Internal Revenue Code – Section 162

Sec. 162. Trade or business expenses

-STATUTE-

(a) In general

There shall be allowed as a deduction all the ordinary and

necessary expenses paid or incurred during the taxable year in

carrying on any trade or business, including -

(1) a reasonable allowance for salaries or other compensation

for personal services actually rendered;

(2) traveling expenses (including amounts expended for meals

and lodging other than amounts which are lavish or extravagant

under the circumstances) while away from home in the pursuit of a

trade or business; and

(3) rentals or other payments required to be made as a

condition to the continued use or possession, for purposes of the

trade or business, of property to which the taxpayer has not

taken or is not taking title or in which he has no equity.

 

For purposes of the preceding sentence, the place of residence of a

Member of Congress (including any Delegate and Resident

Commissioner) within the State, congressional district, or

possession which he represents in Congress shall be considered his

home, but amounts expended by such Members within each taxable year

for living expenses shall not be deductible for income tax purposes

in excess of $3,000. For purposes of paragraph (2), the taxpayer

shall not be treated as being temporarily away from home during any

period of employment if such period exceeds 1 year. The preceding

sentence shall not apply to any Federal employee during any period

for which such employee is certified by the Attorney General (or

the designee thereof) as traveling on behalf of the United States

in temporary duty status to investigate or prosecute, or provide

support services for the investigation or prosecution of, a Federal

crime.

(b) Charitable contributions and gifts excepted

No deduction shall be allowed under subsection (a) for any

contribution or gift which would be allowable as a deduction under

section 170 were it not for the percentage limitations, the dollar

limitations, or the requirements as to the time of payment, set

forth in such section.

(c) Illegal bribes, kickbacks, and other payments

(1) Illegal payments to government officials or employees

No deduction shall be allowed under subsection (a) for any

payment made, directly or indirectly, to an official or employee

of any government, or of any agency or instrumentality of any

government, if the payment constitutes an illegal bribe or

kickback or, if the payment is to an official or employee of a

foreign government, the payment is unlawful under the Foreign

Corrupt Practices Act of 1977. The burden of proof in respect of

the issue, for the purposes of this paragraph, as to whether a

payment constitutes an illegal bribe or kickback (or is unlawful

under the Foreign Corrupt Practices Act of 1977) shall be upon

the Secretary to the same extent as he bears the burden of proof

under section 7454 (concerning the burden of proof when the issue

relates to fraud).

(2) Other illegal payments

No deduction shall be allowed under subsection (a) for any

payment (other than a payment described in paragraph (1)) made,

directly or indirectly, to any person, if the payment constitutes

an illegal bribe, illegal kickback, or other illegal payment

under any law of the United States, or under any law of a State

(but only if such State law is generally enforced), which

subjects the payor to a criminal penalty or the loss of license

or privilege to engage in a trade or business. For purposes of

this paragraph, a kickback includes a payment in consideration of

the referral of a client, patient, or customer. The burden of

proof in respect of the issue, for purposes of this paragraph, as

to whether a payment constitutes an illegal bribe, illegal

kickback, or other illegal payment shall be upon the Secretary to

the same extent as he bears the burden of proof under section

7454 (concerning the burden of proof when the issue relates to

fraud).

(3) Kickbacks, rebates, and bribes under medicare and medicaid

No deduction shall be allowed under subsection (a) for any

kickback, rebate, or bribe made by any provider of services,

supplier, physician, or other person who furnishes items or

services for which payment is or may be made under the Social

Security Act, or in whole or in part out of Federal funds under a

State plan approved under such Act, if such kickback, rebate, or

bribe is made in connection with the furnishing of such items or

services or the making or receipt of such payments. For purposes

of this paragraph, a kickback includes a payment in consideration

of the referral of a client, patient, or customer.

(d) Capital contributions to Federal National Mortgage Association

For purposes of this subtitle, whenever the amount of capital

contributions evidenced by a share of stock issued pursuant to

section 303(c) of the Federal National Mortgage Association Charter

Act (12 U.S.C., sec. 1718) exceeds the fair market value of the

stock as of the issue date of such stock, the initial holder of the

stock shall treat the excess as ordinary and necessary expenses

paid or incurred during the taxable year in carrying on a trade or

business.

(e) Denial of deduction for certain lobbying and political

expenditures

(1) In general

No deduction shall be allowed under subsection (a) for any

amount paid or incurred in connection with -

(A) influencing legislation,

(B) participation in, or intervention in, any political

campaign on behalf of (or in opposition to) any candidate for

public office,

(C) any attempt to influence the general public, or segments

thereof, with respect to elections, legislative matters, or

referendums, or

(D) any direct communication with a covered executive branch

official in an attempt to influence the official actions or

positions of such official.

(2) Exception for local legislation

In the case of any legislation of any local council or similar

governing body -

(A) paragraph (1)(A) shall not apply, and

(B) the deduction allowed by subsection (a) shall include all

ordinary and necessary expenses (including, but not limited to,

traveling expenses described in subsection (a)(2) and the cost

of preparing testimony) paid or incurred during the taxable

year in carrying on any trade or business -

(i) in direct connection with appearances before,

submission of statements to, or sending communications to the

committees, or individual members, of such council or body

with respect to legislation or proposed legislation of direct

interest to the taxpayer, or

(ii) in direct connection with communication of information

between the taxpayer and an organization of which the

taxpayer is a member with respect to any such legislation or

proposed legislation which is of direct interest to the

taxpayer and to such organization,

 

and that portion of the dues so paid or incurred with respect

to any organization of which the taxpayer is a member which is

attributable to the expenses of the activities described in

clauses (i) and (ii) carried on by such organization.

(3) Application to dues of tax-exempt organizations

No deduction shall be allowed under subsection (a) for the

portion of dues or other similar amounts paid by the taxpayer to

an organization which is exempt from tax under this subtitle

which the organization notifies the taxpayer under section

6033(e)(1)(A)(ii) is allocable to expenditures to which paragraph

(1) applies.

(4) Influencing legislation

For purposes of this subsection -

(A) In general

The term "influencing legislation" means any attempt to

influence any legislation through communication with any member

or employee of a legislative body, or with any government

official or employee who may participate in the formulation of

legislation.

(B) Legislation

The term "legislation" has the meaning given such term by

section 4911(e)(2).

(5) Other special rules

(A) Exception for certain taxpayers

In the case of any taxpayer engaged in the trade or business

of conducting activities described in paragraph (1), paragraph

(1) shall not apply to expenditures of the taxpayer in

conducting such activities directly on behalf of another person

(but shall apply to payments by such other person to the

taxpayer for conducting such activities).

(B) De minimis exception

(i) In general

Paragraph (1) shall not apply to any in-house expenditures

for any taxable year if such expenditures do not exceed

$2,000. In determining whether a taxpayer exceeds the $2,000

limit under this clause, there shall not be taken into

account overhead costs otherwise allocable to activities

described in paragraphs (1)(A) and (D).

(ii) In-house expenditures

For purposes of clause (i), the term "in-house

expenditures" means expenditures described in paragraphs

(1)(A) and (D) other than -

(I) payments by the taxpayer to a person engaged in the

trade or business of conducting activities described in

paragraph (1) for the conduct of such activities on behalf

of the taxpayer, or

(II) dues or other similar amounts paid or incurred by

the taxpayer which are allocable to activities described in

paragraph (1).

(C) Expenses incurred in connection with lobbying and political

activities

Any amount paid or incurred for research for, or preparation,

planning, or coordination of, any activity described in

paragraph (1) shall be treated as paid or incurred in

connection with such activity.

(6) Covered executive branch official

For purposes of this subsection, the term "covered executive

branch official" means -

(A) the President,

(B) the Vice President,

(C) any officer or employee of the White House Office of the

Executive Office of the President, and the 2 most senior level

officers of each of the other agencies in such Executive

Office, and

(D)(i) any individual serving in a position in level I of the

Executive Schedule under section 5312 of title 5, United States

Code, (ii) any other individual designated by the President as

having Cabinet level status, and (iii) any immediate deputy of

an individual described in clause (i) or (ii).

(7) Special rule for Indian tribal governments

For purposes of this subsection, an Indian tribal government

shall be treated in the same manner as a local council or similar

governing body.

(8) Cross reference

For reporting requirements and alternative taxes related to

this subsection, see section 6033(e).

(f) Fines and penalties

No deduction shall be allowed under subsection (a) for any fine

or similar penalty paid to a government for the violation of any

law.

(g) Treble damage payments under the antitrust laws

If in a criminal proceeding a taxpayer is convicted of a

violation of the antitrust laws, or his plea of guilty or nolo

contendere to an indictment or information charging such a

violation is entered or accepted in such a proceeding, no deduction

shall be allowed under subsection (a) for two-thirds of any amount

paid or incurred -

(1) on any judgment for damages entered against the taxpayer

under section 4 of the Act entitled "An Act to supplement

existing laws against unlawful restraints and monopolies, and for

other purposes", approved October 15, 1914 (commonly known as the

Clayton Act), on account of such violation or any related

violation of the antitrust laws which occurred prior to the date

of the final judgment of such conviction, or

(2) in settlement of any action brought under such section 4 on

account of such violation or related violation.

 

The preceding sentence shall not apply with respect to any

conviction or plea before January 1, 1970, or to any conviction or

plea on or after such date in a new trial following an appeal of a

conviction before such date.

(h) State legislators' travel expenses away from home

(1) In general

For purposes of subsection (a), in the case of any individual

who is a State legislator at any time during the taxable year and

who makes an election under this subsection for the taxable year -

(A) the place of residence of such individual within the

legislative district which he represented shall be considered

his home,

(B) he shall be deemed to have expended for living expenses

(in connection with his trade or business as a legislator) an

amount equal to the sum of the amounts determined by

multiplying each legislative day of such individual during the

taxable year by the greater of -

(i) the amount generally allowable with respect to such day

to employees of the State of which he is a legislator for per

diem while away from home, to the extent such amount does not

exceed 110 percent of the amount described in clause (ii)

with respect to such day, or

(ii) the amount generally allowable with respect to such

day to employees of the executive branch of the Federal

Government for per diem while away from home but serving in

the United States, and

 

(C) he shall be deemed to be away from home in the pursuit of

a trade or business on each legislative day.

(2) Legislative days

For purposes of paragraph (1), a legislative day during any

taxable year for any individual shall be any day during such year

on which -

(A) the legislature was in session (including any day in

which the legislature was not in session for a period of 4

consecutive days or less), or

(B) the legislature was not in session but the physical

presence of the individual was formally recorded at a meeting

of a committee of such legislature.

(3) Election

An election under this subsection for any taxable year shall be

made at such time and in such manner as the Secretary shall by

regulations prescribe.

(4) Section not to apply to legislators who reside near capitol

For taxable years beginning after December 31, 1980, this

subsection shall not apply to any legislator whose place of

residence within the legislative district which he represents is

50 or fewer miles from the capitol building of the State.

[(i) Repealed. Pub. L. 101-239, title VI, Sec. 6202(b)(3)(A), Dec.

