r/title-26-INTERNAL-REVENUE-CODE wiki — defined terms

“certified historic structure” applies in that section

The term “certified historic structure” means any building (and its structural components) which— (i) is listed in the National Register, or (ii) is located in a registered historic district and is certified by the Secretary of the Interior to the Secretary as being of historic significance to the district. (B) Registered historic district

“certified rehabilitation” applies in that section

the term “certified rehabilitation” means any rehabilitation of a certified historic structure which the Secretary of the Interior has certified to the Secretary as being consistent with the historic character of such property or the district in which such property is located. (D) Nonresidential real property; residential rental property; class life For purposes of subparagraph (A), the terms “nonresidential real property,” “residential rental property,” and “class life” have the respective meanings given such terms by section 168. (3) Certified historic structure defined (A) In general

“normal rehabilitation period” applies in that section

the term “normal rehabilitation period” means the period reasonably expected to be required for the rehabilitation of the building— (i) beginning with the date on which physical work on the rehabilitation begins (or, if later, the first day of the first taxable year to which an election under this subsection applies), and (ii) ending on the date on which it is expected that the property will be available for placing in service. (3) Special rules for applying paragraph (1) For purposes of paragraph (1)— (A) Component parts, etc.

“qualified rehabilitated building” applies in that section

The term “qualified rehabilitated building” means any building (and its structural components) if— (i) such building has been substantially rehabilitated, (ii) such building was placed in service before the beginning of the rehabilitation, (iii) such building is a certified historic structure, and (iv) depreciation (or amortization in lieu of depreciation) is allowable with respect to such building.

“qualified rehabilitation expenditure” applies in that section

The term “qualified rehabilitation expenditure” means any amount properly chargeable to capital account— (i) for property for which depreciation is allowable under section 168 and which is— (I) nonresidential real property, (II) residential rental property, (III) real property which has a class life of more than 12.5 years, or (IV) an addition or improvement to property described in subclause (I), (II), or (III), and (ii) in connection with the rehabilitation of a qualified rehabilitated building.

“registered historic district” applies in that section

The term “registered historic district” means— (i) any district listed in the National Register, and (ii) any district— (I) which is designated under a statute of the appropriate State or local government, if such statute is certified by the Secretary of the Interior to the Secretary as containing criteria which will substantially achieve the purpose of preserving and rehabilitating buildings of historic significance to the district, and (II) which is certified by the Secretary of the Interior to the Secretary as meeting substantially all of the requirements for the listing of districts in the National Register.

“self-rehabilitated building” applies in that section

the term “self-rehabilitated building” means any building if it is reasonable to believe that more than half of the qualified rehabilitation expenditures for such building will be made directly by the taxpayer. (5) Election This subsection shall apply to any taxpayer only if such taxpayer has made an election under this paragraph. Such an election shall apply to the taxable year for which made and all subsequent taxable years. Such an election, once made, may be revoked only with the consent of the Secretary.

“annual capacity limitation” applies in that section

the term “annual capacity limitation” means 1.8 gigawatts of direct current capacity for each of calendar years 2023 and 2024, and zero thereafter. (D) Carryover of unused limitation If the annual capacity limitation for any calendar year exceeds the aggregate amount allocated for such year under this paragraph, such limitation for the succeeding calendar year shall be increased by the amount of such excess. No amount may be carried under the preceding sentence to any calendar year after 2024 except as provided in section 48E(h)(4)(D)(ii).

“applicable capacity” applies in that section

the term “applicable capacity” means 15 megawatts or a mechanical energy capacity of more than 20,000 horsepower or an equivalent combination of electrical and mechanical energy capacities. (iii) Maximum capacity The term “combined heat and power system property” shall not include any property comprising a system if such system has a capacity in excess of 50 megawatts or a mechanical energy capacity in excess of 67,000 horsepower or an equivalent combination of electrical and mechanical energy capacities.

“combined heat and power system property” applies in that section

The term “combined heat and power system property” means property comprising a system— (i) which uses the same energy source for the simultaneous or sequential generation of electrical power, mechanical shaft power, or both, in combination with the generation of steam or other forms of useful thermal energy (including heating and cooling applications), (ii) which produces— (I) at least 20 percent of its total useful energy in the form of thermal energy which is not used to produce electrical or mechanical power (or combination thereof), and (II) at least 20 percent of its total useful energy in the form of electrical or mechanical power (or combination thereof), (iii) the energy efficiency …

“eligible property” applies in that section

the term “eligible property” means energy property which— (A) is part of a facility described in section 45(d)(1) for which an election was made under subsection (a)(5), or (B) is described in clause (i) or (vi) of subsection (a)(3)(A), including energy storage technology (as described in subsection (a)(3)(A)(ix)) installed in connection with such energy property. (4) Allocations (A) In general Not later than 180 days after the date of enactment of this subsection, the Secretary shall establish a program to allocate amounts of environmental justice solar and wind capacity limitation to qualified solar and wind facilities.

“energy project” applies in that section

the term “energy project” means a project consisting of one or more energy properties that are part of a single project. (B) Project requirements A project meets the requirements of this subparagraph if it is one of the following: (i) A project with a maximum net output of less than 1 megawatt of electrical (as measured in alternating current) or thermal energy. (ii) A project the construction of which begins before the date that is 60 days after the Secretary publishes guidance with respect to the requirements of paragraphs (10)(A) and (11). (iii) A project which satisfies the requirements of paragraphs (10)(A) and (11).

“energy property” applies throughout its subpart

the term “energy property” means any property— (A) which is— (i) equipment which uses solar energy to generate electricity, to heat or cool (or provide hot water for use in) a structure, or to provide solar process heat, excepting property used to generate energy for the purposes of heating a swimming pool, (ii) equipment which uses solar energy to illuminate the inside of a structure using fiber-optic distributed sunlight, or electrochromic glass which uses electricity to change its light transmittance properties in order to heat or cool a structure, but only with respect to property the construction of which begins before January 1, 2025 , (iii) equipment used to produce, distribute, or …

“energy storage technology” applies in that section

The term “energy storage technology” means— (i) property (other than property primarily used in the transportation of goods or individuals and not for the production of electricity) which receives, stores, and delivers energy for conversion to electricity (or, in the case of hydrogen, which stores energy), and has a nameplate capacity of not less than 5 kilowatt hours, and (ii) thermal energy storage property.

“fuel cell power plant” applies in that section

The term “fuel cell power plant” means an integrated system comprised of a fuel cell stack assembly, or linear generator assembly, and associated balance of plant components which converts a fuel into electricity using electrochemical or electromechanical means. (D) Linear generator assembly The term “linear generator assembly” does not include any assembly which contains rotating parts. (E) Termination The term “qualified fuel cell property” shall not include any property the construction of which does not begin before January 1, 2025 . (2) Qualified microturbine property (A) In general

“interconnection agreement” applies in that section

The term “interconnection agreement” means an agreement with a utility for the purposes of interconnecting the energy property owned by such taxpayer to the transmission or distribution system of such utility. (D) Utility For purposes of this paragraph,

“microgrid controller” applies in that section

The term “microgrid controller” means equipment which is— (i) part of a qualified microgrid, and (ii) designed and used to monitor and control the energy resources and loads on such microgrid. (B) Qualified microgrid

“qualified biogas property” applies in that section

The term “qualified biogas property” means property comprising a system which— (i) converts biomass (as defined in section 45K(c)(3), as in effect on the date of enactment of this paragraph) into a gas which— (I) consists of not less than 52 percent methane by volume, or (II) is concentrated by such system into a gas which consists of not less than 52 percent methane, and (ii) captures such gas for sale or productive use, and not for disposal via combustion. (B) Inclusion of cleaning and conditioning property

“qualified clean hydrogen” applies in that section

the term “qualified clean hydrogen” has the meaning given such term by section 45V(c)(2). (E) Regulations The Secretary shall issue such regulations or other guidance as the Secretary determines necessary to carry out the purposes of this section, including regulations or other guidance which recaptures so much of any credit allowed under this section as exceeds the amount of the credit which would have been allowed if the expected production were consistent with the actual verified production (or all of the credit so allowed in the absence of such verification).

