§ 196 Deduction for certain unused business credits
(a) Allowance of deduction
If any portion of the qualified business credits determined for any taxable year has not, after the application of section , been allowed to the taxpayer as a credit under section for any taxable year, an amount equal to the credit not so allowed shall be allowed to the taxpayer as a deduction for the first taxable year following the last taxable year for which such credit could, under section , have been allowed as a credit.
(b) Taxpayer’s dying or ceasing to exist
If a taxpayer dies or ceases to exist before the first taxable year following the last taxable year for which the qualified business credits could, under section , have been allowed as a credit, the amount described in subsection (a) (or the proper portion thereof) shall, under regulations prescribed by the Secretary, be allowed to the taxpayer as a deduction for the taxable year in which such death or cessation occurs.
(c) Qualified business credits
For purposes of this section, the term “qualified business credits” means—
(1) the investment credit determined under section (but only to the extent attributable to property the basis of which is reduced by section ),
(2) the work opportunity credit determined under section ,
(3) the alcohol fuels credit determined under section ,
(4) the research credit determined under section (other than such credit determined under section ) for taxable years beginning after December 31, 1988,
(5) the enhanced oil recovery credit determined under section ,
(6) the empowerment zone employment credit determined under section ,
(7) the Indian employment credit determined under section ,
(8) the employer Social Security credit determined under section ,
(9) the new markets tax credit determined under section ,
(10) the small employer pension plan startup cost credit determined under section ,
(11) the biodiesel fuels credit determined under section ,
(12) the low sulfur diesel fuel production credit determined under section ,
(13) the new energy efficient home credit determined under section , and
(14) the small employer health insurance credit determined under section .
(d) Special rule for investment tax credit
Subsection (a) shall be applied by substituting “an amount equal to 50 percent of” for “an amount equal to” in the case of the investment credit determined under section (other than the rehabilitation credit).
(Added Pub. L. 97–248, title II, § 205(a)(2), Sept. 3, 1982, 96 Stat. 428; amended Pub. L. 98–369, div. A, title IV, § 474(r)(8)(A), July 18, 1984, 98 Stat. 840; Pub. L. 100–647, title IV, § 4008(b)(2), Nov. 10, 1988, 102 Stat. 3653; Pub. L. 101–239, title VII, §§ 7110(c)(2), 7814(e)(1), (2)(D), Dec. 19, 1989, 103 Stat. 2325, 2413, 2414; Pub. L. 101–508, title XI, §§ 11511(b)(3), 11813(b)(12), Nov. 5, 1990, 104 Stat. 1388–485, 1388–554; Pub. L. 103–66, title XIII, §§ 13302(b)(2), 13322(c)(2), Aug. 10, 1993, 107 Stat. 555, 563; Pub. L. 104–188, title I, § 1201(e)(1), Aug. 20, 1996, 110 Stat. 1772; Pub. L. 105–206, title VI, § 6020(a), July 22, 1998, 112 Stat. 823; Pub. L. 106–554, § 1(a)(7) [title I, § 121(c)], Dec. 21, 2000, 114 Stat. 2763, 2763A–610; Pub. L. 107–16, title VI, § 619(c)(2), June 7, 2001, 115 Stat. 110; Pub. L. 108–357, title III, §§ 302(c)(2), 339(e), Oct. 22, 2004, 118 Stat. 1465, 1484; Pub. L. 109–58, title XIII, § 1332(d), Aug. 8, 2005, 119 Stat. 1026; Pub. L. 111–148, title I, § 1421(d)(2), Mar. 23, 2010, 124 Stat. 242; Pub. L. 115–141, div. U, title IV, § 401(b)(16), Mar. 23, 2018, 132 Stat. 1202.)
Operative text only. Editorial notes, amendment history, and effective dates: official OLRC text of § 196