."

Subsec. (d)(9)(E). Pub. L. 110–245, §113(a), struck out heading and text of subpar. (E). Text read as follows: "Clause (iii) of subparagraph (A) shall not apply with respect to any sale or exchange after December 31, 2010."

Subsec. (d)(12). Pub. L. 110–245, §110(a), added par. (12).

2007—Subsec. (b)(4). Pub. L. 110–142 added par. (4) relating to special rule for certain sales by surviving spouses.

Subsec. (d)(9)(E). Pub. L. 110–172 added subpar. (E).

2006—Subsec. (d)(9). Pub. L. 109–432, §417(d), substituted "Uniformed services, Foreign Service, and intelligence community" for "Members of uniformed services and Foreign Service" in heading.

Subsec. (d)(9)(A). Pub. L. 109–432, §417(a), substituted "duty—

"(i) as a member of the uniformed services,

"(ii) as a member of the Foreign Service of the United States, or

"(iii) as an employee of the intelligence community."

for "duty as a member of the uniformed services or of the Foreign Service of the United States."

Subsec. (d)(9)(C)(iv), (v). Pub. L. 109–432, §417(b), added cl. (iv) and redesignated former cl. (iv) as (v).

Subsec. (d)(9)(C)(vi). Pub. L. 109–432, §417(c), added cl. (vi).

2005—Subsec. (d)(10). Pub. L. 109–135, §403(ee)(2), amended heading and text of par. (10) relating to property acquired in like-kind exchange generally. Prior to amendment, text read as follows: "If a taxpayer acquired property in an exchange to which section 1031 applied, subsection (a) shall not apply to the sale or exchange of such property if it occurs during the 5-year period beginning with the date of the acquisition of such property."

Subsec. (d)(11). Pub. L. 109–135, §403(ee)(1), redesignated par. (10), formerly par. (9), as added by Pub. L. 107–16, as (11). See Codification notes above and 2001 and 2003 Amendment notes and Effective Date of 2001 Amendment note below.

Subsec. (g). Pub. L. 109–135, §402(a)(3), substituted "section 1223(6)" for "section 1223(7)".

2004—Subsec. (d)(10). Pub. L. 108–357 added par. (10) relating to property acquired in like-kind exchange.

2003—Subsec. (d)(9), (10). Pub. L. 108–121 added par. (9) and redesignated former par. (9), as added by Pub. L. 107–16, as (10). See Codification notes above and 2001 Amendment note and Effective Date of 2001 Amendment note below.

2001—Subsec. (d)(9). Pub. L. 107–16, §542(c), added par. (9). See Codification notes above and Effective Date of 2001 Amendment note below.

1998—Subsec. (b)(2). Pub. L. 105–206, §6005(e)(1), substituted "Special rules for joint returns" for "$500,000 limitation for certain joint returns" in heading and amended text generally. Prior to amendment, text read as follows: "Paragraph (1) shall be applied by substituting '$500,000' for '$250,000' if—

"(A) a husband and wife make a joint return for the taxable year of the sale or exchange of the property,

"(B) either spouse meets the ownership requirements of subsection (a) with respect to such property,

"(C) both spouses meet the use requirements of subsection (a) with respect to such property, and

"(D) neither spouse is ineligible for the benefits of subsection (a) with respect to such property by reason of paragraph (3)."

Subsec. (c)(1). Pub. L. 105–206, §6005(e)(2), reenacted heading without change and amended text generally. Prior to amendment, text read as follows: "In the case of a sale or exchange to which this subsection applies, the ownership and use requirements of subsection (a) shall not apply and subsection (b)(3) shall not apply; but the amount of gain excluded from gross income under subsection (a) with respect to such sale or exchange shall not exceed—

"(A) the amount which bears the same ratio to the amount which would be so excluded under this section if such requirements had been met, as

"(B) the shorter of—

"(i) the aggregate periods, during the 5-year period ending on the date of such sale or exchange, such property has been owned and used by the taxpayer as the taxpayer's principal residence, or

"(ii) the period after the date of the most recent prior sale or exchange by the taxpayer to which subsection (a) applied and before the date of such sale or exchange,

bears to 2 years."

1997—Pub. L. 105–34 amended section catchline and text generally. Prior to amendment, section related to one-time exclusion of gain from sale of principal residence by individual who had attained age 55.

1988—Subsec. (d)(9). Pub. L. 100–647 added par. (9).

1981—Subsec. (b)(1). Pub. L. 97–34 substituted "$125,000 ($62,500" for "$100,000 ($50,000".

1978—Pub. L. 95–600, §404(a), substituted "One-time exclusion of gain from sale of principal residence by individual who has attained age 55" for "Gain from sale or exchange of residence of individual who has attained age 65" in section catchline.

Subsec. (a). Pub. L. 95–600, §404(a), substituted "55" for "65", "5-year" for "8-year", and "3 years" for "5 years".

Subsec. (b). Pub. L. 95–600, §404(a), in par. (1) substituted provisions respecting dollar limitations for amount of gain for provisions setting forth applicable limitations where the adjusted sales price exceeds $35,000 and added par. (3).

Subsec. (d)(2). Pub. L. 95–600, §404(c)(1), substituted "5-year period" for "8-year period".

Subsec. (d)(5). Pub. L. 95–600, §404(c)(2), substituted "5-year period" for "8-year period" and "3 years" for "5 years".

Subsec. (d)(8). Pub. L. 95–600, §404(b), added par. (8).

1976—Subsec. (b)(1). Pub. L. 94–455, §1404(a), substituted "$35,000" for "$20,000" in three places.

Subsecs. (c), (d)(5). Pub. L. 94–455, §1906(b)(13)(A), struck out "or his delegate" after "Secretary".

Statutory Notes and Related Subsidiaries

Effective Date of 2017 Amendment

Amendment by Pub. L. 115–97 applicable to any divorce or separation instrument (as defined in former section 71(b)(2) of this title as in effect before Dec. 22, 2017) executed after Dec. 31, 2018, and to such instruments executed on or before Dec. 31, 2018, and modified after Dec. 31, 2018, if the modification expressly provides that the amendment made by section 11051 of Pub. L. 115–97 applies to such modification, see section 11051(c) of Pub. L. 115–97, set out as a note under section 61 of this title.

Effective Date of 2014 Amendment

Amendment by section 212(c) of Pub. L. 113–295 effective as if included in the provisions of the Housing Assistance Tax Act of 2008, Pub. L. 110–289, div. C, to which such amendment relates, see section 212(d) of Pub. L. 113–295, set out as a note under section 42 of this title.

Pub. L. 113–295, div. A, title II, §213(d), Dec. 19, 2014, 128 Stat. 4034, provided that: "The amendments made by this section [amending this section and sections 125 and 877 of this title and provisions set out as a note under section 6511 of this title] shall take effect as if included in the provisions of the Heroes Earnings Assistance and Relief Tax Act of 2008 [Pub. L. 110–245] to which they relate."

Amendment by section 221(a)(20) of Pub. L. 113–295 effective Dec. 19, 2014, subject to a savings provision, see section 221(b) of Pub. L. 113–295, set out as a note under section 1 of this title.

Effective and Termination Dates of 2010 Amendment

Pub. L. 111–312, title III, §301(e), Dec. 17, 2010, 124 Stat. 3301, provided that: "Except as otherwise provided in this section, the amendments made by this section [amending this section and sections 170, 684, 1014, 1040, 1221, 1246, 1291, 1296, 2505, 4947, 6018, 6019, 6075, and 7701 of this title and repealing sections 1022, 2210, 2664, and 6716 of this title] shall apply to estates of decedents dying, and transfers made, after December 31, 2009."

Pub. L. 111–312, title III, §304, Dec. 17, 2010, 124 Stat. 3304, which provided that section 901 of the Economic Growth and Tax Relief Reconciliation Act of 2001, Pub. L. 107–16, would apply to the amendments made by title III of Pub. L. 111–312, was repealed by Pub. L. 112–240, title I, §101(a)(2), Jan. 2, 2013, 126 Stat. 2315.

[Amendment by Pub. L. 112–240 (repealing section 304 of Pub. L. 111–312, formerly set out above) applicable to taxable, plan, or limitation years beginning after Dec. 31, 2012, and estates of decedents dying, gifts made, or generation skipping transfers after Dec. 31, 2012, see section 101(a)(3) of Pub. L. 112–240, set out as a note following former section 901 of Pub. L. 107–16 which was set out as an Effective and Termination Dates of 2001 Amendment note under section 1 of this title.]

Effective Date of 2008 Amendment

Pub. L. 110–289, div. C, title III, §3092(b), July 30, 2008, 122 Stat. 2912, provided that: "The amendment made by this section [amending this section] shall apply to sales and exchanges after December 31, 2008."

Pub. L. 110–245, title I, §110(b), June 17, 2008, 122 Stat. 1634, provided that: "The amendment made by subsection (a) [amending this section] shall apply to taxable years beginning after December 31, 2007."

Pub. L. 110–245, title I, §113(c), June 17, 2008, 122 Stat. 1635, provided that: "The amendments made by this section [amending this section] shall apply to sales or exchanges after the date of the enactment of this Act [June 17, 2008]."

Effective Date of 2007 Amendment

Pub. L. 110–142, §7(b), Dec. 20, 2007, 121 Stat. 1806, provided that: "The amendment made by this section [amending this section] shall apply to sales or exchanges after December 31, 2007."

Effective Date of 2006 Amendment

Pub. L. 109–432, div. A, title IV, §417(e), Dec. 20, 2006, 120 Stat. 2966, as amended by Pub. L. 110–172, §11(a)(11)(B), Dec. 29, 2007, 121 Stat. 2485, provided that: "The amendments made by this section [amending this section] shall apply to sales or exchanges after the date of the enactment of this Act [Dec. 20, 2006]."

Effective Date of 2005 Amendment

Amendment by section 402(a)(3) of Pub. L. 109–135 effective as if included in the provisions of the Energy Policy Act of 2005, Pub. L. 109–58, to which it relates, but not applicable with respect to any transaction ordered in compliance with the Public Utility Holding Company Act of 1935 (15 U.S.C. 79 et seq.) before its repeal, see section 402(m) of Pub. L. 109–135, set out as an Effective and Termination Dates of 2005 Amendments note under section 23 of this title.

Amendment by section 403(ee) of Pub. L. 109–135 effective as if included in the provision of the American Jobs Creation Act of 2004, Pub. L. 108–357, to which such amendment relates, see section 403(nn) of Pub. L. 109–135, set out as a note under section 26 of this title.