“qualified fuel cell property” applies in that section

The term “qualified fuel cell property” means a fuel cell power plant which— (i) has a nameplate capacity of at least 0.5 kilowatt (1 kilowatt in the case of a fuel cell power plant with a linear generator assembly) of electricity using an electrochemical or electromechanical process, and (ii) has an electricity-only generation efficiency greater than 30 percent. (B) Limitation In the case of qualified fuel cell property placed in service during the taxable year, the credit otherwise determined under subsection (a) for such year with respect to such property shall not exceed an amount equal to $1,500 for each 0.5 kilowatt of capacity of such property. (C) Fuel cell power plant

“qualified interconnection property” applies in that section

The term “qualified interconnection property” means, with respect to an energy project which is not a microgrid controller, any tangible property— (i) which is part of an addition, modification, or upgrade to a transmission or distribution system which is required at or beyond the point at which the energy project interconnects to such transmission or distribution system in order to accommodate such interconnection, (ii) either— (I) which is constructed, reconstructed, or erected by the taxpayer, or (II) for which the cost with respect to the construction, reconstruction, or erection of such property is paid or incurred by such taxpayer, and (iii) the original use of which, pursuant to an …

“qualified investment credit facility” applies in that section

the term “qualified investment credit facility” means any facility— (i) which is a qualified facility (within the meaning of section 45) described in paragraph (1), (2), (3), (4), (6), (7), (9), or (11) of section 45(d), (ii) which is placed in service after 2008 and the construction of which begins before January 1, 2025 , and (iii) with respect to which— (I) no credit has been allowed under section 45, and (II) the taxpayer makes an irrevocable election to have this paragraph apply. (D) Qualified property For purposes of this paragraph,

“qualified microgrid” applies in that section

The term “qualified microgrid” means an electrical system which— (i) includes equipment which is capable of generating not less than 4 kilowatts and not greater than 20 megawatts of electricity, (ii) is capable of operating— (I) in connection with the electrical grid and as a single controllable entity with respect to such grid, and (II) independently (and disconnected) from such grid, and (iii) is not part of a bulk-power system (as defined in section 215 of the Federal Power Act ( 16 U.S.C. 824 o )). (C) Termination The term “microgrid controller” shall not include any property the construction of which begins after December 31, 2024 .

“qualified microturbine property” applies in that section

The term “qualified microturbine property” means a stationary microturbine power plant which— (i) has a nameplate capacity of less than 2,000 kilowatts, and (ii) has an electricity-only generation efficiency of not less than 26 percent at International Standard Organization conditions. (B) Limitation In the case of qualified microturbine property placed in service during the taxable year, the credit otherwise determined under subsection (a) for such year with respect to such property shall not exceed an amount equal to $200 for each kilowatt of capacity of such property. (C) Stationary microturbine power plant

“qualified offshore wind facility” applies in that section

the term “qualified offshore wind facility” means a qualified facility (within the meaning of section 45) described in paragraph (1) of section 45(d) (determined without regard to any date by which the construction of the facility is required to begin) which is located in the inland navigable waters of the United States or in the coastal waters of the United States.

“qualified property” applies in that section

the term “qualified property” means property— (i) which is— (I) tangible personal property, or (II) other tangible property (not including a building or its structural components), but only if such property is used as an integral part of the qualified investment credit facility, (ii) with respect to which depreciation (or amortization in lieu of depreciation) is allowable, (iii) which is constructed, reconstructed, erected, or acquired by the taxpayer, and (iv) the original use of which commences with the taxpayer.

“qualified small wind energy property” applies in that section

The term “qualified small wind energy property” means property which uses a qualifying small wind turbine to generate electricity. (B) Qualifying small wind turbine

“qualified solar and wind facility” applies in that section

The term “qualified solar and wind facility” means any facility— (i) which generates electricity solely from property described in section 45(d)(1) or in clause (i) or (vi) of subsection (a)(3)(A), (ii) which has a maximum net output of less than 5 megawatts (as measured in alternating current), and (iii) which— (I) is located in a low-income community (as defined in section 45D(e)) or on Indian land (as defined in section 2601(2) of the Energy Policy Act of 1992 ( 25 U.S.C. 3501(2) )), or (II) is part of a qualified low-income residential building project or a qualified low-income economic benefit project.

“qualifying small wind turbine” applies in that section

The term “qualifying small wind turbine” means a wind turbine which has a nameplate capacity of not more than 100 kilowatts. (C) Termination The term “qualified small wind energy property” shall not include any property the construction of which does not begin before January 1, 2025 . (5) Waste energy recovery property (A) In general

“specified clean hydrogen production facility” applies in that section

the term “specified clean hydrogen production facility” means any qualified clean hydrogen production facility (as defined in section 45V(c)(3))— (i) which is placed in service after December 31, 2022 , (ii) with respect to which— (I) no credit has been allowed under section 45V or 45Q, and (II) the taxpayer makes an irrevocable election to have this paragraph apply, and (iii) for which an unrelated third party has verified (in such form or manner as the Secretary may prescribe) that such facility produces hydrogen through a process which results in lifecycle greenhouse gas emissions which are consistent with the hydrogen that such facility was designed and expected to produce under …

“stationary microturbine power plant” applies in that section

The term “stationary microturbine power plant” means an integrated system comprised of a gas turbine engine, a combustor, a recuperator or regenerator, a generator or alternator, and associated balance of plant components which converts a fuel into electricity and thermal energy. Such term also includes all secondary components located between the existing infrastructure for fuel delivery and the existing infrastructure for power distribution, including equipment and controls for meeting relevant power standards, such as voltage, frequency, and power factors.

“thermal energy storage property” applies in that section

the term “thermal energy storage property” means property comprising a system which— (I) is directly connected to a heating, ventilation, or air conditioning system, (II) removes heat from, or adds heat to, a storage medium for subsequent use, and (III) provides energy for the heating or cooling of the interior of a residential or commercial building. (ii) Exclusion The term “thermal energy storage property” shall not include— (I) a swimming pool, (II) combined heat and power system property, or (III) a building or its structural components. (D) Termination The term “energy storage technology” shall not include any property the construction of which begins after December 31, 2024 .

“utility” applies in that section

the term “utility” means the owner or operator of an electrical transmission or distribution system which is subject to the regulatory authority of a State or political subdivision thereof, any agency or instrumentality of the United States, a public service or public utility commission or other similar body of any State or political subdivision thereof, or the governing or ratemaking body of an electric cooperative. (E) Special rule for interconnection property In the case of expenses paid or incurred for interconnection property, amounts otherwise chargeable to capital account with respect to such expenses shall be reduced under rules similar to the rules of section 50(c).

“waste energy recovery property” applies in that section

The term “waste energy recovery property” means property that generates electricity solely from heat from buildings or equipment if the primary purpose of such building or equipment is not the generation of electricity. (B) Capacity limitation The term “waste energy recovery property” shall not include any property which has a capacity in excess of 50 megawatts.

