USC Subpart C

USC Subpart C
in effect

26 U.S.C. § 31 Tax withheld on wages

(a) Wage withholding for income tax purposes(1) In generalThe amount withheld as tax under chapter 24 shall be allowed to the recipient of the income as a credit against the tax imposed by this subtitle. (2) Year of creditThe amount so withheld during any calendar year shall be allowed as a credit for the taxable year beginning in such calendar year. If more than one taxable year begins in a calendar year, such amount shall be allowed as a credit for the last taxable year so beginning. (b) Credit for special refunds of social security tax(1) In generalThe Secretary may prescribe regulations providing for the crediting against the tax imposed by this subtitle of the amount determined by the taxpayer or the Secretary to be allowable under section 6413(c) as a special refund of tax imposed on wages. The amount allowed as a credit under such regulations shall, for purposes of this subtitle, be considered an amount withheld at source as tax under section 3402. (2) Year of creditAny amount to which paragraph (1) applies shall be allowed as a credit for the taxable year beginning in the calendar year during which the wages were received. If more than one taxable year begins in the calendar year, such amount shall be allowed as a credit for the last taxable year so beginning. (c) Special rule for backup withholdingAny credit allowed by subsection (a) for any amount withheld under section 3406 shall be allowed for the taxable year of the recipient of the income in which the income is received.