Effective Date of 2004 Amendment

Pub. L. 108–357, title VIII, §840(b), Oct. 22, 2004, 118 Stat. 1597, provided that: "The amendment made by this section [amending this section] shall apply to sales or exchanges after the date of the enactment of this Act [Oct. 22, 2004]."

Effective Date of 2003 Amendment

Pub. L. 108–121, title I, §101(b), Nov. 11, 2003, 117 Stat. 1336, provided that:

"(1) Effective date.—The amendments made by this section [amending this section] shall take effect as if included in the amendments made by section 312 of the Taxpayer Relief Act of 1997 [Pub. L. 105–34].

"(2) Waiver of limitations.—If refund or credit of any overpayment of tax resulting from the amendments made by this section [amending this section] is prevented at any time before the close of the 1-year period beginning on the date of the enactment of this Act [Nov. 11, 2003] by the operation of any law or rule of law (including res judicata), such refund or credit may nevertheless be made or allowed if claim therefor is filed before the close of such period."

Effective Date of 2001 Amendment

Pub. L. 107–16, title V, §542(f), June 7, 2001, 115 Stat. 86, provided that:

"(1) In general.—Except as provided in paragraph (2), the amendments made by this section [enacting sections 1022 and 6716 of this title and amending this section and sections 170, 684, 1040, 1221, 1246, 1291, 1296, 4947, 6018, 6019, 6075, and 7701 of this title] shall apply to estates of decedents dying after December 31, 2009.

"(2) Transfers to nonresidents.—The amendments made by subsection (e)(1) [amending section 684 of this title] shall apply to transfers after December 31, 2009.

"(3) Section 4947.—The amendment made by subsection (e)(4) [amending section 4947 of this title] shall apply to deductions for taxable years beginning after December 31, 2009."

Effective Date of 1998 Amendment

Amendment by Pub. L. 105–206 effective, except as otherwise provided, as if included in the provisions of the Taxpayer Relief Act of 1997, Pub. L. 105–34, to which such amendment relates, see section 6024 of Pub. L. 105–206, set out as a note under section 1 of this title.

Effective Date of 1997 Amendment

Pub. L. 105–34, title III, §312(d), Aug. 5, 1997, 111 Stat. 841, as amended by Pub. L. 105–206, title VI, §6005(e)(3), July 22, 1998, 112 Stat. 806, provided that:

"(1) In general.—The amendments made by this section [amending this section and sections 25, 32, 56, 143, 163, 215, 280A, 464, 512, 1016, 1033, 1038, 1223, 1250, 1274, 6012, 6045, 6212, 6334, 6504, and 7872 of this title and repealing section 1034 of this title] shall apply to sales and exchanges after May 6, 1997.

"(2) Sales on or before date of enactment.—At the election of the taxpayer, the amendments made by this section shall not apply to any sale or exchange on or before the date of the enactment of this Act [Aug. 5, 1997].

"(3) Certain sales within 2 years after date of enactment.—Section 121 of the Internal Revenue Code of 1986 (as amended by this section) shall be applied without regard to subsection (c)(2)(B) thereof in the case of any sale or exchange of property during the 2-year period beginning on the date of the enactment of this Act if the taxpayer held such property on the date of the enactment of this Act and fails to meet the ownership and use requirements of subsection (a) thereof with respect to such property.

"(4) Binding contracts.—At the election of the taxpayer, the amendments made by this section shall not apply to a sale or exchange after the date of the enactment of this Act, if—

"(A) such sale or exchange is pursuant to a contract which was binding on such date, or

"(B) without regard to such amendments, gain would not be recognized under section 1034 of the Internal Revenue Code of 1986 (as in effect on the day before the date of the enactment of this Act) on such sale or exchange by reason of a new residence acquired on or before such date or with respect to the acquisition of which by the taxpayer a binding contract was in effect on such date.

This paragraph shall not apply to any sale or exchange by an individual if the treatment provided by section 877(a)(1) of the Internal Revenue Code of 1986 applies to such individual."

Effective Date of 1988 Amendment

Pub. L. 100–647, title VI, §6011(b), Nov. 10, 1988, 102 Stat. 3691, provided that: "The amendment made by subsection (a) [amending this section] shall apply with respect to any sale or exchange after September 30, 1988, in taxable years ending after such date."

Effective Date of 1981 Amendment

Pub. L. 97–34, title I, §123(b), Aug. 13, 1981, 95 Stat. 197, provided that: "The amendment made by this section [amending this section] shall apply to residences sold or exchanged after July 20, 1981."

Effective Date of 1978 Amendment

Pub. L. 95–600, title IV, §404(d)(1), Nov. 6, 1978, 92 Stat. 2870, provided that: "The amendments made by this section [amending this section and sections 1033, 1034, 1038, 1250, and 6012 of this title] shall apply to sales or exchanges after July 26, 1978, in taxable years ending after such date."

Effective Date of 1976 Amendment

Pub. L. 94–455, title XIV, §1404(b), Oct. 4, 1976, 90 Stat. 1733, provided that: "The amendment made by subsection (a) [amending this section] shall apply to taxable years beginning after December 31, 1976."

Effective Date

Pub. L. 88–272, title II, §206(c), Feb. 26, 1964, 78 Stat. 40, provided that: "The amendments made by this section [enacting this section, redesignating former section 121 as 122, and amending sections 1033, 1034, and 6012 of this title] shall apply to dispositions after Dec. 31, 1963, in taxable years ending after such date."

Sense of Congress Concerning Tax Treatment of Principal Residence of Members of Armed Forces While Away From Home on Active Duty

Pub. L. 105–261, div. A, title X, §1074, Oct. 17, 1998, 112 Stat. 2138, provided that: "It is the sense of Congress that a member of the Armed Forces should be treated for purposes of section 121 of the Internal Revenue Code of 1986 as using property as a principal residence during any continuous period that the member is serving on active duty for 180 days or more with the Armed Forces, but only if the member used the property as a principal residence for any period during or immediately before that period of active duty."

Transitional Rule in Case of Sale or Exchange of Residence Before July 26, 1981

Pub. L. 95–600, title IV, §404(d)(2), Nov. 6, 1978, 92 Stat. 2870, as amended by Pub. L. 99–514, §2, Oct. 22, 1986, 100 Stat. 2095, provided that: "In the case of a sale or exchange of a residence before July 26, 1981, a taxpayer who has attained age 65 on the date of such sale or exchange may elect to have section 121 of the Internal Revenue Code of 1986 [formerly I.R.C. 1954] applied by substituting '8-year period' for '5-year period' and '5 years' for '3 years' in subsections (a), (d)(2), and (d)(5) of such section."

1 See References in Text note below.
26 U.S.C. § 6655 (2024) — Title 26: INTERNAL REVENUE CODE / Chapter 68 / Section 6655: Failure by corporation to pay estimated income tax
Failure by corporation to pay estimated income tax
Status: in_force

(a) Addition to tax

Except as otherwise provided in this section, in the case of any underpayment of estimated tax by a corporation, there shall be added to the tax under chapter 1 for the taxable year an amount determined by applying—

(1) the underpayment rate established under section 6621,

(2) to the amount of the underpayment,

(3) for the period of the underpayment.

(b) Amount of underpayment; period of underpayment

For purposes of subsection (a)—

(1) Amount

The amount of the underpayment shall be the excess of—

(A) the required installment, over

(B) the amount (if any) of the installment paid on or before the due date for the installment.

(2) Period of underpayment

The period of the underpayment shall run from the due date for the installment to whichever of the following dates is the earlier—

(A) the 15th day of the 4th month following the close of the taxable year, or

(B) with respect to any portion of the underpayment, the date on which such portion is paid.

(3) Order of crediting payments

For purposes of paragraph (2)(B), a payment of estimated tax shall be credited against unpaid required installments in the order in which such installments are required to be paid.

(c) Number of required installments; due dates

For purposes of this section—

(1) Payable in 4 installments

There shall be 4 required installments for each taxable year.

(2) Time for payment of installments
 

 In the case of the following 
  required installments:
The due date is:

   1st
April 15  

   2nd
June 15  

   3rd
September 15  

   4th
December 15.

(d) Amount of required installments

For purposes of this section—

(1) Amount

(A) In general

Except as otherwise provided in this section, the amount of any required installment shall be 25 percent of the required annual payment.

(B) Required annual payment

Except as otherwise provided in this subsection, the term "required annual payment" means the lesser of—

(i) 100 percent of the tax shown on the return for the taxable year (or, if no return is filed, 100 percent of the tax for such year), or

(ii) 100 percent of the tax shown on the return of the corporation for the preceding taxable year.

Clause (ii) shall not apply if the preceding taxable year was not a taxable year of 12 months, or the corporation did not file a return for such preceding taxable year showing a liability for tax.

(2) Large corporations required to pay 100 percent of current year tax

(A) In general

Except as provided in subparagraph (B), clause (ii) of paragraph (1)(B) shall not apply in the case of a large corporation.

(B) May use last year's tax for 1st installment

Subparagraph (A) shall not apply for purposes of determining the amount of the 1st required installment for any taxable year. Any reduction in such 1st installment by reason of the preceding sentence shall be recaptured by increasing the amount of the next required installment determined under paragraph (1) by the amount of such reduction.

(e) Lower required installment where annualized income installment or adjusted seasonal installment is less than amount determined under subsection (d)

(1) In general

In the case of any required installment, if the corporation establishes that the annualized income installment or the adjusted seasonal installment is less than the amount determined under subsection (d)(1) (as modified by paragraphs (2) and (3) of subsection (d))—

(A) the amount of such required installment shall be the annualized income installment (or, if lesser, the adjusted seasonal installment), and

(B) any reduction in a required installment resulting from the application of this paragraph shall be recaptured by increasing the amount of the next required installment determined under subsection (d)(1) (as so modified) by the amount of such reduction (and by increasing subsequent required installments to the extent that the reduction has not previously been recaptured under this subparagraph).

(2) Determination of annualized income installment

(A) In general

In the case of any required installment, the annualized income installment is the excess (if any) of—

(i) an amount equal to the applicable percentage of the tax for the taxable year computed by placing on an annualized basis the taxable income, adjusted financial statement income (as defined in section 56A), and modified taxable income—

(I) for the first 3 months of the taxable year, in the case of the 1st required installment,

(II) for the first 3 months of the taxable year, in the case of the 2nd required installment,

(III) for the first 6 months of the taxable year in the case of the 3rd required installment, and

(IV) for the first 9 months of the taxable year, in the case of the 4th required installment, over

(ii) the aggregate amount of any prior required installments for the taxable year.

