USC Subpart A

USC Subpart A
in effect

26 U.S.C. § 21 Expenses for household and dependent care services necessary for gainful employment

(a) Allowance of credit(1) In generalIn the case of an individual for which there are 1 or more qualifying individuals (as defined in subsection (b)(1)) with respect to such individual, there shall be allowed as a credit against the tax imposed by this chapter for the taxable year an amount equal to the applicable percentage of the employment-related expenses (as defined in subsection (b)(2)) paid by such individual during the taxable year. (2) Applicable percentage definedFor purposes of paragraph (1), the term “applicable percentage” means 50 percent—(A) reduced (but not below 35 percent) by 1 percentage point for each $2,000 or fraction thereof by which the taxpayer’s adjusted gross income for the taxable year exceeds $15,000, and (B) further reduced (but not below 20 percent) by 1 percentage point for each $2,000 ($4,000 in the case of a joint return) or fraction thereof by which the taxpayer’s adjusted gross income for the taxable year exceeds $75,000 ($150,000 in the case of a joint return). (b) Definitions of qualifying individual and employment-related expensesFor purposes of this section—(1) Qualifying individualThe term “qualifying individual” means—(A) a dependent of the taxpayer (as defined in section 152(a)(1)) who has not attained age 13, (B) a dependent of the taxpayer (as defined in section 152, determined without regard to subsections (b)(1), (b)(2), and (d)(1)(B)) who is physically or mentally incapable of caring for himself or herself and who has the same principal place of abode as the taxpayer for more than one-half of such taxable year, or (C) the spouse of the taxpayer, if the spouse is physically or mentally incapable of caring for himself or herself and who has the same principal place of abode as the taxpayer for more than one-half of such taxable year. (2) Employment-related expenses(A) In generalThe term “employment-related expenses” means amounts paid for the following expenses, but only if such expenses are incurred to enable the taxpayer to be gainfully employed for any period for which there are 1 or more qualifying individuals with respect to the taxpayer:(i) expenses for household services, and (ii) expenses for the care of a qualifying individual. Such term shall not include any amount paid for services outside the taxpayer’s household at a camp where the qualifying individual stays overnight. (B) ExceptionEmployment-related expenses described in subparagraph (A) which are incurred for services outside the taxpayer’s household shall be taken into account only if incurred for the care of—(i) a qualifying individual described in paragraph (1)(A), or (ii) a qualifying individual (not described in paragraph (1)(A)) who regularly spends at least 8 hours each day in the taxpayer’s household. (C) Dependent care centersEmployment-related expenses described in subparagraph (A) which are incurred for services provided outside the taxpayer’s household by a dependent care center (as defined in subparagraph (D)) shall be taken into account only if—(i) such center complies with all applicable laws and regulations of a State or unit of local government, and (ii) the requirements of subparagraph (B) are met. (D) Dependent care center definedFor purposes of this paragraph, the term “dependent care center” means any facility which—(i) provides care for more than six individuals (other than individuals who reside at the facility), and (ii) receives a fee, payment, or grant for providing services for any of the individuals (regardless of whether such facility is operated for profit). (c) Dollar limit on amount creditableThe amount of the employment-related expenses incurred during any taxable year which may be taken into account under subsection (a) shall not exceed—(1) $3,000 if there is 1 qualifying individual with respect to the taxpayer for such taxable year, or (2) $6,000 if there are 2 or more qualifying individuals with respect to the taxpayer for such taxable year. The amount determined under paragraph (1) or (2) (whichever is applicable) shall be reduced by the aggregate amount excludable from gross income under section 129 for the taxable year. (d) Earned income limitation(1) In generalExcept as otherwise provided in this subsection, the amount of the employment-related expenses incurred during any taxable year which may be taken into account under subsection (a) shall not exceed—(A) in the case of an individual who is not married at the close of such year, such individual’s earned income for such year, or (B) in the case of an individual who is married at the close of such year, the lesser of such individual’s earned income or the earned income of his spouse for such year. (2) Special rule for spouse who is a student or incapable of caring for himselfIn the case of a spouse who is a student or a qualifying individual described in subsection (b)(1)(C), for purposes of paragraph (1), such spouse shall be deemed for each month during which such spouse is a full-time student at an educational institution, or is such a qualifying individual, to be gainfully employed and to have earned income of not less than—(A) $250 if subsection (c)(1) applies for the taxable year, or (B) $500 if subsection (c)(2) applies for the taxable year. In the case of any husband and wife, this paragraph shall apply with respect to only one spouse for any one month. (e) Special rulesFor purposes of this section—(1) Place of abodeAn individual shall not be treated as having the same principal place of abode of the taxpayer if at any time during the taxable year of the taxpayer the relationship between the individual and the taxpayer is in violation of local law. (2) Married couples must file joint returnIf the taxpayer is married at the close of the taxable year, the credit shall be allowed under subsection (a) only if the taxpayer and his spouse file a joint return for the taxable year. (3) Marital statusAn individual legally separated from his spouse under a decree of divorce or of separate maintenance shall not be considered as married. (4) Certain married individuals living apartIf—(A) an individual who is married and who files a separate return—(i) maintains as his home a household which constitutes for more than one-half of the taxable year the