26 U.S.C. § 32 Earned income

(a) Allowance of credit(1) In generalIn the case of an eligible individual, there shall be allowed as a credit against the tax imposed by this subtitle for the taxable year an amount equal to the credit percentage of so much of the taxpayer’s earned income for the taxable year as does not exceed the earned income amount. (2) LimitationThe amount of the credit allowable to a taxpayer under paragraph (1) for any taxable year shall not exceed the excess (if any) of—(A) the credit percentage of the earned income amount, over (B) the phaseout percentage of so much of the adjusted gross income (or, if greater, the earned income) of the taxpayer for the taxable year as exceeds the phaseout amount. (b) Percentages and amountsFor purposes of subsection (a)—(1) PercentagesThe credit percentage and the phaseout percentage shall be determined as follows: In the case of an eligible individual with:The credit percentage is:Thephaseoutpercentageis: 1 qualifying child3415.98 2 qualifying children4021.06 3 or more qualifying children4521.06 No qualifying children7.65 7.65 (2) Amounts(A) In generalSubject to subparagraph (B), the earned income amount and the phaseout amount shall be determined as follows: In the case of an eligible individual with:The earned income amount is:Thephaseoutamount is: 1 qualifying child$6,330$11,610 2 or more qualifying children$8,890$11,610 No qualifying children$4,220 $5,280 (B) Joint returnsIn the case of a joint return filed by an eligible individual and such individual’s spouse, the phaseout amount determined under subparagraph (A) shall be increased by $5,000. (c) Definitions and special rulesFor purposes of this section—(1) Eligible individual(A) In generalThe term “eligible individual” means—(i) any individual who has a qualifying child for the taxable year, or (ii) any other individual who does not have a qualifying child for the taxable year, if—(I) such individual’s principal place of abode is in the United States for more than one-half of such taxable year, (II) such individual (or, if the individual is married, either the individual or the individual’s spouse) has attained age 25 but not attained age 65 before the close of the taxable year, and (III) such individual is not a dependent for whom a deduction is allowable under section 151 to another taxpayer for any taxable year beginning in the same calendar year as such taxable year. (B) Qualifying child ineligibleIf an individual is the qualifying child of a taxpayer for any taxable year of such taxpayer beginning in a calendar year, such individual shall not be treated as an eligible individual for any taxable year of such individual beginning in such calendar year. (C) Exception for individual claiming benefits under section 911The term “eligible individual” does not include any individual who claims the benefits of section 911 (relating to citizens or residents living abroad) for the taxable year. (D) Limitation on eligibility of nonresident aliensThe term “eligible individual” shall not include any individual who is a nonresident alien individual for any portion of the taxable year unless such individual is treated for such taxable year as a resident of the United States for purposes of this chapter by reason of an election under subsection (g) or (h) of section 6013. (E) Identification number requirementNo credit shall be allowed under this section to an eligible individual who does not include on the return of tax for the taxable year—(i) such individual’s taxpayer identification number, and (ii) if the individual is married, the taxpayer identification number of such individual’s spouse. (2) Earned income(A) The term “earned income” means—(i) wages, salaries, tips, and other employee compensation, but only if such amounts are includible in gross income for the taxable year, plus (ii) the amount of the taxpayer’s net earnings from self-employment for the taxable year (within the meaning of section 1402(a)), but such net earnings shall be determined with regard to the deduction allowed to the taxpayer by section 164(f). (B) For purposes of subparagraph (A)—(i) the earned income of an individual shall be computed without regard to any community property laws, (ii) no amount received as a pension or annuity shall be taken into account, (iii) no amount to which section 871(a) applies (relating to income of nonresident alien individuals not connected with United States business) shall be taken into account, (iv) no amount received for services provided by an individual while the individual is an inmate at a penal institution shall be taken into account, (v) no amount described in subparagraph (A) received for service performed in work activities as defined in paragraph (4) or (7) of section 407(d) of the Social Security Act to which the taxpayer is assigned under any State program under part A of title IV of such Act shall be taken into account, but only to the extent such amount is subsidized under such State program, and (vi) a taxpayer may elect to treat amounts excluded from gross income by reason of section 112 as earned income. (3) Qualifying child(A) In generalThe term “qualifying child” means a qualifying child of the taxpayer (as defined in section 152(c), determined without regard to paragraph (1)(D) thereof and section 152(e)). (B) Married individualThe term “qualifying child” shall not include an individual who is married as of the close of the taxpayer’s taxable year unless the taxpayer is entitled to a deduction under section 151 for such taxable year with respect to such individual (or would be so entitled but for section 152(e)). (C) Place of abodeFor purposes of subparagraph (A), the requirements of section 152(c)(1)(B) shall be met only if the principal place of abode is in the United States. (D) Identification requirements(i) In generalA qualifying child shall not be taken into account under subsection (b) unless the taxpayer includes the name, age, and TIN of the qualifying child on the return of tax for the taxable year. (ii) Other methodsThe Secretary may prescribe other methods for providing the information described in clause (i). (4) Treatment of military personnel stationed outside the United StatesFor purposes of paragraphs (1)(A)(ii)(I) and (3)(C), the principal place of abode of a member of the Armed Forces of the United States shall be treated as in the United States during any period during which such member is stationed outside the United States while serving on extended active duty with the Armed Forces of the United States. For purposes of the preceding sentence, the term “extended active duty” means any period of active duty pursuant to a call or order to such duty for a period in excess of 90 days or for an indefinite period. (d) Married individuals(1) In generalIn the case of an individual who is married, this section shall apply only if a joint return is filed for the taxable year under section 6013. (2) Determination of marital statusFor purposes of this section—(A) In generalExcept as provided in subparagraph (B), marital status shall be determined under section 7703(a). (B) Special rule for separated spouseAn individual shall not be treated as married if such individual—(i) is married (as determined under section 7703(a)) and does not file a joint return for the taxable year, (ii) resides with a qualifying child of the individual for more than one-half of such taxable year, and (iii)(I) during the last 6 months of such taxable year, does not have the same principal place of abode as the individual’s spouse, or (II) has a decree, instrument, or agreement (other than a decree of divorce) described in section 121(d)(3)(C) with respect to the individual’s spouse and is not a member of the same household with the individual’s spouse by the end of the taxable year. (e) Taxable year must be full taxable yearExcept in the case of a taxable year closed by reason of the death of the taxpayer, no credit shall be allowable under this section in the case of a taxable year covering a period of less than 12 months. (f) Amount of credit to be determined under tables(1) In generalThe amount of the credit allowed by this section shall be determined under tables prescribed by the Secretary. (2) Requirements for