(B) Special rules

For purposes of this paragraph—

(i) Annualization

The taxable income, adjusted financial statement income (as defined in section 56A), and modified taxable income shall be placed on an annualized basis under regulations prescribed by the Secretary.

(ii) Applicable percentage
 

   In the case of the following
    required installments:
The applicable percentage is:

 1st
25  

 2nd
50  

 3rd
75  

 4th
100.

(iii) Modified taxable income

The term "modified taxable income" has the meaning given such term by section 59A(c)(1).

(C) Election for different annualization periods

(i) If the taxpayer makes an election under this clause—

(I) subclause (I) of subparagraph (A)(i) shall be applied by substituting "2 months" for "3 months",

(II) subclause (II) of subparagraph (A)(i) shall be applied by substituting "4 months" for "3 months",

(III) subclause (III) of subparagraph (A)(i) shall be applied by substituting "7 months" for "6 months", and

(IV) subclause (IV) of subparagraph (A)(i) shall be applied by substituting "10 months" for "9 months".

(ii) If the taxpayer makes an election under this clause—

(I) subclause (II) of subparagraph (A)(i) shall be applied by substituting "5 months" for "3 months",

(II) subclause (III) of subparagraph (A)(i) shall be applied by substituting "8 months" for "6 months", and

(III) subclause (IV) of subparagraph (A)(i) shall be applied by substituting "11 months" for "9 months".

(iii) An election under clause (i) or (ii) shall apply to the taxable year for which made and such an election shall be effective only if made on or before the date required for the payment of the first required installment for such taxable year.

(3) Determination of adjusted seasonal installment

(A) In general

In the case of any required installment, the amount of the adjusted seasonal installment is the excess (if any) of—

(i) 100 percent of the amount determined under subparagraph (C), over

(ii) the aggregate amount of all prior required installments for the taxable year.

(B) Limitation on application of paragraph

This paragraph shall apply only if the base period percentage for any 6 consecutive months of the taxable year equals or exceeds 70 percent.

(C) Determination of amount

The amount determined under this subparagraph for any installment shall be determined in the following manner—

(i) take the taxable income for all months during the taxable year preceding the filing month,

(ii) divide such amount by the base period percentage for all months during the taxable year preceding the filing month,

(iii) determine the tax on the amount determined under clause (ii), and

(iv) multiply the tax computed under clause (iii) by the base period percentage for the filing month and all months during the taxable year preceding the filing month.

(D) Definitions and special rules

For purposes of this paragraph—

(i) Base period percentage

The base period percentage for any period of months shall be the average percent which the taxable income for the corresponding months in each of the 3 preceding taxable years bears to the taxable income for the 3 preceding taxable years.

(ii) Filing month

The term "filing month" means the month in which the installment is required to be paid.

(iii) Reorganization, etc.

The Secretary may by regulations provide for the determination of the base period percentage in the case of reorganizations, new corporations, and other similar circumstances.

(4) Treatment of subpart F income

(A) In general

Any amounts required to be included in gross income under section 951(a) (and credits properly allocable thereto) shall be taken into account in computing any annualized income installment under paragraph (2) in a manner similar to the manner under which partnership income inclusions (and credits properly allocable thereto) are taken into account.

(B) Prior year safe harbor

(i) In general

If a taxpayer elects to have this subparagraph apply for any taxable year—

(I) subparagraph (A) shall not apply, and

(II) for purposes of computing any annualized income installment for such taxable year, the taxpayer shall be treated as having received ratably during such taxable year items of income and credit described in subparagraph (A) in an amount equal to 115 percent of the amount of such items shown on the return of the taxpayer for the preceding taxable year (the second preceding taxable year in the case of the first and second required installments for such taxable year).

(ii) Special rule for noncontrolling shareholder

(I) In general

If a taxpayer making the election under clause (i) is a noncontrolling shareholder of a corporation, clause (i)(II) shall be applied with respect to items of such corporation by substituting "100 percent" for "115 percent".

(II) Noncontrolling shareholder

For purposes of subclause (I), the term "noncontrolling shareholder" means, with respect to any corporation, a shareholder which (as of the beginning of the taxable year for which the installment is being made) does not own (within the meaning of section 958(a)), and is not treated as owning (within the meaning of section 958(b)), more than 50 percent (by vote or value) of the stock in the corporation.

(5) Treatment of certain REIT dividends

(A) In general

Any dividend received from a closely held real estate investment trust by any person which owns (after application of subsection (d)(5) of section 856) 10 percent or more (by vote or value) of the stock or beneficial interests in the trust shall be taken into account in computing annualized income installments under paragraph (2) in a manner similar to the manner under which partnership income inclusions are taken into account.

(B) Closely held REIT

For purposes of subparagraph (A), the term "closely held real estate investment trust" means a real estate investment trust with respect to which 5 or fewer persons own (after application of subsection (d)(5) of section 856) 50 percent or more (by vote or value) of the stock or beneficial interests in the trust.

(f) Exception where tax is small amount

No addition to tax shall be imposed under subsection (a) for any taxable year if the tax shown on the return for such taxable year (or, if no return is filed, the tax) is less than $500.

(g) Definitions and special rules

(1) Tax

For purposes of this section, the term "tax" means the excess of—

(A) the sum of—

(i) the tax imposed by section 11 or subchapter L of chapter 1, whichever applies,

(ii) the tax imposed by section 55,

(iii) the tax imposed by section 59A, plus

(iv) the tax imposed by section 887, over

(B) the credits against tax provided by part IV of subchapter A of chapter 1.

For purposes of the preceding sentence, in the case of a foreign corporation subject to taxation under section 11 or 1201(a), or under subchapter L of chapter 1, the tax imposed by section 881 shall be treated as a tax imposed by section 11.

(2) Large corporation

(A) In general

For purposes of this section, the term "large corporation" means any corporation if such corporation (or any predecessor corporation) had taxable income of $1,000,000 or more for any taxable year during the testing period.

(B) Rules for applying subparagraph (A)

(i) Testing period

For purposes of subparagraph (A), the term "testing period" means the 3 taxable years immediately preceding the taxable year involved.

(ii) Members of controlled group

For purposes of applying subparagraph (A) to any taxable year in the testing period with respect to corporations which are component members of a controlled group of corporations for such taxable year, the $1,000,000 amount specified in subparagraph (A) shall be divided among such members under rules similar to the rules of section 1561.

(iii) Certain carrybacks and carryovers not taken into account

For purposes of subparagraph (A), taxable income shall be determined without regard to any amount carried to the taxable year under section 172 or 1212(a).

(3) Certain tax-exempt organizations

For purposes of this section—

(A) Any organization subject to the tax imposed by section 511, and any private foundation, shall be treated as a corporation subject to tax under section 11.

(B) Any tax imposed by section 511, and any tax imposed by section 1 or 4940 on a private foundation, shall be treated as a tax imposed by section 11.

(C) Any reference to taxable income shall be treated as including a reference to unrelated business taxable income or net investment income (as the case may be).

In the case of any organization described in subparagraph (A), subsection (b)(2)(A) shall be applied by substituting "5th month" for "4th month", subsection (e)(2)(A) shall be applied by substituting "2 months" for "3 months" in clause (i)(I), the election under clause (i) of subsection (e)(2)(C) may be made separately for each installment, and clause (ii) of subsection (e)(2)(C) shall not apply. In the case of a private foundation, subsection (c)(2) shall be applied by substituting "May 15" for "April 15".

(4) Application of section to certain taxes imposed on S corporations

In the case of an S corporation, for purposes of this section—

(A) The following taxes shall be treated as imposed by section 11:

(i) The tax imposed by section 1374(a).

(ii) The tax imposed by section 1375(a).

(iii) Any tax for which the S corporation is liable by reason of section 1371(d)(2).

(B) Paragraph (2) of subsection (d) shall not apply.

(C) Clause (ii) of subsection (d)(1)(B) shall be applied as if it read as follows:

"(ii) the sum of—

"(I) the amount determined under clause (i) by only taking into account the taxes referred to in clauses (i) and (iii) of subsection (g)(4)(A), and

"(II) 100 percent of the tax imposed by section 1375(a) which was shown on the return of the corporation for the preceding taxable year."

(D) The requirement in the last sentence of subsection (d)(1)(B) that the return for the preceding taxable year show a liability for tax shall not apply.

(E) Subsection (b)(2)(A) shall be applied by substituting "3rd month" for "4th month".

(F) Any reference in subsection (e) to taxable income shall be treated as including a reference to the net recognized built-in gain or the excess passive income (as the case may be).

(h) Excessive adjustment under section 6425

(1) Addition to tax

If the amount of an adjustment under section 6425 made before the 15th day of the 4th month following the close of the taxable year is excessive, there shall be added to the tax under chapter 1 for the taxable year an amount determined at the underpayment rate established under section 6621 upon the excessive amount from the date on which the credit is allowed or the refund is paid to such 15th day.

(2) Excessive amount

For purposes of paragraph (1), the excessive amount is equal to the amount of the adjustment or (if smaller) the amount by which—

(A) the income tax liability (as defined in section 6425(c)) for the taxable year as shown on the return for the taxable year, exceeds

(B) the estimated income tax paid during the taxable year, reduced by the amount of the adjustment.

(i) Fiscal years and short years

(1) Fiscal years

In applying this section to a taxable year beginning on any date other than January 1, there shall be substituted, for the months specified in this section, the months which correspond thereto.

(2) Short taxable year

This section shall be applied to taxable years of less than 12 months in accordance with regulations prescribed by the Secretary.

(j) Regulations

The Secretary shall prescribe such regulations as may be necessary to carry out the purposes of this section.