“advanced coal-based generation technology” applies in that section

The term “advanced coal-based generation technology” means a technology which meets the requirements of subsection (f). (3) Eligible property

“coal” applies in that section

The term “coal” means anthracite, bituminous coal, subbituminous coal, lignite, and peat. (5) Greenhouse gas capture capability

“electric generation unit” applies in that section

The term “electric generation unit” means any facility at least 50 percent of the total annual net output of which is electrical power, including an otherwise eligible facility which is used in an industrial application. (7) Integrated gasification combined cycle

“eligible property” applies in that section

The term “eligible property” means— (A) in the case of any qualifying advanced coal project using an integrated gasification combined cycle, any property which is a part of such project and is necessary for the gasification of coal, including any coal handling and gas separation equipment, and (B) in the case of any other qualifying advanced coal project, any property which is a part of such project. (4) Coal

“greenhouse gas capture capability” applies in that section

The term “greenhouse gas capture capability” means an integrated gasification combined cycle technology facility capable of adding components which can capture, separate on a long-term basis, isolate, remove, and sequester greenhouse gases which result from the generation of electricity. (6) Electric generation unit

“integrated gasification combined cycle” applies in that section

The term “integrated gasification combined cycle” means an electric generation unit which produces electricity by converting coal to synthesis gas which is used to fuel a combined-cycle plant which produces electricity from both a combustion turbine (including a combustion turbine/fuel cell hybrid) and a steam turbine. (d) Qualifying advanced coal project program (1) Establishment Not later than 180 days after the date of enactment of this section, the Secretary, in consultation with the Secretary of Energy, shall establish a qualifying advanced coal project program for the deployment of advanced coal-based generation technologies.

“qualifying advanced coal project” applies in that section

The term “qualifying advanced coal project” means a project which meets the requirements of subsection (e). (2) Advanced coal-based generation technology

“biomass” applies in that section

The term “biomass” means any— (i) agricultural or plant waste, (ii) byproduct of wood or paper mill operations, including lignin in spent pulping liquors, and (iii) other products of forestry maintenance. (B) Exclusion The term “biomass” does not include paper which is commonly recycled. (5) Carbon capture capability

“carbon capture capability” applies in that section

The term “carbon capture capability” means a gasification plant design which is determined by the Secretary to reflect reasonable consideration for, and be capable of, accommodating the equipment likely to be necessary to capture carbon dioxide from the gaseous stream, for later use or sequestration, which would otherwise be emitted in the flue gas from a project which uses a nonrenewable fuel. (6) Coal

“coal” applies in that section

The term “coal” means anthracite, bituminous coal, subbituminous coal, lignite, and peat. (7) Eligible entity

“eligible entity” applies in that section

The term “eligible entity” means any person whose application for certification is principally intended for use in a domestic project which employs domestic gasification applications related to— (A) chemicals, (B) fertilizers, (C) glass, (D) steel, (E) petroleum residues, (F) forest products, (G) agriculture, including feedlots and dairy operations, and (H) transportation grade liquid fuels. (8) Petroleum residue

“eligible property” applies in that section

The term “eligible property” means any property which is a part of a qualifying gasification project and is necessary for the gasification technology of such project. (4) Biomass (A) In general

“gasification technology” applies in that section

The term “gasification technology” means any process which converts a solid or liquid product from coal, petroleum residue, biomass, or other materials which are recovered for their energy or feedstock value into a synthesis gas composed primarily of carbon monoxide and hydrogen for direct use or subsequent chemical or physical conversion. (3) Eligible property

“petroleum residue” applies in that section

The term “petroleum residue” means the carbonized product of high-boiling hydrocarbon fractions obtained in petroleum processing. (d) Qualifying gasification project program (1) In general Not later than 180 days after the date of the enactment of this section, the Secretary, in consultation with the Secretary of Energy, shall establish a qualifying gasification project program to consider and award certifications for qualified investment eligible for credits under this section to qualifying gasification project sponsors under this section.

“qualifying gasification project” applies in that section

The term “qualifying gasification project” means any project which— (A) employs gasification technology, (B) will be carried out by an eligible entity, and (C) any portion of the qualified investment of which is certified under the qualifying gasification program as eligible for credit under this section in an amount (not to exceed $650,000,000) determined by the Secretary. (2) Gasification technology

“eligible property” applies in that section

The term “eligible property” means any property— (A) which is necessary for— (i) the production or recycling of property described in clause (i) of paragraph (1)(A), (ii) re-equipping an industrial or manufacturing facility described in clause (ii) of such paragraph, or (iii) re-equipping, expanding, or establishing an industrial facility described in clause (iii) of such paragraph, (B) which is— (i) tangible personal property, or (ii) other tangible property (not including a building or its structural components), but only if such property is used as an integral part of the qualified investment credit facility, and (C) with respect to which depreciation (or amortization in lieu of …

“qualifying advanced energy project” applies in that section

The term “qualifying advanced energy project” means a project, any portion of the qualified investment of which is certified by the Secretary under subsection (e) as eligible for a credit under this section— (i) which re-equips, expands, or establishes an industrial or manufacturing facility for the production or recycling of— (I) property designed to be used to produce energy from the sun, water, wind, geothermal deposits (within the meaning of section 613(e)(2)), or other renewable resources, (II) fuel cells, microturbines, or energy storage systems and components, (III) electric grid modernization equipment or components, (IV) property designed to capture, remove, use, or sequester …

“advanced manufacturing facility” applies in that section

the term “advanced manufacturing facility” means a facility for which the primary purpose is the manufacturing of semiconductors or semiconductor manufacturing equipment. (4) Coordination with rehabilitation credit The qualified investment with respect to any advanced manufacturing facility for any taxable year shall not include that portion of the basis of any property which is attributable to qualified rehabilitation expenditures (as defined in section 47(c)(2)).

“eligible taxpayer” applies in that section

the term “eligible taxpayer” means any taxpayer which— (1) is not a foreign entity of concern (as defined in section 9901(6) 1 of the William M. (Mac) Thornberry National Defense Authorization Act for Fiscal Year 2021), and (2) has not made an applicable transaction (as defined in section 50(a)) during the taxable year.

“excessive payment” applies in that section

the term “excessive payment” means, with respect to property for which an election is made under this subsection for any taxable year, an amount equal to the excess of— (I) the amount treated as a payment which is made by the taxpayer under paragraph (1), or the amount of the payment made pursuant to subparagraph (A), with respect to such property for such taxable year, over (II) the amount of the credit which, without application of this subsection, would be otherwise allowable (determined without regard to section 38(c)) under subsection (a) with respect to such property for such taxable year.

“qualified property” applies in that section

the term “qualified property” means property— (i) which is tangible property, (ii) with respect to which depreciation (or amortization in lieu of depreciation) is allowable, (iii) which is— (I) constructed, reconstructed, or erected by the taxpayer, or (II) acquired by the taxpayer if the original use of such property commences with the taxpayer, and (iv) which is integral to the operation of the advanced manufacturing facility. (B) Buildings and structural components (i) In general

“annual capacity limitation” applies in that section

the term “annual capacity limitation” means 1.8 gigawatts of direct current capacity for each calendar year during the period beginning on January 1, 2025 , and ending on December 31 of the applicable year (as defined in section 45Y(d)(3)), and zero thereafter. (D) Carryover of unused limitation (i) In general If the annual capacity limitation for any calendar year exceeds the aggregate amount allocated for such year under this paragraph, such limitation for the succeeding calendar year shall be increased by the amount of such excess.

“applicable facility” applies in that section

the term “applicable facility” means a qualified facility which— (i) uses wind to produce electricity (within the meaning of such term as used in section 45(d)(1), as determined without regard to any requirement under such section with respect to the date on which construction of property begins), or (ii) uses solar energy to produce electricity (within the meaning of such term as used in section 45(d)(4), as determined without regard to any requirement under such section with respect to the date on which construction of property begins). (C) Exception This paragraph shall not apply with respect to any energy storage technology which is placed in service at any applicable facility.