tablesThe tables prescribed under paragraph (1) shall reflect the provisions of subsections (a) and (b) and shall have income brackets of not greater than $50 each—(A) for earned income between $0 and the amount of earned income at which the credit is phased out under subsection (b), and (B) for adjusted gross income between the dollar amount at which the phaseout begins under subsection (b) and the amount of adjusted gross income at which the credit is phased out under subsection (b). [(g) Repealed. Pub. L. 111–226, title II, § 219(a)(2), Aug. 10, 2010, 124 Stat. 2403] [(h) Repealed. Pub. L. 107–16, title III, § 303(c), June 7, 2001, 115 Stat. 55] (i) Denial of credit for individuals having excessive investment income(1) In generalNo credit shall be allowed under subsection (a) for the taxable year if the aggregate amount of disqualified income of the taxpayer for the taxable year exceeds $10,000. (2) Disqualified incomeFor purposes of paragraph (1), the term “disqualified income” means—(A) interest or dividends to the extent includible in gross income for the taxable year, (B) interest received or accrued during the taxable year which is exempt from tax imposed by this chapter, (C) the excess (if any) of—(i) gross income from rents or royalties not derived in the ordinary course of a trade or business, over (ii) the sum of—(I) the deductions (other than interest) which are clearly and directly allocable to such gross income, plus (II) interest deductions properly allocable to such gross income, (D) the capital gain net income (as defined in section 1222) of the taxpayer for such taxable year, and (E) the excess (if any) of—(i) the aggregate income from all passive activities for the taxable year (determined without regard to any amount included in earned income under subsection (c)(2) or described in a preceding subparagraph), over (ii) the aggregate losses from all passive activities for the taxable year (as so determined). For purposes of subparagraph (E), the term “passive activity” has the meaning given such term by section 469. (j) Inflation adjustments(1) In generalIn the case of any taxable year beginning after 2015 (2021 in the case of the dollar amount in subsection (i)(1)), each of the dollar amounts in subsections (b)(2) and (i)(1) shall be increased by an amount equal to—(A) such dollar amount, multiplied by (B) the cost-of-living adjustment determined under section 1(f)(3) for the calendar year in which the taxable year begins, determined by substituting in subparagraph (A)(ii) thereof—(i) in the case of amounts in subsection (b)(2)(A), “calendar year 1995” for “calendar year 2016”, (ii) in the case of the $5,000 amount in subsection (b)(2)(B), “calendar year 2008” for “calendar year 2016”, and (iii) in the case of the $10,000 amount in subsection (i)(1), “calendar year 2020” for “calendar year 2016”. (2) Rounding(A) In generalIf any dollar amount in subsection (b)(2)(A) (after being increased under subparagraph (B) thereof), after being increased under paragraph (1), is not a multiple of $10, such dollar amount shall be rounded to the nearest multiple of $10. (B) Disqualified income threshold amountIf the dollar amount in subsection (i)(1), after being increased under paragraph (1), is not a multiple of $50, such amount shall be rounded to the next lowest multiple of $50. (k) Restrictions on taxpayers who improperly claimed credit in prior year(1) Taxpayers making prior fraudulent or reckless claims(A) In generalNo credit shall be allowed under this section for any taxable year in the disallowance period. (B) Disallowance periodFor purposes of paragraph (1), the disallowance period is—(i) the period of 10 taxable years after the most recent taxable year for which there was a final determination that the taxpayer’s claim of credit under this section was due to fraud, and (ii) the period of 2 taxable years after the most recent taxable year for which there was a final determination that the taxpayer’s claim of credit under this section was due to reckless or intentional disregard of rules and regulations (but not due to fraud). (2) Taxpayers making improper prior claimsIn the case of a taxpayer who is denied credit under this section for any taxable year as a result of the deficiency procedures under subchapter B of chapter 63, no credit shall be allowed under this section for any subsequent taxable year unless the taxpayer provides such information as the Secretary may require to demonstrate eligibility for such credit. (l) Coordination with certain means-tested programsFor purposes of—(1) the United States Housing Act of 1937, (2) title V of the Housing Act of 1949, (3) section 101 of the Housing and Urban Development Act of 1965, (4) sections 221(d)(3), 235, and 236 of the National Housing Act, and (5) the Food and Nutrition Act of 2008, any refund made to an individual (or the spouse of an individual) by reason of this section shall not be treated as income (and shall not be taken into account in determining resources for the month of its receipt and the following month). (m) Identification numbersSolely for purposes of subsections (c)(1)(E) and (c)(3)(D), a taxpayer identification number means a social security number issued to an individual by the Social Security Administration (other than a social security number issued pursuant to clause (II) (or that portion of clause (III) that relates to clause (II)) of section 205(c)(2)(B)(i) of the Social Security Act) on or before the due date for filing the return for the taxable year. (n) Special rules for individuals without qualifying childrenIn the case of any taxable year beginning after December 31, 2020, and before January 1, 2022—(1) Decrease in minimum age for credit(A) In generalSubsection (c)(1)(A)(ii)(II) shall be applied by substituting “the applicable minimum age” for “age 25”. (B) Applicable minimum ageFor purposes of this paragraph, the term “applicable minimum age” means—(i) except as otherwise provided in this subparagraph, age 19, (ii) in the case of a specified student (other than a qualified former foster youth or a qualified homeless youth), age 24, and (iii) in the case of a qualified former foster youth or a qualified homeless youth, age 18. (C) Specified studentFor purposes of this paragraph, the term “specified student” means, with respect to any taxable year, an individual who is an eligible student (as defined in section 25A(b)(3)) during at least 5 calendar months during the taxable year. (D) Qualified former foster youthFor purposes of this paragraph, the term “qualified former foster youth” means an individual who—(i) on or after the date that such individual attained age 14, was in foster care provided under the supervision or administration of an entity administering (or eligible to administer) a plan under part B or part E of title IV of the Social Security Act (without regard to whether Federal assistance was provided with respect to such child under such part E), and (ii) provides (in such manner as the Secretary may provide) consent for entities which administer a plan under part B or part E of title IV of the Social Security Act to disclose to the Secretary information related to the status of such individual as a qualified former foster youth. (E) Qualified homeless youthFor purposes of this paragraph, the term “qualified homeless youth” means, with respect to any taxable year, an individual who certifies, in a manner as provided by the Secretary, that such individual is either an unaccompanied youth who is a homeless child or youth, or is unaccompanied, at risk of homelessness, and self-supporting. (2) Elimination of maximum age for creditSubsection (c)(1)(A)(ii)(II) shall be applied without regard to the phrase “but not attained age 65”. (3) Increase in credit and phaseout percentagesThe table contained in subsection (b)(1) shall be applied by substituting “15.3” for “7.65” each place it appears therein. (4) Increase in earned income and phaseout amounts(A) In generalThe table contained in subsection (b)(2)(A) shall be applied—(i) by substituting “$9,820” for “$4,220”, and (ii) by substituting “$11,610” for “$5,280”. (B) Coordination with inflation adjustmentSubsection (j) shall not apply to any dollar amount specified in this paragraph.