(Aug. 16, 1954, ch. 736, 68A Stat. 825; Pub. L. 88–272, title I, §122(c), Feb. 26, 1964, 78 Stat. 28; Pub. L. 90–364, title I, §103(c), (d)(2), (e)(1), June 28, 1968, 82 Stat. 262, 264; Pub. L. 93–625, §7(c), Jan. 3, 1975, 88 Stat. 2115; Pub. L. 94–455, title XIX, §1906(b)(3)(A)–(C)(i), (13)(A), Oct. 4, 1976, 90 Stat. 1833, 1834; Pub. L. 95–600, title III, §301(b)(20)(B), Nov. 6, 1978, 92 Stat. 2824; Pub. L. 96–499, title XI, §1111(a), (b), Dec. 5, 1980, 94 Stat. 2681, 2682; Pub. L. 97–34, title VI, §601(a)(6)(B), title VII, §731(a), (b), Aug. 13, 1981, 95 Stat. 336, 346, 347; Pub. L. 97–248, title II, §234(a), (c), (d), Sept. 3, 1982, 96 Stat. 503, 504; Pub. L. 97–448, title II, §201(j)(4), Jan. 12, 1983, 96 Stat. 2396; Pub. L. 99–499, title V, §516(b)(4)(D), Oct. 17, 1986, 100 Stat. 1771; Pub. L. 99–514, title VII, §701(d)(3), title XV, §1511(c)(15), Oct. 22, 1986, 100 Stat. 2342, 2745; Pub. L. 100–203, title X, §10301(a), Dec. 22, 1987, 101 Stat. 1330–424; Pub. L. 100–418, title I, §1941(b)(6)(B), Aug. 23, 1988, 102 Stat. 1324; Pub. L. 100–647, title II, §2004(r), title V, §5001(a), Nov. 10, 1988, 102 Stat. 3609, 3660; Pub. L. 101–239, title VII, §§7209(a), 7822(a), Dec. 19, 1989, 103 Stat. 2338, 2424; Pub. L. 101–508, title XI, §11704(a)(28), Nov. 5, 1990, 104 Stat. 1388–519; Pub. L. 102–227, title II, §201(a), (b), Dec. 11, 1991, 105 Stat. 1689; Pub. L. 102–244, §3(a), Feb. 7, 1992, 106 Stat. 4; Pub. L. 102–318, title V, §512(a), (b), July 3, 1992, 106 Stat. 300; Pub. L. 103–66, title XIII, §13225(a), (b), Aug. 10, 1993, 107 Stat. 486; Pub. L. 103–465, title VII, §711(a), Dec. 8, 1994, 108 Stat. 4998; Pub. L. 104–188, title I, §1703(h), Aug. 20, 1996, 110 Stat. 1876; Pub. L. 105–34, title XIV, §1461(a), Aug. 5, 1997, 111 Stat. 1057; Pub. L. 106–170, title V, §571(a), Dec. 17, 1999, 113 Stat. 1950; Pub. L. 106–554, §1(a)(7) [title III, §319(21)], Dec. 21, 2000, 114 Stat. 2763, 2763A–647; Pub. L. 113–295, div. A, title II, §221(a)(12)(K), (114), Dec. 19, 2014, 128 Stat. 4039, 4054; Pub. L. 114–41, title II, §2006(a)(2)(F), (G), July 31, 2015, 129 Stat. 457; Pub. L. 115–97, title I, §§12001(b)(18), (19), 13001(b)(2)(P), 14401(d)(4), Dec. 22, 2017, 131 Stat. 2094, 2097, 2233; Pub. L. 115–141, div. U, title IV, §401(d)(1)(D)(xx), Mar. 23, 2018, 132 Stat. 1208; Pub. L. 117–169, title I, §10101(a)(4)(G), (H), Aug. 16, 2022, 136 Stat. 1822.)

Editorial Notes

Amendments

2022—Subsec. (e)(2)(A)(i). Pub. L. 117–169, §10101(a)(4)(G), inserted ", adjusted financial statement income (as defined in section 56A)," before "and modified taxable income" in introductory provisions.

Subsec. (e)(2)(B)(i). Pub. L. 117–169, §10101(a)(4)(G), inserted ", adjusted financial statement income (as defined in section 56A)," before "and modified taxable income".

Subsec. (g)(1)(A)(ii) to (iv). Pub. L. 117–169, §10101(a)(4)(H), added cl. (ii) and redesignated former cls. (ii) and (iii) as (iii) and (iv), respectively.

2018—Subsec. (e)(4). Pub. L. 115–141, §401(d)(1)(D)(xx)(II), struck out "and section 936" after "subpart F" in heading.

Subsec. (e)(4)(A). Pub. L. 115–141, §401(d)(1)(D)(xx)(I), struck out "936(h) or" before "951(a)".

2017—Subsec. (e)(2)(A)(i). Pub. L. 115–97, §14401(d)(4)(B), inserted "and modified taxable income" after "taxable income" in introductory provisions.

Pub. L. 115–97, §12001(b)(18), struck out "and alternative minimum taxable income" after "taxable income" in introductory provisions.

Subsec. (e)(2)(B)(i). Pub. L. 115–97, §14401(d)(4)(B), inserted "and modified taxable income" after "taxable income".

Pub. L. 115–97, §12001(b)(18), struck out "and alternative minimum taxable income" after "taxable income".

Subsec. (e)(2)(B)(iii). Pub. L. 115–97, §14401(d)(4)(C), added cl. (iii).

Subsec. (g)(1)(A)(i). Pub. L. 115–97, §14401(d)(4)(A), struck out "plus" at end.

Pub. L. 115–97, §13001(b)(2)(P), struck out "or 1201(a)," after "section 11".

Pub. L. 115–97, §12001(b)(19), inserted "plus" at end.

Subsec. (g)(1)(A)(ii). Pub. L. 115–97, §14401(d)(4)(A), added cl. (ii). Former cl. (ii) redesignated (iii).

Pub. L. 115–97, §12001(b)(19), redesignated cl. (iii) as (ii) and struck out former cl. (ii) which read as follows: "the tax imposed by section 55, plus".

Subsec. (g)(1)(A)(iii). Pub. L. 115–97, §14401(d)(4)(A), redesignated cl. (ii) as (iii).

Pub. L. 115–97, §12001(b)(19), redesignated cl. (iii) as (ii).

2015—Subsecs. (b)(2)(A), (g)(3). Pub. L. 114–41, §2006(a)(2)(F), substituted "4th month" for "3rd month".

Subsec. (g)(4)(E), (F). Pub. L. 114–41, §2006(a)(2)(G), added subpar. (E) and redesignated former subpar. (E) as (F).

Subsec. (h)(1). Pub. L. 114–41, §2006(a)(2)(F), substituted "4th month" for "3rd month".

2014—Subsec. (e)(2)(A)(i), (B)(i). Pub. L. 113–295, §221(a)(12)(K)(i), substituted "taxable income and alternative minimum taxable income" for "taxable income, alternative minimum taxable income, and modified alternative minimum taxable income".

Subsec. (e)(2)(B)(iii). Pub. L. 113–295, §221(a)(12)(K)(ii), struck out cl. (iii). Text read as follows: "The term 'modified alternative minimum taxable income' has the meaning given to such term by section 59A(b)."

Subsec. (g)(1)(A)(ii) to (iv). Pub. L. 113–295, §221(a)(12)(K)(iii), inserted "plus" at end of cl. (ii), redesignated cl. (iv) as (iii), and struck out former cl. (iii) which read as follows: "the tax imposed by section 59A, plus".

Subsec. (g)(4)(A)(i). Pub. L. 113–295, §221(a)(114), struck out "(or the corresponding provisions of prior law)" before period at end.

2000—Subsec. (e)(5)(A), (B). Pub. L. 106–554 substituted "subsection (d)(5)" for "subsections (d)(5) and (l)(3)(B)".

1999—Subsec. (e)(5). Pub. L. 106–170 added par. (5).

1997—Subsec. (g)(3). Pub. L. 105–34 inserted at end "In the case of a private foundation, subsection (c)(2) shall be applied by substituting 'May 15' for 'April 15'."

1996—Subsec. (g)(3). Pub. L. 104–188, §1703(h), in closing provisions, substituted ", subsection (e)(2)(A) shall be applied by substituting '2 months' for '3 months' in clause (i)(I), the election under clause (i) of subsection (e)(2)(C) may be made separately for each installment, and clause (ii) of subsection (e)(2)(C) shall not apply." for ", and, except in the case of an election under subsection (e)(2)(C), subsection (e)(2)(A) shall be applied by substituting '2 months' for '3 months' and in clause (i)(I), by substituting '4 months' for '5 months' in clause (i)(II), by substituting '7 months' for '8 months' in clause (i)(III), and by substituting '10 months' for '11 months' in clause (i)(IV)."

1994—Subsec. (e)(4). Pub. L. 103–465 added par. (4).

1993—Subsec. (d)(1)(B)(i). Pub. L. 103–66, §13225(a)(1), substituted "100 percent" for "91 percent" in two places.

Subsec. (d)(2). Pub. L. 103–66, §13225(a)(2)(A)(ii), substituted "100 percent" for "91 percent" in heading.

Subsec. (d)(3). Pub. L. 103–66, §13225(a)(2)(A)(i), struck out heading and text of par. (3). Text read as follows: "In the case of any taxable year beginning after June 30, 1992, and before 1997—

"(A) paragraph (1)(B)(i) and subsection (e)(3)(A)(i) shall be applied by substituting '97 percent' for '91 percent' each place it appears, and

"(B) the table contained in subsection (e)(2)(B)(ii) shall be applied by substituting '24.25', '48.50', '72.75', and '97' for '22.75', '45.50', '68.25', and '91.00', respectively."

Subsec. (e)(2)(A)(i)(II). Pub. L. 103–66, §13225(b)(1)(A), struck out "or for the first 5 months" after "3 months".

Subsec. (e)(2)(A)(i)(III). Pub. L. 103–66, §13225(b)(1)(B), struck out "or for the first 8 months" after "6 months".

Subsec. (e)(2)(A)(i)(IV). Pub. L. 103–66, §13225(b)(1)(C), struck out "or for the first 11 months" after "9 months".

Subsec. (e)(2)(B)(ii). Pub. L. 103–66, §13225(a)(2)(B), in table, substituted applicable percentages of 25, 50, 75, and 100 for 22.75, 45.50, 68.25, and 91.00, respectively, in 1st, 2nd, 3rd, and 4th installments.

Subsec. (e)(2)(C). Pub. L. 103–66, §13225(b)(2), added subpar. (C).

Subsec. (e)(3)(A)(i). Pub. L. 103–66, §13225(a)(2)(C), substituted "100 percent" for "91 percent".

Subsec. (g)(3). Pub. L. 103–66, §13225(b)(3), substituted "and, except in the case of an election under subsection (e)(2)(C), subsection (e)(2)(A)" for "and subsection (e)(2)(A)" in last sentence.