“applicable year” applies in that section

the term “applicable year” has the same meaning given such term in section 45Y(d)(3). (4) Termination for wind and solar facilities (A) In general This section shall not apply to any qualified property placed in service by the taxpayer after December 31, 2027 , which is part of an applicable facility. (B) Applicable facility For purposes of this paragraph,

“CO2e per KWh” applies in that section

the terms “CO2e per KWh” and “greenhouse gas emissions rate” have the same meaning given such terms under section 45Y. (c) Qualified investment with respect to energy storage technology (1) Qualified investment For purposes of subsection (a), the qualified investment with respect to energy storage technology for any taxable year is the basis of any energy storage technology placed in service by the taxpayer during such taxable year. (2) Energy storage technology For purposes of this section,

“eligible property” applies in that section

the term “eligible property” means a qualified investment with respect to any applicable facility. (4) Allocations (A) In general Not later than January 1, 2025 , the Secretary shall establish a program to allocate amounts of environmental justice capacity limitation to applicable facilities. In establishing such program and to carry out the purposes of this subsection, the Secretary shall provide procedures to allow for an efficient allocation process, including, when determined appropriate, consideration of multiple projects in a single application if such projects will be placed in service by a single taxpayer.

“energy storage technology” applies in that section

the term “energy storage technology” has the meaning given such term in section 48(c)(6) (except that subparagraph (D) of such section shall not apply). (3) Material assistance from prohibited foreign entities The term “energy storage technology” shall not include any property the construction of which begins after December 31, 2025 , if the construction of such property includes any material assistance from a prohibited foreign entity (as defined in section 7701(a)(52)).

“greenhouse gas” applies in that section

the term “greenhouse gas” has the same meaning given such term under section 45Y(e)(2). (g) Recapture of credit For purposes of section 50, if the Secretary determines that the greenhouse gas emissions rate for a qualified facility is greater than 10 grams of CO 2 e per KWh, any property for which a credit was allowed under this section with respect to such facility shall cease to be investment credit property in the taxable year in which the determination is made.

“greenhouse gas emissions rate” applies in that section

the terms “CO2e per KWh” and “greenhouse gas emissions rate” have the same meaning given such terms under section 45Y. (c) Qualified investment with respect to energy storage technology (1) Qualified investment For purposes of subsection (a), the qualified investment with respect to energy storage technology for any taxable year is the basis of any energy storage technology placed in service by the taxpayer during such taxable year. (2) Energy storage technology For purposes of this section,

“qualified facility” applies in that section

the term “qualified facility” means a facility— (i) which is used for the generation of electricity, (ii) which is placed in service after December 31, 2024 , and (iii) for which the anticipated greenhouse gas emissions rate (as determined under subparagraph (B)(ii)) is not greater than zero. (B) Additional rules (i) Expansion of facility; incremental production Rules similar to the rules of section 45Y(b)(1)(C) shall apply for purposes of this paragraph. (ii) Greenhouse gas emissions rate Rules similar to the rules of section 45Y(b)(2) shall apply for purposes of this paragraph.

“qualified interconnection property” applies in that section

the term “qualified interconnection property” has the meaning given such term in section 48(a)(8)(B). (5) Coordination with rehabilitation credit The qualified investment with respect to any qualified facility for any taxable year shall not include that portion of the basis of any property which is attributable to qualified rehabilitation expenditures (as defined in section 47(c)(2)).

“qualified property” applies in that section

the term “qualified property” means property— (A) which is— (i) tangible personal property, or (ii) other tangible property (not including a building or its structural components), but only if such property is used as an integral part of the qualified facility, (B) with respect to which depreciation (or amortization in lieu of depreciation) is allowable, and (C) (i) the construction, reconstruction, or erection of which is completed by the taxpayer, or (ii) which is acquired by the taxpayer if the original use of such property commences with the taxpayer. (3) Qualified facility (A) In general For purposes of this section,

“credit base” applies in that section

the term “credit base” means— (i) the portion of the basis of any qualified rehabilitated building attributable to qualified rehabilitation expenditures, (ii) the basis of any energy property, (iii) the basis of any property which is part of a qualifying advanced coal project under section 48A, (iv) the basis of any property which is part of a qualifying gasification project under section 48B, (v) the basis of any property which is part of a qualifying advanced energy project under section 48C, (vi) the basis of any qualified property (as defined in subsection (b)(2) of section 48D) which is part of an advanced manufacturing facility (as defined in subsection (b)(3) of such section), (vii) …

“nonqualified nonrecourse financing” applies in that section

the term “nonqualified nonrecourse financing” means any nonrecourse financing which is not qualified commercial financing. (ii) Qualified commercial financing For purposes of this paragraph,

“nonrecourse financing” applies in that section

the term “nonrecourse financing” includes— (I) any amount with respect to which the taxpayer is protected against loss through guarantees, stop-loss agreements, or other similar arrangements, and (II) except to the extent provided in regulations, any amount borrowed from a person who has an interest (other than as a creditor) in the activity in which the property is used or from a related person to a person (other than the taxpayer) having such an interest. In the case of amounts borrowed by a corporation from a shareholder, subclause (II) shall not apply to an interest as a shareholder. (iv) Qualified person For purposes of this paragraph,

“qualified business property” applies in that section

the term “qualified business property” means any property if— (I) such property is used by the corporation in the active conduct of a trade or business, (II) during the entire 12-month period ending on the last day of the taxable year, such corporation had at least 3 full-time employees who were not owner-employees (as defined in section 465(c)(7)(E)(i)) and substantially all the services of whom were services directly related to such trade or business, and (III) during the entire 12-month period ending on the last day of such taxable year, such corporation had at least 1 full-time employee substantially all of the services of whom were in the active management of the trade or business.

“qualified commercial financing” applies in that section

the term “qualified commercial financing” means any financing with respect to any property if— (I) such property is acquired by the taxpayer from a person who is not a related person, (II) the amount of the nonrecourse financing with respect to such property does not exceed 80 percent of the credit base of such property, and (III) such financing is borrowed from a qualified person or represents a loan from any Federal, State, or local government or instrumentality thereof, or is guaranteed by any Federal, State, or local government. Such term shall not include any convertible debt. (iii) Nonrecourse financing For purposes of this subparagraph,

“qualified person” applies in that section

the term “qualified person” means any person which is actively and regularly engaged in the business of lending money and which is not— (I) a related person with respect to the taxpayer, (II) a person from which the taxpayer acquired the property (or a related person to such person), or (III) a person who receives a fee with respect to the taxpayer’s investment in the property (or a related person to such person). (v) Related person For purposes of this subparagraph,

“related person” applies in that section

the term “related person” has the meaning given such term by section 465(b)(3)(C). Except as otherwise provided in regulations prescribed by the Secretary, the determination of whether a person is a related person shall be made as of the close of the taxable year in which the property is placed in service.

“applicable payment” applies in that section

the term “applicable payment” means, with respect to any taxable year, a payment or payments described in section 7701(a)(51)(D)(i)(II). (C) Specified taxpayer For purposes of this paragraph,

“applicable taxpayer” applies in that section

the term “applicable taxpayer” means any taxpayer who has been allowed a credit under section 48D(a) for any prior taxable year. (b) Certain property not eligible No credit shall be determined under this subpart with respect to— (1) Property used outside United States (A) In general Except as provided in subparagraph (B), no credit shall be determined under this subpart with respect to any property which is used predominantly outside the United States. (B) Exceptions Subparagraph (A) shall not apply to any property described in section 168(g)(4).