26 U.S.C. § 33 Tax withheld at source on nonresident aliens and foreign corporations

There shall be allowed as a credit against the tax imposed by this subtitle the amount of tax withheld at source under subchapter A of chapter 3 (relating to withholding of tax on nonresident aliens and on foreign corporations).

26 U.S.C. § 34 Certain uses of gasoline and special fuels

(a) General ruleThere shall be allowed as a credit against the tax imposed by this subtitle for the taxable year an amount equal to the sum of the amounts payable to the taxpayer—(1) under section 6420 (determined without regard to section 6420(g)), (2) under section 6421 (determined without regard to section 6421(i)), and (3) under section 6427 (determined without regard to section 6427(k)). (b) ExceptionCredit shall not be allowed under subsection (a) for any amount payable under section 6421 or 6427, if a claim for such amount is timely filed and, under section 6421(i) or 6427(k), is payable under such section.

26 U.S.C. § 35 Health insurance costs of eligible individuals

(a) In generalIn the case of an individual, there shall be allowed as a credit against the tax imposed by subtitle A an amount equal to 72.5 percent of the amount paid by the taxpayer for coverage of the taxpayer and qualifying family members under qualified health insurance for eligible coverage months beginning in the taxable year. (b) Eligible coverage monthFor purposes of this section—(1) In generalThe term “eligible coverage month” means any month if—(A) as of the first day of such month, the taxpayer—(i) is an eligible individual, (ii) is covered by qualified health insurance, the premium for which is paid by the taxpayer, (iii) does not have other specified coverage, and (iv) is not imprisoned under Federal, State, or local authority, and (B) such month begins more than 90 days after the date of the enactment of the Trade Act of 2002, and before January 1, 2022. (2) Joint returnsIn the case of a joint return, the requirements of paragraph (1)(A) shall be treated as met with respect to any month if at least 1 spouse satisfies such requirements. (c) Eligible individualFor purposes of this section—(1) In generalThe term “eligible individual” means—(A) an eligible TAA recipient, (B) an eligible alternative TAA recipient, and (C) an eligible PBGC pension recipient. (2) Eligible TAA recipient(A) In generalExcept as provided in subparagraph (B), the term “eligible TAA recipient” means, with respect to any month, any individual who is receiving for any day of such month a trade readjustment allowance under chapter 2 of title II of the Trade Act of 1974 or who would be eligible to receive such allowance if section 231 of such Act were applied without regard to subsection (a)(3)(B) of such section. An individual shall continue to be treated as an eligible TAA recipient during the first month that such individual would otherwise cease to be an eligible TAA recipient by reason of the preceding sentence. (B) Special ruleIn the case of any eligible coverage month beginning after the date of the enactment of this paragraph, the term “eligible TAA recipient” means, with respect to any month, any individual who—(i) is receiving for any day of such month a trade readjustment allowance under chapter 2 of title II of the Trade Act of 1974, (ii) would be eligible to receive such allowance except that such individual is in a break in training provided under a training program approved under section 236 of such Act that exceeds the period specified in section 233(e) of such Act, but is within the period for receiving such allowances provided under section 233(a) of such Act, or (iii) is receiving unemployment compensation (as defined in section 85(b)) for any day of such month and who would be eligible to receive such allowance for such month if section 231 of such Act were applied without regard to subsections (a)(3)(B) and (a)(5) thereof. An individual shall continue to be treated as an eligible TAA recipient during the first month that such individual would otherwise cease to be an eligible TAA recipient by reason of the preceding sentence. (3) Eligible alternative TAA recipientThe term “eligible alternative TAA recipient” means, with respect to any month, any individual who—(A) is a worker described in section 246(a)(3)(B) of the Trade Act of 1974 who is participating in the program established under section 246(a)(1) of such Act, and (B) is receiving a benefit for such month under section 246(a)(2) of such Act. An individual shall continue to be treated as an eligible alternative TAA recipient during the first month that such individual would otherwise cease to be an eligible alternative TAA recipient by reason of the preceding sentence. (4) Eligible PBGC pension recipientThe term “eligible PBGC pension recipient” means, with respect to any month, any individual who—(A) has attained age 55 as of the first day of such month, and (B) is receiving a benefit for such month any portion of which is paid by the Pension Benefit Guaranty Corporation under title IV of the Employee Retirement Income Security Act of 1974. (d) Qualifying family memberFor purposes of this section—(1) In generalThe term “qualifying family member” means—(A) the taxpayer’s spouse, and (B) any dependent of the taxpayer with respect to whom the taxpayer is entitled to a deduction under section 151(c). Such term does not include any individual who has other specified coverage. (2) Special dependency test in case of divorced parents, etc.If section 152(e) applies to any child with respect to any calendar year, in the case of any taxable year beginning in such calendar year, such child shall be treated as described in paragraph (1)(B) with respect to the custodial parent (as defined in section 152(e)(4)(A)) and not with respect to the noncustodial parent. (e) Qualified health insuranceFor purposes of this section—(1) In generalThe term “qualified health insurance” means any of the following:(A) Coverage under a COBRA continuation provision (as defined in section 9832(d)(1)). (B) State-based continuation coverage provided by the State under a State law that requires such coverage. (C) Coverage offered through a qualified State high risk pool (as defined in section 2744(c)(2) of the Public Health Service Act). (D) Coverage under a health insurance program offered for State employees. (E) Coverage under a State-based health insurance program that is comparable to the health insurance program offered for State employees. (F) Coverage through an arrangement entered into by a State and—(i) a group health plan (including such a plan which is a multiemployer plan as defined in section 3(37) of the Employee Retirement Income Security Act of 1974), (ii) an issuer of health insurance coverage, (iii) an administrator, or (iv) an employer. (G) Coverage offered through a State arrangement with a private sector health care coverage purchasing pool. (H) Coverage under a State-operated health plan that does not receive any Federal financial participation. (I) Coverage under a group health plan that is available through the employment of the eligible individual’s spouse. (J) In the case of any eligible individual and such individual’s qualifying family members, coverage under individual health insurance (other than coverage enrolled in through an Exchange established under the Patient Protection and Affordable Care Act). For purposes of this subparagraph, the term “individual health insurance” means any insurance which constitutes medical care offered to individuals other than in connection with a group health plan and does not include Federal- or State-based health insurance coverage. (K) Coverage under an employee benefit plan funded by a voluntary employees’ beneficiary association (as defined in section 501(c)(9)) established pursuant to an order of a bankruptcy court, or by agreement with an authorized representative, as provided in section 1114 of title 11, United States Code. (2) Requirements for state-based coverage(A) In generalThe term “qualified health insurance” does not include any coverage described in subparagraphs (B) through (H) of paragraph (1) unless the State involved has elected to have such coverage treated as qualified health insurance under this section and such coverage meets the following requirements:(i) Guaranteed issueEach qualifying individual is guaranteed enrollment if the individual pays the premium for enrollment or provides a qualified health insurance costs credit eligibility certificate described in section 7527 and pays the remainder of such premium. (ii) No imposition of preexisting condition exclusionNo pre-existing condition limitations are imposed with respect to any qualifying individual. (iii) Nondiscriminatory premiumThe total premium (as determined without regard to any subsidies) with respect to a qualifying individual may not be greater than the total premium (as so determined) for a similarly situated individual who is not a qualifying individual. (iv) Same benefitsBenefits under the coverage are the same as (or substantially similar to) the benefits provided to similarly situated individuals who are not qualifying individuals. (B) Qualifying individualFor purposes of this paragraph, the term “qualifying individual” means—(i) an eligible individual for whom, as of the date on which the individual seeks to enroll in the coverage described in subparagraphs (B) through (H) of paragraph (1), the aggregate of the periods of creditable coverage (as defined in section 9801(c)) is 3 months or longer and who, with respect to any month, meets the requirements of clauses (iii) and (iv) of subsection (b)(1)(A); and (ii) the qualifying family members of such eligible