§ 280c. - Certain Expenses for Which Credits Are Allowable

26 U.S.C. § 280C
in: § 280c. - Certain Expenses for Which Credits Are Allowable
Previous § 280b. - Demolition of StructuresNext § 280d. - Repealed. Pub. L. 100–418, Title I, § 1941(b)(4)(a), Aug. 23, 1988, 102 Stat. 1324

(a) Rule for employment credits

No deduction shall be allowed for that portion of the wages or salaries paid or incurred for the taxable year which is equal to the sum of the credits determined for the taxable year under sections 45A(a), 45P(a), 45S(a)(1)(A), 51(a), and 1396(a). No deduction shall be allowed for that portion of the premiums paid or incurred for the taxable year which is equal to that portion of the paid family and medical leave credit which is determined for the taxable year under section 45S(a)(1)(B). In the case of a corporation which is a member of a controlled group of corporations (within the meaning of section 52(a)) or a trade or business which is treated as being under common control with other trades or businesses (within the meaning of section 52(b)), this subsection shall be applied under rules prescribed by the Secretary similar to the rules applicable under subsections (a) and (b) of section 52.

(b) Credit for qualified clinical testing expenses for certain drugs

  • (1) In general
    No deduction shall be allowed for that portion of the qualified clinical testing expenses (as defined in section 45C(b)) otherwise allowable as a deduction for the taxable year which is equal to the amount of the credit allowable for the taxable year under section 45C (determined without regard to section 38(c)).
  • (2) Similar rule where taxpayer capitalizes rather than deducts expenses
    If—
    • (A) the amount of the credit allowable for the taxable year under section 45C (determined without regard to section 38(c)), exceeds
    • (B) the amount allowable as a deduction for the taxable year for qualified clinical testing expenses (determined without regard to paragraph (1)), the amount chargeable to capital account for the taxable year for such expenses shall be reduced by the amount of such excess.
  • (3) Election of reduced credit
    • (A) In general In the case of any taxable year for which an election is made under this paragraph—
      • (i) paragraphs (1) and (2) shall not apply, and
      • (ii) the amount of the credit under section 45C(a) shall be the amount determined under subparagraph (B).
    • (B) Amount of reduced credit The amount of credit determined under this subparagraph for any taxable year shall be the amount equal to the excess of—
      • (i) the amount of credit determined under section 45C(a) without regard to this paragraph, over
      • (ii) the product of— (I) the amount described in clause (i), and (II) the maximum rate of tax under section 11(b).
    • (C) Election An election under this paragraph for any taxable year shall be made not later than the time for filing the return of tax for such year (including extensions), shall be made on such return, and shall be made in such manner as the Secretary shall prescribe. Such an election, once made, shall be irrevocable.
  • (4) Controlled groups
    In the case of a corporation which is a member of a controlled group of corporations (within the meaning of section 41(f)(5)) or a trade or business which is treated as being under common control with other trades or business (within the meaning of section 41(f)(1)(B)), this subsection shall be applied under rules prescribed by the Secretary similar to the rules applicable under subparagraphs (A) and (B) of section 41(f)(1).

(c) Credit for increasing research activities

  • (1) In general
    The domestic research or experimental expenditures (as defined in section 174A(b)) otherwise taken into account as a deduction or charged to capital account under this chapter shall be reduced by the amount of the credit allowed under section 41(a).
  • (2) Election of reduced credit
    • (A) In general In the case of any taxable year for which an election is made under this paragraph—
      • (i) paragraph (1) shall not apply, and
      • (ii) the amount of the credit under section 41(a) shall be the amount determined under subparagraph (B).
    • (B) Amount of reduced credit The amount of credit determined under this subparagraph for any taxable year shall be the amount equal to the excess of—
      • (i) the amount of credit determined under section 41(a) without regard to this paragraph, over
      • (ii) the product of— (I) the amount described in clause (i), and (II) the maximum rate of tax under section 11(b).
    • (C) Election An election under this paragraph for any taxable year shall be made not later than the time for filing the return of tax for such year (including extensions), shall be made on such return, and shall be made in such manner as the Secretary may prescribe. Such an election, once made, shall be irrevocable.
  • (3) Controlled groups
    Paragraph (3) of subsection (b) shall apply for purposes of this subsection.

(d) Credit for low sulfur diesel fuel production

The deductions otherwise allowed under this chapter for the taxable year shall be reduced by the amount of the credit determined for the taxable year under section 45H(a).

