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26 U.S.C. § 68 — Overall limitation on itemized deductions

submitted 36 years ago by Pub. L. 101-508 to r/title-26-INTERNAL-REVENUE-CODE · 118 words · no verdicts yet

in plain englishAI-generated · not legal advice

For an individual, itemized deductions get cut by 2/37 of the smaller of two amounts: the itemized deductions themselves, or the taxable income above where the 37% tax bracket starts. This cut applies after any other limit on a specific deduction.

(a) General rule: For an individual, the itemized deductions otherwise allowed for the year (figured without this section) are reduced. The reduction equals 2/37 of the lesser of two numbers: the amount of itemized deductions, or the amount by which the taxpayer's taxable income — figured without this section, and increased by the itemized-deduction amount — exceeds the dollar level where the 37 percent tax bracket under section 1 begins for that taxpayer.

(b) Coordination with other limitations: This section is applied after any other limitation on an itemized deduction has already been applied — so other caps come first, and this reduction is calculated on what's left.

the actual law source: uscode.house.gov ↗public domain
(a) In general

In the case of an individual, the amount of the itemized deductions otherwise allowable for the taxable year (determined without regard to this section) shall be reduced by 2⁄37 of the lesser of—

(1)

such amount of itemized deductions, or

(2)

so much of the taxable income of the taxpayer for the taxable year (determined without regard to this section and increased by such amount of itemized deductions) as exceeds the dollar amount at which the 37 percent rate bracket under section 1 begins with respect to the taxpayer.

(b) Coordination with other limitations

This section shall be applied after the application of any other limitation on the allowance of any itemized deduction.

Source credit: (Added Pub. L. 101–508, title XI, § 11103(a), Nov. 5, 1990, 104 Stat. 1388–406; amended Pub. L. 103–66, title XIII, §§ 13201(b)(3)(E), 13204, Aug. 10, 1993, 107 Stat. 459, 462; Pub. L. 105–277, div. J, title IV, § 4004(b)(2), Oct. 21, 1998, 112 Stat. 2681–911; Pub. L. 107–16, title I, § 103(a), June 7, 2001, 115 Stat. 44; Pub. L. 112–240, title I, § 101(b)(2)(A), Jan. 2, 2013, 126 Stat. 2316; Pub. L. 115–97, title I, §§ 11002(d)(2), 11046(a), Dec. 22, 2017, 131 Stat. 2061, 2088; Pub. L. 115–141, div. U, title IV, § 401(a)(33), Mar. 23, 2018, 132 Stat. 1186; Pub. L. 119–21, title VII, § 70111(a), July 4, 2025, 139 Stat. 164.)

history & why it existsrecord from the source credit
  • 1990Enacted · Pub. L. 101-508 · 104 Stat. 1388
  • 1993Amended · Pub. L. 103-66 · 107 Stat. 459, 462
  • 1998Amended · Pub. L. 105-277 · 112 Stat. 2681
  • 2001Amended · Pub. L. 107-16 · 115 Stat. 44
  • 2013Amended · Pub. L. 112-240 · 126 Stat. 2316
  • 2017Amended · Pub. L. 115-97 · 131 Stat. 2061, 2088
  • 2018Amended · Pub. L. 115-141 · 132 Stat. 1186
  • 2025Amended · Pub. L. 119-21 · 139 Stat. 164

A history note hasn’t been published yet. The record shows enactment by Pub. L. 101-508 on 1990-11-05.

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