26 U.S.C. § 39
§ 39. Carryback and carryforward of unused credits
No plain-English explainer yet. Below is the official text. Explainers are being added section by section.
History
Added in 1984 by the Deficit Reduction Act of 1984. Last changed August 16, 2022 by the Inflation Reduction Act of 2022.
Every change, newest first (16)
- August 16, 2022Inflation Reduction Act of 2022
- March 23, 2018Consolidated Appropriations Act, 2018
- September 27, 2010Public Law 111-240
- December 21, 2005Gulf Opportunity Zone Act of 2005
- October 22, 2004American Jobs Creation Act of 2004
- June 7, 2001Economic Growth and Tax Relief Reconciliation Act of 2001
- December 21, 2000Public Law 106-554
- July 22, 1998IRS Restructuring and Reform Act of 1998
- August 5, 1997Taxpayer Relief Act of 1997
- August 20, 1996Small Business Job Protection Act of 1996
- August 10, 1993Omnibus Budget Reconciliation Act of 1993
- October 24, 1992Public Law 102-486
- November 5, 1990Omnibus Budget Reconciliation Act of 1990
- November 10, 1988Technical and Miscellaneous Revenue Act of 1988
- October 22, 1986Tax Reform Act of 1986
- July 18, 1984Deficit Reduction Act of 1984 · added this section
The law as written
Current through Public Law 119-102. Amendment notes omitted.
Structure
If the sum of the business credit carryforwards to the taxable year plus the amount of the current year business credit for the taxable year exceeds the amount of the limitation imposed by subsection (c) of section 38 for such taxable year (hereinafter in this section referred to as the “unused credit year”), such excess (to the extent attributable to the amount of the current year business credit) shall be—
a business credit carryback to the taxable year preceding the unused credit year, and
a business credit carryforward to each of the 20 taxable years following the unused credit year,
and, subject to the limitations imposed by subsections (b) and (c), shall be taken into account under the provisions of section 38(a) in the manner provided in section 38(a).
The entire amount of the unused credit for an unused credit year shall be carried to the earliest of the 21 taxable years to which (by reason of paragraph (1)) such credit may be carried.
The amount of the unused credit for the unused credit year shall be carried to each of the other 20 taxable years to the extent that such unused credit may not be taken into account under section 38(a) for a prior taxable year because of the limitations of subsections (b) and (c).
Notwithstanding subsection (d), in the case of the marginal oil and gas well production credit—
this section shall be applied separately from the business credit (other than the marginal oil and gas well production credit),
paragraph (1) shall be applied by substituting “each of the 5 taxable years” for “the taxable year” in subparagraph (A) thereof, and
paragraph (2) shall be applied—
by substituting “25 taxable years” for “21 taxable years” in subparagraph (A) thereof, and
by substituting “24 taxable years” for “20 taxable years” in subparagraph (B) thereof.
Notwithstanding subsection (d), in the case of any applicable credit (as defined in section 6417(b))—
this section shall be applied separately from the business credit (other than the applicable credit),
paragraph (1) shall be applied by substituting “each of the 3 taxable years” for “the taxable year” in subparagraph (A) thereof, and
paragraph (2) shall be applied—
by substituting “23 taxable years” for “21 taxable years” in subparagraph (A) thereof, and
by substituting “22 taxable years” for “20 taxable years” in subparagraph (B) thereof.
The amount of the unused credit which may be taken into account under section 38(a)(3) for any preceding taxable year shall not exceed the amount by which the limitation imposed by section 38(c) for such taxable year exceeds the sum of—
the amounts determined under paragraphs (1) and (2) of section 38(a) for such taxable year, plus
the amounts which (by reason of this section) are carried back to such taxable year and are attributable to taxable years preceding the unused credit year.
The amount of the unused credit which may be taken into account under section 38(a)(1) for any succeeding taxable year shall not exceed the amount by which the limitation imposed by section 38(c) for such taxable year exceeds the sum of the amounts which, by reason of this section, are carried to such taxable year and are attributable to taxable years preceding the unused credit year.
No portion of the unused business credit for any taxable year which is attributable to a credit specified in section 38(b) or any portion thereof may be carried back to any taxable year before the first taxable year for which such specified credit or such portion is allowable (without regard to subsection (a)).