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26 U.S.C. § 196

Deduction for certain unused business credits

United States · Title 26 — INTERNAL REVENUE CODE · Status: effective

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26 U.S.C. § 196, Deduction for certain unused business credits, United States, version 1 as recorded 2026-07-09, yourstate.us, https://yourstate.us/provision/462290
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If any portion of the qualified business credits determined for any taxable year has not, after the application of section 38(c), been allowed to the taxpayer as a credit under section 38 for any taxable year, an amount equal to the credit not so allowed shall be allowed to the taxpayer as a deduction for the first taxable year following the last taxable year for which such credit could, under section 39, have been allowed as a credit. If a taxpayer dies or ceases to exist before the first taxable year following the last taxable year for which the qualified business credits could, under section 39, have been allowed as a credit, the amount described in subsection (a) (or the proper portion thereof) shall, under regulations prescribed by the Secretary, be allowed to the taxpayer as a deduction for the taxable year in which such death or cessation occurs. For purposes of this section, the term “qualified business credits” means— Subsection (a) shall be applied by substituting “an amount equal to 50 percent of” for “an amount equal to” in the case of the investment credit determined under section 46 (other than the rehabilitation credit).

Legislative history

The public laws that enacted or amended this section. Tallies are for the whole bill as it passed each chamber — often an omnibus covering far more than this provision — not a vote on this section alone.