individual. (3) ExceptionThe term “qualified health insurance” shall not include—(A) a flexible spending or similar arrangement, and (B) any insurance if substantially all of its coverage is of excepted benefits described in section 9832(c). (f) Other specified coverageFor purposes of this section, an individual has other specified coverage for any month if, as of the first day of such month—(1) Subsidized coverage(A) In generalSuch individual is covered under any insurance which constitutes medical care (except insurance substantially all of the coverage of which is of excepted benefits described in section 9832(c)) under any health plan maintained by any employer (or former employer) of the taxpayer or the taxpayer’s spouse and at least 50 percent of the cost of such coverage (determined under section 4980B) is paid or incurred by the employer. (B) Eligible alternative TAA recipientsIn the case of an eligible alternative TAA recipient, such individual is either—(i) eligible for coverage under any qualified health insurance (other than insurance described in subparagraph (A), (B), or (F) of subsection (e)(1)) under which at least 50 percent of the cost of coverage (determined under section 4980B(f)(4)) is paid or incurred by an employer (or former employer) of the taxpayer or the taxpayer’s spouse, or (ii) covered under any such qualified health insurance under which any portion of the cost of coverage (as so determined) is paid or incurred by an employer (or former employer) of the taxpayer or the taxpayer’s spouse. (C) Treatment of cafeteria plansFor purposes of subparagraphs (A) and (B), the cost of coverage shall be treated as paid or incurred by an employer to the extent the coverage is in lieu of a right to receive cash or other qualified benefits under a cafeteria plan (as defined in section 125(d)). (2) Coverage under Medicare, Medicaid, or SCHIPSuch individual—(A) is entitled to benefits under part A of title XVIII of the Social Security Act or is enrolled under part B of such title, or (B) is enrolled in the program under title XIX or XXI of such Act (other than under section 1928 of such Act). (3) Certain other coverageSuch individual—(A) is enrolled in a health benefits plan under chapter 89 of title 5, United States Code, or (B) is entitled to receive benefits under chapter 55 of title 10, United States Code. (g) Special rules(1) Coordination with advance payments of creditWith respect to any taxable year, the amount which would (but for this subsection) be allowed as a credit to the taxpayer under subsection (a) shall be reduced (but not below zero) by the aggregate amount paid on behalf of such taxpayer under section 7527 for months beginning in such taxable year. (2) Coordination with other deductionsAmounts taken into account under subsection (a) shall not be taken into account in determining any deduction allowed under section 162(l) or 213. (3) Medical and health savings accountsAmounts distributed from an Archer MSA (as defined in section 220(d)) or from a health savings account (as defined in section 223(d)) shall not be taken into account under subsection (a). (4) Denial of credit to dependentsNo credit shall be allowed under this section to any individual with respect to whom a deduction under section 151 is allowable to another taxpayer for a taxable year beginning in the calendar year in which such individual’s taxable year begins. (5) Both spouses eligible individualsThe spouse of the taxpayer shall not be treated as a qualifying family member for purposes of subsection (a), if—(A) the taxpayer is married at the close of the taxable year, (B) the taxpayer and the taxpayer’s spouse are both eligible individuals during the taxable year, and (C) the taxpayer files a separate return for the taxable year. (6) Marital status; certain married individuals living apartRules similar to the rules of paragraphs (3) and (4) of section 21(e) shall apply for purposes of this section. (7) Insurance which covers other individualsFor purposes of this section, rules similar to the rules of section 213(d)(6) shall apply with respect to any contract for qualified health insurance under which amounts are payable for coverage of an individual other than the taxpayer and qualifying family members. (8) Treatment of paymentsFor purposes of this section—(A) Payments by SecretaryPayments made by the Secretary on behalf of any individual under section 7527 (relating to advance payment of credit for health insurance costs of eligible individuals) shall be treated as having been made by the taxpayer on the first day of the month for which such payment was made. (B) Payments by taxpayerPayments made by the taxpayer for eligible coverage months shall be treated as having been made by the taxpayer on the first day of the month for which such payment was made. (9) Continuation coverage premium assistanceIn the case of an assistance eligible individual who receives premium assistance for continuation coverage under section 9501(a)(1) of the American Rescue Plan Act of 2021 for any month during the taxable year, such individual shall not be treated as an eligible individual, a certified individual, or a qualifying family member for purposes of this section or section 7527 with respect to such month. (10) Continued qualification of family members after certain events(A) Medicare eligibilityIn the case of any month which would be an eligible coverage month with respect to an eligible individual but for subsection (f)(2)(A), such month shall be treated as an eligible coverage month with respect to such eligible individual solely for purposes of determining the amount of the credit under this section with respect to any qualifying family members of such individual (and any advance payment of such credit under section 7527). This subparagraph shall only apply with respect to the first 24 months after such eligible individual is first entitled to the benefits described in subsection (f)(2)(A). (B) DivorceIn the case of the finalization of a divorce between an eligible individual and such individual’s spouse, such spouse shall be treated as an eligible individual for purposes of this section and section 7527 for a period of 24 months beginning with the date of such finalization, except that the only qualifying family members who may be taken into account with respect to such spouse are those individuals who were qualifying family members immediately before such finalization. (C) DeathIn the case of the death of an eligible individual—(i) any spouse of such individual (determined at the time of such death) shall be treated as an eligible individual for purposes of this section and section 7527 for a period of 24 months beginning with the date of such death, except that the only qualifying family members who may be taken into account with respect to such spouse are those individuals who were qualifying family members immediately before such death, and (ii) any individual who was a qualifying family member of the decedent immediately before such death (or, in the case of an individual to whom paragraph (4) applies, the taxpayer to whom the deduction under section 151 is allowable) shall be treated as an eligible individual for purposes of this section and section 7527 for a period of 24 months beginning with the date of such death, except that in determining the amount of such credit only such qualifying family member may be taken into account. (11) Election(A) In generalThis section shall not apply to any taxpayer for any eligible coverage month unless such taxpayer elects the application of this section for such month. (B) Timing and applicability of electionExcept as the Secretary may provide—(i) an election to have this section apply for any eligible coverage month in a taxable year shall be made not later than the due date (including extensions) for the return of tax for the taxable year; and (ii) any election for this section to apply for an eligible coverage month shall apply for all subsequent eligible coverage months in the taxable year and, once made, shall be irrevocable with respect to such months. (12) Coordination with premium tax credit(A) In generalAn eligible coverage month to which the election under paragraph (11) applies shall not be treated as a coverage month (as defined in section 36B(c)(2)) for purposes of section 36B with respect to the taxpayer. (B) Coordination with advance payments of premium tax creditIn the case of a taxpayer who makes the election under paragraph (11) with respect to any eligible coverage month in a taxable year or on behalf of whom any advance payment is made under section 7527 with respect to any month in such taxable year—(i) the tax imposed by this chapter for the taxable year shall be increased by the excess, if any, of—(I) the sum of any advance payments made on behalf of the taxpayer under section 1412 of the Patient Protection and Affordable Care Act and section 7527 for months during such taxable year, over (II) the sum of the credits allowed under this section (determined without regard to paragraph (1)) and section 36B (determined without regard to subsection (f)(1) thereof) for such taxable year; and (ii) section 36B(f)(2) shall not apply with respect to such taxpayer for such taxable year, except that if such taxpayer received any advance payments under section 7527 for any month in such taxable year and is later allowed a credit under section 36B for such taxable year, then the amount determined under clause (i) shall be substituted for the amount determined under section 36B(f)(2). (13) RegulationsThe Secretary may prescribe such regulations and other guidance as may be necessary or appropriate to carry out this section, section 6050T, and section 7527.