19, 1989, 103 Stat. 2233]

(j) Certain foreign advertising expenses

(1) In general

No deduction shall be allowed under subsection (a) for any

expenses of an advertisement carried by a foreign broadcast

undertaking and directed primarily to a market in the United

States. This paragraph shall apply only to foreign broadcast

undertakings located in a country which denies a similar

deduction for the cost of advertising directed primarily to a

market in the foreign country when placed with a United States

broadcast undertaking.

(2) Broadcast undertaking

For purposes of paragraph (1), the term "broadcast undertaking"

includes (but is not limited to) radio and television stations.

(k) Stock reacquisition expenses

(1) In general

Except as provided in paragraph (2), no deduction otherwise

allowable shall be allowed under this chapter for any amount paid

or incurred by a corporation in connection with the reacquisition

of its stock or of the stock of any related person (as defined in

section 465(b)(3)(C)).

(2) Exceptions

Paragraph (1) shall not apply to -

(A) Certain specific deductions

Any -

(i) deduction allowable under section 163 (relating to

interest),

(ii) deduction for amounts which are properly allocable to

indebtedness and amortized over the term of such

indebtedness, or

(iii) deduction for dividends paid (within the meaning of

section 561).

(B) Stock of certain regulated investment companies

Any amount paid or incurred in connection with the redemption

of any stock in a regulated investment company which issues

only stock which is redeemable upon the demand of the

shareholder.

(l) Special rules for health insurance costs of self-employed

individuals

(1) Allowance of deduction

In the case of a taxpayer who is an employee within the meaning

of section 401(c)(1), there shall be allowed as a deduction under

this section an amount equal to the amount paid during the

taxable year for insurance which constitutes medical care for -

(A) the taxpayer,

(B) the taxpayer's spouse,

(C) the taxpayer's dependents, and

(D) any child (as defined in section 152(f)(1)) of the

taxpayer who as of the end of the taxable year has not attained

age 27.

(2) Limitations

(A) Dollar amount

No deduction shall be allowed under paragraph (1) to the

extent that the amount of such deduction exceeds the taxpayer's

earned income (within the meaning of section 401(c)) derived by

the taxpayer from the trade or business with respect to which

the plan providing the medical care coverage is established.

(B) Other coverage

Paragraph (1) shall not apply to any taxpayer for any

calendar month for which the taxpayer is eligible to

participate in any subsidized health plan maintained by any

employer of the taxpayer or of the spouse of, or any dependent,

or individual described in subparagraph (D) of paragraph (1)

with respect to, the taxpayer. The preceding sentence shall be

applied separately with respect to -

(i) plans which include coverage for qualified long-term

care services (as defined in section 7702B(c)) or are

qualified long-term care insurance contracts (as defined in

section 7702B(b)), and

(ii) plans which do not include such coverage and are not

such contracts.

(C) Long-term care premiums

In the case of a qualified long-term care insurance contract

(as defined in section 7702B(b)), only eligible long-term care

premiums (as defined in section 213(d)(10)) shall be taken into

account under paragraph (1).

(3) Coordination with medical deduction

Any amount paid by a taxpayer for insurance to which paragraph

(1) applies shall not be taken into account in computing the

amount allowable to the taxpayer as a deduction under section

213(a).

(4) Deduction not allowed for self-employment tax purposes

The deduction allowable by reason of this subsection shall not

be taken into account in determining an individual's net earnings

from self-employment (within the meaning of section 1402(a)) for

purposes of chapter 2 for taxable years beginning before January

1, 2010, or after December 31, 2010.

(5) Treatment of certain S corporation shareholders

This subsection shall apply in the case of any individual

treated as a partner under section 1372(a), except that -

(A) for purposes of this subsection, such individual's wages

(as defined in section 3121) from the S corporation shall be

treated as such individual's earned income (within the meaning

of section 401(c)(1)), and

(B) there shall be such adjustments in the application of

this subsection as the Secretary may by regulations prescribe.

(m) Certain excessive employee remuneration

(1) In general

In the case of any publicly held corporation, no deduction

shall be allowed under this chapter for applicable employee

remuneration with respect to any covered employee to the extent

that the amount of such remuneration for the taxable year with

respect to such employee exceeds $1,000,000.

(2) Publicly held corporation

For purposes of this subsection, the term "publicly held

corporation" means any corporation issuing any class of common

equity securities required to be registered under section 12 of

the Securities Exchange Act of 1934.

(3) Covered employee

For purposes of this subsection, the term "covered employee"

means any employee of the taxpayer if -

(A) as of the close of the taxable year, such employee is the

chief executive officer of the taxpayer or is an individual

acting in such a capacity, or

(B) the total compensation of such employee for the taxable

year is required to be reported to shareholders under the

Securities Exchange Act of 1934 by reason of such employee

being among the 4 highest compensated officers for the taxable

year (other than the chief executive officer).

(4) Applicable employee remuneration

For purposes of this subsection -

(A) In general

Except as otherwise provided in this paragraph, the term

"applicable employee remuneration" means, with respect to any

covered employee for any taxable year, the aggregate amount

allowable as a deduction under this chapter for such taxable

year (determined without regard to this subsection) for

remuneration for services performed by such employee (whether

or not during the taxable year).

(B) Exception for remuneration payable on commission basis

The term "applicable employee remuneration" shall not include

any remuneration payable on a commission basis solely on

account of income generated directly by the individual

performance of the individual to whom such remuneration is

payable.

(C) Other performance-based compensation

The term "applicable employee remuneration" shall not include

any remuneration payable solely on account of the attainment of

one or more performance goals, but only if -

(i) the performance goals are determined by a compensation

committee of the board of directors of the taxpayer which is

comprised solely of 2 or more outside directors,

(ii) the material terms under which the remuneration is to

be paid, including the performance goals, are disclosed to

shareholders and approved by a majority of the vote in a

separate shareholder vote before the payment of such

remuneration, and

(iii) before any payment of such remuneration, the

compensation committee referred to in clause (i) certifies

that the performance goals and any other material terms were

in fact satisfied.

(D) Exception for existing binding contracts

The term "applicable employee remuneration" shall not include

any remuneration payable under a written binding contract which

was in effect on February 17, 1993, and which was not modified

thereafter in any material respect before such remuneration is

paid.

(E) Remuneration

For purposes of this paragraph, the term "remuneration"

includes any remuneration (including benefits) in any medium

other than cash, but shall not include -

(i) any payment referred to in so much of section

3121(a)(5) as precedes subparagraph (E) thereof, and

(ii) any benefit provided to or on behalf of an employee if

at the time such benefit is provided it is reasonable to

believe that the employee will be able to exclude such

benefit from gross income under this chapter.

 

For purposes of clause (i), section 3121(a)(5) shall be applied

without regard to section 3121(v)(1).

(F) Coordination with disallowed golden parachute payments

The dollar limitation contained in paragraph (1) shall be

reduced (but not below zero) by the amount (if any) which would

have been included in the applicable employee remuneration of

the covered employee for the taxable year but for being

disallowed under section 280G.

(G) Coordination with excise tax on specified stock

compensation

The dollar limitation contained in paragraph (1) with respect

to any covered employee shall be reduced (but not below zero)

by the amount of any payment (with respect to such employee) of

the tax imposed by section 4985 directly or indirectly by the

expatriated corporation (as defined in such section) or by any

member of the expanded affiliated group (as defined in such

section) which includes such corporation.

(5) Special rule for application to employers participating in

the Troubled Assets Relief Program

(A) In general

In the case of an applicable employer, no deduction shall be

allowed under this chapter -

(i) in the case of executive remuneration for any

applicable taxable year which is attributable to services

performed by a covered executive during such applicable

taxable year, to the extent that the amount of such

remuneration exceeds $500,000, or

(ii) in the case of deferred deduction executive

remuneration for any taxable year for services performed

during any applicable taxable year by a covered executive, to

the extent that the amount of such remuneration exceeds

$500,000 reduced (but not below zero) by the sum of -

(I) the executive remuneration for such applicable

taxable year, plus

(II) the portion of the deferred deduction executive

remuneration for such services which was taken into account

under this clause in a preceding taxable year.

(B) Applicable employer

For purposes of this paragraph -

(i) In general

Except as provided in clause (ii), the term "applicable

employer" means any employer from whom 1 or more troubled

assets are acquired under a program established by the

Secretary under section 101(a) of the Emergency Economic

Stabilization Act of 2008 if the aggregate amount of the

assets so acquired for all taxable years exceeds

$300,000,000.

(ii) Disregard of certain assets sold through direct purchase

If the only sales of troubled assets by an employer under

the program described in clause (i) are through 1 or more

direct purchases (within the meaning of section 113(c) of the

Emergency Economic Stabilization Act of 2008), such assets

shall not be taken into account under clause (i) in

determining whether the employer is an applicable employer

for purposes of this paragraph.

(iii) Aggregation rules

Two or more persons who are treated as a single employer

under subsection (b) or (c) of section 414 shall be treated

as a single employer, except that in applying section 1563(a)

for purposes of either such subsection, paragraphs (2) and

(3) thereof shall be disregarded.

(C) Applicable taxable year

For purposes of this paragraph, the term "applicable taxable

year" means, with respect to any employer -

(i) the first taxable year of the employer -

(I) which includes any portion of the period during which

the authorities under section 101(a) of the Emergency

Economic Stabilization Act of 2008 are in effect

(determined under section 120 thereof), and

(II) in which the aggregate amount of troubled assets

acquired from the employer during the taxable year pursuant

to such authorities (other than assets to which

subparagraph (B)(ii) applies), when added to the aggregate

amount so acquired for all preceding taxable years, exceeds

$300,000,000, and

 

(ii) any subsequent taxable year which includes any portion

of such period.

(D) Covered executive

For purposes of this paragraph -

(i) In general

The term "covered executive" means, with respect to any

applicable taxable year, any employee -

(I) who, at any time during the portion of the taxable

year during which the authorities under section 101(a) of

the Emergency Economic Stabilization Act of 2008 are in

effect (determined under section 120 thereof), is the chief

executive officer of the applicable employer or the chief

financial officer of the applicable employer, or an

individual acting in either such capacity, or

(II) who is described in clause (ii).

(ii) Highest compensated employees

An employee is described in this clause if the employee is

1 of the 3 highest compensated officers of the applicable

employer for the taxable year (other than an individual

described in clause (i)(I)), determined -

(I) on the basis of the shareholder disclosure rules for

compensation under the Securities Exchange Act of 1934

(without regard to whether those rules apply to the

employer), and

(II) by only taking into account employees employed

during the portion of the taxable year described in clause

(i)(I).

(iii) Employee remains covered executive

If an employee is a covered executive with respect to an

applicable employer for any applicable taxable year, such

employee shall be treated as a covered executive with respect

to such employer for all subsequent applicable taxable years

and for all subsequent taxable years in which deferred

deduction executive remuneration with respect to services

performed in all such applicable taxable years would (but for

this paragraph) be deductible.

(E) Executive remuneration

For purposes of this paragraph, the term "executive

remuneration" means the applicable employee remuneration of the

covered executive, as determined under paragraph (4) without

regard to subparagraphs (B), (C), and (D) thereof. Such term

shall not include any deferred deduction executive remuneration

with respect to services performed in a prior applicable

taxable year.