1992—Subsec. (d)(1)(B)(i). Pub. L. 102–318, §512(a)(1), substituted "91 percent" for "90 percent" in two places.

Subsec. (d)(2). Pub. L. 102–318, §512(a)(2), substituted "91 percent" for "90 percent" in heading.

Subsec. (d)(3). Pub. L. 102–318, §512(a)(3), added par. (3) and struck out former par. (3) which related to temporary increase in amount of installment method based on current tax year for taxable years beginning after 1991 and before 1997.

Subsec. (d)(3)(A). Pub. L. 102–244, amended table generally, substituting a single entry "1993 through 1996 . . . . . 95" for former arrangement under which years after 1992 were covered by two table entries: "1993 or 1994 . . . . . 94" and "1995 or 1996 . . . . . 95".

Subsec. (e)(2)(B)(ii). Pub. L. 102–318, §512(b)(1), in table, substituted applicable percentages of 22.75, 45.50, 68.25, and 91.00 for 22.5, 45, 67.5, and 90, respectively, in 1st, 2nd, 3rd and 4th installments.

Subsec. (e)(3)(A)(i). Pub. L. 102–318, §512(b)(2), substituted "91 percent" for "90 percent".

1991—Subsec. (d)(3). Pub. L. 102–227, §201(a), added par. (3).

Subsec. (e)(1). Pub. L. 102–227, §201(b), substituted "paragraphs (2) and (3) of subsection (d)" for "subsection (d)(2)".

1990—Subsec. (g)(3). Pub. L. 101–508 inserted a period at end of last sentence.

1989—Subsec. (e)(1). Pub. L. 101–239, §7822(a), substituted "under subsection (d)(1)" for "under section (d)(1)".

Subsec. (g)(4). Pub. L. 101–239, §7209(a), added par. (4).

1988—Subsec. (e)(1). Pub. L. 100–647, §5001(a), struck out at end "A reduction shall be treated as recaptured for purposes of subparagraph (B) if 90 percent of the reduction is recaptured."

Subsec. (g)(1)(B). Pub. L. 100–418 amended subpar. (B) generally. Prior to amendment, subpar. (B) read as follows: "the sum of—

"(i) the credits against tax provided by part IV of subchapter A of chapter 1, plus

"(ii) to the extent allowed under regulations prescribed by the Secretary, any overpayment of the tax imposed by section 4986 (determined without regard to section 4995(a)(4)(B))."

Subsec. (g)(3). Pub. L. 100–647, §2004(r), inserted last sentence, and struck out former last sentence which read as follows: "In the case of any organization described in subparagraph (A), subsection (b)(2)(A) shall be applied by substituting '5th month' for '3rd month'."

1987—Pub. L. 100–203 amended section generally, revising and restating as subsecs. (a) to (j) provisions of former subsecs. (a) to (i).

1986—Subsec. (a)(1). Pub. L. 99–514, §1511(c)(15), substituted "the underpayment rate established under section 6621" for "the rate established under section 6621".

Subsec. (f)(1). Pub. L. 99–514, §701(d)(3), amended par. (1) generally, restating existing provisions in subpar. (A) and adding subpar. (B).

Pub. L. 99–499 amended subsec. (f)(1), as amended by the Tax Reform Act of 1986 (Pub. L. 99–514), by striking out "plus" at end of subpar. (A), substituting "plus" for "over" at end of subpar. (B), and adding subpar. (C).

1983—Subsec. (f)(2)(B). Pub. L. 97–448 amended subpar. (B) generally. Prior to amendment, subpar. (B) read as follows: "to the extent allowed under regulations prescribed by the Secretary, any amount which is treated under section 6429 as an overpayment of the tax imposed by section 4986". Notwithstanding directory language that amendment be made to subsec. (e)(2)(B), the amendment was executed to subsec. (f)(2)(B) to reflect the probable intent of Congress, the intervening redesignation of subsec. (e) as (f) by Pub. L. 97–248, and the retrospective effect of the amendment as provided by section 203(a), (b) of Pub. L. 97–448, set out as an Effective Date of 1983 Amendment note under section 4988 of this title.

1982—Subsec. (a). Pub. L. 97–248, §234(c), in heading substituted "Addition to tax" for "Addition to the tax", in provisions preceding par. (1) inserted reference to subsec. (e) as an exception and struck out "estimated" before "tax", designated existing provisions as par. (1), and in par. (1) as so designated struck out parenthetical reference to subsecs. (b) and (c) for determination of the amount of the underpayment and the period of the underpayment, respectively, and added par. (2).

Subsec. (b)(1). Pub. L. 97–248, §234(a)(1), substituted "90" for "80" wherever appearing.

Subsec. (d)(3)(A). Pub. L. 97–248, §234(a)(2), substituted "90" for "80".

Subsec. (e). Pub. L. 97–248, §234(d)(1), added subsec. (e). Former subsec. (e) redesignated (f).

Subsec. (f). Pub. L. 97–248, §234(d), redesignated former subsec. (e) as (f) and substituted references to subsecs. (e) and (i) for references to subsec. (h). Former subsec. (f) redesignated (g).

Subsecs. (g) to (i). Pub. L. 97–248, §234(d)(1), redesignated former subsecs. (f) to (h) as (g) to (i), respectively.

1981—Subsec. (e)(2). Pub. L. 97–34, §601(a)(6)(B), inserted "the sum of—", designated existing provisions as subpar. (A), inserted at end of subpar. (A) ", plus", and added subpar. (B).

Subsec. (h). Pub. L. 97–34, §731(a), (b), substituted in heading "minimum percentage" for "at least 60 percent" and provisions of par. (1) respecting minimum percentage, for provisions respecting in the case of a large corporation, the amount treated as the estimated tax for the taxable year under paragraphs (1) and (2) of subsection (d) shall in no event be less than 60 percent of the tax shown on the return for the taxable year, or if no return was filed, the tax for such year.

1980—Subsec. (e). Pub. L. 96–499, §1111(b), substituted "subsections (b), (d), and (h)" for "subsections (b) and (d)".

Subsec. (h). Pub. L. 96–499, §1111(a), added subsec. (h).

1978—Subsec. (e). Pub. L. 95–600 struck out provisions relating to the corporation's temporary estimated tax exemption.

1976—Subsec. (e)(1)(B). Pub. L. 94–455, §1906(b)(3)(A), struck out in cl. (ii) "after December 31, 1967, and" after "taxable year beginning" and struck out cl. (iii) which related to the case of a taxable year beginning after Dec. 31, 1967, and before Jan. 1, 1972, the amount of the corporation's transitional exemption for such year.

Subsec. (e)(2)(B). Pub. L. 94–455, §1906(b)(3)(B), substituted "clause (ii)" for "clauses (ii) and (iii)".

Subsec. (e)(3), (4). Pub. L. 94–455, §1906(b)(3)(C)(i), redesignated par. (4) as (3). Former par. (3), which related to the computation of a corporation's transitional exemption, was struck out.

Subsec. (f). Pub. L. 94–455, §1906(b)(13)(A), struck out "or his delegate" after "Secretary".

1975—Subsecs. (a), (g)(1). Pub. L. 93–625 substituted "an annual rate established under section 6621" for "the rate of 6 percent per annum".

1968—Subsec. (b)(1). Pub. L. 90–364, §103(c)(1), substituted "80 percent" for "70 percent".

Subsec. (d)(1). Pub. L. 90–364, §103(e)(1), struck out "reduced by $100,000" after "The tax shown on the return of the corporation for the preceding taxable year".

Subsec. (d)(3)(A). Pub. L. 90–364, §103(c)(1), substituted "80 percent" for "70 percent".

Subsec. (e). Pub. L. 90–364, §103(c)(2), designated existing provisions as par. (1) under a heading "In general", in such redesignated par. (1) substituted "For purposes of subsections (b) and (d)" for "For purposes of subsections (b), (d)(2), and (d)(3)" in introductory text, redesignated as subpar. (A) former par. (1) and as subpar. (B) former par. (2), struck out reference to $100,000 as one factor in the sum required for redesignated subpar. (B) and added cls. (ii) and (iii), and added pars. (2), (3), and (4) under headings "Temporary estimated tax exemption", "Transitional exemption", and "Special rule for subsection (d)(1) and (2)" respectively.

Subsec. (g). Pub. L. 90–364, §103(d)(2), added subsec. (g).

1964—Subsec. (c)(2). Pub. L. 88–272, §122(c)(1), substituted "any installment date" and "such installment date" for "the 15th day of the 12th month".

Subsec. (d)(3). Pub. L. 88–272, §122(c)(2), redesignated cls. (A)(i) and (ii) as (A)(iii) and (iv), respectively, added cls. (A)(i) and (ii), and substituted "(3, 5, 6, 8, 9,)" for "(6 or 8, or 9)" in subpar. (B)(ii).

Statutory Notes and Related Subsidiaries

Effective Date of 2022 Amendment

Amendment by Pub. L. 117–169 applicable to taxable years beginning after Dec. 31, 2022, see section 10101(f) of Pub. L. 117–169, set out as a note under section 11 of this title.

Effective Date of 2017 Amendment

Amendment by section 12001(b)(18), (19) of Pub. L. 115–97 applicable to taxable years beginning after Dec. 31, 2017, see section 12001(c) of Pub. L. 115–97, set out as a note under section 11 of this title.

Amendment by section 13001(b)(2)(P) of Pub. L. 115–97 applicable to taxable years beginning after Dec. 31, 2017, see section 13001(c)(1) of Pub. L. 115–97, set out as a note under section 11 of this title.

Amendment by section 14401(d)(4)(A) of Pub. L. 115–97 applicable to base erosion payments (as defined in section 59A(d) of this title) paid or accrued in taxable years beginning after Dec. 31, 2017, see section 14401(e) of Pub. L. 115–97, set out as a note under section 26 of this title.

Effective Date of 2015 Amendment

Amendment by Pub. L. 114–41 applicable to returns for taxable years beginning after Dec. 31, 2015, with special rule for certain C corporations, see section 2006(a)(3) of Pub. L. 114–41, set out as a note under section 170 of this title.

Effective Date of 2014 Amendment

Amendment by Pub. L. 113–295 effective Dec. 19, 2014, subject to a savings provision, see section 221(b) of Pub. L. 113–295, set out as a note under section 1 of this title.