26 U.S.C. § 36 First-time homebuyer credit

(a) Allowance of creditIn the case of an individual who is a first-time homebuyer of a principal residence in the United States during a taxable year, there shall be allowed as a credit against the tax imposed by this subtitle for such taxable year an amount equal to 10 percent of the purchase price of the residence. (b) Limitations(1) Dollar limitation(A) In generalExcept as otherwise provided in this paragraph, the credit allowed under subsection (a) shall not exceed $8,000. (B) Married individuals filing separatelyIn the case of a married individual filing a separate return, subparagraph (A) shall be applied by substituting “$4,000” for “$8,000”. (C) Other individualsIf two or more individuals who are not married purchase a principal residence, the amount of the credit allowed under subsection (a) shall be allocated among such individuals in such manner as the Secretary may prescribe, except that the total amount of the credits allowed to all such individuals shall not exceed $8,000. (D) Special rule for long-time residents of same principal residenceIn the case of a taxpayer to whom a credit under subsection (a) is allowed by reason of subsection (c)(6), subparagraphs (A), (B), and (C) shall be applied by substituting “$6,500” for “$8,000” and “$3,250” for “$4,000”. (2) Limitation based on modified adjusted gross income(A) In generalThe amount allowable as a credit under subsection (a) (determined without regard to this paragraph) for the taxable year shall be reduced (but not below zero) by the amount which bears the same ratio to the amount which is so allowable as—(i) the excess (if any) of—(I) the taxpayer’s modified adjusted gross income for such taxable year, over (II) $125,000 ($225,000 in the case of a joint return), bears to (ii) $20,000. (B) Modified adjusted gross incomeFor purposes of subparagraph (A), the term “modified adjusted gross income” means the adjusted gross income of the taxpayer for the taxable year increased by any amount excluded from gross income under section 911, 931, or 933. (3) Limitation based on purchase priceNo credit shall be allowed under subsection (a) for the purchase of any residence if the purchase price of such residence exceeds $800,000. (4) Age limitationNo credit shall be allowed under subsection (a) with respect to the purchase of any residence unless the taxpayer has attained age 18 as of the date of such purchase. In the case of any taxpayer who is married (within the meaning of section 7703), the taxpayer shall be treated as meeting the age requirement of the preceding sentence if the taxpayer or the taxpayer’s spouse meets such age requirement. (c) DefinitionsFor purposes of this section—(1) First-time homebuyerThe term “first-time homebuyer” means any individual if such individual (and if married, such individual’s spouse) had no present ownership interest in a principal residence during the 3-year period ending on the date of the purchase of the principal residence to which this section applies. (2) Principal residenceThe term “principal residence” has the same meaning as when used in section 121. (3) Purchase(A) In generalThe term “purchase” means any acquisition, but only if—(i) the property is not acquired from a person related to the person acquiring such property (or, if married, such individual’s spouse), and (ii) the basis of the property in the hands of the person acquiring such property is not determined—(I) in whole or in part by reference to the adjusted basis of such property in the hands of the person from whom acquired, or (II) under section 1014(a) (relating to property acquired from a decedent). (B) ConstructionA residence which is constructed by the taxpayer shall be treated as purchased by the taxpayer on the date the taxpayer first occupies such residence. (4) Purchase priceThe term “purchase price” means the adjusted basis of the principal residence on the date such residence is purchased. (5) Related personsA person shall be treated as related to another person if the relationship between such persons would result in the disallowance of losses under section 267 or 707(b) (but, in applying section 267(b) and (c) for purposes of this section, paragraph (4) of section 267(c) shall be treated as providing that the family of an individual shall include only his spouse, ancestors, and lineal descendants). (6) Exception for long-time residents of same principal residenceIn the case of an individual (and, if married, such individual’s spouse) who has owned and used the same residence as such individual’s principal residence for any 5-consecutive-year period during the 8-year period ending on the date of the purchase of a subsequent principal residence, such individual shall be treated as a first-time homebuyer for purposes of this section with respect to the purchase of such subsequent residence. (d) ExceptionsNo credit under subsection (a) shall be allowed to any taxpayer for any taxable year with respect to the purchase of a residence if—(1) the taxpayer is a nonresident alien, (2) the taxpayer disposes of such residence (or such residence ceases to be the principal residence of the taxpayer (and, if married, the taxpayer’s spouse)) before the close of such taxable year, (3) a deduction under section 151 with respect to such taxpayer is allowable to another taxpayer for such taxable year, or (4) the taxpayer fails to attach to the return of tax for such taxable year a properly executed copy of the settlement statement used to complete such purchase. (e) ReportingIf the Secretary requires information reporting under section 6045 by a person described in subsection (e)(2) thereof to verify the eligibility of taxpayers for the credit allowable by this section, the exception provided by section 6045(e) shall not apply. (f) Recapture of credit(1) In generalExcept as otherwise provided in this subsection, if a credit under subsection (a) is allowed to a taxpayer, the tax imposed by this chapter shall be increased by 6⅔ percent of the amount of such credit for each taxable year in the recapture period. (2) Acceleration of recaptureIf a taxpayer disposes of the principal residence with respect to which a credit was allowed under subsection (a) (or such residence ceases to be the principal residence of the taxpayer (and, if married, the taxpayer’s spouse)) before the end of the recapture period—(A) the tax imposed by this chapter for the taxable year of such disposition or cessation shall be increased by the excess of the amount of the credit allowed over the amounts of tax imposed by paragraph (1) for preceding taxable years, and (B) paragraph (1) shall not apply with respect to such credit for such taxable year or any subsequent taxable year. (3) Limitation based on gainIn the case of the sale of the principal residence to a person who is not related to the taxpayer, the increase in tax determined under paragraph (2) shall not exceed the amount of gain (if any) on such sale. Solely for purposes of the preceding sentence, the adjusted basis of such residence shall be reduced by the amount of the credit allowed under subsection (a) to the extent not previously recaptured under paragraph (1). (4) Exceptions(A) Death of taxpayerParagraphs (1) and (2) shall not apply to any taxable year ending after the date of the taxpayer’s death. (B) Involuntary conversionParagraph (2) shall not apply in the case of a residence which is compulsorily or involuntarily converted (within the meaning of section 1033(a)) if the taxpayer acquires a new principal residence during the 2-year period beginning on the date of the disposition or cessation referred to in paragraph (2). Paragraph (2) shall apply to such new principal residence during the recapture period in the same manner as if such new principal residence were the converted residence. (C) Transfers between spouses or incident to divorceIn the case of a transfer of a residence to which section 1041(a) applies—(i) paragraph (2) shall not apply to such transfer, and (ii) in the case of taxable years ending after such transfer, paragraphs (1) and (2) shall apply to the transferee in the same manner as if such transferee were the transferor (and shall not apply to the transferor). (D) Waiver of recapture for purchases in 2009 and 2010In the case of any credit allowed with respect to the purchase of a principal residence after December 31, 2008—(i) paragraph (1) shall not apply, and (ii) paragraph (2) shall apply only if the disposition or cessation described in paragraph (2) with respect to such residence occurs during the 36-month period beginning on the date of the purchase of such residence by the taxpayer. (E) Special rule for members of the armed forces, etc.(i) In generalIn the case of the disposition of a principal residence by an individual (or a cessation referred to in paragraph (2)) after December 31, 2008, in connection with Government orders received by such individual, or such individual’s spouse, for qualified official extended duty service—(I) paragraph (2) and subsection (d)(2) shall not apply to such disposition (or cessation), and (II) if such residence was acquired before January 1, 2009, paragraph (1) shall not apply to the taxable year in which such disposition (or cessation) occurs or any subsequent taxable year. (ii) Qualified official extended duty serviceFor purposes of this section, the term “qualified official extended duty service” means service on qualified official extended duty as—(I) a member of the uniformed services, (II) a member of the Foreign Service of the United States, or (III) an employee of the intelligence community. (iii) DefinitionsAny term used in this subparagraph which is also used in paragraph (9) of section 121(d) shall have the same meaning as when used in such paragraph. (5) Joint returnsIn the case of a credit allowed under subsection (a) with respect to a joint return, half of such credit shall be treated as having been allowed to each individual filing such return for purposes of this subsection. (6) Return requirementIf the tax imposed by this chapter for the taxable year is increased under this subsection, the taxpayer shall, notwithstanding section 6012, be required to file a return with respect to the taxes imposed under this subtitle. (7) Recapture periodFor purposes of this subsection, the term “recapture period” means the 15 taxable years beginning with the second taxable year following the taxable year in which the purchase of the principal residence for which a credit is allowed under subsection (a) was made. (g) Election to treat purchase in prior yearIn the case of a purchase of a principal residence after December 31, 2008, a taxpayer may elect to treat such purchase as made on December 31 of the calendar year preceding such purchase for purposes of this section (other than subsections (b)(4), (c), (f)(4)(D), and (h)). (h) Application of section(1) In generalThis section shall only apply to a principal residence purchased by the taxpayer on or after April 9, 2008, and before May 1, 2010. (2) Exception in case of binding contractIn the case of any taxpayer who enters into a written binding contract before May 1, 2010, to close on the purchase of a principal residence before July 1, 2010, and who purchases such residence before October 1, 2010, paragraph (1) shall be applied by substituting “October 1, 2010” for “May 1, 2010”. (3) Special rule for individuals on qualified official extended duty outside the United StatesIn the case of any individual who serves on qualified official extended duty service (as defined in section 121(d)(9)(C)(i)) outside the United States for at least 90 days during the period beginning after December 31, 2008, and ending before May 1, 2010, and, if married, such individual’s spouse—(A) paragraphs (1) and (2) shall each be applied by substituting “May 1, 2011” for “May 1, 2010”, and (B) paragraph (2) shall be applied by substituting “July 1, 2011” for “July 1, 2010”, and for “October 1, 2010”.