(e) Mine rescue team training credit

No deduction shall be allowed for that portion of the expenses otherwise allowable as a deduction for the taxable year which is equal to the amount of the credit determined for the taxable year under section 45N(a).

(f) Credit for security of agricultural chemicals

No deduction shall be allowed for that portion of the expenses otherwise allowable as a deduction taken into account in determining the credit under section 45O for the taxable year which is equal to the amount of the credit determined for such taxable year under section 45O(a).

(g) Credit for health insurance premiums

No deduction shall be allowed for the portion of the premiums paid by the taxpayer for coverage of 1 or more individuals under a qualified health plan which is equal to the amount of the credit determined for the taxable year under section 36B(a) with respect to such premiums.

(h) Credit for employee health insurance expenses of small employers

No deduction shall be allowed for that portion of the premiums for qualified health plans (as defined in section 1301(a) of the Patient Protection and Affordable Care Act), or for health insurance coverage in the case of taxable years beginning in 2010, 2011, 2012, or 2013, paid by an employer which is equal to the amount of the credit determined under section 45R(a) with respect to the premiums.

(Added Pub. L. 95–30, title II, § 202(c)(1), May 23, 1977, 91 Stat. 147; amended Pub. L. 95–600, title III, § 322(d)(1), Nov. 6, 1978, 92 Stat. 2838; Pub. L. 96–178, § 6(c)(4), Jan. 2, 1980, 93 Stat. 1298; Pub. L. 96–222, title I, § 103(a)(7)(D)(iv), Apr. 1, 1980, 94 Stat. 212; Pub. L. 97–414, § 4(b)(1), (2)(A), Jan. 4, 1983, 96 Stat. 2055; Pub. L. 98–369, div. A, title IV, § 474(r)(10), July 18, 1984, 98 Stat. 841; Pub. L. 99–514, title II, § 231(d)(3)(E), title XVIII, § 1847(b)(8), Oct. 22, 1986, 100 Stat. 2179, 2856; Pub. L. 100–647, title IV, § 4008(a), Nov. 10, 1988, 102 Stat. 3652; Pub. L. 101–239, title VII, §§ 7110(c)(1), 7814(e)(2)(A), Dec. 19, 1989, 103 Stat. 2325, 2413; Pub. L. 103–66, title XIII, §§ 13302(b)(1), 13322(c)(1), Aug. 10, 1993, 107 Stat. 555, 563; Pub. L. 104–188, title I, § 1205(d)(7), Aug. 20, 1996, 110 Stat. 1776; Pub. L. 106–170, title V, § 502(c)(2), Dec. 17, 1999, 113 Stat. 1919; Pub. L. 106–554, § 1(a)(7) [title III, § 311(a)(1)], Dec. 21, 2000, 114 Stat. 2763, 2763A–639; Pub. L. 108–357, title III, § 339(c), Oct. 22, 2004, 118 Stat. 1484; Pub. L. 109–135, title I, § 103(b)(2), title II, § 201(b)(2), Dec. 21, 2005, 119 Stat. 2595, 2607; Pub. L. 109–432, div. A, title IV, § 405(c), Dec. 20, 2006, 120 Stat. 2957; Pub. L. 110–172, § 7(a)(1)(B), Dec. 29, 2007, 121 Stat. 2481; Pub. L. 110–234, title XV, § 15343(c), May 22, 2008, 122 Stat. 1519; Pub. L. 110–245, title I, § 111(c), June 17, 2008, 122 Stat. 1635; Pub. L. 110–246, § 4(a), title XV, § 15343(c), June 18, 2008, 122 Stat. 1664, 2281; Pub. L. 111–148, title I, §§ 1401(b), 1421(d)(1), title IX, § 9023(c)(2), title X, § 10105(e)(3), Mar. 23, 2010, 124 Stat. 219, 242, 880, 906; Pub. L. 115–97, title I, §§ 13001(b)(1)(A), 13206(d)(2), 13401(b), 13403(d)(1), Dec. 22, 2017, 131 Stat. 2096, 2112, 2133, 2137; Pub. L. 115–141, div. U, title IV, § 401(a)(62), (d)(3)(B)(iii), (6)(B)(iv), Mar. 23, 2018, 132 Stat. 1187, 1209, 1211; Pub. L. 119–21, title VII, §§ 70302(b)(2)(B), 70304(b), July 4, 2025, 139 Stat. 191, 197.)

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