§ 280C Certain expenses for which credits are allowable
(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 , , , , and . 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 . In the case of a corporation which is a member of a controlled group of corporations (within the meaning of section ) or a trade or business which is treated as being under common control with other trades or businesses (within the meaning of section ), this subsection shall be applied under rules prescribed by the Secretary similar to the rules applicable under subsections (a) and (b) of section .
(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 ) 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 (determined without regard to section ).
(2) Similar rule where taxpayer capitalizes rather than deducts expenses
If—
(A) the amount of the credit allowable for the taxable year under section (determined without regard to section ), 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 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 without regard to this paragraph, over
(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 ) or a trade or business which is treated as being under common control with other trades or business (within the meaning of section ), this subsection shall be applied under rules prescribed by the Secretary similar to the rules applicable under subparagraphs (A) and (B) of section .
(c) Credit for increasing research activities
(1) In general
The domestic research or experimental expenditures (as defined in section ) 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 .
(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 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 without regard to this paragraph, over
(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 .
(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 .
(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 for the taxable year which is equal to the amount of the credit determined for such taxable year under section .
(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 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 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.)
Operative text only. Editorial notes, amendment history, and effective dates: official OLRC text of § 280C