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26 U.S.C. § 53 — Credit for prior year minimum tax liability

submitted 40 years ago by Pub. L. 99-514 to r/title-26-INTERNAL-REVENUE-CODE · 416 words · no verdicts yet

in plain englishAI-generated · not legal advice

This section lets a taxpayer credit unused minimum tax from prior years against this year's regular tax. The credit cannot exceed regular tax, after certain credits, minus the tentative minimum tax. Corporations follow special versions of these rules for tax years after 2022.

(a) Allowance of credit: You can subtract a credit from the tax you owe under this chapter. The credit is called the "minimum tax credit" for that year. (b) Minimum tax credit: This subsection defines the credit. It's the amount by which the "adjusted net minimum tax" you paid in all earlier years after 1986 is more than the credits you already used from those years. In short, it's your leftover minimum tax from the past that you haven't used yet. (c) Limitation: The credit can't be bigger than a certain ceiling. Take your regular tax liability for the year. Subtract certain other credits (from subparts A, B, D, E, and F of this part). Then subtract your "tentative minimum tax" for the year. Whatever is left over is the most credit you can claim. (d) Definitions: (1) "Net minimum tax" means the tax imposed by section 55 (the alternative minimum tax). (A) In general, that's the starting point. (B) But you don't get credit for certain kinds of minimum tax, called "exclusion preferences." (i) The "adjusted net minimum tax" is your net minimum tax, minus what your net minimum tax would have been if only the items listed in clause (ii) counted. (ii) Those specified items are: the adjustment in section 56(b)(1), and the tax preference items described in section 57(a)(1), (5), and (7). (iii) For a corporation, though, this reduction doesn't apply. A corporation's adjusted net minimum tax is simply its full net minimum tax for the year. (2) "Tentative minimum tax" has the same meaning given in section 55(b). (e) Application to applicable corporations: For corporations defined as "applicable corporations": (1) When figuring the credit under subsection (b), use "the net minimum tax for all prior years after 2022" instead of "the adjusted net minimum tax for all prior years after 1986." (2) The ceiling described in subsection (c)(1) is increased by the amount of tax the corporation owes under section 59A for that year.
the actual law source: uscode.house.gov ↗public domain
(a) Allowance of credit

There shall be allowed as a credit against the tax imposed by this chapter for any taxable year an amount equal to the minimum tax credit for such taxable year.

(b) Minimum tax credit

For purposes of subsection (a), the minimum tax credit for any taxable year is the excess (if any) of—

(1)

the adjusted net minimum tax imposed for all prior taxable years beginning after 1986, over

(2)

the amount allowable as a credit under subsection (a) for such prior taxable years.

(c) Limitation

The credit allowable under subsection (a) for any taxable year shall not exceed the excess (if any) of—

(1)

the regular tax liability of the taxpayer for such taxable year reduced by the sum of the credits allowable under subparts A, B, D, E, and F of this part, over

(2)

the tentative minimum tax for the taxable year.

(d) Definitions

For purposes of this section—

(1) Net minimum tax
(A) In general

The term “net minimum tax” means the tax imposed by section 55.

(B) Credit not allowed for exclusion preferences
(i) Adjusted net minimum tax

The adjusted net minimum tax for any taxable year is—

(I)

the amount of the net minimum tax for such taxable year, reduced by

(II)

the amount which would be the net minimum tax for such taxable year if the only adjustments and items of tax preference taken into account were those specified in clause (ii).

(ii) Specified items

The following are specified in this clause—

(I)

the adjustments provided for in subsection (b)(1) of section 56, and

(II)

the items of tax preference described in paragraphs (1), (5), and (7) of section 57(a).

(iii) Credit allowable for exclusion preferences of corporations

In the case of a corporation—

(I)

the preceding provisions of this subparagraph shall not apply, and

(II)

the adjusted net minimum tax for any taxable year is the amount of the net minimum tax for such year.

(2) Tentative minimum tax

The term “tentative minimum tax” has the meaning given to such term by section 55(b).