Effective Date of 1999 Amendment

Pub. L. 106–170, title V, §571(b), Dec. 17, 1999, 113 Stat. 1951, provided that: "The amendment made by subsection (a) [amending this section] shall apply to estimated tax payments due on or after December 15, 1999."

Effective Date of 1997 Amendment

Pub. L. 105–34, title XIV, §1461(b), Aug. 5, 1997, 111 Stat. 1057, provided that: "The amendment made by subsection (a) [amending this section] shall apply for purposes of determining underpayments of estimated tax for taxable years beginning after the date of the enactment of this Act [Aug. 5, 1997]."

Effective Date of 1996 Amendment

Amendment by Pub. L. 104–188 effective as if included in the provision of the Revenue Reconciliation Act of 1993, Pub. L. 103–66, §§13001–13444, to which such amendment relates, see section 1703(o) of Pub. L. 104–188, set out as a note under section 39 of this title.

Effective Date of 1994 Amendment

Amendment by Pub. L. 103–465 applicable for purposes of determining underpayments of estimated tax for taxable years beginning after Dec. 31, 1994, see section 711(c) of Pub. L. 103–465, set out as a note under section 6654 of this title.

Effective Date of 1993 Amendment

Pub. L. 103–66, title XIII, §13225(c), Aug. 10, 1993, 107 Stat. 487, provided that: "The amendments made by this section [amending this section] shall apply to taxable years beginning after December 31, 1993."

Effective Date of 1992 Amendments

Pub. L. 102–318, title V, §512(c), July 3, 1992, 106 Stat. 300, provided that: "The amendments made by this section [amending this section] shall apply to taxable years beginning after June 30, 1992."

Pub. L. 102–244, §3(b), Feb. 7, 1992, 106 Stat. 4, provided that: "The amendment made by subsection (a) [amending this section] shall apply to taxable years beginning after December 31, 1992."

Effective Date of 1991 Amendment

Pub. L. 102–227, title II, §201(c), Dec. 11, 1991, 105 Stat. 1690, provided that: "The amendments made by subsection (a) [amending this section] shall apply to taxable years beginning after December 31, 1991."

Effective Date of 1989 Amendment

Pub. L. 101–239, title VII, §7209(b), Dec. 19, 1989, 103 Stat. 2339, provided that: "The amendment made by subsection (a) [amending this section] shall apply to taxable years beginning after December 31, 1989."

Amendment by section 7822(a) of Pub. L. 101–239 effective as if included in the provision of the Revenue Act of 1987, Pub. L. 100–203, title X, to which such amendment relates, see section 7823 of Pub. L. 101–239, set out as a note under section 26 of this title.

Effective Date of 1988 Amendments

Amendment by section 2004(r) of Pub. L. 100–647 effective, except as otherwise provided, as if included in the provision of the Revenue Act of 1987, Pub. L. 100–203, title X, to which such amendment relates, see section 2004(u) of Pub. L. 100–647, set out as a note under section 56 of this title.

Pub. L. 100–647, title V, §5001(b), Nov. 10, 1988, 102 Stat. 3660, provided that: "The amendment made by subsection (a) [amending this section] shall apply to installments required to be made after December 31, 1988."

Amendment by Pub. L. 100–418 applicable to crude oil removed from the premises on or after Aug. 23, 1988, see section 1941(c) of Pub. L. 100–418, set out as a note under section 164 of this title.

Effective Date of 1987 Amendment

Amendment by Pub. L. 100–203 applicable to taxable years beginning after Dec. 31, 1987, see section 10301(c) of Pub. L. 100–203, set out as a note under section 585 of this title.

Effective Date of 1986 Amendments

Amendment by section 701(d)(3) of Pub. L. 99–514 applicable to taxable years beginning after Dec. 31, 1986, with certain exceptions and qualifications, see section 701(f) of Pub. L. 99–514, set out as an Effective Date note under section 55 of this title.

Amendment by section 1511(c)(15) of Pub. L. 99–514 applicable for purposes of determining interest for periods after Dec. 31, 1986, see section 1511(d) of Pub. L. 99–514, set out as a note under section 47 of this title.

Amendment by Pub. L. 99–499 applicable to taxable years beginning after Dec. 31, 1986, see section 516(c) of Pub. L. 99–499, set out as a note under section 26 of this title.

Effective Date of 1983 Amendment

Amendment by Pub. L. 97–448 effective, except as otherwise provided, as if it had been included in the provision of the Crude Oil Windfall Profit Tax Act of 1980, Pub. L. 96–223, to which such amendment relates, see section 203(a), (b) of Pub. L. 97–448, set out as a note under section 6652 of this title.

Effective Date of 1982 Amendment

Pub. L. 97–248, title II, §234(e), Sept. 3, 1982, 96 Stat. 505, provided that: "The amendments made by this section [amending this section and sections 832, 6081, 6152, and 6164 of this title] shall apply to taxable years beginning after December 31, 1982."

Effective Date of 1981 Amendment

Amendment by section 601(a)(6)(B) of Pub. L. 97–34 effective Jan. 1, 1980, see section 601(c)(2) of Pub. L. 97–34, set out as a note under section 6654 of this title.

Pub. L. 97–34, title VII, §731(c), Aug. 13, 1981, 95 Stat. 347, provided that: "The amendments made by this section [amending this section] shall apply to taxable years beginning after December 31, 1981."

Effective Date of 1980 Amendment

Pub. L. 96–499, title XI, §1111(c), Dec. 5, 1980, 94 Stat. 2682, provided that: "The amendments made by this section [amending this section] shall apply to taxable years beginning after December 31, 1980."

Effective Date of 1978 Amendment

Amendment by Pub. L. 95–600 applicable to taxable years beginning after Dec. 31, 1978, see section 301(c) of Pub. L. 95–600, set out as a note under section 11 of this title.

Effective Date of 1976 Amendment

Amendment by section 1906(b)(3)(A)–(C)(i) of Pub. L. 94–455 effective with respect to taxable years after Dec. 31, 1976, see section 1906(d)(2) of Pub. L. 94–455, set out as a note under section 6013 of this title.

Effective Date of 1975 Amendment

Amendment by Pub. L. 93–625 effective July 1, 1975, and applicable to amounts outstanding on such date or arising thereafter, see section 7(e) of Pub. L. 93–625, set out as an Effective Date note under section 6621 of this title.

Effective Date of 1968 Amendment

Amendment by Pub. L. 90–364 applicable with respect to taxable years beginning after Dec. 31, 1967, except as provided by section 104 of Pub. L. 90–364, see section 103(f) of Pub. L. 90–364, set out as a note under section 243 of this title.

Effective Date of 1964 Amendment

Amendment by Pub. L. 88–272 effective, except for purposes of section 21 of this title, with respect to taxable years beginning after Dec. 31, 1963, see section 131 of Pub. L. 88–272, set out as a note under section 1 of this title.

Repeal of Certain Shifts in the Timing of Corporate Estimated Tax Payments

Pub. L. 112–96, title VII, §7001, Feb. 22, 2012, 126 Stat. 256, as amended by Pub. L. 113–295, div. A, title II, §203(a), Dec. 19, 2014, 128 Stat. 4024, provided that: "The following provisions of law (and any modification of any such provision which is contained in any other provision of law) shall not apply with respect to any installment of corporate estimated tax:

"(1) Section 202(b) of the Corporate Estimated Tax Shift Act of 2009 [Pub. L. 111–42, set out below].

"(2) Section 561 of the Hiring Incentives to Restore Employment Act [Pub. L. 111–147, set out below].

"(3) Section 505 of the United States-Korea Free Trade Agreement Implementation Act [Pub. L. 112–41, 19 U.S.C. 3805 note].

"(4) Section 603 of the United States-Colombia Trade Promotion Agreement Implementation Act [Pub. L. 112–42, 19 U.S.C. 3805 note].

"(5) Section 502 of the United States-Panama Trade Promotion Agreement Implementation Act [Pub. L. 112–43, 19 U.S.C. 3805 note]."

[Pub. L. 113–295, div. A, title II, §203(b), Dec. 19, 2014, 128 Stat. 4025, provided that: "The amendment made by subsection (a) [amending section 7001 of Pub. L. 112–96, set out above] shall take effect as if included in section 7001 of the Middle Class Tax Relief and Job Creation Act of 2012 [Pub. L. 112–96]."]

Savings Provision

For provisions that nothing in amendment by Pub. L. 115–141 be construed to affect treatment of certain transactions occurring, property acquired, or items of income, loss, deduction, or credit taken into account prior to Mar. 23, 2018, for purposes of determining liability for tax for periods ending after Mar. 23, 2018, see section 401(e) of Pub. L. 115–141, set out as a note under section 23 of this title.

Payment of Corporate Estimated Taxes

Pub. L. 114–27, title VIII, §803, June 29, 2015, 129 Stat. 415, which provided for an increase of any required installment of corporate estimated tax due in July, August, or September of 2020 for corporations with assets of not less than $1,000,000,000, and a corresponding reduction of the next required installment, was repealed by Pub. L. 115–123, div. D, title II, §41118, Feb. 9, 2018, 132 Stat. 162.

Pub. L. 112–163, §4, Aug. 10, 2012, 126 Stat. 1277, provided that: "Notwithstanding section 6655 of the Internal Revenue Code of 1986—

"(1) in the case of a corporation with assets of not less than $1,000,000,000 (determined as of the end of the preceding taxable year), the amount of any required installment of corporate estimated tax which is otherwise due in July, August, or September of 2017 shall be 100.25 percent of such amount; and

"(2) the amount of the next required installment after an installment referred to in paragraph (1) shall be appropriately reduced to reflect the amount of the increase by reason of such paragraph."

Notwithstanding this section, in the case of a corporation with assets of not less than $1,000,000,000, any required installment of corporate estimated tax due in July, August, or September of 2012 and July, August, or September of 2016 to be increased by 0.25 percent, and the amount of the next required installment thereafter to be appropriately reduced to reflect the amount of the increase, see section 502 of Pub. L. 112–43, set out in a note under section 3805 of Title 19, Customs Duties.

Notwithstanding this section, in the case of a corporation with assets of not less than $1,000,000,000, any required installment of corporate estimated tax otherwise due in July, August, or September of 2016 to be increased by 0.50 percent, and the amount of the next required installment thereafter to be appropriately reduced to reflect the amount of the increase, see section 603 of Pub. L. 112–42, set out in a note under section 3805 of Title 19, Customs Duties.