principal place of abode of a qualifying individual, and (ii) furnishes over half of the cost of maintaining such household during the taxable year, and (B) during the last 6 months of such taxable year such individual’s spouse is not a member of such household, such individual shall not be considered as married. (5) Special dependency test in case of divorced parents, etc.If—(A) section 152(e) applies to any child with respect to any calendar year, and (B) such child is under the age of 13 or is physically or mentally incapable of caring for himself, in the case of any taxable year beginning in such calendar year, such child shall be treated as a qualifying individual described in subparagraph (A) or (B) of subsection (b)(1) (whichever is appropriate) with respect to the custodial parent (as defined in section 152(e)(4)(A)), and shall not be treated as a qualifying individual with respect to the noncustodial parent. (6) Payments to related individualsNo credit shall be allowed under subsection (a) for any amount paid by the taxpayer to an individual—(A) with respect to whom, for the taxable year, a deduction under section 151(c) (relating to deduction for personal exemptions for dependents) is allowable either to the taxpayer or his spouse, or (B) who is a child of the taxpayer (within the meaning of section 152(f)(1)) who has not attained the age of 19 at the close of the taxable year. For purposes of this paragraph, the term “taxable year” means the taxable year of the taxpayer in which the service is performed. (7) StudentThe term “student” means an individual who during each of 5 calendar months during the taxable year is a full-time student at an educational organization. (8) Educational organizationThe term “educational organization” means an educational organization described in section 170(b)(1)(A)(ii). (9) Identifying information required with respect to service providerNo credit shall be allowed under subsection (a) for any amount paid to any person unless—(A) the name, address, and taxpayer identification number of such person are included on the return claiming the credit, or (B) if such person is an organization described in section 501(c)(3) and exempt from tax under section 501(a), the name and address of such person are included on the return claiming the credit. In the case of a failure to provide the information required under the preceding sentence, the preceding sentence shall not apply if it is shown that the taxpayer exercised due diligence in attempting to provide the information so required. (10) Identifying information required with respect to qualifying individualsNo credit shall be allowed under this section with respect to any qualifying individual unless the TIN of such individual is included on the return claiming the credit. (f) RegulationsThe Secretary shall prescribe such regulations as may be necessary to carry out the purposes of this section. (g) Special rules for 2021In the case of any taxable year beginning after December 31, 2020, and before January 1, 2022—(1) Credit made refundableIf the taxpayer (in the case of a joint return, either spouse) has a principal place of abode in the United States (determined as provided in section 32) for more than one-half of the taxable year, the credit allowed under subsection (a) shall be treated as a credit allowed under subpart C (and not allowed under this subpart). (2) Increase in dollar limit on amount creditableSubsection (c) shall be applied—(A) by substituting “$8,000” for “$3,000” in paragraph (1) thereof, and (B) by substituting “$16,000” for “$6,000” in paragraph (2) thereof. (3) Increase in applicable percentageSubsection (a)(2) shall be applied—(A) by substituting “50 percent” for “35 percent”, and (B) by substituting “$125,000” for “$15,000”. (4) Application of phaseout to high income individuals(A) In generalSubsection (a)(2) shall be applied by substituting “the phaseout percentage” for “20 percent”. (B) Phaseout percentageThe term “phaseout percentage” means 20 percent reduced (but not below zero) by 1 percentage point for each $2,000 (or fraction thereof) by which the taxpayer’s adjusted gross income for the taxable year exceeds $400,000. (h) Application of credit in possessions(1) Payment to possessions with mirror code tax systemsThe Secretary shall pay to each possession of the United States with a mirror code tax system amounts equal to the loss (if any) to that possession by reason of the application of this section (determined without regard to this subsection) with respect to taxable years beginning in or with 2021. Such amounts shall be determined by the Secretary based on information provided by the government of the respective possession. (2) Payments to other possessionsThe Secretary shall pay to each possession of the United States which does not have a mirror code tax system amounts estimated by the Secretary as being equal to the aggregate benefits that would have been provided to residents of such possession by reason of this section with respect to taxable years beginning in or with 2021 if a mirror code tax system had been in effect in such possession. The preceding sentence shall not apply unless the respective possession has a plan, which has been approved by the Secretary, under which such possession will promptly distribute such payments to its residents. (3) Coordination with credit allowed against United States income taxesIn the case of any taxable year beginning in or with 2021, no credit shall be allowed under this section to any individual—(A) to whom a credit is allowable against taxes imposed by a possession with a mirror code tax system by reason of this section, or (B) who is eligible for a payment under a plan described in paragraph (2). (4) Mirror code tax systemFor purposes of this subsection, the term “mirror code tax system” means, with respect to any possession of the United States, the income tax system of such possession if the income tax liability of the residents of such possession under such system is determined by reference to the income tax laws of the United States as if such possession were the United States. (5) Treatment of paymentsFor purposes of section 1324 of title 31, United States Code, the payments under this subsection shall be treated in the same manner as a refund due from a credit provision referred to in subsection (b)(2) of such section.