“applicable transaction” applies in that section

The term “applicable transaction” means, with respect to any applicable taxpayer, any significant transaction (as determined by the Secretary, in coordination with the Secretary of Commerce and the Secretary of Defense) involving the material expansion of semiconductor manufacturing capacity of such applicable taxpayer in the People’s Republic of China or a foreign country of concern (as defined in section 9901(7) of the William M. (Mac) Thornberry National Defense Authorization Act for Fiscal Year 2021).

“investment credit property” applies in that section

the term “investment credit property” means any property eligible for a credit determined under this subpart. (B) Transfer between spouses or incident to divorce In the case of any transfer described in subsection (a) of section 1041— (i) the foregoing provisions of this subsection shall not apply, and (ii) the same tax treatment under this subsection with respect to the transferred property shall apply to the transferee as would have applied to the transferor. (C) Special rule Any increase in tax under paragraph (1), (2), (3), or (4) shall not be treated as tax imposed by this chapter for purposes of determining the amount of any credit allowable under this chapter.

“recapture amount” applies in that section

the term “recapture amount” means any increase in tax (or adjustment in carrybacks or carryovers) determined under subsection (a). (3) Special rule In the case of any energy credit or clean electricity investment credit— (A) only 50 percent of such credit shall be taken into account under paragraph (1), (B) only 50 percent of any recapture amount attributable to such credit shall be taken into account under paragraph (2), and (C) paragraph (1) shall not apply for purposes of determining eligible basis under section 42.

“specified taxpayer” applies in that section

the term “specified taxpayer” means any taxpayer who has been allowed a credit under section 48E(a) for any taxable year beginning after the date which is 2 years after the date of enactment of this paragraph. (5) Carrybacks and carryovers adjusted In the case of any cessation described in paragraph (1) or (2), any applicable transaction to which paragraph (3)(A) applies, or any applicable payment to which paragraph (4)(A) applies, the carrybacks and carryovers under section 39 shall be adjusted by reason of such cessation or applicable transaction.

“compensation” applies in that section

the terms “compensation” and “service-connected” have the meanings given such terms under section 101 of title 38 , United States Code. (4) Qualified ex-felon

“designated community resident” applies in that section

The term “designated community resident” means any individual who is certified by the designated local agency— (i) as having attained age 18 but not age 40 on the hiring date, and (ii) as having his principal place of abode within an empowerment zone, enterprise community, renewal community, or rural renewal county. (B) Individual must continue to reside in zone, community, or county In the case of a designated community resident, the term “qualified wages” shall not include wages paid or incurred for services performed while the individual’s principal place of abode is outside an empowerment zone, enterprise community, renewal community, or rural renewal county.

“designated local agency” applies in that section

The term “designated local agency” means a State employment security agency established in accordance with the Act of June 6, 1933 , as amended ( 29 U.S.C. 49–49n ). (13) Special rules for certifications (A) In general An individual shall not be treated as a member of a targeted group unless— (i) on or before the day on which such individual begins work for the employer, the employer has received a certification from a designated local agency that such individual is a member of a targeted group, or (ii) (I) on or before the day the individual is offered employment with the employer, a pre-screening notice is completed by the employer with respect to such individual, and (II) not later than …

“disconnected youth” applies in that section

The term “disconnected youth” means any individual who is certified by the designated local agency— (I) as having attained age 16 but not age 25 on the hiring date, (II) as not regularly attending any secondary, technical, or post-secondary school during the 6-month period preceding the hiring date, (III) as not regularly employed during such 6-month period, and (IV) as not readily employable by reason of lacking a sufficient number of basic skills. (15) Qualified long-term unemployment recipient

“extended active duty” applies in that section

the term “extended active duty” means a period of more than 90 days during which the individual was on active duty (other than active duty for training). (C) Other definitions For purposes of subparagraph (A),

“hiring date” applies in that section

The term “hiring date” means the day the individual is hired by the employer. (12) Designated local agency

“IV–A program” applies in that section

the term “IV–A program” means any program providing assistance under a State program funded under part A of title IV of the Social Security Act and any successor of such program. (3) Qualified veteran (A) In general

“long-term family assistance recipient” applies in that section

The term “long-term family assistance recipient” means any individual who is certified by the designated local agency— (A) as being a member of a family receiving assistance under a IV–A program (as defined in paragraph (2)(B)) for at least the 18-month period ending on the hiring date, (B) (i) as being a member of a family receiving such assistance for 18 months beginning after August 5, 1997 , and (ii) as having a hiring date which is not more than 2 years after the end of the earliest such 18-month period, or (C) (i) as being a member of a family which ceased to be eligible for such assistance by reason of any limitation imposed by Federal or State law on the maximum period such …

“pre-screening notice” applies in that section

the term “pre-screening notice” means a document (in such form as the Secretary shall prescribe) which contains information provided by the individual on the basis of which the employer believes that the individual is a member of a targeted group. (B) Incorrect certifications If— (i) an individual has been certified by a designated local agency as a member of a targeted group, and (ii) such certification is incorrect because it was based on false information provided by such individual, the certification shall be revoked and wages paid by the employer after the date on which notice of revocation is received by the employer shall not be treated as qualified wages.

“qualified ex-felon” applies in that section

The term “qualified ex-felon” means any individual who is certified by the designated local agency— (A) as having been convicted of a felony under any statute of the United States or any State, and (B) as having a hiring date which is not more than 1 year after the last date on which such individual was so convicted or was released from prison. (5) Designated community residents (A) In general

“qualified first-year wages” applies throughout its subpart

The term “qualified first-year wages” means, with respect to any individual, qualified wages attributable to service rendered during the 1-year period beginning with the day the individual begins work for the employer.

“qualified IV–A recipient” applies throughout its subpart

The term “qualified IV–A recipient” means any individual who is certified by the designated local agency as being a member of a family receiving assistance under a IV–A program for any 9 months during the 18-month period ending on the hiring date. (B) IV–A program For purposes of this paragraph,

“qualified long-term unemployment recipient” applies in that section

The term “qualified long-term unemployment recipient” means any individual who is certified by the designated local agency as being in a period of unemployment which— (A) is not less than 27 consecutive weeks, and (B) includes a period in which the individual was receiving unemployment compensation under State or Federal law.

“qualified second-year wages” applies in that section

the term “qualified second-year wages” means qualified wages— (A) which are paid to a long-term family assistance recipient, and (B) which are attributable to service rendered during the 1-year period beginning on the day after the last day of the 1-year period with respect to such recipient determined under subsection (b)(2).

“qualified SSI recipient” applies in that section

The term “qualified SSI recipient” means any individual who is certified by the designated local agency as receiving supplemental security income benefits under title XVI of the Social Security Act (including supplemental security income benefits of the type described in section 1616 of such Act or section 212 of Public Law 93–66 ) for any month ending within the 60-day period ending on the hiring date. (10) Long-term family assistance recipient

“qualified summer youth employee” applies in that section

The term “qualified summer youth employee” means any individual— (i) who performs services for the employer between May 1 and September 15, (ii) who is certified by the designated local agency as having attained age 16 but not 18 on the hiring date (or if later, on May 1 of the calendar year involved), (iii) who has not been an employee of the employer during any period prior to the 90-day period described in subparagraph (B)(i), and (iv) who is certified by the designated local agency as having his principal place of abode within an empowerment zone, enterprise community, or renewal community.