Notwithstanding this section, in the case of a corporation with assets of not less than $1,000,000,000, any required installment of corporate estimated tax due in July, August, or September of 2012 to be increased by 0.25 percent and any required installment due in July, August, or September of 2016 to be increased by 2.75 percent, and the amount of the next required installment thereafter to be appropriately reduced to reflect the amount of the increase, see section 505 of Pub. L. 112–41, set out in a note under section 3805 of Title 19, Customs Duties.

Pub. L. 109–222, title IV, §401, May 17, 2006, 120 Stat. 353, as amended by Pub. L. 110–28, title VIII, §8248, May 25, 2007, 121 Stat. 204; Pub. L. 110–42, §4, June 30, 2007, 121 Stat. 236; Pub. L. 110–52, §3, Aug. 1, 2007, 121 Stat. 264; Pub. L. 110–89, §2(a), Sept. 28, 2007, 121 Stat. 982; Pub. L. 110–138, title VI, §602, Dec. 14, 2007, 121 Stat. 1490; Pub. L. 110–289, div. C, title III, §3094(a), July 30, 2008, 122 Stat. 2912, provided that: "Notwithstanding section 6655 of the Internal Revenue Code of 1986—

"(1) in the case of a corporation with assets of not less than $1,000,000,000 (determined as of the end of the preceding taxable year)—

"(A) the amount of any required installment of corporate estimated tax which is otherwise due in July, August, or September of 2006 shall be 105 percent of such amount,

"(B) the amount of any required installment of corporate estimated tax which is otherwise due in July, August, or September of 2012 shall be 100 percent of such amount,

"(C) the amount of any required installment of corporate estimated tax which is otherwise due in July, August, or September of 2013 shall be 100.75 percent of such amount, and

"(D) the amount of the next required installment after an installment referred to in subparagraph (A), (B), or (C) shall be appropriately reduced to reflect the amount of the increase by reason of such subparagraph,

"(2) 20.5 percent of the amount of any required installment of corporate estimated tax which is otherwise due in September 2010 shall not be due until October 1, 2010, and

"(3) 27.5 percent of the amount of any required installment of corporate estimated tax which is otherwise due in September 2011 shall not be due until October 1, 2011."

[Pub. L. 111–42, title II, §202, July 28, 2009, 123 Stat. 1964, provided that:

["(a) Repeal of Adjustments for 2010, 2011, and 2013.—Section 401 of the Tax Increase Prevention and Reconciliation Act of 2005 [Pub. L. 109–222, set out above] (and any modification of such section contained in any other provision of law) shall not apply with respect to any installment of corporate estimated tax which (without regard to such section) would otherwise be due after December 31, 2009.

["(b) Adjustment for 2014.—Notwithstanding section 6655 of the Internal Revenue Code of 1986—

["(1) in the case of a corporation with assets of not less than $1,000,000,000 (determined as of the end of the preceding taxable year), the amount of any required installment of corporate estimated tax which is otherwise due in July, August, or September of 2014 shall be 100.25 percent of such amount; and

["(2) the amount of the next required installment after an installment referred to in paragraph (1) shall be appropriately reduced to reflect the amount of the increase by reason of such paragraph."]

[Section 202(b) of Pub. L. 111–42, set out above, and any modification of such provision, not applicable with respect to any installment of corporate income tax, see section 7001 of Pub. L. 112–96, set out as a note above.]

[Pub. L. 111–171, §12(a), May 24, 2010, 124 Stat. 1207, provided that: "The percentage under paragraph (1) of section 202(b) of the Corporate Estimated Tax Shift Act of 2009 [Pub. L. 111–42, set out above] in effect on the date of the enactment of this Act [May 24, 2010] is increased by 0.75 percentage points."]

[Pub. L. 111–152, title I, §1410, Mar. 30, 2010, 124 Stat. 1070, provided that: "The percentage under paragraph (1) of section 202(b) of the Corporate Estimated Tax Shift Act of 2009 [Pub. L. 111–42, set out above] in effect on the date of the enactment of this Act [Mar. 30, 2010] is increased by 15.75 percentage points."]

[Pub. L. 111–147, title V, §561, Mar. 18, 2010, 124 Stat. 117, provided that: "Notwithstanding section 6655 of the Internal Revenue Code of 1986, in the case of a corporation with assets of not less than $1,000,000,000 (determined as of the end of the preceding taxable year)—

["(1) the percentage under paragraph (1) of section 202(b) of the Corporate Estimated Tax Shift Act of 2009 [Pub. L. 111–42, set out above] in effect on the date of the enactment of this Act [Mar. 18, 2010] is increased by 23 percentage points,

["(2) the amount of any required installment of corporate estimated tax which is otherwise due in July, August, or September of 2015 shall be 121.5 percent of such amount,

["(3) the amount of any required installment of corporate estimated tax which is otherwise due in July, August, or September of 2019 shall be 106.5 percent of such amount, and

["(4) the amount of the next required installment after an installment referred to in paragraph (2) or (3) shall be appropriately reduced to reflect the amount of the increase by reason of such paragraph."]

[Section 561 of Pub. L. 111–147, set out above, and any modification of such provision, not applicable with respect to any installment of corporate income tax, see section 7001 of Pub. L. 112–96, set out as a note above.]

[Pub. L. 111–344, title III, §302, Dec. 29, 2010, 124 Stat. 3617, provided that: "The percentage under paragraph (2) of section 561 of the Hiring Incentives to Restore Employment Act [Pub. L. 111–147, set out above] in effect on the date of the enactment of this Act [Dec. 29, 2010] is increased by 4.5 percentage points."]

[Pub. L. 111–240, title II, §2131, Sept. 27, 2010, 124 Stat. 2568, provided that: "The percentage under paragraph (2) of section 561 of the Hiring Incentives to Restore Employment Act [Pub. L. 111–147, set out above] in effect on the date of the enactment of this Act [Sept. 27, 2010] is increased by 36 percentage points."]

[Pub. L. 111–237, §4(a), Aug. 16, 2010, 124 Stat. 2498, provided that: "The percentage under paragraph (2) of section 561 of the Hiring Incentives to Restore Employment Act [Pub. L. 111–147, set out above] in effect on the date of the enactment of this Act [Aug. 16, 2010] is increased by 0.25 percentage points."]

[Pub. L. 111–227, title IV, §4002, Aug. 11, 2010, 124 Stat. 2480, provided that: "The percentage under paragraph (2) of section 561 of the Hiring Incentives to Restore Employment Act [Pub. L. 111–147, set out above] in effect on the date of the enactment of this Act [Aug. 11, 2010] is increased by 0.5 percentage points."]

[Pub. L. 111–210, §3, July 27, 2010, 124 Stat. 2256, provided that: "The percentage under paragraph (2) of section 561 of the Hiring Incentives to Restore Employment Act [Pub. L. 111–147, set out above] in effect on the date of the enactment of this Act [July 27, 2010] is increased by 0.25 percentage points."]

[Pub. L. 111–171, §12(b), May 24, 2010, 124 Stat. 1207, provided that: "The percentage under paragraph (2) of section 561 of the Hiring Incentives to Restore Employment Act [Pub. L. 111–147, set out above] in effect on the date of the enactment of this Act [May 24, 2010] is increased by 0.75 percentage points."]

[Pub. L. 111–124, §4, Dec. 28, 2009, 123 Stat. 3485, provided that: "The percentage under paragraph (1) of section 202(b) of the Corporate Estimated Tax Shift Act of 2009 [Pub. L. 111–42, set out above] in effect on the date of the enactment of this Act [Dec. 28, 2009] is increased by 1.5 percentage points."]

[Pub. L. 111–92, §18, Nov. 6, 2009, 123 Stat. 2997, provided that: "The percentage under paragraph (1) of section 202(b) of the Corporate Estimated Tax Shift Act of 2009 [Pub. L. 111–42, set out above] in effect on the date of the enactment of this Act [Nov. 6, 2009] is increased by 33.0 percentage points."]

[Pub. L. 111–3, title VII, §704, Feb. 4, 2009, 123 Stat. 111, provided that: "The percentage under subparagraph (C) of section 401(1) of the Tax Increase Prevention and Reconciliation Act of 2005 [Pub. L. 109–222, set out above] in effect on the date of the enactment of this Act [Feb. 4, 2009] is increased by 0.5 percentage point."]

[Pub. L. 110–436, §6, Oct. 16, 2008, 122 Stat. 4981, provided that: "The percentage under subparagraph (C) of section 401(1) of the Tax Increase Prevention and Reconciliation Act of 2005 [Pub. L. 109–222, set out above] in effect on the date of the enactment of this Act [Oct. 16, 2008] is increased by 2 percentage points."]

[Pub. L. 110–289, div. C, title III, §3094(a), July 30, 2008, 122 Stat. 2912, provided that: "Subparagraph (B) of section 401(1) of the Tax Increase Prevention and Reconciliation Act of 2005 [Pub. L. 109–222, set out above] is amended by striking the percentage contained therein and inserting '100 percent'. No other provision of law which would change such percentage shall have any force and effect."]

[Pub. L. 110–289, div. C, title III, §3094(b), July 30, 2008, 122 Stat. 2913, provided that: "The percentage under subparagraph (C) of section 401(1) of the Tax Increase Prevention and Reconciliation Act of 2005 [Pub. L. 109–222, set out above] in effect on the date of the enactment of this Act [July 30, 2008] is increased by 16.75 percentage points."]

[Pub. L. 110–287, §3, July 29, 2008, 122 Stat. 2649, provided that: "The percentage under subparagraph (C) of section 401(1) of the Tax Increase Prevention and Reconciliation Act of 2005 [Pub. L. 109–222, set out above] in effect on the date of the enactment of this Act [July 29, 2008] is increased by 0.25 percentage points."]

[Pub. L. 110–234, title XV, §15202, May 22, 2008, 122 Stat. 1500, and Pub. L. 110–246, §4(a), title XV, §15202, June 18, 2008, 122 Stat. 1664, 2262, provided that: "The percentage under subparagraph (B) of section 401(1) of the Tax Increase Prevention and Reconciliation Act of 2005 [Pub. L. 109–222, set out above] in effect on the date of the enactment of this Act [June 18, 2008] is increased by 7.75 percentage points." Pub. L. 110–234 and Pub. L. 110–246 enacted identical provisions. Pub. L. 110–234 was repealed by section 4(a) of Pub. L. 110–246, set out as a note under section 8701 of Title 7, Agriculture.]