26 U.S.C. § 22 Credit for the elderly and the permanently and totally disabled

(a) General ruleIn the case of a qualified individual, there shall be allowed as a credit against the tax imposed by this chapter for the taxable year an amount equal to 15 percent of such individual’s section 22 amount for such taxable year. (b) Qualified individualFor purposes of this section, the term “qualified individual” means any individual—(1) who has attained age 65 before the close of the taxable year, or (2) who retired on disability before the close of the taxable year and who, when he retired, was permanently and totally disabled. (c) Section 22 amountFor purposes of subsection (a)—(1) In generalAn individual’s section 22 amount for the taxable year shall be the applicable initial amount determined under paragraph (2), reduced as provided in paragraph (3) and in subsection (d). (2) Initial amount(A) In generalExcept as provided in subparagraph (B), the initial amount shall be—(i) $5,000 in the case of a single individual, or a joint return where only one spouse is a qualified individual, (ii) $7,500 in the case of a joint return where both spouses are qualified individuals, or (iii) $3,750 in the case of a married individual filing a separate return. (B) Limitation in case of individuals who have not attained age 65(i) In generalIn the case of a qualified individual who has not attained age 65 before the close of the taxable year, except as provided in clause (ii), the initial amount shall not exceed the disability income for the taxable year. (ii) Special rules in case of joint returnIn the case of a joint return where both spouses are qualified individuals and at least one spouse has not attained age 65 before the close of the taxable year—(I) if both spouses have not attained age 65 before the close of the taxable year, the initial amount shall not exceed the sum of such spouses’ disability income, or (II) if one spouse has attained age 65 before the close of the taxable year, the initial amount shall not exceed the sum of $5,000 plus the disability income for the taxable year of the spouse who has not attained age 65 before the close of the taxable year. (iii) Disability incomeFor purposes of this subparagraph, the term “disability income” means the aggregate amount includable in the gross income of the individual for the taxable year under section 72 or 105(a) to the extent such amount constitutes wages (or payments in lieu of wages) for the period during which the individual is absent from work on account of permanent and total disability. (3) Reduction(A) In generalThe reduction under this paragraph is an amount equal to the sum of the amounts received by the individual (or, in the case of a joint return, by either spouse) as a pension or annuity or as a disability benefit—(i) which is excluded from gross income and payable under—(I) title II of the Social Security Act, (II) the Railroad Retirement Act of 1974, or (III) a law administered by the Department of Veterans Affairs, or (ii) which is excluded from gross income under any provision of law not contained in this title. No reduction shall be made under clause (i)(III) for any amount described in section 104(a)(4). (B) Treatment of certain workmen’s compensation benefitsFor purposes of subparagraph (A), any amount treated as a social security benefit under section 86(d)(3) shall be treated as a disability benefit received under title II of the Social Security Act. (d) Adjusted gross income limitationIf the adjusted gross income of the taxpayer exceeds—(1) $7,500 in the case of a single individual, (2) $10,000 in the case of a joint return, or (3) $5,000 in the case of a married individual filing a separate return, the section 22 amount shall be reduced by one-half of the excess of the adjusted gross income over $7,500, $10,000, or $5,000, as the case may be. (e) Definitions and special rulesFor purposes of this section—(1) Married couple must file joint returnExcept in the case of a husband and wife who live apart at all times during the taxable year, if the taxpayer is married at the close of the taxable year, the credit provided by this section shall be allowed only if the taxpayer and his spouse file a joint return for the taxable year. (2) Marital statusMarital status shall be determined under section 7703. (3) Permanent and total disability definedAn individual is permanently and totally disabled if he is unable to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment which can be expected to result in death or which has lasted or can be expected to last for a continuous period of not less than 12 months. An individual shall not be considered to be permanently and totally disabled unless he furnishes proof of the existence thereof in such form and manner, and at such times, as the Secretary may require. (f) Nonresident alien ineligible for creditNo credit shall be allowed under this section to any nonresident alien.

26 U.S.C. § 23 Adoption expenses

(a) Allowance of credit(1) In generalIn the case of an individual, there shall be allowed as a credit against the tax imposed by this chapter the amount of the qualified adoption expenses paid or incurred by the taxpayer. (2) Year credit allowedThe credit under paragraph (1) with respect to any expense shall be allowed—(A) in the case of any expense paid or incurred before the taxable year in which such adoption becomes final, for the taxable year following the taxable year during which such expense is paid or incurred, and (B) in the case of an expense paid or incurred during or after the taxable year in which such adoption becomes final, for the taxable year in which such expense is paid or incurred. (3) $10,000 credit for adoption of child with special needs regardless of expensesIn the case of an adoption of a child with special needs which becomes final during a taxable year, the taxpayer shall be treated as having paid during such year qualified adoption expenses with respect to such adoption in an amount equal to the excess (if any) of $10,000 over the aggregate qualified adoption expenses actually paid or incurred by the taxpayer with respect to such adoption during such taxable year and all prior taxable years. (4) Portion of credit refundableSo much of the credit allowed under paragraph (1) as does not exceed $5,000 shall be treated as a credit allowed