(F) Deferred deduction executive remuneration

For purposes of this paragraph, the term "deferred deduction

executive remuneration" means remuneration which would be

executive remuneration for services performed in an applicable

taxable year but for the fact that the deduction under this

chapter (determined without regard to this paragraph) for such

remuneration is allowable in a subsequent taxable year.

(G) Coordination

Rules similar to the rules of subparagraphs (F) and (G) of

paragraph (4) shall apply for purposes of this paragraph.

(H) Regulatory authority

The Secretary may prescribe such guidance, rules, or

regulations as are necessary to carry out the purposes of this

paragraph and the Emergency Economic Stabilization Act of 2008,

including the extent to which this paragraph applies in the

case of any acquisition, merger, or reorganization of an

applicable employer.

(6) Special rule for application to certain health insurance

providers

(A) In general

No deduction shall be allowed under this chapter -

(i) in the case of applicable individual remuneration which

is for any disqualified taxable year beginning after December

31, 2012, and which is attributable to services performed by

an applicable individual during such taxable year, to the

extent that the amount of such remuneration exceeds $500,000,

or

(ii) in the case of deferred deduction remuneration for any

taxable year beginning after December 31, 2012, which is

attributable to services performed by an applicable

individual during any disqualified taxable year beginning

after December 31, 2009, to the extent that the amount of

such remuneration exceeds $500,000 reduced (but not below

zero) by the sum of -

(I) the applicable individual remuneration for such

disqualified taxable year, plus

(II) the portion of the deferred deduction remuneration

for such services which was taken into account under this

clause in a preceding taxable year (or which would have

been taken into account under this clause in a preceding

taxable year if this clause were applied by substituting

"December 31, 2009" for "December 31, 2012" in the matter

preceding subclause (I)).

(B) Disqualified taxable year

For purposes of this paragraph, the term "disqualified

taxable year" means, with respect to any employer, any taxable

year for which such employer is a covered health insurance

provider.

(C) Covered health insurance provider

For purposes of this paragraph -

(i) In general

The term "covered health insurance provider" means -

(I) with respect to taxable years beginning after

December 31, 2009, and before January 1, 2013, any employer

which is a health insurance issuer (as defined in section

9832(b)(2)) and which receives premiums from providing

health insurance coverage (as defined in section

9832(b)(1)), and

(II) with respect to taxable years beginning after

December 31, 2012, any employer which is a health insurance

issuer (as defined in section 9832(b)(2)) and with respect

to which not less than 25 percent of the gross premiums

received from providing health insurance coverage (as

defined in section 9832(b)(1)) is from minimum essential

coverage (as defined in section 5000A(f)).

(ii) Aggregation rules

Two or more persons who are treated as a single employer

under subsection (b), (c), (m), or (o) of section 414 shall

be treated as a single employer, except that in applying

section 1563(a) for purposes of any such subsection,

paragraphs (2) and (3) thereof shall be disregarded.

(D) Applicable individual remuneration

For purposes of this paragraph, the term "applicable

individual remuneration" means, with respect to any applicable

individual for any disqualified taxable year, the aggregate

amount allowable as a deduction under this chapter for such

taxable year (determined without regard to this subsection) for

remuneration (as defined in paragraph (4) without regard to

subparagraphs (B), (C), and (D) thereof) for services performed

by such individual (whether or not during the taxable year).

Such term shall not include any deferred deduction remuneration

with respect to services performed during the disqualified

taxable year.

(E) Deferred deduction remuneration

For purposes of this paragraph, the term "deferred deduction

remuneration" means remuneration which would be applicable

individual remuneration for services performed in a

disqualified taxable year but for the fact that the deduction

under this chapter (determined without regard to this

paragraph) for such remuneration is allowable in a subsequent

taxable year.

(F) Applicable individual

For purposes of this paragraph, the term "applicable

individual" means, with respect to any covered health insurance

provider for any disqualified taxable year, any individual -

(i) who is an officer, director, or employee in such

taxable year, or

(ii) who provides services for or on behalf of such covered

health insurance provider during such taxable year.

(G) Coordination

Rules similar to the rules of subparagraphs (F) and (G) of

paragraph (4) shall apply for purposes of this paragraph.

(H) Regulatory authority

The Secretary may prescribe such guidance, rules, or

regulations as are necessary to carry out the purposes of this

paragraph.

(n) Special rule for certain group health plans

(1) In general

No deduction shall be allowed under this chapter to an employer

for any amount paid or incurred in connection with a group health

plan if the plan does not reimburse for inpatient hospital care

services provided in the State of New York -

(A) except as provided in subparagraphs (B) and (C), at the

same rate as licensed commercial insurers are required to

reimburse hospitals for such services when such reimbursement

is not through such a plan,

(B) in the case of any reimbursement through a health

maintenance organization, at the same rate as health

maintenance organizations are required to reimburse hospitals

for such services for individuals not covered by such a plan

(determined without regard to any government-supported

individuals exempt from such rate), or

(C) in the case of any reimbursement through any corporation

organized under Article 43 of the New York State Insurance Law,

at the same rate as any such corporation is required to

reimburse hospitals for such services for individuals not

covered by such a plan.

(2) State law exception

Paragraph (1) shall not apply to any group health plan which is

not required under the laws of the State of New York (determined

without regard to this subsection or other provisions of Federal

law) to reimburse at the rates provided in paragraph (1).

(3) Group health plan

For purposes of this subsection, the term "group health plan"

means a plan of, or contributed to by, an employer or employee

organization (including a self-insured plan) to provide health

care (directly or otherwise) to any employee, any former

employee, the employer, or any other individual associated or

formerly associated with the employer in a business relationship,

or any member of their family.

(o) Treatment of certain expenses of rural mail carriers

(1) General rule

In the case of any employee of the United States Postal Service

who performs services involving the collection and delivery of

mail on a rural route and who receives qualified reimbursements

for the expenses incurred by such employee for the use of a

vehicle in performing such services -

(A) the amount allowable as a deduction under this chapter

for the use of a vehicle in performing such services shall be

equal to the amount of such qualified reimbursements; and

(B) such qualified reimbursements shall be treated as paid

under a reimbursement or other expense allowance arrangement

for purposes of section 62(a)(2)(A) (and section 62(c) shall

not apply to such qualified reimbursements).

(2) Special rule where expenses exceed reimbursements

Notwithstanding paragraph (1)(A), if the expenses incurred by

an employee for the use of a vehicle in performing services

described in paragraph (1) exceed the qualified reimbursements

for such expenses, such excess shall be taken into account in

computing the miscellaneous itemized deductions of the employee

under section 67.

(3) Definition of qualified reimbursements

For purposes of this subsection, the term "qualified

reimbursements" means the amounts paid by the United States

Postal Service to employees as an equipment maintenance allowance

under the 1991 collective bargaining agreement between the United

States Postal Service and the National Rural Letter Carriers'

Association. Amounts paid as an equipment maintenance allowance

by such Postal Service under later collective bargaining

agreements that supersede the 1991 agreement shall be considered

qualified reimbursements if such amounts do not exceed the

amounts that would have been paid under the 1991 agreement,

adjusted for changes in the Consumer Price Index (as defined in

section 1(f)(5)) since 1991.

(p) Treatment of expenses of members of reserve component of Armed

Forces of the United States

For purposes of subsection (a)(2), in the case of an individual

who performs services as a member of a reserve component of the

Armed Forces of the United States at any time during the taxable

year, such individual shall be deemed to be away from home in the

pursuit of a trade or business for any period during which such

individual is away from home in connection with such service.

(q) Cross reference

(1) For special rule relating to expenses in connection with

subdividing real property for sale, see section 1237.

(2) For special rule relating to the treatment of payments by

a transferee of a franchise, trademark, or trade name, see

section 1253.

(3) For special rules relating to -

(A) funded welfare benefit plans, see section 419, and

(B) deferred compensation and other deferred benefits, see

section 404.

 

-SOURCE-

(Aug. 16, 1954, ch. 736, 68A Stat. 45; Pub. L. 85-866, title I,

Sec. 5(a), Sept. 2, 1958, 72 Stat. 1608; Pub. L. 86-779, Secs.

7(b), 8(a), Sept. 14, 1960, 74 Stat. 1002, 1003; Pub. L. 87-834,

Secs. 3(a), 4(b), Oct. 16, 1962, 76 Stat. 973, 976; Pub. L. 91-172,

title V, Sec. 516(c)(2)(A), title IX, Sec. 902(a), (b), Dec. 30,

1969, 83 Stat. 648, 710; Pub. L. 92-178, title III, Sec. 310(a),

Dec. 10, 1971, 85 Stat. 525; Pub. L. 94-455, title XIX, Secs.

1901(c)(4), 1906(b)(13)(A), Oct. 4, 1976, 90 Stat. 1803, 1834; Pub.

L. 97-34, title I, Sec. 127(a), Aug. 13, 1981, 95 Stat. 202; Pub.

L. 97-35, title XXI, Sec. 2146(b), Aug. 13, 1981, 95 Stat. 801;

Pub. L. 97-51, Sec. 139(b)(1), Oct. 1, 1981, 95 Stat. 967; Pub. L.

97-216, title II, Sec. 215(a), July 18, 1982, 96 Stat. 194; Pub. L.

97-248, title I, Sec. 128(b), title II, Sec. 288(a), Sept. 3, 1982,

96 Stat. 366, 571; Pub. L. 98-369, div. A, title V, Sec. 512(b),

div. B, title III, Sec. 2354(d), July 18, 1984, 98 Stat. 863, 1102;

Pub. L. 98-573, title II, Sec. 232(a), Oct. 30, 1984, 98 Stat.

2991; Pub. L. 99-272, title X, Sec. 10001(a), (c), (d), Apr. 7,

1986, 100 Stat. 222, 223, 227; Pub. L. 99-509, title IX, Secs.

9307(c)(2)(B), 9501(a)(1), (b)(1)(A), (2)(A), (c)(1), (d)(1), Oct.

21, 1986, 100 Stat. 1995, 2075-2077; Pub. L. 99-514, title VI, Sec.

613(a), title XI, Sec. 1161(a), title XVIII, Sec. 1895(d)(1)(A),

(2)(A), (3)(A), (4)(A), (5)(A), (6)(A), (7), Oct. 22, 1986, 100

Stat. 2251, 2509, 2936-2940; Pub. L. 100-647, title I, Secs.

1011B(b)(1)-(3), 1018(t)(7)(B), title III, Sec. 3011(b)(2), (3),

Nov. 10, 1988, 102 Stat. 3488, 3589, 3624, 3625; Pub. L. 101-140,

title II, Sec. 203(a)(4), Nov. 8, 1989, 103 Stat. 830; Pub. L. 101-

239, title VI, Sec. 6202(b)(3)(A), title VII, Secs. 7107(a)(1),

(b), 7862(c)(3)(A), Dec. 19, 1989, 103 Stat. 2233, 2306, 2432; Pub.