[Pub. L. 110–191, §4, Feb. 29, 2008, 122 Stat. 647, provided that: "The percentage under subparagraph (C) of section 401(1) of the Tax Increase Prevention and Reconciliation Act of 2005 [Pub. L. 109–222, set out above] in effect on the date of the enactment of this Act [Feb. 29, 2008] is increased by 0.25 percentage points."]

[Pub. L. 110–142, §10, Dec. 20, 2007, 121 Stat. 1808, provided that: "The percentage under subparagraph (B) of section 401(1) of the Tax Increase Prevention and Reconciliation Act of 2005 [Pub. L. 109–222, set out above] in effect on the date of the enactment of this Act [Dec. 20, 2007] is increased by 1.50 percentage points."]

[Pub. L. 110–138, title I, §107(a), (c), title VI, §602, Dec. 14, 2007, 121 Stat. 1459, 1490, which directed amendment of section 401(1)(B) of Pub. L. 109–222, set out above, by striking "115 percent" and inserting "115.75 percent" effective on the date on which the United States-Peru Trade Promotion Agreement entered into force (Feb. 1, 2009) and ceasing to have effect on the date on which the Agreement terminates, could not be executed in view of the subsequent amendment by Pub. L. 110–289, §3094(a), which was effective July 30, 2008.]

Time for Payment of September 2001 and September 2004 Corporate Estimated Taxes

Pub. L. 107–16, title VIII, §801, June 7, 2001, 115 Stat. 148, provided that: "Notwithstanding section 6655 of the Internal Revenue Code of 1986—

"(1) 100 percent of the amount of any required installment of corporate estimated tax which is otherwise due in September 2001 shall not be due until October 1, 2001; and

"(2) 20 percent of the amount of any required installment of corporate estimated tax which is otherwise due in September 2004 shall not be due until October 1, 2004."

Waiver of Estimated Tax Penalties for 1998 Underpayments

No addition to tax to be made under this section with respect to any underpayment of an installment required to be paid on or before the 30th day after July 22, 1998, to the extent such underpayment was created or increased by any provision of Pub. L. 105–206, see section 1(c) of Pub. L. 105–206, set out as a note under section 6654 of this title.

No addition to tax to be made under this section for any period before Jan. 1, 1998, for any payment the due date of which is before Jan. 16, 1998, with respect to any underpayment attributable to such period to the extent such underpayment was created or increased by any provision of Pub. L. 105–34, see section 1(d) of Pub. L. 105–34, set out as a note under section 6654 of this title.

Underpayments of Estimated Tax for 1996

No addition to tax to be made under this section with respect to any underpayment of an installment required to be paid before Aug. 20, 1996, to the extent such underpayment was created or increased by any provision of title I (§§1101–1954) of Pub. L. 104–188, see section 1102 of Pub. L. 104–188, set out as a note under section 6654 of this title.

Waiver of Estimated Penalties for 1993 Underpayments Attributable to Revenue Reconciliation Act of 1993

No addition to tax to be made under this section for any period before Apr. 16, 1994 (Mar. 16, 1994, in the case of a corporation), with respect to any underpayment to the extent such underpayment was created or increased by any provision of chapter 1 (§§13001–13444) of title XIII of Pub. L. 103–66, see section 13001(d) of Pub. L. 103–66, set out as a note under section 6654 of this title.

Waiver of Estimated Tax Penalties for Underpayments Attributable to Section 420(b)(4)(B) of This Title

No addition to tax to be made under this section for taxable year preceding taxpayer's first taxable year beginning after Dec. 31, 1990, with respect to any underpayment to the extent such underpayment was created or increased by reason of former section 420(b)(4)(B) of this title, see section 12011(c)(2) of Pub. L. 101–508, set out as an Effective Date note under section 420 of this title.

Waiver of Estimated Penalties for 1990 Underpayments Attributable to Revenue Reconciliation Act of 1990

Pub. L. 101–508, title XI, §11307, Nov. 5, 1990, 104 Stat. 1388–452, provided that: "No addition to tax shall be made under section 6655 of the Internal Revenue Code of 1986 for any period before March 16, 1991, with respect to any underpayment to the extent such underpayment was created or increased by any provision of this part [part I (§§11301–11307) of subtitle C of title XI of Pub. L. 101–508, see Tables for classification]."

Applicability of Certain Amendments by Pub. L. 99–514 in Relation to Treaty Obligations of United States

For applicability of amendment by section 701(d)(3) of Pub. L. 99–514 notwithstanding any treaty obligation of the United States in effect on Oct. 22, 1986, see section 1012(aa)(2) of Pub. L. 100–647, set out as a note under section 861 of this title.

Waiver of Estimated Penalties for 1988 Underpayments Attributable to Technical and Miscellaneous Revenue Act of 1988

No addition to tax to be made under this section for any period before Mar. 16, 1989, with respect to any underpayment to the extent such underpayment was created or increased by any provision of title I (§§1001 to 1019) or II (§§2001 to 2006) of Pub. L. 100–647, see section 1019(b) of Pub. L. 100–647, set out as an Effective Date of 1988 Amendment note under section 1 of this title.

Corporations Also May Use 1986 Tax To Determine Amount of Certain Estimated Tax Installments Due On or Before June 15, 1987

Pub. L. 100–203, title X, §10303(b)(2), Dec. 22, 1987, 101 Stat. 1330–430, provided that:

"(A) In general.—In the case of a large corporation, no addition to tax shall be imposed by section 6655 of the Internal Revenue Code of 1986 with respect to any underpayment of an estimated tax installment to which this subsection applies if no addition would be imposed with respect to such underpayment by reason of section 6655(d)(1) of such Code if such corporation were not a large corporation. The preceding sentence shall apply only to the extent the underpayment is paid on or before the last date prescribed for payment of the most recent installment of estimated tax due on or before September 15, 1987.

"(B) Installment to which subsection applies.—This subsection applies to any installment of estimated tax for a taxable year beginning after December 31, 1986, which is due on or before June 15, 1987.

"(C) Large corporation.—For purposes of this subsection, the term 'large corporation' has the meaning given such term by section 6655(i)(2) of such Code (as in effect on the day before the date of the enactment of this Act [Dec. 22, 1987])."

Waiver of Estimated Penalties for 1986 Underpayments Attributable to Tax Reform Act of 1986

No addition to tax to be made under this section for any period before Mar. 16, 1987, with respect to any underpayment, to the extent such underpayment was created or increased by any provision of Pub. L. 99–514, see section 1543 of Pub. L. 99–514, set out as a note under section 6654 of this title.

Waiver of Estimated Tax Penalties

Pub. L. 99–514, title XVIII, §1879(a), Oct. 22, 1986, 100 Stat. 2905, provided that: "No addition to tax shall be made under section 6654 or 6655 of the Internal Revenue Code of 1954 [now 1986] (relating to failure to pay estimated income tax) for any period before April 16, 1985 (March 16, 1985 in the case of a taxpayer subject to section 6655 of such Code), with respect to any underpayment, to the extent that such underpayment was created or increased by any provision of the Tax Reform Act of 1984 [Pub. L. 98–369, div. A]."

Underpayments of Estimated Tax for 1984

Pub. L. 98–369, div. A, title II, subtitle A, §218, July 18, 1984, 98 Stat. 766, which provided that no addition to the tax shall be made under section 6655 of this title with respect to any underpayment of an installment required to be paid before July 18, 1984, to the extent such underpayment was created or increased by any provision of this subtitle, and such underpayment was paid in full on or before the last date prescribed for payment of the first installment of estimated tax required to be paid after July 18, 1984, was repealed by Pub. L. 99–514, title XVIII, §1824, Oct. 22, 1986, 100 Stat. 2846.

Waiver of Penalty for Underpayment of Estimated Tax

Pub. L. 94–455, title VIII, §803(g), Oct. 4, 1976, 90 Stat. 1589, as amended by Pub. L. 99–514, §2, Oct. 22, 1986, 100 Stat. 2095, provided that: "If—

"(1) a corporation made underpayments of estimated tax for a taxable year of the corporation which includes August 1, 1975, because the corporation intended to elect to have the provisions of subparagraph (B) of section 46(a)(1) of the Internal Revenue Code of 1986 [formerly I.R.C. 1954] (as it existed before the date of enactment of this Act [Oct. 4, 1976]) apply for such taxable year, and

"(2) the corporation does not elect to have the provisions of such subparagraph apply for such taxable year because this Act does not contain the amendments made by section 804(a)(2) (relating to flowthrough of investment credit), or the provisions of subsection (f) of such section (relating to grace period for certain plan transfers), of the bill H.R. 10612 (94th Congress, 2d Session), as amended by the Senate,

then the provisions of section 6655 of such Code (relating to failure by corporation to pay estimated income tax) shall not apply to so much of any such underpayment as the corporation can establish, to the satisfaction of the Secretary of the Treasury, is properly attributable to the inapplicability of such subparagraph (B) for such taxable year."

Declaration of Estimated Tax

With respect to taxable years beginning before Dec. 30, 1969, if a taxpayer is required to make a declaration, or to pay any amount of estimated tax by reason of amendments made by Pub. L. 91–172, such amount shall be paid ratably on each of the remaining installment dates for the taxable year beginning with the first installment date on or after Dec. 30, 1969; as to any declaration or payment of estimated tax before the first installment date, this section, and sections 6015, 6154, and 6654 of this title shall be applied without regard to amendments made by Pub. L. 91–172, see section 946(b) of Pub. L. 91–172, set out as a note under section 6153 of this title.

Tax Surcharge Extension; Declarations of Estimated Tax

Requirement of making a declaration or amended declaration of estimated tax or of payment of any amount or additional amount of estimated tax by reason of amendment of sections 51(a)(1)(A), (B), (2)(A) and 963(b) of this title as calling for payment of such amount or additional amount ratably on or before each of remaining installment dates for taxable year beginning with installment date on or after the 30th day after Aug. 7, 1969; application of this section without regard to such amendment with respect to any declaration or payment of estimated tax before such first installment date; and definition of "installment date", see Pub. L. 93–53, §5(c), Aug. 7, 1969, 83 Stat. 95.

Estimated Tax of Life Insurance Companies for 1958

Pub. L. 86–69, June 25, 1959, §3(h), 73 Stat. 140, provided that in the case of a taxpayer subject to tax under section 811 of this title, as in effect before June 25, 1959, no additional tax was to be payable under this section with respect to estimated tax for a taxable year beginning in 1958.