under subpart C and not as a credit allowed under this subpart. (b) Limitations(1) Dollar limitationThe aggregate amount of qualified adoption expenses which may be taken into account under subsection (a) for all taxable years with respect to the adoption of a child by the taxpayer shall not exceed $10,000. (2) Income limitation(A) In generalThe amount allowable as a credit under subsection (a) for any taxable year (determined without regard to subsection (c)) shall be reduced (but not below zero) by an amount which bears the same ratio to the amount so allowable (determined without regard to this paragraph but with regard to paragraph (1)) as—(i) the amount (if any) by which the taxpayer’s adjusted gross income exceeds $150,000, bears to (ii) $40,000. (B) Determination of adjusted gross incomeFor purposes of subparagraph (A), adjusted gross income shall be determined without regard to sections 911, 931, and 933. (3) Denial of double benefit(A) In generalNo credit shall be allowed under subsection (a) for any expense for which a deduction or credit is allowed under any other provision of this chapter. (B) GrantsNo credit shall be allowed under subsection (a) for any expense to the extent that funds for such expense are received under any Federal, State, or local program. (c) Carryforwards of unused credit(1) In generalIf the portion of the credit allowable under subsection (a) which is allowed under this subpart for any taxable year exceeds the limitation imposed by section 26(a) for such taxable year reduced by the sum of the credits allowable under this subpart (other than this section and section 25D), such excess shall be carried to the succeeding taxable year and added to the portion of the credit allowable under subsection (a) which is allowed under this subpart for such taxable year. (2) LimitationNo credit may be carried forward under this subsection to any taxable year following the fifth taxable year after the taxable year in which the credit arose. For purposes of the preceding sentence, credits shall be treated as used on a first-in first-out basis. (d) DefinitionsFor purposes of this section—(1) Qualified adoption expensesThe term “qualified adoption expenses” means reasonable and necessary adoption fees, court costs, attorney fees, and other expenses—(A) which are directly related to, and the principal purpose of which is for, the legal adoption of an eligible child by the taxpayer, (B) which are not incurred in violation of State or Federal law or in carrying out any surrogate parenting arrangement, (C) which are not expenses in connection with the adoption by an individual of a child who is the child of such individual’s spouse, and (D) which are not reimbursed under an employer program or otherwise. (2) Eligible childThe term “eligible child” means any individual who—(A) has not attained age 18, or (B) is physically or mentally incapable of caring for himself. (3) Child with special needsThe term “child with special needs” means any child if—(A) a State or Indian tribal government has determined that the child cannot or should not be returned to the home of his parents, (B) such State or Indian tribal government has determined that there exists with respect to the child a specific factor or condition (such as his ethnic background, age, or membership in a minority or sibling group, or the presence of factors such as medical conditions or physical, mental, or emotional handicaps) because of which it is reasonable to conclude that such child cannot be placed with adoptive parents without providing adoption assistance, and (C) such child is a citizen or resident of the United States (as defined in section 217(h)(3)). (e) Special rules for foreign adoptionsIn the case of an adoption of a child who is not a citizen or resident of the United States (as defined in section 217(h)(3))—(1) subsection (a) shall not apply to any qualified adoption expense with respect to such adoption unless such adoption becomes final, and (2) any such expense which is paid or incurred before the taxable year in which such adoption becomes final shall be taken into account under this section as if such expense were paid or incurred during such year. (f) Filing requirements(1) Married couples must file joint returnsRules similar to the rules of paragraphs (2), (3), and (4) of section 21(e) shall apply for purposes of this section. (2) Taxpayer must include TIN(A) In generalNo credit shall be allowed under this section with respect to any eligible child unless the taxpayer includes (if known) the name, age, and TIN of such child on the return of tax for the taxable year. (B) Other methodsThe Secretary may, in lieu of the information referred to in subparagraph (A), require other information meeting the purposes of subparagraph (A), including identification of an agent assisting with the adoption. (g) Basis adjustmentsFor purposes of this subtitle, if a credit is allowed under this section for any expenditure with respect to any property, the increase in the basis of such property which would (but for this subsection) result from such expenditure shall be reduced by the amount of the credit so allowed. (h) Adjustments for inflation(1) In generalIn the case of a taxable year beginning after December 31, 2002, each of the dollar amounts in paragraphs (3) and (4) of subsection (a) and paragraphs (1) and (2)(A)(i) of subsection (b) 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 “calendar year 2001” for “calendar year 2016” in subparagraph (A)(ii) thereof. (2) RoundingIf any amount as increased under paragraph (1) is not a multiple of $10, such amount shall be rounded to the nearest multiple of $10. (3) Special rule for refundable portionIn the case of the dollar amount in subsection (a)(4), paragraph (1) shall be applied—(A) by substituting “2025” for “2002” in the matter preceding subparagraph (A), and (B) by substituting “calendar year 2024” for “calendar year 2001” in subparagraph (B) thereof. (i) RegulationsThe Secretary shall prescribe such regulations as may be appropriate to carry out this section and section 137, including regulations which treat unmarried individuals who pay or incur qualified adoption expenses with respect to the same child as 1 taxpayer for purposes of applying the dollar amounts in subsections (a)(3) and (b)(1) of this section and in section 137(b)(1).