L. 101-508, title XI, Secs. 11111(d)(2), 11410(a), Nov. 5, 1990,

104 Stat. 1388-413, 1388-479; Pub. L. 102-227, title I, Sec.

110(a)(1), Dec. 11, 1991, 105 Stat. 1688; Pub. L. 102-486, title

XIX, Sec. 1938(a), Oct. 24, 1992, 106 Stat. 3033; Pub. L. 103-66,

title XIII, Secs. 13131(d)(2), 13174(a)(1), (b)(1), 13211(a),

13222(a), 13442(a), Aug. 10, 1993, 107 Stat. 435, 457, 469, 477,

568; Pub. L. 104-7, Sec. 1(a), (b), Apr. 11, 1995, 109 Stat. 93;

Pub. L. 104-188, title I, Sec. 1704(p)(1)-(3), Aug. 20, 1996, 110

Stat. 1886; Pub. L. 104-191, title III, Secs. 311(a), 322(b)(2)(B),

Aug. 21, 1996, 110 Stat. 2053, 2060; Pub. L. 105-34, title IX, Sec.

934(a), title XII, Secs. 1203(a), 1204(a), title XVI, Sec. 1602(c),

Aug. 5, 1997, 111 Stat. 882, 994, 995, 1094; Pub. L. 105-206, title

VI, Sec. 6012(a), July 22, 1998, 112 Stat. 818; Pub. L. 105-277,

div. J, title II, Sec. 2002(a), Oct. 21, 1998, 112 Stat. 2681-901;

Pub. L. 108-121, title I, Sec. 109(a), Nov. 11, 2003, 117 Stat.

1341; Pub. L. 108-357, title III, Sec. 318(a), (b), title VIII,

Sec. 802(b)(2), Oct. 22, 2004, 118 Stat. 1470, 1568; Pub. L. 110-

343, div. A, title III, Sec. 302(a), Oct. 3, 2008, 122 Stat. 3803;

Pub. L. 111-148, title IX, Sec. 9014(a), title X, Sec. 10108(g)(1),

Mar. 23, 2010, 124 Stat. 868, 913; Pub. L. 111-152, title I, Sec.

1004(d)(2), (3), Mar. 30, 2010, 124 Stat. 1035; Pub. L. 111-240,

title II, Sec. 2042(a), Sept. 27, 2010, 124 Stat. 2560.)

 

 

-STATAMEND-

AMENDMENT OF SUBSECTION (A)

Pub. L. 111-148, title X, Sec. 10108(g), Mar. 23, 2010, 124 Stat.

913, provided that, applicable to vouchers provided after Dec. 31,

2013, subsection (a) of this section is amended by adding at the

end "For purposes of paragraph (1), the amount of a free choice

voucher provided under section 10108 of the Patient Protection and

Affordable Care Act shall be treated as an amount for compensation

for personal services actually rendered."

 

-REFTEXT-

REFERENCES IN TEXT

The Foreign Corrupt Practices Act of 1977, referred to in subsec.

(c)(1), is title I of Pub. L. 95-213, Dec. 19, 1977, 91 Stat. 1494,

as amended, which enacted sections 78dd-1 to 78dd-3 of Title 15,

Commerce and Trade, and amended sections 78m and 78ff of Title 15.

For complete classification of this Act to the Code, see Short

Title of 1977 Amendment note set out under section 78a of Title 15

and Tables.

The Social Security Act, referred to in subsec. (c)(3), is act

Aug. 14, 1935, ch. 531, 49 Stat. 620, as amended, which is

classified generally to chapter 7 (Sec. 301 et seq.) of Title 42,

The Public Health and Welfare. For complete classification of this

Act to the Code, see section 1305 of Title 42 and Tables.

Section 4 of the Clayton Act, referred to in subsec. (g)(1), is

classified to section 15 of Title 15, Commerce and Trade.

The Securities Exchange Act of 1934, referred to in subsec.

(m)(2), (3)(B), (5)(D)(ii)(I), is act June 6, 1934, ch. 404, 48

Stat. 881, which is classified principally to chapter 2B (Sec. 78a

et seq.) of Title 15, Commerce and Trade. Section 12 of the Act is

classified to section 78l of Title 15. For complete classification

of this Act to the Code, see section 78a of Title 15 and Tables.

The Emergency Economic Stabilization Act of 2008, referred to in

subsec. (m)(5), is div. A of Pub. L. 110-343, Oct. 3, 2008, 122

Stat. 3765, which is classified principally to chapter 52 (Sec.

5201 et seq.) of Title 12, Banks and Banking. Section 101(a) of the

Act enacted section 5211(a) of Title 12 and amended section 5315 of

Title 5, Government Organization and Employees, and section 301 of

Title 31, Money and Finance. Section 113(c) of the Act is

classified to section 5223(c) of Title 12. Section 120 of the Act

is classified to section 5230 of Title 12. For complete

classification of this Act to the Code, see Short Title note set

out under section 5201 of Title 12 and Tables.

 

 

-MISC1-

AMENDMENTS

2010 - Subsec. (l)(1). Pub. L. 111-152, Sec. 1004(d)(2), amended

par. (1) generally. Prior to amendment, par. (1) authorized a

deduction in an amount equal to the applicable percentage of the

amount paid during the taxable year for insurance which constitutes

medical care for the taxpayer, his spouse, and dependents.

Subsec. (l)(2)(B). Pub. L. 111-152, Sec. 1004(d)(3), inserted ",

or any dependent, or individual described in subparagraph (D) of

paragraph (1) with respect to," after "spouse of" in introductory

provisions.

Subsec. (l)(4). Pub. L. 111-240 inserted "for taxable years

beginning before January 1, 2010, or after December 31, 2010"

before period at end.

Subsec. (m)(6). Pub. L. 111-148, Sec. 9014(a), added par. (6).

2008 - Subsec. (m)(5). Pub. L. 110-343 added par. (5).

2004 - Subsec. (m)(4)(G). Pub. L. 108-357, Sec. 802(b)(2), added

subpar. (G).

Subsec. (o). Pub. L. 108-357, Sec. 318(b), struck out

"reimbursed" before "expenses" in heading.

Subsec. (o)(2), (3). Pub. L. 108-357, Sec. 318(a), added par. (2)

and redesignated former par. (2) as (3).

2003 - Subsecs. (p), (q). Pub. L. 108-121 added subsec. (p) and

redesignated former subsec. (p) as (q).

1998 - Subsec. (a). Pub. L. 105-206, in last sentence,

substituted "investigate or prosecute, or provide support services

for the investigation or prosecution of, a Federal crime." for

"investigate, or provide support services for the investigation of,

a Federal crime."

Subsec. (l)(1)(B). Pub. L. 105-277 amended table in subpar. (B)

generally. Prior to amendment, table read as follows:

 

 

"For taxable years beginning              2The applicable

in calendar year -                   percentage is -

--------------------------------------------------------------------

1997                                                              40

1998 and 1999                                                     45

2000 and 2001                                                     50

2002                                                              60

2003 through 2005                                                 80

2006                                                              90

2007 and thereafter                                            100."

--------------------------------------------------------------------

 

1997 - Subsec. (a). Pub. L. 105-34, Sec. 1204(a), inserted at end

of concluding provisions "The preceding sentence shall not apply to

any Federal employee during any period for which such employee is

certified by the Attorney General (or the designee thereof) as

traveling on behalf of the United States in temporary duty status

to investigate, or provide support services for the investigation

of, a Federal crime."

Subsec. (l)(1)(B). Pub. L. 105-34, Sec. 934(a), amended table

generally. Prior to amendment, table read as follows:

 

 

"For taxable years beginning              2The applicable

in calendar year -

percentage is -

--------------------------------------------------------------------

1997                                                      40 percent

1998 through 2002                                         45 percent

2003                                                      50 percent

2004                                                      60 percent

2005                                                      70 percent

2006 or thereafter                                      80 percent."

--------------------------------------------------------------------

 

Subsec. (l)(2)(B). Pub. L. 105-34, Sec. 1602(c), inserted "The

preceding sentence shall be applied separately with respect to - "

at end and added cls. (i) and (ii).

Subsecs. (o), (p). Pub. L. 105-34, Sec. 1203(a), added subsec.

(o) and redesignated former subsec. (o) as (p).

1996 - Subsec. (k). Pub. L. 104-188, Sec. 1704(p)(3), substituted

"reaquisition" for "redemption" in heading.

Subsec. (k)(1). Pub. L. 104-188, Sec. 1704(p)(1), substituted

"the reacquisition of its stock or of the stock of any related

person (as defined in section 465(b)(3)(C))" for "the redemption of

its stock".

Subsec. (k)(2)(A). Pub. L. 104-188, Sec. 1704(p)(2), struck out

"or" at end of cl. (i), added cl. (ii), and redesignated former cl.

(ii) as (iii).

Subsec. (l)(1). Pub. L. 104-191, Sec. 311(a), amended par. (1)

generally. Prior to amendment, par. (1) read as follows:

"(1) In general. - In the case of an individual who is an

employee within the meaning of section 401(c)(1), there shall be

allowed as a deduction under this section an amount equal to 30

percent of the amount paid during the taxable year for insurance

which constitutes medical care for the taxpayer, his spouse, and

dependents."

Subsec. (l)(2)(C). Pub. L. 104-191, Sec. 322(b)(2)(B), added

subpar. (C).

1995 - Subsec. (l)(1). Pub. L. 104-7, Sec. 1(b), substituted "30

percent" for "25 percent".

Subsec. (l)(6). Pub. L. 104-7, Sec. 1(a), struck out par. (6)

"Termination" which read as follows: "This subsection shall not

apply to any taxable year beginning after December 31, 1993."

1993 - Subsec. (e). Pub. L. 103-66, Sec. 13222(a), amended

heading and text generally. Prior to amendment, text consisted of

pars. (1) and (2) relating to deduction of ordinary and necessary

expenses paid or incurred in connection with certain activities

relating to congressional, State, and local legislation.

Subsec. (l)(2)(B). Pub. L. 103-66, Sec. 13174(b)(1), amended

heading and text of subpar. (B) generally. Prior to amendment, text

read as follows: "Paragraph (1) shall not apply to any taxpayer who

is eligible to participate in any subsidized health plan maintained

by any employer of the taxpayer or of the spouse of the taxpayer."

Subsec. (l)(3). Pub. L. 103-66, Sec. 13131(d)(2), amended heading

and text of par. (3) generally. Prior to amendment, text read as

follows:

"(A) Medical deduction. - Any amount paid by a taxpayer for

insurance to which paragraph (1) applies shall not be taken into

account in computing the amount allowable to the taxpayer as a

deduction under section 213(a).

"(B) Health insurance credit. - The amount otherwise taken into

account under paragraph (1) as paid for insurance which constitutes

medical care shall be reduced by the amount (if any) of the health

insurance credit allowable to the taxpayer for the taxable year

under section 32."

Subsec. (l)(6). Pub. L. 103-66, Sec. 13174(a)(1), substituted

"December 31, 1993" for "June 30, 1992".

Subsec. (m). Pub. L. 103-66, Sec. 13211(a), added subsec. (m).