26 U.S.C. § 36B Refundable credit for coverage under a qualified health plan

(a) In generalIn the case of an applicable taxpayer, there shall be allowed as a credit against the tax imposed by this subtitle for any taxable year an amount equal to the premium assistance credit amount of the taxpayer for the taxable year. (b) Premium assistance credit amountFor purposes of this section—(1) In generalThe term “premium assistance credit amount” means, with respect to any taxable year, the sum of the premium assistance amounts determined under paragraph (2) with respect to all coverage months of the taxpayer occurring during the taxable year. (2) Premium assistance amountThe premium assistance amount determined under this subsection with respect to any coverage month is the amount equal to the lesser of—(A) the monthly premiums for such month for 1 or more qualified health plans offered in the individual market within a State which cover the taxpayer, the taxpayer’s spouse, or any dependent (as defined in section 152) of the taxpayer and which were enrolled in through an Exchange established by the State under 1311 11 So in original. Probably should be preceded by “section”. of the Patient Protection and Affordable Care Act, or (B) the excess (if any) of—(i) the adjusted monthly premium for such month for the applicable second lowest cost silver plan with respect to the taxpayer, over (ii) an amount equal to 1/12 of the product of the applicable percentage and the taxpayer’s household income for the taxable year. (3) Other terms and rules relating to premium assistance amountsFor purposes of paragraph (2)—(A) Applicable percentage(i) In generalExcept as provided in clause (ii), the applicable percentage for any taxable year shall be the percentage such that the applicable percentage for any taxpayer whose household income is within an income tier specified in the following table shall increase, on a sliding scale in a linear manner, from the initial premium percentage to the final premium percentage specified in such table for such income tier: In the case of household income (expressed as a percent of poverty line) within the following income tier:The initial premium percentage is—The final premium percentage is— Up to 133%2.0%2.0% 133% up to 150%3.0%4.0% 150% up to 200%4.0%6.3% 200% up to 250%6.3%8.05% 250% up to 300%8.05%9.5% 300% up to 400%9.5%9.5%. (ii) Indexing(I) In generalSubject to subclause (II), in the case of taxable years beginning in any calendar year after 2014, the initial and final applicable percentages under clause (i) (as in effect for the preceding calendar year after application of this clause) shall be adjusted to reflect the excess of the rate of premium growth for the preceding calendar year over the rate of income growth for the preceding calendar year. (II) Additional adjustmentExcept as provided in subclause (III), in the case of any calendar year after 2018, the percentages described in subclause (I) shall, in addition to the adjustment under subclause (I), be adjusted to reflect the excess (if any) of the rate of premium growth estimated under subclause (I) for the preceding calendar year over the rate of growth in the consumer price index for the preceding calendar year. (III) FailsafeSubclause (II) shall apply for any calendar year only if the aggregate amount of premium tax credits under this section and cost-sharing reductions under section 1402 of the Patient Protection and Affordable Care Act for the preceding calendar year exceeds an amount equal to 0.504 percent of the gross domestic product for the preceding calendar year. (iii) Temporary percentages for 2021 through 2025In the case of a taxable year beginning after December 31, 2020, and before January 1, 2026—(I) clause (ii) shall not apply for purposes of adjusting premium percentages under this subparagraph, and (II) the following table shall be applied in lieu of the table contained in clause (i): In the case of household income (expressed as a percent of poverty line) within the following income tier:The initial premium percentage is—The final premium percentage is— Up to 150.0 percent0.00.0 150.0 percent up to 200.0 percent0.02.0 200.0 percent up to 250.0 percent2.04.0 250.0 percent up to 300.0 percent4.06.0 300.0 percent up to 400.0 percent6.08.5 400.0 percent and higher8.58.5 (B) Applicable second lowest cost silver planThe applicable second lowest cost silver plan with respect to any applicable taxpayer is the second lowest cost silver plan of the individual market in the rating area in which the taxpayer resides which—(i) is offered through the same Exchange through which the qualified health plans taken into account under paragraph (2)(A) were offered, and (ii) provides—(I) self-only coverage in the case of an applicable taxpayer—(aa) whose tax for the taxable year is determined under section 1(c) 22 See References in Text note below. (relating to unmarried individuals other than surviving spouses and heads of households) and who is not allowed a deduction under section 151 for the taxable year with respect to a dependent, or (bb) who is not described in item (aa) but who purchases only self-only coverage, and (II) family coverage in the case of any other applicable taxpayer. If a taxpayer files a joint return and no credit is allowed under this section with respect to 1 of the spouses by reason of subsection (e), the taxpayer shall be treated as described in clause (ii)(I) unless a deduction is allowed under section 151 for the taxable year with respect to a dependent other than either spouse and subsection (e) does not apply to the dependent. (C) Adjusted monthly premiumThe adjusted monthly premium for an applicable second lowest cost silver plan is the monthly premium which would have been charged (for the rating area with respect to which the premiums under paragraph (2)(A) were determined) for the plan if each individual covered under a qualified health plan taken into account under paragraph (2)(A) were covered by such silver plan and the premium was adjusted only for the age of each such individual in the manner allowed under section 2701 of the Public Health Service Act. In the case of a State participating in the wellness discount demonstration project under section 2705(d) of the Public Health Service Act, the adjusted monthly premium shall be determined without regard to any premium discount or rebate under such project. (D) Additional benefitsIf—(i) a qualified health plan under section 1302(b)(5) of the Patient Protection and Affordable Care Act offers benefits in addition to the essential health benefits required to be provided by the plan, or (ii) a State requires a qualified health plan under section 1311(d)(3)(B) of such Act to cover benefits in addition to the essential health benefits required to be provided by the plan, the portion of the premium for the plan properly allocable (under rules prescribed by the Secretary of Health and Human Services) to such additional benefits shall not be taken into account in determining either the monthly premium or the adjusted monthly premium under paragraph (2). (E) Special rule for pediatric dental coverageFor purposes of determining the amount of any monthly premium, if an individual enrolls in both a qualified health plan and a plan described in section 1311(d)(2)(B)(ii)(I) 2 of the Patient Protection and Affordable Care Act for any plan year, the portion of the premium for the plan described in such section that (under regulations prescribed by the Secretary) is properly allocable to pediatric dental benefits which are included in the essential health benefits required to be provided by a qualified health plan under section 1302(b)(1)(J) of such Act shall be treated as a premium payable for a qualified health plan. (c) Definition and rules relating to applicable taxpayers, coverage months, and qualified health planFor purposes of this section—(1) Applicable taxpayer(A) In generalThe term “applicable taxpayer” means, with respect to any taxable year, a taxpayer whose household income for the taxable year equals or exceeds 100 percent but does not exceed 400 percent of an amount equal to the poverty line for a family of the size involved. [(B) Repealed. Pub. L. 119–21, § 71302(a), July 4, 2025, 139 Stat. 322] (C) Married couples must file joint returnIf the taxpayer is married (within the meaning of section 7703) at the close of the taxable year, the taxpayer shall be treated as an applicable taxpayer only if the taxpayer and the taxpayer’s spouse file a joint return for the taxable year. (D) Denial of credit to dependentsNo credit shall be allowed under this section to any individual with respect to whom a deduction under section 151 is allowable to another taxpayer for a taxable year beginning in the calendar year in which such individual’s taxable year begins. (E) Temporary rule for 2021 through 2025In the case of a taxable year beginning after December 31, 2020, and before January 1, 2026, subparagraph (A) shall be applied without regard to “but does not exceed 400 percent”. (2) Coverage monthFor purposes of this subsection—(A) In generalThe term “coverage month” means, with respect to an applicable taxpayer, any month if—(i) as of the first day of such month the taxpayer, the taxpayer’s spouse, or any dependent of the taxpayer is covered by a qualified health plan described in subsection (b)(2)(A) that was enrolled in through an Exchange established by the State under section 1311 of the Patient Protection and Affordable Care Act, and (ii) the premium for coverage under such plan for such month is paid by the taxpayer (or through advance payment of the credit under subsection (a) under section 1412 of the Patient Protection and Affordable Care Act). (B) Exception for minimum essential coverage(i) In generalThe term “coverage month” shall not include any month with respect to an individual if for such month the individual is eligible for minimum essential coverage other than eligibility for coverage described in section 5000A(f)(1)(C) (relating to coverage in the individual market). (ii) Minimum essential coverageThe term “minimum essential coverage” has the meaning given such term by section 5000A(f). (C) Special rule for employer-sponsored minimum essential coverageFor purposes of subparagraph (B)—(i) Coverage must be affordableExcept as provided in clause (iii), an employee shall not be treated as eligible for minimum essential coverage if such coverage—(I) consists of an eligible employer-sponsored plan (as defined in section 5000A(f)(2)), and (II) the employee’s required contribution (within the meaning of section 5000A(e)(1)(B)) with respect to the plan exceeds 9.5 percent of the applicable taxpayer’s household income. This clause shall also apply to an individual who is eligible to enroll in the plan by reason of a relationship the individual bears to the employee. (ii) Coverage must provide minimum valueExcept as provided in clause (iii), an employee shall not be treated as eligible for minimum essential coverage if such coverage consists of an eligible employer-sponsored plan (as defined in section 5000A(f)(2)) and the plan’s share of the total allowed costs of benefits provided under the plan is less than 60 percent of such costs. (iii) Employee or family must not be covered under employer planClauses (i) and (ii) shall not apply if the employee (or any individual described in the last sentence of clause (i)) is covered under the eligible employer-sponsored plan or the grandfathered health plan. (iv) IndexingIn the case of plan years beginning in any calendar year after 2014, the