(e) Application to applicable corporations

In the case of a corporation—

(1)

subsection (b)(1) shall be applied by substituting “the net minimum tax for all prior taxable years beginning after 2022” for “the adjusted net minimum tax imposed for all prior taxable years beginning after 1986”, and

(2)

the amount determined under subsection (c)(1) shall be increased by the amount of tax imposed under section 59A for the taxable year.

Source credit: (Added Pub. L. 99–514, title VII, § 701(b), Oct. 22, 1986, 100 Stat. 2339; amended Pub. L. 100–647, title I, § 1007(g)(4), title VI, § 6304(a), Nov. 10, 1988, 102 Stat. 3435, 3756; Pub. L. 101–239, title VII, §§ 7612(a)(1), (2), (b)(1), 7811(d)(2), Dec. 19, 1989, 103 Stat. 2373, 2374, 2408; Pub. L. 102–486, title XIX, § 1913(b)(2)(C), Oct. 24, 1992, 106 Stat. 3020; Pub. L. 103–66, title XIII, §§ 13113(b)(2), 13171(c), Aug. 10, 1993, 107 Stat. 429, 455; Pub. L. 104–188, title I, §§ 1205(d)(5), 1704(j)(1), Aug. 20, 1996, 110 Stat. 1776, 1881; Pub. L. 108–357, title IV, § 421(a)(2), Oct. 22, 2004, 118 Stat. 1514; Pub. L. 109–58, title XIII, § 1322(a)(3)(G), Aug. 8, 2005, 119 Stat. 1012; Pub. L. 109–432, div. A, title IV, § 402(a), Dec. 20, 2006, 120 Stat. 2953; Pub. L. 110–172, § 2(a), Dec. 29, 2007, 121 Stat. 2473; Pub. L. 110–343, div. C, title I, § 103(a), (b), Oct. 3, 2008, 122 Stat. 3863; Pub. L. 111–5, div. B, title I, § 1142(b)(4), Feb. 17, 2009, 123 Stat. 331; Pub. L. 113–295, div. A, title II, § 221(a)(8)(A)(i), Dec. 19, 2014, 128 Stat. 4038; Pub. L. 115–97, title I, §§ 12001(b)(2), 12002(a), (b), Dec. 22, 2017, 131 Stat. 2092, 2094; Pub. L. 116–136, div. A, title II, § 2305(a), (b), Mar. 27, 2020, 134 Stat. 357; Pub. L. 117–169, title I, § 10101(e), Aug. 16, 2022, 136 Stat. 1828.)

history & why it existsrecord from the source credit
  • 1986Enacted · Pub. L. 99-514 · 100 Stat. 2339
  • 1988Amended · Pub. L. 100-647 · 102 Stat. 3435, 3756
  • 1989Amended · Pub. L. 101-239 · 103 Stat. 2373, 2374, 2408
  • 1992Amended · Pub. L. 102-486 · 106 Stat. 3020
  • 1993Amended · Pub. L. 103-66 · 107 Stat. 429, 455
  • 1996Amended · Pub. L. 104-188 · 110 Stat. 1776, 1881
  • 2004Amended · Pub. L. 108-357 · 118 Stat. 1514
  • 2005Amended · Pub. L. 109-58 · 119 Stat. 1012
  • 2006Amended · Pub. L. 109-432 · 120 Stat. 2953
  • 2007Amended · Pub. L. 110-172 · 121 Stat. 2473
  • 2008Amended · Pub. L. 110-343 · 122 Stat. 3863
  • 2009Amended · Pub. L. 111-5 · 123 Stat. 331
  • 2014Amended · Pub. L. 113-295 · 128 Stat. 4038
  • 2017Amended · Pub. L. 115-97 · 131 Stat. 2092, 2094
  • 2020Amended · Pub. L. 116-136 · 134 Stat. 357
  • 2022Amended · Pub. L. 117-169 · 136 Stat. 1828

A history note hasn’t been published yet. The record shows enactment by Pub. L. 99-514 on 1986-10-22.

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