“qualified supplemental nutrition assistance program benefits recipient” applies in that section

The term “qualified supplemental nutrition assistance program benefits recipient” means any individual who is certified by the designated local agency— (i) as having attained age 18 but not age 40 on the hiring date, and (ii) as being a member of a family— (I) receiving assistance under a supplemental nutrition assistance program under the Food and Nutrition Act of 2008 for the 6-month period ending on the hiring date, or (II) receiving such assistance for at least 3 months of the 5-month period ending on the hiring date, in the case of a member of a family who ceases to be eligible for such assistance under section 6( o ) of the Food and Nutrition Act of 2008.

“qualified veteran” applies in that section

The term “qualified veteran” means any veteran who is certified by the designated local agency as— (i) being a member of a family receiving assistance under a supplemental nutrition assistance program under the Food and Nutrition Act of 2008 for at least a 3-month period ending during the 12-month period ending on the hiring date, (ii) entitled to compensation for a service-connected disability, and— (I) having a hiring date which is not more that 1 year after having been discharged or released from active duty in the Armed Forces of the United States, or (II) having aggregate periods of unemployment during the 1-year period ending on the hiring date which equal or exceed 6 months, (iii) …

“qualified wages” applies throughout its subpart

The term “qualified wages” means the wages paid or incurred by the employer during the taxable year to individuals who are members of a targeted group. (2) Qualified first-year wages

“rural renewal county” applies in that section

the term “rural renewal county” means any county which— (i) is outside a metropolitan statistical area (defined as such by the Office of Management and Budget), and (ii) during the 5-year periods 1990 through 1994 and 1995 through 1999 had a net population loss. (6) Vocational rehabilitation referral

“service-connected” applies in that section

the terms “compensation” and “service-connected” have the meanings given such terms under section 101 of title 38 , United States Code. (4) Qualified ex-felon

“unemployed veteran” applies in that section

The term “unemployed veteran” means any veteran (as defined in paragraph (3)(B), determined without regard to clause (ii) thereof) who is certified by the designated local agency as— (I) having been discharged or released from active duty in the Armed Forces at any time during the 5-year period ending on the hiring date, and (II) being in receipt of unemployment compensation under State or Federal law for not less than 4 weeks during the 1-year period ending on the hiring date. (ii) Disconnected youth

“unemployment insurance wages” applies throughout its subpart

the term “unemployment insurance wages” means, with respect to the remuneration paid by the employer to such employee for such year, an amount equal to so much of such remuneration as constitutes “wages” within the meaning of section 3121(a), except that the contribution and benefit base for each calendar year shall be deemed to be $6,000. (B) Railway labor If more than one-half of remuneration paid by an employer to an employee during any year is remuneration for service described in section 3306(c)(9),

“veteran” applies in that section

the term “veteran” means any individual who is certified by the designated local agency as— (i) (I) having served on active duty (other than active duty for training) in the Armed Forces of the United States for a period of more than 180 days, or (II) having been discharged or released from active duty in the Armed Forces of the United States for a service-connected disability, and (ii) not having any day during the 60-day period ending on the hiring date which was a day of extended active duty in the Armed Forces of the United States. For purposes of clause (ii),

“vocational rehabilitation referral” applies in that section

The term “vocational rehabilitation referral” means any individual who is certified by the designated local agency as— (A) having a physical or mental disability which, for such individual, constitutes or results in a substantial handicap to employment, and (B) having been referred to the employer upon completion of (or while receiving) rehabilitative services pursuant to— (i) an individualized written plan for employment under a State plan for vocational rehabilitation services approved under the Rehabilitation Act of 1973, (ii) a program of vocational rehabilitation carried out under chapter 31 of title 38, United States Code, or (iii) an individual work plan developed and implemented by …

“wages” applies in that section

the term “wages” has the meaning given to such term by subsection (b) of section 3306 (determined without regard to any dollar limitation contained in such section). (2) On-the-job training and work supplementation payments (A) Exclusion for employers receiving on-the-job training payments The term “wages” shall not include any amounts paid or incurred by an employer for any period to any individual for whom the employer receives federally funded payments for on-the-job training of such individual for such period.

“controlled group of corporations” applies in that section

the term “controlled group of corporations” has the meaning given to such term by section 1563(a), except that— (1) “more than 50 percent” shall be substituted for “at least 80 percent” each place it appears in section 1563(a)(1), and (2) the determination shall be made without regard to subsections (a)(4) and (e)(3)(C) of section 1563.

“net minimum tax” applies in that section

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).

“tentative minimum tax” applies in that section

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.

“alternative minimum taxable income” applies in that section

The term “alternative minimum taxable income” means the taxable income of the taxpayer for the taxable year— (i) determined with the adjustments provided in section 56 and section 58, and (ii) increased by the amount of the items of tax preference described in section 57. If a taxpayer is subject to the regular tax, such taxpayer shall be subject to the tax imposed by this section (and, if the regular tax is determined by reference to an amount other than taxable income, such amount shall be treated as the taxable income of such taxpayer for purposes of the preceding sentence).

“exemption amount” applies in that section

the term “exemption amount” means— (A) $78,750 in the case of— (i) a joint return, or (ii) a surviving spouse, (B) $50,600 in the case of an individual who— (i) is not a married individual, and (ii) is not a surviving spouse, (C) 50 percent of the dollar amount applicable under subparagraph (A) in the case of a married individual who files a separate return, and (D) $22,500 in the case of an estate or trust. For purposes of this paragraph,

“regular tax” applies in that section

the term “regular tax” means the regular tax liability for the taxable year (as defined in section 26(b)) reduced by the foreign tax credit allowable under section 27(a). 1 Such term shall not include any increase in tax under section 45(e)(11)(C), 49(b) or 50(a) or subsection (j) or (k) of section 42. (2) Coordination with income averaging for farmers and fishermen Solely for purposes of this section, section 1301 (relating to averaging of farm and fishing income) shall not apply in computing the regular tax liability. (3) Cross references For provisions providing that certain credits are not allowable against the tax imposed by this section, see sections 30C(d)(2) and 38(c).

“surviving spouse” applies in that section

the term “surviving spouse” has the meaning given to such term by section 2(a), and marital status shall be determined under section 7703. (2) Phase-out of exemption amount The exemption amount of any taxpayer shall be reduced (but not below zero) by an amount equal to 25 percent of the amount by which the alternative minimum taxable income of the taxpayer exceeds— (A) $150,000 in the case of a taxpayer described in paragraph (1)(A), (B) $112,500 in the case of a taxpayer described in paragraph (1)(B), and (C) 50 percent of the dollar amount applicable under subparagraph (A) in the case of a taxpayer described in subparagraph (C) or (D) of paragraph (1).

“taxable excess” applies in that section

the term “taxable excess” means so much of the alternative minimum taxable income for the taxable year as exceeds the exemption amount. (C) Married individual filing separate return In the case of a married individual filing a separate return, subparagraph (A) shall be applied by substituting 50 percent of the dollar amount otherwise applicable under clause (i) and clause (ii) thereof. For purposes of the preceding sentence, marital status shall be determined under section 7703. (D) Alternative minimum taxable income

“alternative tax net operating loss deduction” applies throughout its part

the term “alternative tax net operating loss deduction” means the net operating loss deduction allowable for the taxable year under section 172, except that— (A) the amount of such deduction shall not exceed the sum of— (i) the lesser of— (I) the amount of such deduction attributable to net operating losses (other than the deduction described in clause (ii)(I)), or (II) 90 percent of alternative minimum taxable income determined without regard to such deduction and the deduction under section 199, 1 plus (ii) the lesser of— (I) the amount of such deduction attributable to an applicable net operating loss with respect to which an election is made under section 172(b)(1)(H) (as in effect …

“qualified dwelling” applies throughout its part

The term “qualified dwelling” means any— (A) house, (B) apartment, (C) condominium, or (D) mobile home not used on a transient basis (within the meaning of section 7701(a)(19)(C)(v)), including all structures or other property appurtenant thereto. (3) Special rule for indebtedness incurred before July 1, 1982

“qualified housing interest” applies throughout its part

The term “qualified housing interest” means interest which is qualified residence interest (as defined in section 163(h)(3)) and is paid or accrued during the taxable year on indebtedness which is incurred in acquiring, constructing, or substantially improving any property which— (A) is the principal residence (within the meaning of section 121) of the taxpayer at the time such interest accrues, or (B) is a qualified dwelling which is a qualified residence (within the meaning of section 163(h)(5)).