Former subsec. (m) redesignated (n).

Subsec. (n). Pub. L. 103-66, Sec. 13442(a), added subsec. (n).

Former subsec. (n) redesignated (o).

Pub. L. 103-66, Sec. 13211(a), redesignated subsec. (m) as (n).

Subsec. (o). Pub. L. 103-66, Sec. 13442(a), redesignated subsec.

(n) as (o).

1992 - Subsec. (a). Pub. L. 102-486 inserted at end "For purposes

of paragraph (2), the taxpayer shall not be treated as being

temporarily away from home during any period of employment if such

period exceeds 1 year."

1991 - Subsec. (l)(6). Pub. L. 102-227 substituted "June 30,

1992" for "December 31, 1991".

1990 - Subsec. (l)(3). Pub. L. 101-508, Sec. 11111(d)(2),

substituted heading for one which read: "Coordination with medical

deduction" and amended text generally. Prior to amendment, text

read as follows: "Any amount paid by a taxpayer for insurance to

which paragraph (1) applies shall not be taken into account in

computing the amount allowable to the taxpayer as a deduction under

section 213(a)."

Subsec. (l)(6). Pub. L. 101-508, Sec. 11410(a), substituted

"December 31, 1991" for "September 30, 1990".

1989 - Subsec. (i). Pub. L. 101-239, Sec. 6202(b)(3)(A), struck

out subsec. (i) which read as follows:

"(1) Coverage relating to end stage renal disease. - The expenses

paid or incurred by an employer for a group health plan shall not

be allowed as a deduction under this section if the plan

differentiates in the benefits it provides between individuals

having end stage renal disease and other individuals covered by

such plan on the basis of the existence of end stage renal disease,

the need for renal dialysis, or in any other manner.

"(2) Group health plan. - For purposes of this subsection the

term 'group health plan' means any plan of, or contributed to by,

an employer to provide medical care (as defined in section 213(d)

to his employees, former employees, or the families of such

employees or former employees, directly or through insurance,

reimbursement, or otherwise."

Subsec. (k)(2)(B)(iv). Pub. L. 101-239, Sec. 7862(c)(3)(A),

amended cl. (iv) as it existed prior to repeal of subsec. (k) by

Pub. L. 100-647, by substituting "entitlement" for "eligibility" in

heading and inserting "which does not contain any exclusion or

limitation with respect to any preexisting condition of such

beneficiary" after "or otherwise)" in subclause (I).

Subsec. (l)(2). Pub. L. 101-140 redesignated subpar. (C) as (B)

and struck out former subpar. (B) which read as follows: "Required

coverage. - Paragraph (1) shall not apply to any taxpayer for any

taxable year unless coverage is provided under 1 or more plans

meeting the requirements of section 89, treating such coverage as

an employer-provided benefit."

Subsec. (l)(5). Pub. L. 101-239, Sec. 7107(b), added par. (5).

Former par. (5) redesignated (6).

Pub. L. 101-239, Sec. 7107(a)(1), substituted "September 30,

1990" for "December 31, 1989".

Subsec. (l)(6). Pub. L. 101-239, Sec. 7107(b), redesignated

former par. (5) as (6).

1988 - Subsec. (i)(2), (3). Pub. L. 100-647, Sec. 3011(b)(2),

redesignated par. (3) as (2) and struck out former par. (2) which

required plans to provide continuation coverage to certain

individuals.

Subsec. (k). Pub. L. 100-647, Sec. 3011(b)(3), redesignated

subsec. (l), relating to stock redemption expenses, as (k) and

struck out former subsec. (k) which related to continuation

coverage requirements of group health plans.

Subsec. (k)(5)(B). Pub. L. 100-647, Sec. 1018(t)(7)(B), made

amendment identical to Pub. L. 99-509, Sec. 9307(c)(2)(B), which

amended directory language of Pub. L. 99-514, Sec. 1895(d)(5)(A),

by substituting "section 162(k)(5)" for "section 162(k)(2)". See

1986 Amendment note below.

Subsec . (l). Pub. L. 100-647, Sec. 3011(b)(3)(A), (B),

redesignated subsec. (m), relating to special rules for health

insurance costs of self-employed individuals, as (l). Former

subsec. (l), relating to stock redemption expenses, redesignated

(k).

Subsec. (m). Pub. L. 100-647, Sec. 3011(b)(3)(B), (C),

redesignated subsec. (n), relating to cross references, as (m).

Former subsec. (m), relating to special rules for health insurance

costs of self-employed individuals, redesignated (l).

Pub. L. 100-647, Sec. 1011B(b)(2), redesignated subsec. (m),

relating to cross references, as (n).

Subsec. (m)(2)(A). Pub. L. 100-647, Sec. 1011B(b)(3), inserted

"derived by the taxpayer from the trade or business with respect to

which the plan providing the medical care coverage is established"

after "401(c))".

Subsec. (m)(4), (5). Pub. L. 100-647, Sec. 1011B(b)(1), added

par. (4) and redesignated former par. (4) as (5).

Subsec. (n). Pub. L. 100-647, Sec. 3011(b)(3)(C), redesignated

subsec. (n) as (m).

Pub. L. 100-647, Sec. 1011B(b)(2), redesignated subsec. (m),

relating to cross references, as (n).

1986 - Subsec. (i)(1). Pub. L. 99-272, Sec. 10001(d), substituted

"Coverage relating to end stage renal disease" for "General rule"

in heading.

Subsec. (i)(2), (3). Pub. L. 99-272, Sec. 10001(a), added par.

(2) and redesignated former par. (2) as (3).

Subsec. (k). Pub. L. 99-272, Sec. 10001(c), added subsec. (k).

Former subsec. (k) redesignated (l).

Subsec. (k)(2)(A). Pub. L. 99-514, Sec. 1895(d)(1)(A), inserted

"If coverage under the plan is modified for any group of similarly

situated beneficiaries, the coverage shall also be modified in the

same manner for all individuals who are qualified beneficiaries

under the plan pursuant to this subsection in connection with such

group."

Subsec. (k)(2)(B)(i). Pub. L. 99-514, Sec. 1895(d)(2)(A),

substituted "Maximum required period" for "Maximum period" in

heading and amended text generally. Prior to amendment, text read

as follows: "In the case of -

"(I) a qualifying event described in paragraph (3)(B) (relating

to terminations and reduced hours), the date which is 18 months

after the date of the qualifying event, and

"(II) any qualifying event not described in subclause (I), the

date which is 36 months after the date of the qualifying event."

Subsec. (k)(2)(B)(i)(II). Pub. L. 99-509, Sec. 9501(b)(1)(A)(i),

inserted "(other than a qualifying event described in paragraph

(3)(F))".

Subsec. (k)(2)(B)(i)(III), (IV). Pub. L. 99-509, Sec.

9501(b)(1)(A)(ii)-(iv), added subcl. (III), redesignated former

subcl. (III) as (IV), and inserted "or (3)(F)".

Subsec. (k)(2)(B)(iii). Pub. L. 99-514, Sec. 1895(d)(3)(A),

inserted "The payment of any premium (other than any payment

referred to in the last sentence of subparagraph (C)) shall be

considered to be timely if made within 30 days after the date due

or within such longer period as applies to or under the plan."

Subsec. (k)(2)(B)(iv). Pub. L. 99-514, Sec. 1895(d)(4)(A)(iii),

substituted "Group health plan coverage" for "Reemployment" in

heading.

Subsec. (k)(2)(B)(iv)(I). Pub. L. 99-514, Sec. 1895(d)(4)(A)(ii),

substituted "covered under any other group health plan (as an

employee or otherwise)" for "a covered employee under any other

group health plan".

Subsec. (k)(2)(B)(iv)(II). Pub. L. 99-509, Sec. 9501(b)(2)(A),

inserted "in the case of a qualified beneficiary other than a

qualified beneficiary described in paragraph (7)(B)(iv),".

Subsec. (k)(2)(B)(v). Pub. L. 99-514, Sec. 1895(d)(4)(A)(i),

struck out cl. (v), remarriage of spouse, which read as follows:

"In the case of an individual who is a qualified beneficiary by

reason of being the spouse of a covered employee, the date on which

the beneficiary remarries and becomes covered under a group health

plan."

Subsec. (k)(3). Pub. L. 99-509, Sec. 9501(a)(1), added subpar.

(F) and concluding provisions.

Subsec. (k)(5)(B). Pub. L. 99-514, Sec. 1895(d)(5)(A), as amended

by Pub. L. 99-509, Sec. 9307(c)(2)(B), and Pub. L. 100-647, Sec.

1018(t)(7)(B), inserted "of continuation coverage" and "If there is

a choice among types of coverage under the plan, each qualified

beneficiary is entitled to make a separate selection among such

types of coverage." See 1988 Amendment note above.

Subsec. (k)(6)(B). Pub. L. 99-509, Sec. 9501(d)(1), substituted

"(D), or (F)" for "or (D)".

Subsec. (k)(6)(C). Pub. L. 99-514, Sec. 1895(d)(6)(A), inserted

"within 60 days after the date of the qualifying event".

Subsec. (k)(6)(D)(i). Pub. L. 99-509, Sec. 9501(d)(1),

substituted "(D), or (F)" for "or (D)".

Subsec. (k)(7)(B)(iii). Pub. L. 99-514, Sec. 1895(d)(7), added

cl. (iii).

Subsec. (k)(7)(B)(iv). Pub. L. 99-509, Sec. 9501(c)(1), added cl.

(iv).

Subsec. (l). Pub. L. 99-514, Sec. 613(a), added subsec. (l).

Former subsec. (l) redesignated (m).

Pub. L. 99-272, Sec. 10001(c), redesignated former subsec. (k),

relating to cross references, as (l).

Subsec. (m). Pub. L. 99-514, Sec. 1161(a), added subsec. (m)

relating to special rules for health insurance costs of self-

employed individuals, and further directed that this section be

amended "by redesignating subsection (n) as subsection (m)", which

directory language could not be executed because this section does

not contain a subsec. (n).

Pub. L. 99-514, Sec. 613(a), redesignated subsec. (l), relating

to cross references, as (m).

1984 - Subsec. (i)(2). Pub. L. 98-369, Sec. 2354(d), substituted

"section 213(d)" for "section 213(e)".

Subsec. (j). Pub. L. 98-573 added subsec. (j). Former subsec. (j)

redesignated (k).

Subsec. (j)(3). Pub. L. 98-369, Sec. 512(b), added par. (3).

Subsec. (k). Pub. L. 98-573 redesignated former subsec. (j) as

(k).

1982 - Subsec. (a). Pub. L. 97-216 inserted provisions under

which amounts expended by Members of Congress within each taxable

year for living expenses shall not be deductible for income tax

purposes in excess of $3,000.

Subsec. (c)(1). Pub. L. 97-248, Sec. 288(a), substituted "is

unlawful under the Foreign Corrupt Practices Act of 1977" for

"would be unlawful under the laws of the United States if such laws

were applicable to such payment and to such official or employee"

after "government, the payment", and "(or is unlawful under the

Foreign Corrupt Practices Act of 1977)" for "(or would be unlawful

under the laws of the United States)" before "shall be upon the

Secretary".