Secretary shall adjust the 9.5 percent under clause (i)(II) in the same manner as the percentages are adjusted under subsection (b)(3)(A)(ii). (3) Definitions and other rules(A) Qualified health plan(i) 33 See Amendment of Subsection (c)(3)(A) note below. In generalThe term “qualified health plan” has the meaning given such term by section 1301(a) of the Patient Protection and Affordable Care Act, except that such term shall not include a qualified health plan which is a catastrophic plan described in section 1302(e) of such Act. (ii) 3 Pre-enrollment verification process requiredSuch term shall not include any plan enrolled in through an Exchange, unless such Exchange provides a process for pre-enrollment verification through which any applicant may, beginning not later than August 1, verify with the Exchange the applicant’s household income and eligibility for enrollment in such plan for plan years beginning in the subsequent year. (iii) Exception in case of certain special enrollment periodsSuch term shall not include any plan enrolled in during a special enrollment period provided for by an Exchange—(I) on the basis of the relationship of the individual’s expected household income to such a percentage of the poverty line (or such other amount) as is prescribed by the Secretary of Health and Human Services for purposes of such period, and (II) not in connection with the occurrence of an event or change in circumstances specified by the Secretary of Health and Human Services for such purposes. (B) Grandfathered health planThe term “grandfathered health plan” has the meaning given such term by section 1251 of the Patient Protection and Affordable Care Act. (4) Special rules for qualified small employer health reimbursement arrangements(A) In generalThe term “coverage month” shall not include any month with respect to an employee (or any spouse or dependent of such employee) if for such month the employee is provided a qualified small employer health reimbursement arrangement which constitutes affordable coverage. (B) Denial of double benefitIn the case of any employee who is provided a qualified small employer health reimbursement arrangement for any coverage month (determined without regard to subparagraph (A)), the credit otherwise allowable under subsection (a) to the taxpayer for such month shall be reduced (but not below zero) by the amount described in subparagraph (C)(i)(II) for such month. (C) Affordable coverageFor purposes of subparagraph (A), a qualified small employer health reimbursement arrangement shall be treated as constituting affordable coverage for a month if—(i) the excess of—(I) the amount that would be paid by the employee as the premium for such month for self-only coverage under the second lowest cost silver plan offered in the relevant individual health insurance market, over (II) 1⁄12 of the employee’s permitted benefit (as defined in section 9831(d)(3)(C)) under such arrangement, does not exceed— (ii) 1⁄12 of 9.5 percent of the employee’s household income. (D) Qualified small employer health reimbursement arrangementFor purposes of this paragraph, the term “qualified small employer health reimbursement arrangement” has the meaning given such term by section 9831(d)(2). (E) Coverage for less than entire yearIn the case of an employee who is provided a qualified small employer health reimbursement arrangement for less than an entire year, subparagraph (C)(i)(II) shall be applied by substituting “the number of months during the year for which such arrangement was provided” for “12”. (F) IndexingIn the case of plan years beginning in any calendar year after 2014, the Secretary shall adjust the 9.5 percent amount under subparagraph (C)(ii) in the same manner as the percentages are adjusted under subsection (b)(3)(A)(ii). (d) Terms relating to income and familiesFor purposes of this section—(1) Family sizeThe family size involved with respect to any taxpayer shall be equal to the number of individuals for whom the taxpayer is allowed a deduction under section 151 (relating to allowance of deduction for personal exemptions) for the taxable year. (2) Household income(A) Household incomeThe term “household income” means, with respect to any taxpayer, an amount equal to the sum of—(i) the modified adjusted gross income of the taxpayer, plus (ii) the aggregate modified adjusted gross incomes of all other individuals who—(I) were taken into account in determining the taxpayer’s family size under paragraph (1), and (II) were required to file a return of tax imposed by section 1 for the taxable year. (B) Modified adjusted gross incomeThe term “modified adjusted gross income” means adjusted gross income increased by—(i) any amount excluded from gross income under section 911, (ii) any amount of interest received or accrued by the taxpayer during the taxable year which is exempt from tax, and (iii) an amount equal to the portion of the taxpayer’s social security benefits (as defined in section 86(d)) which is not included in gross income under section 86 for the taxable year. (3) Poverty line(A) In generalThe term “poverty line” has the meaning given that term in section 2110(c)(5) of the Social Security Act (42 U.S.C. 1397jj(c)(5)). (B) Poverty line usedIn the case of any qualified health plan offered through an Exchange for coverage during a taxable year beginning in a calendar year, the poverty line used shall be the most recently published poverty line as of the 1st day of the regular enrollment period for coverage during such calendar year. (e) Rules for individuals not lawfully present(1) In generalIf 1 or more individuals for whom a taxpayer is allowed a deduction under section 151 (relating to allowance of deduction for personal exemptions) for the taxable year (including the taxpayer or his spouse) are individuals who are not lawfully present—(A) the aggregate amount of premiums otherwise taken into account under clauses (i) and (ii) of subsection (b)(2)(A) shall be reduced by the portion (if any) of such premiums which is attributable to such individuals, and (B) for purposes of applying this section, the determination as to what percentage a taxpayer’s household income bears to the poverty level for a family of the size involved shall be made under one of the following methods:(i) A method under which—(I) the taxpayer’s family size is determined by not taking such individuals into account, and (II) the taxpayer’s household income is equal to the product of the taxpayer’s household income (determined without regard to this subsection) and a fraction—(aa) the numerator of which is the poverty line for the taxpayer’s family size determined after application of subclause (I), and (bb) the denominator of which is the poverty line for the taxpayer’s family size determined without regard to subclause (I). (ii) A comparable method reaching the same result as the method under clause (i). (2) Lawfully presentFor purposes of this section, an individual shall be treated as lawfully present only if the individual is, and is reasonably expected to be for the entire period of enrollment for which the credit under this section is being claimed, a citizen or national of the United States or an alien lawfully present in the United States. (3) Secretarial authorityThe Secretary of Health and Human Services, in consultation with the Secretary, shall prescribe rules setting forth the methods by which calculations of family size and household income are made for purposes of this subsection. Such rules shall be designed to ensure that the least burden is placed on individuals enrolling in qualified health plans through an Exchange and taxpayers eligible for the credit allowable under this section. (f) Reconciliation of credit and advance credit(1) In generalThe amount of the credit allowed under this section for any taxable year shall be reduced (but not below zero) by the amount of any advance payment of such credit under section 1412 of the Patient Protection and Affordable Care Act. (2) Excess advance paymentsIf the advance payments to a taxpayer under section 1412 of the Patient Protection and Affordable Care Act for a taxable year exceed the credit allowed by this section (determined without regard to paragraph (1)), the tax imposed by this chapter for the taxable year shall be increased by the amount of such excess. (3) Information requirementEach Exchange (or any person carrying out 1 or more responsibilities of an Exchange under section 1311(f)(3) or 1321(c) of the Patient Protection and Affordable Care Act) shall provide the following information to the Secretary and to the taxpayer with respect to any health plan provided through the Exchange:(A) The level of coverage described in section 1302(d) of the Patient Protection and Affordable Care Act and the period such coverage was in effect. (B) The total premium for the coverage without regard to the credit under this section or cost-sharing reductions under section 1402 of such Act. (C) The aggregate amount of any advance payment of such credit or reductions under section 1412 of such Act. (D) The name, address, and TIN of the primary insured and the name and TIN of each other individual obtaining coverage under the policy. (E) Any information provided to the Exchange, including any change of circumstances, necessary to determine eligibility for, and the amount of, such credit. (F) Information necessary to determine whether a taxpayer has received excess advance payments. (g) Special rule for individuals who receive unemployment compensation during 2021(1) In generalFor purposes of this section, in the case of a taxpayer who has received, or has been approved to receive, unemployment compensation for any week beginning during 2021, for the taxable year in which such week begins—(A) such taxpayer shall be treated as an applicable taxpayer, and (B) there shall not be taken into account any household income of the taxpayer in excess of 133 percent of the poverty line for a family of the size involved. (2) Unemployment compensationFor purposes of this subsection, the term “unemployment compensation” has the meaning given such term in section 85(b). (3) Evidence of unemployment compensationFor purposes of this subsection, a taxpayer shall not be treated as having received (or been approved to receive) unemployment compensation for any week unless such taxpayer provides self-attestation of, and such documentation as the Secretary shall prescribe which demonstrates, such receipt or approval. (4) Clarification of rules remaining applicable(A) Joint return requirementParagraph (1)(A) shall not affect the application of subsection (c)(1)(C). (B) Household income and affordabillity 44 So in original. Probably should be “affordability”.Paragraph (1)(B) shall not apply to any determination of household income for purposes of paragraph (2)(C)(i)(II) or (4)(C)(ii) of subsection (c) 55 So in original. Probably should be followed by a period. (h) RegulationsThe Secretary shall prescribe such regulations as may be necessary to carry out the provisions of this section, including regulations which provide for—(1) the coordination of the credit allowed under this section with the program for advance payment of the credit under section 1412 of the Patient Protection and Affordable Care Act, and (2) the application of subsection (f) where the filing status of the taxpayer for a taxable year is different from such status used for determining the advance payment of the credit.

26 U.S.C. § 37 Overpayments of tax

For credit against the tax imposed by this subtitle for overpayments of tax, see section 6401.