“adjusted financial statement income” applies throughout its part

the term “adjusted financial statement income” means, with respect to any corporation for any taxable year, the net income or loss of the taxpayer set forth on the taxpayer’s applicable financial statement for such taxable year, adjusted as provided in this section. (b) Applicable financial statement For purposes of this section,

“applicable financial statement” applies in that section

the term “applicable financial statement” means, with respect to any taxable year, an applicable financial statement (as defined in section 451(b)(3) or as specified by the Secretary in regulations or other guidance) which covers such taxable year. (c) General adjustments (1) Statements covering different taxable years Appropriate adjustments shall be made in adjusted financial statement income in any case in which an applicable financial statement covers a period other than the taxable year.

“covered benefit plan” applies in that section

the term “covered benefit plan” means— (i) a defined benefit plan (other than a multiemployer plan described in section 414(f)) if the trust which is part of such plan is an employees’ trust described in section 401(a) which is exempt from tax under section 501(a), (ii) any qualified foreign plan (as defined in section 404A(e)), or (iii) any other defined benefit plan which provides post-employment benefits other than pension benefits.

“financial statement net operating loss” applies in that section

the term “financial statement net operating loss” means the amount of the net loss (if any) set forth on the corporation’s applicable financial statement (determined after application of subsection (c) and without regard to this subsection) for taxable years ending after December 31, 2019 . (e) Regulations and other guidance The Secretary shall provide for such regulations and other guidance as necessary to carry out the purposes of this section, including regulations and other guidance relating to the effect of the rules of this section on partnerships with income taken into account by an applicable corporation.

“qualified wireless spectrum” applies in that section

the term “qualified wireless spectrum” means wireless spectrum which— (i) is used in the trade or business of a wireless telecommunications carrier, and (ii) was acquired after December 31, 2007 , and before the date of enactment of this section.

“specified private activity bond” applies throughout its part

the term “specified private activity bond” means any private activity bond (as defined in section 141) which is issued after August 7, 1986 , and the interest on which is not includible in gross income under section 103. (ii) Exception for qualified 501(c)(3) bonds For purposes of clause (i), the term “private activity bond” shall not include any qualified 501(c)(3) bond (as defined in section 145).

“straight line recovery of intangibles” applies throughout its part

the term “straight line recovery of intangibles” means any method which would be permitted for purposes of determining cost depletion with respect to such well and which is selected by the taxpayer for purposes of subsection (a)(2).

“insolvent” applies in that section

the term “insolvent” means the excess of liabilities over the fair market value of assets. (2) Loss allowed for year of disposition of farm shelter activity If the taxpayer disposes of his entire interest in any tax shelter farm activity during any taxable year, the amount of the loss attributable to such activity (determined after carryovers under subsection (a)(1)(B)) shall (to the extent otherwise allowable) be allowed for such taxable year in computing alternative minimum taxable income and not treated as a loss from a tax shelter farm activity.

“tax shelter farm activity” applies in that section

the term “tax shelter farm activity” means— (A) any farming syndicate as defined in section 461(k), and (B) any other activity consisting of farming which is a passive activity (within the meaning of section 469(c)). (3) Determination of loss In determining the amount of the loss from any tax shelter farm activity, the adjustments of sections 56 and 57 shall apply.

“applicable corporation” applies throughout its part

The term “applicable corporation” means, with respect to any taxable year, any corporation (other than an S corporation, a regulated investment company, or a real estate investment trust) which meets the average annual adjusted financial statement income test of subparagraph (B) for one or more taxable years which— (i) are prior to such taxable year, and (ii) end after December 31, 2021 .

“differently treated item” applies in that section

the term “differently treated item” means any item of tax preference or any other item which is treated differently for purposes of this part than for purposes of computing the regular tax. (e) Optional 10-year writeoff of certain tax preferences (1) In general For purposes of this title, any qualified expenditure to which an election under this paragraph applies shall be allowed as a deduction ratably over the 10-year period (3-year period in the case of circulation expenditures described in section 173) beginning with the taxable year in which such expenditure was made (or, in the case of a qualified expenditure described in paragraph (2)(C), over the 60-month period beginning with the …

“foreign-parented multinational group” applies in that section

the term “foreign-parented multinational group” means, with respect to any taxable year, two or more entities if— (i) at least one entity is a domestic corporation and another entity is a foreign corporation, (ii) such entities are included in the same applicable financial statement with respect to such year, and (iii) either— (I) the common parent of such entities is a foreign corporation, or (II) if there is no common parent, the entities are treated as having a common parent which is a foreign corporation under subparagraph (D).

“pre-credit tentative minimum tax” applies in that section

the term “pre-credit tentative minimum tax” means the amount determined under the first sentence of section 55(b)(1)(A). (3) Election to use simplified section 904 limitation (A) In general In determining the alternative minimum tax foreign tax credit for any taxable year to which an election under this paragraph applies— (i) subparagraph (B) of paragraph (1) shall not apply, and (ii) the limitation of section 904 shall be based on the proportion which— (I) the taxpayer’s taxable income (as determined for purposes of the regular tax) from sources without the United States (but not in excess of the taxpayer’s entire alternative minimum taxable income), bears to (II) the taxpayer’s entire …

“qualified expenditure” applies in that section

the term “qualified expenditure” means any amount which, but for an election under this subsection, would have been allowable as a deduction (determined without regard to section 291) for the taxable year in which paid or incurred under— (A) section 173 (relating to circulation expenditures), (B) section 174A(a) (relating to domestic research or experimental expenditures), (C) section 263(c) (relating to intangible drilling and development expenditures), (D) section 616(a) (relating to development expenditures), or (E) section 617(a) (relating to mining exploration expenditures).

“25-percent owner” applies in that section

The term “25-percent owner” means, with respect to any corporation, any person who owns at least 25 percent of— (A) the total voting power of all classes of stock of a corporation entitled to vote, or (B) the total value of all classes of stock of such corporation. (3) Section 318 to apply Section 318 shall apply for purposes of paragraphs (1) and (2), except that— (A) “10 percent” shall be substituted for “50 percent” in section 318(a)(2)(C), and (B) subparagraphs (A), (B), and (C) of section 318(a)(3) shall not be applied so as to consider a United States person as owning stock which is owned by a person who is not a United States person.

“applicable section 38 credits” applies in that section

the term “applicable section 38 credits” means the credit allowed under section 38 for the taxable year which is properly allocable to— (A) the low-income housing credit determined under section 42(a), (B) the renewable electricity production credit determined under section 45(a), and (C) the investment credit determined under section 46, but only to the extent properly allocable to the energy credit determined under section 48. (c) Modified taxable income For purposes of this section— (1) In general

“applicable taxpayer” applies in that section

The term “applicable taxpayer” means, with respect to any taxable year, a taxpayer— (A) which is a corporation other than a regulated investment company, a real estate investment trust, or an S corporation, (B) the average annual gross receipts of which for the 3-taxable-year period ending with the preceding taxable year are at least $500,000,000, and (C) the base erosion percentage (as determined under subsection (c)(4)) of which for the taxable year is 3 percent (2 percent in the case of a taxpayer described in subsection (b)(2)(B)) or higher.