26 U.S.C. § 24 Child tax credit

(a) Allowance of creditThere shall be allowed as a credit against the tax imposed by this chapter for the taxable year with respect to each qualifying child of the taxpayer for which the taxpayer is allowed a deduction under section 151 an amount equal to $1,000. (b) Limitations(1) Limitation based on adjusted gross incomeThe amount of the credit allowable under subsection (a) shall be reduced (but not below zero) by $50 for each $1,000 (or fraction thereof) by which the taxpayer’s modified adjusted gross income exceeds the threshold amount. For purposes of the preceding sentence, the term “modified adjusted gross income” means adjusted gross income increased by any amount excluded from gross income under section 911, 931, or 933. (2) Threshold amountFor purposes of paragraph (1), the term “threshold amount” means—(A) $110,000 in the case of a joint return, (B) $75,000 in the case of an individual who is not married, and (C) $55,000 in the case of a married individual filing a separate return. For purposes of this paragraph, marital status shall be determined under section 7703. (c) Qualifying childFor purposes of this section—(1) In generalThe term “qualifying child” means a qualifying child of the taxpayer (as defined in section 152(c)) who has not attained age 17. (2) Exception for certain noncitizensThe term “qualifying child” shall not include any individual who would not be a dependent if subparagraph (A) of section 152(b)(3) were applied without regard to all that follows “resident of the United States”. (d) Portion of credit refundable(1) In generalThe aggregate credits allowed to a taxpayer under subpart C shall be increased by the lesser of—(A) the credit which would be allowed under this section without regard to this subsection and the limitation under section 26(a) or (B) the amount by which the aggregate amount of credits allowed by this subpart (determined without regard to this subsection) would increase if the limitation imposed by section 26(a) were increased by the greater of—(i) 15 percent of so much of the taxpayer’s earned income (within the meaning of section 32) which is taken into account in computing taxable income for the taxable year as exceeds $3,000, or (ii) in the case of a taxpayer with 3 or more qualifying children, the excess (if any) of—(I) the taxpayer’s social security taxes for the taxable year, over (II) the credit allowed under section 32 for the taxable year. The amount of the credit allowed under this subsection shall not be treated as a credit allowed under this subpart and shall reduce the amount of credit otherwise allowable under subsection (a) without regard to section 26(a). For purposes of subparagraph (B), any amount excluded from gross income by reason of section 112 shall be treated as earned income which is taken into account in computing taxable income for the taxable year. (2) Social security taxesFor purposes of paragraph (1)—(A) In generalThe term “social security taxes” means, with respect to any taxpayer for any taxable year—(i) the amount of the taxes imposed by sections 3101 and 3201(a) on amounts received by the taxpayer during the calendar year in which the taxable year begins, (ii) 50 percent of the taxes imposed by section 1401 on the self-employment income of the taxpayer for the taxable year, and (iii) 50 percent of the taxes imposed by section 3211(a) on amounts received by the taxpayer during the calendar year in which the taxable year begins. (B) Coordination with special refund of social security taxesThe term “social security taxes” shall not include any taxes to the extent the taxpayer is entitled to a special refund of such taxes under section 6413(c). (C) Special ruleAny amounts paid pursuant to an agreement under section 3121(l) (relating to agreements entered into by American employers with respect to foreign affiliates) which are equivalent to the taxes referred to in subparagraph (A)(i) shall be treated as taxes referred to in such subparagraph. (3) Exception for taxpayers excluding foreign earned incomeParagraph (1) shall not apply to any taxpayer for any taxable year if such taxpayer elects to exclude any amount from gross income under section 911 for such taxable year. (e) Identification requirements(1) Qualifying child identification requirementNo credit shall be allowed under this section to a taxpayer with respect to any qualifying child unless the taxpayer includes the name and taxpayer identification number of such qualifying child on the return of tax for the taxable year and such taxpayer identification number was issued on or before the due date for filing such return. (2) Taxpayer identification requirementNo credit shall be allowed under this section if the taxpayer identification number of the taxpayer was issued after the due date for filing the return for the taxable year. (f) 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. (g) 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 subparagraph (A), 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. (h) Special rules for taxable years beginning after 2017(1) In generalIn the case of a taxable year beginning after December 31, 2017, this section shall be applied as provided in paragraphs (2) through (7). (2) Credit amountSubsection (a) shall be applied by substituting “$2,200” for “$1,000”. (3) LimitationIn lieu of the amount determined under subsection (b)(2), the threshold amount shall be $400,000 in the case of a joint return ($200,000 in any other case). (4) Partial credit allowed for certain other dependents(A) In generalThe credit determined under subsection (a) (after the application of paragraph (2)) shall be increased by $500 for each dependent of the taxpayer (as defined in section 152) other than a qualifying child described in subsection (c). (B) Exception for certain noncitizensSubparagraph (A) shall not apply with respect to any individual who would not be a dependent if subparagraph (A) of section 152(b)(3) were applied without regard to all that follows “resident of the United States”. (C) Certain qualifying childrenIn the case of any qualifying child with respect to whom a credit is not allowed under this section by reason of paragraph (7), such child shall be treated as a dependent to whom subparagraph (A) applies. (5) Maximum amount of refundable creditThe amount determined under subsection (d)(1)(A) with respect to any qualifying child shall not exceed $1,400, and such subsection shall be applied without regard to paragraph (4) of this subsection. (6) Earned income threshold for refundable creditSubsection (d)(1)(B)(i) shall be applied by substituting “$2,500” for “$3,000”. (7) Social security number required(A) In generalNo credit shall be allowed under this section to a taxpayer with respect to any qualifying child unless the taxpayer includes on the return of tax for the taxable year—(i) the taxpayer’s social security number (or, in the case of a joint return, the social security number of at least 1 spouse), and (ii) the social security number of such qualifying child. (B) Social security numberFor purposes of this paragraph, the term “social security number” means a social security number issued to an individual by the Social Security Administration, but only if