26 U.S.C. § 280C
§ 280C. Certain expenses for which credits are allowable
No plain-English explainer yet. Below is the official text. Explainers are being added section by section.
History
Changed by the 2025 tax lawAdded in 1977 by the Public Law 95-30. Last changed July 4, 2025 by the One Big Beautiful Bill Act (2025).
Every change, newest first (24)
- July 4, 2025One Big Beautiful Bill Act (2025)
- March 23, 2018Consolidated Appropriations Act, 2018
- December 22, 2017Tax Cuts and Jobs Act (2017)
- March 23, 2010Patient Protection and Affordable Care Act (2010)
- June 18, 2008Public Law 110-246
- June 17, 2008Public Law 110-245
- May 22, 2008Public Law 110-234
- December 29, 2007Public Law 110-172
- December 20, 2006Public Law 109-432
- December 21, 2005Gulf Opportunity Zone Act of 2005
- October 22, 2004American Jobs Creation Act of 2004
- December 21, 2000Public Law 106-554
- December 17, 1999Public Law 106-170
- August 20, 1996Small Business Job Protection Act of 1996
- August 10, 1993Omnibus Budget Reconciliation Act of 1993
- December 19, 1989Omnibus Budget Reconciliation Act of 1989
- November 10, 1988Technical and Miscellaneous Revenue Act of 1988
- October 22, 1986Tax Reform Act of 1986
- July 18, 1984Deficit Reduction Act of 1984
- January 4, 1983Public Law 97-414
- April 1, 1980Public Law 96-222
- January 2, 1980Public Law 96-178
- November 6, 1978Revenue Act of 1978
- May 23, 1977Public Law 95-30 · added this section
The law as written
Current through Public Law 119-102. Amendment notes omitted.
Structure
- (a) Rule for employment credits
- (b) Credit for qualified clinical testing expenses for certain drugs
- (c) Credit for increasing research activities
- (d) Credit for low sulfur diesel fuel production
- (e) Mine rescue team training credit
- (f) Credit for security of agricultural chemicals
- (g) Credit for health insurance premiums
- (h) Credit for employee health insurance expenses of small employers
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.
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)).
If—
the amount of the credit allowable for the taxable year under section 45C (determined without regard to section 38(c)), exceeds
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.
In the case of any taxable year for which an election is made under this paragraph—
paragraphs (1) and (2) shall not apply, and
the amount of the credit under section 45C(a) shall be the amount determined under subparagraph (B).
The amount of credit determined under this subparagraph for any taxable year shall be the amount equal to the excess of—
the amount of credit determined under section 45C(a) without regard to this paragraph, over
the product of—
the amount described in clause (i), and
the maximum rate of tax under section 11(b).
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.
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).
In the case of any taxable year for which an election is made under this paragraph—
paragraph (1) shall not apply, and
the amount of the credit under section 41(a) shall be the amount determined under subparagraph (B).
The amount of credit determined under this subparagraph for any taxable year shall be the amount equal to the excess of—
the amount of credit determined under section 41(a) without regard to this paragraph, over
the product of—
the amount described in clause (i), and
the maximum rate of tax under section 11(b).
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.
Paragraph (3) of subsection (b) shall apply for purposes of this subsection.
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).
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).
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.
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.