“base erosion minimum tax amount” applies in that section

the term “base erosion minimum tax amount” means, with respect to any applicable taxpayer for any taxable year, the excess (if any) of— (A) an amount equal to 10.5 percent (5 percent in the case of taxable years beginning in calendar year 2018) of the modified taxable income of such taxpayer for the taxable year, over (B) an amount equal to the regular tax liability (as defined in section 26(b)) of the taxpayer for the taxable year, reduced (but not below zero) by the excess (if any) of— (i) the credits allowed under this chapter against such regular tax liability, over (ii) the sum of— (I) the credit allowed under section 38 for the taxable year which is properly allocable to the research …

“base erosion payment” applies in that section

The term “base erosion payment” means any amount paid or accrued by the taxpayer to a foreign person which is a related party of the taxpayer and with respect to which a deduction is allowable under this chapter. (2) Purchase of depreciable property Such term shall also include any amount paid or accrued by the taxpayer to a foreign person which is a related party of the taxpayer in connection with the acquisition by the taxpayer from such person of property of a character subject to the allowance for depreciation (or amortization in lieu of depreciation).

“base erosion percentage” applies throughout its chapter

The term “base erosion percentage” means, for any taxable year, the percentage determined by dividing— (i) the aggregate amount of base erosion tax benefits of the taxpayer for the taxable year, by (ii) the sum of— (I) the aggregate amount of the deductions (including deductions described in clauses (i) and (ii) of paragraph (2)(A)) allowable to the taxpayer under this chapter for the taxable year, plus (II) the base erosion tax benefits described in clauses (iii) and (iv) of paragraph (2)(A) allowable to the taxpayer for the taxable year.

“base erosion tax benefit” applies in that section

The term “base erosion tax benefit” means— (i) any deduction described in subsection (d)(1) which is allowed under this chapter for the taxable year with respect to any base erosion payment, (ii) in the case of a base erosion payment described in subsection (d)(2), any deduction allowed under this chapter for the taxable year for depreciation (or amortization in lieu of depreciation) with respect to the property acquired with such payment, (iii) in the case of a base erosion payment described in subsection (d)(3)— (I) any reduction under section 803(a)(1)(B) in the gross amount of premiums and other consideration on insurance and annuity contracts for premiums and other consideration …

“derivative” applies in that section

The term “derivative” means any contract (including any option, forward contract, futures contract, short position, swap, or similar contract) the value of which, or any payment or other transfer with respect to which, is (directly or indirectly) determined by reference to one or more of the following: (i) Any share of stock in a corporation. (ii) Any evidence of indebtedness. (iii) Any commodity which is actively traded. (iv) Any currency. (v) Any rate, price, amount, index, formula, or algorithm. Such term shall not include any item described in clauses (i) through (v).

“expanded affiliated group” applies in that section

The term “expanded affiliated group” has the meaning given such term by section 7874(c)(1). (5) Exception for certain amounts with respect to services Paragraph (1) shall not apply to any amount paid or accrued by a taxpayer for services if— (A) such services are services which meet the requirements for eligibility for use of the services cost method under section 482 (determined without regard to the requirement that the services not contribute significantly to fundamental risks of business success or failure), and (B) such amount constitutes the total services cost with no markup component. (e) Applicable taxpayer For purposes of this section— (1) In general

“foreign person” applies in that section

the term “foreign person” has the meaning given such term by section 6038A(c)(3). (g) Related party For purposes of this section— (1) In general

“modified taxable income” applies in that section

The term “modified taxable income” means the taxable income of the taxpayer computed under this chapter for the taxable year, determined without regard to— (A) any base erosion tax benefit with respect to any base erosion payment, or (B) the base erosion percentage of any net operating loss deduction allowed under section 172 for the taxable year. (2) Base erosion tax benefit (A) In general

“qualified derivative payment” applies in that section

The term “qualified derivative payment” means any payment made by a taxpayer pursuant to a derivative with respect to which the taxpayer— (i) recognizes gain or loss as if such derivative were sold for its fair market value on the last business day of the taxable year (and such additional times as required by this title or the taxpayer’s method of accounting), (ii) treats any gain or loss so recognized as ordinary, and (iii) treats the character of all items of income, deduction, gain, or loss with respect to a payment pursuant to the derivative as ordinary.

“related party” applies in that section

The term “related party” means, with respect to any applicable taxpayer— (A) any 25-percent owner of the taxpayer, (B) any person who is related (within the meaning of section 267(b) or 707(b)(1)) to the taxpayer or any 25-percent owner of the taxpayer, and (C) any other person who is related (within the meaning of section 482) to the taxpayer. (2) 25-percent owner

“surrogate foreign corporation” applies in that section

The term “surrogate foreign corporation” has the meaning given such term by section 7874(a)(2)(B) but does not include a foreign corporation treated as a domestic corporation under section 7874(b). (ii) Expanded affiliated group

“adjusted gross income” applies in that section

the term “adjusted gross income” means, in the case of an individual, gross income minus the following deductions: (1) Trade and business deductions The deductions allowed by this chapter (other than by part VII of this subchapter) which are attributable to a trade or business carried on by the taxpayer, if such trade or business does not consist of the performance of services by the taxpayer as an employee.

“eligible educator” applies in that section

the term “eligible educator” means, with respect to any taxable year, an individual who is a kindergarten through grade 12 teacher, instructor, counselor, principal, or aide in a school for at least 900 hours during a school year. (B) School

“joint return” applies in that section

the term “joint return” means the joint return of a husband and wife made under section 6013. (c) Certain arrangements not treated as reimbursement arrangements For purposes of subsection (a)(2)(A), an arrangement shall in no event be treated as a reimbursement or other expense allowance arrangement if— (1) such arrangement does not require the employee to substantiate the expenses covered by the arrangement to the person providing the reimbursement, or (2) such arrangement provides the employee the right to retain any amount in excess of the substantiated expenses covered under the arrangement.

“jury pay” applies in that section

the term “jury pay” means any payment received by the individual for the discharge of jury duty. [(14) Repealed. Pub. L. 113–295, div. A, title II, § 221(a)(34)(C) , Dec. 19, 2014 , 128 Stat. 4042 ] (15) Moving expenses The deduction allowed by section 217. (16) Archer MSAs The deduction allowed by section 220. (17) Interest on education loans The deduction allowed by section 221. [(18) Repealed. Pub. L. 116–260, div. EE, title I, § 104(b)(2)(A) , Dec. 27, 2020 , 134 Stat. 3041 ] (19) Health savings accounts The deduction allowed by section 223. (20) Costs involving discrimination suits, etc.

“qualified performing artist” applies in that section

the term “qualified performing artist” means, with respect to any taxable year, any individual if— (A) such individual performed services in the performing arts as an employee during the taxable year for at least 2 employers, (B) the aggregate amount allowable as a deduction under section 162 in connection with the performance of such services exceeds 10 percent of such individual’s gross income attributable to the performance of such services, and (C) the adjusted gross income of such individual for the taxable year (determined without regard to subsection (a)(2)(B)) does not exceed $16,000.

“school” applies in that section

The term “school” means any school which provides elementary education or secondary education (kindergarten through grade 12), as determined under State law. (2) Coordination with exclusions A deduction shall be allowed under subsection (a)(2)(D) for expenses only to the extent the amount of such expenses exceeds the amount excludable under section 135, 529(c)(1), or 530(d)(2) for the taxable year.