the social security number is issued—(i) to a citizen of the United States or pursuant to subclause (I) (or that portion of subclause (III) that relates to subclause (I)) of section 205(c)(2)(B)(i) of the Social Security Act, and (ii) before the due date for such return. (i) Inflation adjustments(1) Maximum amount of refundable creditIn the case of a taxable year beginning after 2024, the $1,400 amount in subsection (h)(5) 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 “2017” for “2016” in subparagraph (A)(ii) thereof. (2) Special rule for adjustment of credit amountIn the case of a taxable year beginning after 2025, the $2,200 amount in subsection (h)(2) 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 “2024” for “2016” in subparagraph (A)(ii) thereof. (3) RoundingIf any increase under this subsection is not a multiple of $100, such increase shall be rounded to the next lowest multiple of $100. (j) Reconciliation of credit and advance credit(1) In generalThe amount of the credit allowed under this section to any taxpayer for any taxable year shall be reduced (but not below zero) by the aggregate amount of payments made under section 7527A to such taxpayer during such taxable year. Any failure to so reduce the credit shall be treated as arising out of a mathematical or clerical error and assessed according to section 6213(b)(1). (2) Excess advance payments(A) In generalIf the aggregate amount of payments under section 7527A to the taxpayer during the taxable year exceeds the amount of the credit allowed under this section to such taxpayer for such taxable year (determined without regard to paragraph (1)), the tax imposed by this chapter for such taxable year shall be increased by the amount of such excess. Any failure to so increase the tax shall be treated as arising out of a mathematical or clerical error and assessed according to section 6213(b)(1). (B) Safe harbor based on modified adjusted gross income(i) In generalIn the case of a taxpayer whose modified adjusted gross income (as defined in subsection (b)) for the taxable year does not exceed 200 percent of the applicable income threshold, the amount of the increase determined under subparagraph (A) with respect to such taxpayer for such taxable year shall be reduced (but not below zero) by the safe harbor amount. (ii) Phase out of safe harbor amountIn the case of a taxpayer whose modified adjusted gross income (as defined in subsection (b)) for the taxable year exceeds the applicable income threshold, the safe harbor amount otherwise in effect under clause (i) shall be reduced by the amount which bears the same ratio to such amount as such excess bears to the applicable income threshold. (iii) Applicable income thresholdFor purposes of this subparagraph, the term “applicable income threshold” means—(I) $60,000 in the case of a joint return or surviving spouse (as defined in section 2(a)), (II) $50,000 in the case of a head of household, and (III) $40,000 in any other case. (iv) Safe harbor amountFor purposes of this subparagraph, the term “safe harbor amount” means, with respect to any taxable year, the product of—(I) $2,000, multiplied by (II) the excess (if any) of the number of qualified children taken into account in determining the annual advance amount with respect to the taxpayer under section 7527A with respect to months beginning in such taxable year, over the number of qualified children taken into account in determining the credit allowed under this section for such taxable year. (k) Application of credit in possessions(1) Mirror code possessions(A) In generalThe Secretary shall pay to each possession of the United States with a mirror code tax system amounts equal to the loss (if any) to that possession by reason of the application of this section (determined without regard to this subsection) with respect to taxable years beginning after 2020. Such amounts shall be determined by the Secretary based on information provided by the government of the respective possession. (B) Coordination with credit allowed against United States income taxesNo credit shall be allowed under this section for any taxable year to any individual to whom a credit is allowable against taxes imposed by a possession of the United States with a mirror code tax system by reason of the application of this section in such possession for such taxable year. (C) Mirror code tax systemFor purposes of this paragraph, the term “mirror code tax system” means, with respect to any possession of the United States, the income tax system of such possession if the income tax liability of the residents of such possession under such system is determined by reference to the income tax laws of the United States as if such possession were the United States. (2) Puerto Rico(A) Application to taxable years in 2021(i) For application of refundable credit to residents of Puerto Rico, see subsection (i)(1). (ii) For nonapplication of advance payment to residents of Puerto Rico, see section 7527A(e)(4)(A). (B) Application to taxable years after 2021In the case of any bona fide resident of Puerto Rico (within the meaning of section 937(a)) for any taxable year beginning after December 31, 2021—(i) the credit determined under this section shall be allowable to such resident, and (ii) subsection (d)(1)(B)(ii) shall be applied without regard to the phrase “in the case of a taxpayer with 3 or more qualifying children”. (3) American Samoa(A) In generalThe Secretary shall pay to American Samoa amounts estimated by the Secretary as being equal to the aggregate benefits that would have been provided to residents of American Samoa by reason of the application of this section for taxable years beginning after 2020 if the provisions of this section had been in effect in American Samoa (applied as if American Samoa were the United States and without regard to the application of this section to bona fide residents of Puerto Rico under subsection (i)(1)). (B) Distribution requirementSubparagraph (A) shall not apply unless American Samoa has a plan, which has been approved by the Secretary, under which American Samoa will promptly distribute such payments to its residents. (C) Coordination with credit allowed against United States income taxes(i) In generalIn the case of a taxable year with respect to which a plan is approved under subparagraph (B), this section (other than this subsection) shall not apply to any individual eligible for a distribution under such plan. (ii) Application of section in event of absence of approved planIn the case of a taxable year with respect to which a plan is not approved under subparagraph (B)—(I) if such taxable year begins in 2021, subsection (i)(1) shall be applied by substituting “bona fide resident of Puerto Rico or American Samoa” for “bona fide resident of Puerto Rico”, and (II) if such taxable year begins after December 31, 2021, rules similar to the rules of paragraph (2)(B) shall apply with respect to bona fide residents of American Samoa (within the meaning of section 937(a)). (4) Treatment of paymentsFor purposes of section 1324 of title 31, United States Code, the payments under this subsection shall be treated in the same manner as a refund due from a credit provision referred to in subsection (b)(2) of such section.