Subsec. (h). Pub. L. 97-248, Sec. 128(b)(2), redesignated subsec.

(i), relating to State legislators' travel expenses away from home,

as (h). Former subsec. (h), relating to group health plans,

redesignated (i).

Subsec. (i). Pub. L. 97-248, Sec. 128(b)(2), redesignated former

subsec. (h), relating to group health plans, as (i). Former subsec.

(i), relating to State legislators' travel expenses away from home,

redesignated (h). Former subsec. (i), relating to cross references,

redesignated (j).

Subsec. (j). Pub. L. 97-248, Sec. 128(b)(1), redesignated former

subsec. (i), relating to cross references, as (j).

1981 - Subsec. (a). Pub L. 97-51 struck out provisions under

which amounts expended by Members of Congress within each taxable

year for living expenses could not be deductible for income tax

purposes in excess of $3,000.

Subsec. (h). Pub. L. 97-35 added subsec. (h) relating to group

health plans. Former subsec. (h), as added by Pub. L. 97-34 and

relating to State legislators' travel expenses away from home,

redesignated (i). See 1982 Amendment note above.

Pub. L. 97-34 added subsec. (h) relating to State legislators'

travel expenses away from home. Former subsec. (h), relating to

cross references, redesignated (i). See 1982 Amendment note above.

Subsec. (i). Pub. L. 97-35 redesignated former subsec. (h), as

added by Pub. L. 97-34 and relating to State legislators' travel

expenses away from home, as (i). See 1982 Amendment note above.

Pub. L. 97-34 redesignated former subsec. (h), relating to cross

references, as (i). See 1982 Amendment note above.

1976 - Subsec. (a). Pub. L. 94-455, Sec. 1901(c)(4), struck out

reference to Territory in provisions following par. (3).

Subsec. (c). Pub. L. 94-455, Sec. 1906(b)(13)(A), struck out in

pars. (1) and (2) "or his delegate" after "Secretary".

1971 - Subsec. (c). Pub. L. 92-178, Sec. 310(a)(2), substituted

"Illegal bribes, kickbacks, and other payments" for "Bribes and

illegal kickbacks" in heading.

Subsec. (c)(2). Pub. L. 92-178, Sec. 310(a)(1), substituted

provisions respecting "Other illegal payments" for former

provisions on "Other bribes or kickbacks" reading "If in a criminal

proceeding a taxpayer is convicted of making a payment (other than

a payment described in paragraph (1) which is an illegal bribe or

kickback, or his plea of guilty or nolo contendere to an indictment

or information charging the making of such a payment is entered or

accepted in such a proceeding, no deduction shall be allowed under

subsection (a) on account of such payment or any related payment

made prior to the date of the final judgment in such proceeding."

Subsec. (c)(3). Pub. L. 92-178, Sec. 310(a)(1), substituted

provisions respecting kickbacks, rebates, and bribes under medicare

and medicaid for former statute of limitations provisions.

1969 - Subsec. (c). Pub. L. 91-172, Sec. 902(b), designated

existing provisions as par. (1), extended the applicability of

nondeductible expenses for payments to any official or employee of

any government, or of any agency or instrumentality of any

government, and added pars. (2) and (3).

Subsecs. (f), (g). Pub. L. 91-172, Sec. 902(a), added subsecs.

(f) and (g). Former subsec. (f) redesignated (h).

Subsec. (h). Pub. L. 91-172, Secs. 516(c)(2)(A), 902(a),

redesignated former subsec. (f) as (h), substituted "(1) For" for

"For", and inserted reference to section 1253 for special rule

relating to the treatment of payments by a transferee of a

franchise, trademark, or trade name.

1962 - Subsec. (a)(2). Pub. L. 87-834, Sec. 4(b), substituted

"(including amounts expended for meals and lodging other than

amounts which are lavish or extravagant under the circumstances)"

for "including the entire amount expended for meals and lodging)".

Subsecs. (e), (f). Pub. L. 87-834, Sec. 3(a), added subsec. (e)

and redesignated former subsec. (e) as (f).

1960 - Subsec. (b). Pub. L. 86-779, Sec. 7(b), inserted "the

dollar limitations," after "the percentage limitations,".

Subsecs. (d), (e). Pub. L. 86-779, Sec. 8(a), added subsec. (d)

and redesignated former subsec. (d) as (e).

1958 - Subsecs. (c), (d). Pub. L. 85-866, Sec. 5(a), added

subsec. (c) and redesignated former subsec. (c) as (d).

 

EFFECTIVE DATE OF 2010 AMENDMENT

Pub. L. 111-240, title II, Sec. 2042(b), Sept. 27, 2010, 124

Stat. 2560, provided that: "The amendments made by this section

[amending this section] shall apply to taxable years beginning

after December 31, 2009."

Pub. L. 111-148, title IX, Sec. 9014(b), Mar. 23, 2010, 124 Stat.

870, provided that: "The amendment made by this section [amending

this section] shall apply to taxable years beginning after December

31, 2009, with respect to services performed after such date."

Pub. L. 111-148, title X, Sec. 10108(g)(2), Mar. 23, 2010, 124

Stat. 914, provided that: "The amendments made by this subsection

[amending this section] shall apply to vouchers provided after

December 31, 2013."

 

EFFECTIVE DATE OF 2008 AMENDMENT

Pub. L. 110-343, div. A, title III, Sec. 302(c)(1), Oct. 3, 2008,

122 Stat. 3806, provided that: "The amendment made by subsection

(a) [amending this section] shall apply to taxable years ending on

or after the date of the enactment of this Act [Oct. 3, 2008]."

 

EFFECTIVE DATE OF 2004 AMENDMENT

Pub. L. 108-357, title III, Sec. 318(c), Oct. 22, 2004, 118 Stat.

1470, provided that: "The amendments made by this section [amending

this section] shall apply to taxable years beginning after December

31, 2003."

Amendment by section 802(b)(2) of Pub. L. 108-357 effective Mar.

4, 2003, see section 802(d) of Pub. L. 108-357, set out as an

Effective Date note under section 4985 of this title.

 

EFFECTIVE DATE OF 2003 AMENDMENT

Amendment by Pub. L. 108-121 applicable to amounts paid or

incurred in taxable years beginning after Dec. 31, 2002, see

section 109(c) of Pub. L. 108-121, set out as a note under section

62 of this title.

 

EFFECTIVE DATE OF 1998 AMENDMENTS

Pub. L. 105-277, div. J, title II, Sec. 2002(b), Oct. 21, 1998,

112 Stat. 2681-901, provided that: "The amendment made by this

section [amending this section] shall apply to taxable years

beginning after December 31, 1998."

Amendment by Pub. L. 105-206 effective, except as otherwise

provided, as if included in the provisions of the Taxpayer Relief

Act of 1997, Pub. L. 105-34, to which such amendment relates, see

section 6024 of Pub. L. 105-206, set out as a note under section 1

of this title.

 

EFFECTIVE DATE OF 1997 AMENDMENT

Section 934(b) of Pub. L. 105-34 provided that: "The amendment

made by this section [amending this section] shall apply to taxable

years beginning after December 31, 1996."

Section 1203(c) of Pub. L. 105-34 provided that: "The amendments

made by this section [amending this section and repealing

provisions set out as a note below] shall apply to taxable years

beginning after December 31, 1997."

Section 1204(b) of Pub. L. 105-34 provided that: "The amendment

made by subsection (a) [amending this section] shall apply to

amounts paid or incurred with respect to taxable years ending after

the date of the enactment of this Act [Aug. 5, 1997]."

Amendment by section 1602(c) of Pub. L. 105-34 effective as if

included in the provisions of the Health Insurance Portability and

Accountability Act of 1996, Pub. L. 104-191, to which such

amendment relates, see section 1602(i) of Pub. L. 105-34, set out

as a note under section 26 of this title.

 

EFFECTIVE DATE OF 1996 AMENDMENTS

Amendment by section 311(a) of Pub. L. 104-191 applicable to

taxable years beginning after Dec. 31, 1996, see section 311(c) of

Pub. L. 104-191, set out as a note under section 104 of this title.

Section 322(c) of Pub. L. 104-191 provided that: "The amendments

made by this section [amending this section and section 213 of this

title] shall apply to taxable years beginning after December 31,

1996."

Section 1704(p)(4) of Pub. L. 104-188 provided that:

"(A) In general. - Except as provided in subparagraph (B), the

amendments made by this subsection [amending this section] shall

apply to amounts paid or incurred after September 13, 1995, in

taxable years ending after such date.

"(B) Paragraph (2). - The amendment made by paragraph (2)

[amending this section] shall take effect as if included in the

amendment made by section 613 of the Tax Reform Act of 1986 [Pub.

L. 99-514]."

 

EFFECTIVE DATE OF 1995 AMENDMENT

Section 1(c) of Pub. L. 104-7 provided that:

"(1) Extension. - The amendment made by subsection (a) [amending

this section] shall apply to taxable years beginning after December

31, 1993.

"(2) Increase. - The amendment made by subsection (b) [amending

this section] shall apply to taxable years beginning after December

31, 1994."

 

EFFECTIVE DATE OF 1993 AMENDMENT

Amendment by section 13131(d)(2) of Pub. L. 103-66 applicable to

taxable years beginning after Dec. 31, 1993, see section 13131(e)

of Pub. L. 103-66, set out as a note under section 32 of this

title.

Section 13174(a)(3) of Pub. L. 103-66 provided that: "The

amendments made by this subsection [amending this section and

repealing provisions set out below] shall apply to taxable years

ending after June 30, 1992."

Section 13174(b)(2) of Pub. L. 103-66 provided that: "The

amendment made by paragraph (1) [amending this section] shall apply

to taxable years beginning after December 31, 1992."

Section 13211(b) of Pub. L. 103-66 provided that: "The amendment

made by subsection (a) [amending this section] shall apply to

amounts which would otherwise be deductible for taxable years

beginning on or after January 1, 1994."

Section 13222(e) of Pub. L. 103-66 provided that: "The amendments

made by this section [amending this section and sections 170, 6033,

and 7871 of this title] shall apply to amounts paid or incurred

after December 31, 1993."

Section 13442(b) of Pub. L. 103-66, as amended by Pub. L. 104-7,

Sec. 5, Apr. 11, 1995, 109 Stat. 96, provided that: "The provisions

of this section [amending this section] shall apply to services

provided after February 2, 1993, and on or before December 31,

1995."

 

EFFECTIVE DATE OF 1992 AMENDMENT

Section 1938(b) of Pub. L. 102-486 provided that: "The amendment

made by subsection (a) [amending this section] shall apply to costs

paid or incurred after December 31, 1992."

 

EFFECTIVE DATE OF 1991 AMENDMENT

Section 110(b) of Pub. L. 102-227 provided that: "The amendment

made by this section [amending this section] shall apply to taxable

years beginning after December 31, 1991."

 

EFFECTIVE DATE OF 1990 AMENDMENT

Amendment by section 11111(d)(2) of Pub. L. 101-508 applicable to

taxable years beginning after Dec. 31, 1990, see section 11111(f)

of Pub. L. 101-508, set out as a note under section 32 of this

title.