26 U.S.C. § 25 Interest on certain home mortgages

(a) Allowance of credit(1) In generalThere shall be allowed as a credit against the tax imposed by this chapter for the taxable year an amount equal to the product of—(A) the certificate credit rate, and (B) the interest paid or accrued by the taxpayer during the taxable year on the remaining principal of the certified indebtedness amount. (2) Limitation where credit rate exceeds 20 percent(A) In generalIf the certificate credit rate exceeds 20 percent, the amount of the credit allowed to the taxpayer under paragraph (1) for any taxable year shall not exceed $2,000. (B) Special rule where 2 or more persons hold interests in residenceIf 2 or more persons hold interests in any residence, the limitation of subparagraph (A) shall be allocated among such persons in proportion to their respective interests in the residence. (b) Certificate credit rate; certified indebtedness amountFor purposes of this section—(1) Certificate credit rateThe term “certificate credit rate” means the rate of the credit allowable by this section which is specified in the mortgage credit certificate. (2) Certified indebtedness amountThe term “certified indebtedness amount” means the amount of indebtedness which is—(A) incurred by the taxpayer—(i) to acquire the principal residence of the taxpayer, (ii) as a qualified home improvement loan (as defined in section 143(k)(4)) with respect to such residence, or (iii) as a qualified rehabilitation loan (as defined in section 143(k)(5)) with respect to such residence, and (B) specified in the mortgage credit certificate. (c) Mortgage credit certificate; qualified mortgage credit certificate programFor purposes of this section—(1) Mortgage credit certificateThe term “mortgage credit certificate” means any certificate which—(A) is issued under a qualified mortgage credit certificate program by the State or political subdivision having the authority to issue a qualified mortgage bond to provide financing on the principal residence of the taxpayer, (B) is issued to the taxpayer in connection with the acquisition, qualified rehabilitation, or qualified home improvement of the taxpayer’s principal residence, (C) specifies—(i) the certificate credit rate, and (ii) the certified indebtedness amount, and (D) is in such form as the Secretary may prescribe. (2) Qualified mortgage credit certificate program(A) In generalThe term “qualified mortgage credit certificate program” means any program—(i) which is established by a State or political subdivision thereof for any calendar year for which it is authorized to issue qualified mortgage bonds, (ii) under which the issuing authority elects (in such manner and form as the Secretary may prescribe) not to issue an amount of private activity bonds which it may otherwise issue during such calendar year under section 146, (iii) under which the indebtedness certified by mortgage credit certificates meets the requirements of the following subsections of section 143 (as modified by subparagraph (B) of this paragraph):(I) subsection (c) (relating to residence requirements), (II) subsection (d) (relating to 3-year requirement), (III) subsection (e) (relating to purchase price requirement), (IV) subsection (f) (relating to income requirements), (V) subsection (h) (relating to portion of loans required to be placed in targeted areas), and (VI) paragraph (1) of subsection (i) (relating to other requirements), (iv) under which no mortgage credit certificate may be issued with respect to any residence any of the financing of which is provided from the proceeds of a qualified mortgage bond or a qualified veterans’ mortgage bond, (v) except to the extent provided in regulations, which is not limited to indebtedness incurred from particular lenders, (vi) except to the extent provided in regulations, which provides that a mortgage credit certificate is not transferrable, and (vii) if the issuing authority allocates a block of mortgage credit certificates for use in connection with a particular development, which requires the developer to furnish to the issuing authority and the homebuyer a certificate that the price for the residence is no higher than it would be without the use of a mortgage credit certificate. Under regulations, rules similar to the rules of subparagraphs (B) and (C) of section 143(a)(2) shall apply to the requirements of this subparagraph. (B) Modifications of section 143Under regulations prescribed by the Secretary, in applying section 143 for purposes of subclauses (II), (IV), and (V) of subparagraph (A)(iii)—(i) each qualified mortgage certificate credit program shall be treated as a separate issue, (ii) the product determined by multiplying—(I) the certified indebtedness amount of each mortgage credit certificate issued under such program, by (II) the certificate credit rate specified in such certificate, shall be treated as proceeds of such issue and the sum of such products shall be treated as the total proceeds of such issue, and (iii) paragraph (1) of section 143(d) shall be applied by substituting “100 percent” for “95 percent or more”. Clause (iii) shall not apply if the issuing authority submits a plan to the Secretary for administering the 95-percent requirement of section 143(d)(1) and the Secretary is satisfied that such requirement will be met under such plan. (d) Determination of certificate credit rateFor purposes of this section—(1) In generalThe certificate credit rate specified in any mortgage credit certificate shall not be less than 10 percent or more than 50 percent. (2) Aggregate limit on certificate credit rates(A) In generalIn the case of each qualified mortgage credit certificate program, the sum of the products determined by multiplying—(i) the certified indebtedness amount of each mortgage credit certificate issued under such program, by (ii) the certificate credit rate with respect to such certificate, shall not exceed 25 percent of the nonissued bond amount. (B) Nonissued bond amountFor purposes of subparagraph (A), the term “nonissued bond amount” means, with respect to any qualified mortgage credit certificate program, the amount of qualified mortgage bonds which the issuing authority is otherwise authorized to issue and elects not to issue under subsection (c)(2)(A)(ii). (e) Special rules and definitionsFor purposes of this section—(1) Carryforward of unused credit(A) In generalIf the credit allowable under subsection (a) for any taxable year exceeds the applicable tax limit for such taxable year, such excess shall be a carryover to each of the 3 succeeding taxable years and, subject to the limitations of subparagraph (B), shall be added to the credit allowable by subsection (a) for such succeeding taxable year. (B) LimitationThe amount of the unused credit which may be taken into account under subparagraph (A) for any taxable year shall not exceed the amount (if any) by which the applicable tax limit for such taxable year exceeds the sum of—(i) the credit allowable under subsection (a) for such taxable year determined without regard to this paragraph, and (ii) the amounts which, by reason of this paragraph, are carried to such taxable year and are attributable to taxable years before the unused credit year. (C) Applicable tax limitFor purposes of this paragraph, the term “applicable tax limit” means the limitation imposed by section 