Section 11410(c) of Pub. L. 101-508 provided that: "The

amendments made by this section [amending this section and

repealing provisions set out below] shall apply to taxable years

beginning after December 31, 1989."

 

EFFECTIVE DATE OF 1989 AMENDMENTS

Section 6202(b)(5) of Pub. L. 101-239 provided that: "The

amendments made by this subsection [amending this section, sections

4980B and 5000 of this title, sections 623 and 631 of Title 29,

Labor, and sections 1395p, 1395r, and 1395y of Title 42, The Public

Health and Welfare] shall apply to items and services furnished

after the date of the enactment of this Act [Dec. 19, 1989]."

Section 7107(c) of Pub. L. 101-239 provided that: "The amendments

made by this section [amending this section] shall apply to taxable

years beginning after December 31, 1989."

Section 7862(c)(3)(D) of Pub. L. 101-239 provided that: "The

amendments made by this paragraph [amending this section, section

4980B of this title, and section 1162 of Title 29, Labor] shall

apply to -

"(i) qualifying events occurring after December 31, 1989, and

"(ii) in the case of qualified beneficiaries who elected

continuation coverage after December 31, 1988, the period for

which the required premium was paid (or was attempted to be paid

but was rejected as such)."

Amendment by Pub. L. 101-140 effective as if included in section

1151 of Pub. L. 99-514, see section 203(c) of Pub. L. 101-140, set

out as a note under section 79 of this title.

 

EFFECTIVE DATE OF 1988 AMENDMENT

Amendment by sections 1011B(b)(1)-(3) and 1018(t)(7)(B) of Pub.

L. 100-647 effective, except as otherwise provided, as if included

in the provision of the Tax Reform Act of 1986, Pub. L. 99-514, to

which such amendment relates, see section 1019(a) of Pub. L. 100-

647, set out as a note under section 1 of this title.

Section 3011(d) of Pub. L. 100-647 provided that: "The amendments

made by this section [enacting section 4980B of this title, and

amending this section, sections 106 and 414 of this title, section

1167 of Title 29, Labor, and section 300bb-8 of Title 42, The

Public Health and Welfare] shall apply to taxable years beginning

after December 31, 1988, but shall not apply to any plan for any

plan year to which section 162(k) of the Internal Revenue Code of

1986 (as in effect on the day before the date of the enactment of

this Act [Nov. 10, 1988]) did not apply by reason of section

10001(e)(2) of the Consolidated Omnibus Budget Reconciliation Act

of 1985 [section 10001(e)(2) of Pub. L. 99-272, set out as an

Effective Date of 1986 Amendment note under section 106 of this

title]."

 

EFFECTIVE DATE OF 1986 AMENDMENTS

Section 613(b) of Pub. L. 99-514 provided that: "The amendments

made by subsection (a) [amending this section] shall apply to any

amount paid or incurred after February 28, 1986, in taxable years

ending after such date."

Section 1161(b) of Pub. L. 99-514 provided that:

"(1) In general. - The amendment made by this section [amending

this section] shall apply to taxable years beginning after December

31, 1986.

"(2) Transitional rule. - In the case of any year to which

section 89 of the Internal Revenue Code of 1986 does not apply,

[former] section 162(m)(2)(B) of such Code shall be applied by

substituting any nondiscrimination requirements otherwise

applicable for the requirements of section 89 of such Code.

"(3) Assistance. - The Secretary of the Treasury or his delegate

shall provide guidance to self-employed individuals to assist them

in meeting the requirements of section 89 of the Internal Revenue

Code of 1986 with respect to coverage required by the amendments

made by this section [amending this section]."

Section 1895(d)(6)(D) of Pub. L. 99-514 provided that: "The

amendments made by this paragraph [amending this section, section

1166 of Title 29, Labor, and section 300bb-6 of Title 42, The

Public Health and Welfare] shall only apply with respect to

qualifying events occurring after the date of the enactment of this

Act [Oct. 22, 1986]."

Section 1895(e) of Pub. L. 99-514 provided that: "Except as

otherwise provided in this section, the amendments made by this

section [amending this section, section 3121 of this title,

sections 1162 and 1165 to 1167 of Title 29, sections 300bb-2, 300bb-

5, 300bb-6, 410, 1301, 1320c-13, 1395p, 1395u, 1395cc, 1395dd,

1395mm, 1395ww, 1395yy, 1396a, 1396b, 1396d, and 1396s of Title 42,

enacting provisions set out as notes under this section, section

3121 of this title, section 1167 of Title 29, and sections 1395u,

1395y, 1395ww, and 1395yy of Title 42, and amending provisions set

out as notes under sections 403, 1395u, 1395cc, 1395mm, 1395ww,

1395yy, and 1396b of Title 42] shall be effective as if included in

the enactment of the Consolidated Omnibus Budget Reconciliation Act

of 1985 [Pub. L. 99-272]."

Amendment by section 9307(c)(2)(B) of Pub. L. 99-509 effective as

if included in the enactment of Tax Reform Act of 1986, Pub. L. 99-

514, see section 9307(c)(2) of Pub. L. 99-509, set out as a note

under section 1395u of Title 42.

Section 9501(e) of Pub. L. 99-509 provided that:

"(1) In general. - The amendments made by this section [amending

this section and sections 1162, 1163, 1166, and 1167 of Title 29,

Labor] shall take effect as if included in title X of the

Consolidated Omnibus Budget Reconciliation Act of 1985 [sections

10001 to 10003 of Pub. L. 99-272].

"(2) Treatment of certain bankruptcy proceedings. -

Notwithstanding paragraph (1), section 10001(e) of the Consolidated

Omnibus Budget Reconciliation Act of 1985 [set out as a note under

section 106 of this title], and section 10002(d) of such Act [set

out as a note under section 1161 of Title 29], the amendments made

by this section [amending this section and sections 1162, 1163,

1166, and 1167 of Title 29] and by sections 10001 and 10002 of such

Act [enacting sections 1161 to 1168 of Title 29, amending this

section, section 106 of this title, and section 1132 of Title 29,

and enacting provisions set out as notes under section 106 of this

title and sections 1161 and 1166 of Title 29] shall apply in the

case of plan years ending during the 12-month period beginning July

1, 1986, but only with respect to -

"(A) a qualifying event described in section 162(k)(3)(F) of

the Internal Revenue Code of 1986 or section 603(6) of the

Employee Retirement Income Security Act of 1974 [29 U.S.C.

1163(6)], and

"(B) a qualifying event described in section 162(k)(3)(A) of

the Internal Revenue Code of 1986 or section 603(1) of the

Employee Retirement Income Security Act of 1974 [29 U.S.C.

1163(1)] relating to the death of a retired employee occurring

after the date of the qualifying event described in subparagraph

(A).

"(3) Treatment of current retirees. - Section 162(k)(3)(F) of the

Internal Revenue Code of 1986 and section 603(6) of the Employee

Retirement Income Security Act of 1974 [29 U.S.C. 1163(6)] apply to

covered employees who retired before, on, or after the date of the

enactment of this Act [Oct. 21, 1986].

"(4) Notice. - In the case of a qualifying event described in

section 603(6) of the Employee Retirement Income Security Act of

1974 [29 U.S.C. 1163(6)] that occurred before the date of the

enactment of this Act [Oct. 21, 1986], the notice required under

section 606(2) of such Act [29 U.S.C. 1166(2)] (and under section

162(k)(6)(B) of the Internal Revenue Code of 1986) with respect to

such event shall be provided no later than 30 days after the date

of the enactment of this Act [Oct. 21, 1986]."

Amendment by Pub. L. 99-272 applicable to plan years beginning on

or after July 1, 1986, with special rule for collective bargaining

agreements, see section 10001(e) of Pub. L. 99-272, set out as a

note under section 106 of this title.

 

EFFECTIVE DATE OF 1984 AMENDMENTS

Section 232(b) of Pub. L. 98-573 provided that: "The amendment

made by subsection (a) [amending this section] shall apply to

taxable years beginning after the date of the enactment of this Act

[Oct. 30, 1984]."

Amendment by section 512(b) of Pub. L. 98-369 applicable to

amounts paid or incurred after July 18, 1984, in taxable years

ending after such date, subject to an exception for certain

extended vacation pay plans, see section 512(c) of Pub. L. 98-369,

set out as a note under section 404 of this title.

Amendment by section 2354(d) of Pub. L. 98-369 effective July 18,

1984, but not to be construed as changing or affecting any right,

liability, status, or interpretation which existed (under the

provisions of law involved) before that date, see section 2354(e)

of Pub. L. 98-369, set out as a note under section 1320a-1 of Title

42, The Public Health and Welfare.

 

EFFECTIVE DATE OF 1982 AMENDMENTS

Section 288(c) of Pub. L. 97-248 provided that: "The amendments

made by this section [amending this section and sections 952 and

964 of this title] shall apply to payments made after the date of

the enactment of this Act [Sept. 3, 1982]."

Amendment by section 128(b) of Pub. L. 97-248 effective as if

such amendment had been originally included as part of this section

as this section was amended by the Omnibus Budget Reconciliation

Act of 1981, Pub. L. 97-35, see section 128(e)(2) of Pub. L. 97-

248, set out as a note under section 1395x of Title 42, The Public

Health and Welfare.

Section 215(d) of Pub. L. 97-216 provided that: "The amendments

made by this section [amending this section and section 280A of

this title and repealing provisions set out as a note under this

section] shall apply to taxable years beginning after December 31,

1981."

 

EFFECTIVE DATE OF 1981 AMENDMENTS

Section 139(b)(3) of Pub. L. 97-51, as amended by Pub. L. 97-92,

Sec. 133a, Dec. 15, 1981, 95 Stat. 1199, provided that: "The

amendments made by this subsection [amending this section and

repealing section 31c of Title 2, The Congress] shall apply to

taxable years beginning after December 31, 1980."

Section 2146(c)(2) of Pub. L. 97-35 provided that: "The

amendments made by subsection (b) [amending this section] shall be

effective with respect to taxable years beginning on or after

January 1, 1982."

Section 127(b) of Pub. L. 97-34 provided that: "The amendment

made by subsection (a) [amending this section] shall apply to

taxable years beginning on or after January 1, 1976."

 

EFFECTIVE DATE OF 1976 AMENDMENT

Amendment by section 1901(c)(4) of Pub. L. 94-455 applicable with

respect to taxable years beginning after Dec. 31, 1976, see section

1901(d) of Pub. L. 94-455, set out as a note under section 2 of

this title.

 

EFFECTIVE DATE OF 1971 AMENDMENT

Section 310(b) of Pub. L. 92-178 provided that: "The amendments

made by subsection (a) [amending this section] shall apply with

respect to payments after December 30, 1969, except that section

162(c)(3) of the Internal Revenue Act of 1954 (as added by

subsection (a)) shall apply only with respect to kickbacks,

rebates, and bribes payment of which is made on or after the date

of the enactment of this Act [Dec. 10, 1971]."

 

EFFECTIVE DATE OF 1969 AMENDMENT

Section 902(c) of Pub. L. 91-172, as amended by Pub. L. 99-514,

Sec. 2, Oct. 22, 1986, 100 Stat. 2095, provided that: "Section

162(f) of the Internal Revenue Code of 1986 [formerly I.R.C. 1954]

(as added by subsection (a)) shall apply to all taxable years to

which such Code applies. Section 162(g) of such Code (as added by

subsection (a)) shall apply with respect to amounts paid or

incurred after December 31, 1969. Section 162(c)(1) of such Code

(as amended by subsection (b)) shall apply to all taxable years to

which such Code applies. Sections 162(c)(2) and (3) of such Code

(as amended by subsection (b)) shall apply with respect to payments

made after the date of the enactment of this Act [Dec. 30, 1969]."

Amendment by section 516(c)(2)(A) of Pub. L. 91-172 applicable to

transfers after Dec. 31, 1969, see section 516(d)(3) of Pub. L. 91-

172, set out as a note under section 1001 of this title.

 

EFFECTIVE DATE OF 1962 AMENDMENT

Section 4(c) of Pub. L. 87-834 provided that: "The amendments

made by this section [amending this section and enacting section

274 of this title] shall apply with respect to taxable years ending

after December 31, 1962, but only in respect of periods after such

date."

Section 3(b) of Pub. L. 87-834 provided that: "The amendments

made by this section [amending this section] shall apply to taxable

years beginning after December 31, 1962."

 

EFFECTIVE DATE OF 1960 AMENDMENT

Section 7(c) of Pub. L. 86-779 provided that: "The amendments

made by subsections (a) and (b) [amending this section and section

170 of this title] shall apply with respect to taxable years

beginning after December 31, 1959."

Section 8(d) of Pub. L. 86-779 provided that: "The amendments

made by subsections (a), (b), and (c) [amending this section and

section 1054 of this title and amending table of sections for Part

IV by adding item 1054 and numbering former item 1054 as 1055]

shall apply with respect to taxable years beginning after December

31, 1959."

 

EFFECTIVE DATE OF 1958 AMENDMENT

Section 5(b) of Pub. L. 85-866 provided that: "The amendment made

by subsection (a) [amending this section] shall apply only with

respect to expenses paid or incurred after the date of the

enactment of this Act [Sept. 2, 1958]. The determination as to

whether any expense paid or incurred on or before the date of the

enactment of this Act shall be allowed as a deduction shall be made

as if this section had not been enacted and without inference drawn

from the fact that this section is not made applicable with respect

to expenses paid or incurred on or before the date of the enactment

of this Act."

 

DEDUCTION FOR SPECIAL ASSESSMENTS

Pub. L. 104-208, div. A, title II, Sec. 2711, Sept. 30, 1996, 110

Stat. 3009-498, provided that, for purposes of subtitle A of this

title, the amount allowed as a deduction under this section for a

taxable year would include any amount paid during that year by

reason of an assessment under section 2702 of Pub. L. 104-208,

formerly set out as a note under section 1817 of Title 12, Banks

and Banking, and that section 172(f) of this title would not apply

to that deduction.

 

SPECIAL RULE FOR DEDUCTIONS UNDER SUBSECTION (L) FOR CERTAIN

TAXABLE YEARS

Section 110(a)(2) of Pub. L. 102-227 provided that, in the case

of any taxable year beginning in 1992 only amounts paid before July

1, 1992, by the individual for insurance coverage for periods

before July 1, 1992, would be taken into account in determining the

amount deductible under subsec. (l) of this section with respect to

such individual for such taxable year, and that for purposes of

subparagraph (A) of subsec. (l)(2) of this section, the amount of

the earned income described in such subparagraph taken into account

for such taxable year would be the amount which bears the same

ratio to the total amount of such earned income as the number of

months in such taxable year ending before July 1, 1992, bears to

the number of months in such taxable year, prior to repeal by Pub.

L. 103-66, title XIII, Sec. 13174(a)(2), Aug. 10, 1993, 107 Stat.

457.

Section 7107(a)(2) of Pub. L. 101-239 provided that, in the case

of any taxable year beginning in 1990 only amounts paid before Oct.

1, 1990, by the individual for insurance coverage for periods

before Oct. 1, 1990, would be taken into account in determining the

amount deductible under subsec. (l) of this section with respect to

such individual for such taxable year, and that for purposes of

subsec. (l)(2)(A) of this section, the amount of the earned income

described in such paragraph taken into account for such taxable

year would be the amount which bears the same ratio to the total

amount of such earned income as the number of months in such

taxable year ending before Oct. 1, 1990, bears to the number of

months in such taxable year, prior to repeal by Pub. L. 101-508,

title XI, Sec. 11410(b), Nov. 5, 1990, 104 Stat. 1388-479.

 

BUSINESS USE OF AUTOMOBILES BY RURAL MAIL CARRIERS

Section 6008 of Pub. L. 100-647 provided that in the case of any

employee of the United States Postal Service who performed services

involving the collection and delivery of mail on a rural route,

such employee was permitted to compute the amount allowable as a

deduction under this chapter for the use of an automobile in

performing such services by using a standard mileage rate for all

miles of such use equal to 150 percent of the basic standard rate,

prior to repeal by Pub. L. 105-34, title XII, Sec. 1203(b), Aug. 5,

1997, 111 Stat. 995. See subsec. (o) of this section.

 

PLAN AMENDMENTS NOT REQUIRED UNTIL JANUARY 1, 1989

For provisions directing that if any amendments made by subtitle

A or subtitle C of title XI [Secs. 1101-1147 and 1171-1177] or

title XVIII [Secs. 1800-1899A] of Pub. L. 99-514 require an

amendment to any plan, such plan amendment shall not be required to

be made before the first plan year beginning on or after Jan. 1,

1989, see section 1140 of Pub. L. 99-514, as amended, set out as a

note under section 401 of this title.

 

LIVING EXPENSES OF MEMBERS OF CONGRESS WHILE AWAY FROM HOME; SENSE

OF CONGRESS

Section 139(a) of Pub. L. 97-51, which expressed the sense of

Congress that the dollar limits on tax deductions for living

expenses of Members of Congress while away from home be the same as

such limits for businessmen and other private citizens, was

repealed by Pub. L. 97-216, title II, Sec. 215(c), July 18, 1982,

96 Stat. 194.

 

STATE LEGISLATORS' TRAVEL EXPENSES AWAY FROM HOME

Section 604 of Pub. L. 94-455, as amended by Pub. L. 95-30, title

III, Sec. 307, May 23, 1977, 91 Stat. 153; Pub. L. 95-258, Sec. 2,

Apr. 7, 1978, 92 Stat. 195; Pub. L. 96-167, Sec. 3, Dec. 29, 1979,

93 Stat. 1275; Pub. L. 96-178, Sec. 1, Jan. 2, 1980, 93 Stat. 1295;

Pub. L. 99-514, Sec. 2, Oct. 22, 1986, 100 Stat. 2095, provided

that:

"(a) In General. - For purposes of section 162(a) of the Internal

Revenue Code of 1986 [formerly I.R.C. 1954], in the case of any

individual who was a State legislator at any time during any

taxable year beginning before January 1, 1981, and who, for the

taxable year, elects the application of this section, for any

period during such a taxable year in which he was a State

legislator -

"(1) the place of residence of such individual within the

legislative district which he represented shall be considered his

home, and

"(2) he shall be deemed to have expended for living expenses

(in connection with his trade or business as a legislator) an

amount equal to the sum of the amounts determined by multiplying

each legislative day of such individual during the taxable year

by the amount generally allowable with respect to such day to

employees of the executive branch of the Federal Government for

per diem while away from home but serving in the United States.

"(b) Legislative Days. - For purposes of subsection (a), a

legislative day during any taxable year for any individual shall be

any day during such year on which (1) the legislature was in

session (including any day in which the legislature was not in

session for a period of 4 consecutive days or less), or (2) the

legislature was not in session but the physical presence of the

individual was formally recorded at a meeting of a committee of

such legislature.

"(c) Limitation. - The amount taken into account as living

expenses attributable to a trade or business as a State legislator

for any taxable year beginning before January 1, 1976, under an

election made under this section shall not exceed the amount

claimed for such purpose under a return (or amended return) filed

before May 21, 1976.

"(d) Making and Effect of Election. - An election under this

section shall be made at such time and in such manner as the

Secretary of the Treasury or his delegate shall by regulations

prescribe."

[Amendment of section 604 of Pub. L. 94-455 by section 1 of Pub.

L. 96-178, which purported to substitute "January 1, 1979" for

"January 1, 1978", was not executed because of the prior amendment

by section 3(a)(2), (b) of Pub. L. 96-167 which substituted

"January 1, 1981" for "January 1, 1978" in subsec. (a) and which

struck out the last sentence of subsec. (d).]

 

DENIAL OF DEDUCTION FOR AMOUNTS PAID OR INCURRED ON JUDGMENTS IN

SUITS BROUGHT TO RECOVER PRICE INCREASES IN PURCHASE OF NEW

PRINCIPAL RESIDENCE

No deductions to be allowed in computing taxable income for two-

thirds of any amount paid or incurred on a judgment entered

against any person in a suit brought under section 208(b) of Pub.

L. 94-12, see section 208(c) of Pub. L. 94-12, title II, Mar. 29,

1975, 89 Stat. 35, set out as a note under section 44 of this

title.

 

DEDUCTIBILITY OF ACCRUED VACATION PAY

Section 97 of Pub. L. 85-866, as amended by Pub. L. 86-496, Sec.

2, June 8, 1960, 74 Stat. 164; Pub. L. 88-153, Oct. 17, 1963, 77

Stat. 272; Pub. L. 88-554, Sec. 1, Aug. 31, 1964, 78 Stat. 761;

Pub. L. 89-692, Oct. 15, 1966, 80 Stat. 1025; Pub. L. 91-172, title

IX, Sec. 903, Dec. 30, 1969, 83 Stat. 711; Pub. L. 92-580, Sec. 3,

Oct. 27, 1972, 86 Stat. 1276, provided that deductions for accrued

vacation pay under this section would not be denied for any taxable

year ending before Jan. 1, 1973, so long as the employee at the

time of accrual of pay has performed the necessary qualifying

service under an appropriate plan.

 

INVESTIGATION OF, AND REPORTS ON, TREATMENT OF ENTERTAINMENT AND

CERTAIN OTHER EXPENSES

Pub. L. 86-564, title III, Sec. 301, June 30, 1960, 74 Stat. 291,

authorized the Joint Committee on Internal Revenue Taxation to

investigate and report on the use of entertainment and certain

other expense deductions to the 87th Congress and authorized the

Secretary of the Treasury to report to the 87th Congress on the

enforcement program of the Internal Revenue Service relating to

such deductions.

 

FILING OF CLAIMS FOR REFUNDS OF OVERPAYMENTS

Extension of time for filing of claims for refunds or credit of

overpayments of income tax resulting from application of this

section, see section 96 of Pub. L. 85-866, set out as a note under

section 6511 of this title.

 

-End-