26(a) for the taxable year reduced by the sum of the credits allowable under this subpart (other than this section and sections 23 and 25D). (2) Indebtedness not treated as certified where certain requirements not in fact metSubsection (a) shall not apply to any indebtedness if all the requirements of subsection (c)(1), (d), (e), (f), and (i) of section 143 and clauses (iv), (v), and (vii) of subsection (c)(2)(A), were not in fact met with respect to such indebtedness. Except to the extent provided in regulations, the requirements described in the preceding sentence shall be treated as met if there is a certification, under penalty of perjury, that such requirements are met. (3) Period for which certificate in effect(A) In generalExcept as provided in subparagraph (B), a mortgage credit certificate shall be treated as in effect with respect to interest attributable to the period—(i) beginning on the date such certificate is issued, and (ii) ending on the earlier of the date on which—(I) the certificate is revoked by the issuing authority, or (II) the residence to which such certificate relates ceases to be the principal residence of the individual to whom the certificate relates. (B) Certificate invalid unless indebtedness incurred within certain periodA certificate shall not apply to any indebtedness which is incurred after the close of the second calendar year following the calendar year for which the issuing authority made the applicable election under subsection (c)(2)(A)(ii). (C) Notice to Secretary when certificate revokedAny issuing authority which revokes any mortgage credit certificate shall notify the Secretary of such revocation at such time and in such manner as the Secretary shall prescribe by regulations. (4) Reissuance of mortgage credit certificatesThe Secretary may prescribe regulations which allow the administrator of a mortgage credit certificate program to reissue a mortgage credit certificate specifying a certified mortgage indebtedness that replaces the outstanding balance of the certified mortgage indebtedness specified on the original certificate to any taxpayer to whom the original certificate was issued, under such terms and conditions as the Secretary determines are necessary to ensure that the amount of the credit allowable under subsection (a) with respect to such reissued certificate is equal to or less than the amount of credit which would be allowable under subsection (a) with respect to the original certificate for any taxable year ending after such reissuance. (5) Public notice that certificates will be issuedAt least 90 days before any mortgage credit certificate is to be issued after a qualified mortgage credit certificate program, the issuing authority shall provide reasonable public notice of—(A) the eligibility requirements for such certificate, (B) the methods by which such certificates are to be issued, and (C) such other information as the Secretary may require. (6) Interest paid or accrued to related personsNo credit shall be allowed under subsection (a) for any interest paid or accrued to a person who is a related person to the taxpayer (within the meaning of section 144(a)(3)(A)). (7) Principal residenceThe term “principal residence” has the same meaning as when used in section 121. (8) Qualified rehabilitation and home improvement(A) Qualified rehabilitationThe term “qualified rehabilitation” has the meaning given such term by section 143(k)(5)(B). (B) Qualified home improvementThe term “qualified home improvement” means an alteration, repair, or improvement described in section 143(k)(4). (9) Qualified mortgage bondThe term “qualified mortgage bond” has the meaning given such term by section 143(a)(1). (10) Manufactured housingFor purposes of this section, the term “single family residence” includes any manufactured home which has a minimum of 400 square feet of living space and a minimum width in excess of 102 inches and which is of a kind customarily used at a fixed location. Nothing in the preceding sentence shall be construed as providing that such a home will be taken into account in making determinations under section 143. (f) Reduction in aggregate amount of qualified mortgage bonds which may be issued where certain requirements not met(1) In generalIf for any calendar year any mortgage credit certificate program which satisfies procedural requirements with respect to volume limitations prescribed by the Secretary fails to meet the requirements of paragraph (2) of subsection (d), such requirements shall be treated as satisfied with respect to any certified indebtedness of such program, but the applicable State ceiling under subsection (d) of section 146 for the State in which such program operates shall be reduced by 1.25 times the correction amount with respect to such failure. Such reduction shall be applied to such State ceiling for the calendar year following the calendar year in which the Secretary determines the correction amount with respect to such failure. (2) Correction amount(A) In generalFor purposes of paragraph (1), the term “correction amount” means an amount equal to the excess credit amount divided by 0.25. (B) Excess credit amount(i) In generalFor purposes of subparagraph (A)(ii), the term “excess credit amount” means the excess of—(I) the credit amount for any mortgage credit certificate program, over (II) the amount which would have been the credit amount for such program had such program met the requirements of paragraph (2) of subsection (d). (ii) Credit amountFor purposes of clause (i), the term “credit amount” means the sum of the products determined under clauses (i) and (ii) of subsection (d)(2)(A). (3) Special rule for States having constitutional home rule citiesIn the case of a State having one or more constitutional home rule cities (within the meaning of section 146(d)(3)(C)), the reduction in the State ceiling by reason of paragraph (1) shall be allocated to the constitutional home rule city, or to the portion of the State not within such city, whichever caused the reduction. (4) Exception where certification programThe provisions of this subsection shall not apply in any case in which there is a certification program which is designed to ensure that the requirements of this section are met and which meets such requirements as the Secretary may by regulations prescribe. (5) WaiverThe Secretary may waive the application of paragraph (1) in any case in which he determines that the failure is due to reasonable cause. (g) Reporting requirementsEach person who makes a loan which is a certified indebtedness amount under any mortgage credit certificate shall file a report with the Secretary containing—(1) the name, address, and social security account number of the individual to which the certificate was issued, (2) the certificate’s issuer, date of issue, certified indebtedness amount, and certificate credit rate, and (3) such other information as the Secretary may require by regulations. Each person who issues a mortgage credit certificate shall file a report showing such information as the Secretary shall by regulations prescribe. Any such report shall be filed at such time and in such manner as the Secretary may require by regulations. (h) Regulations; contracts(1) RegulationsThe Secretary shall prescribe such regulations as may be necessary to carry out the purposes of this section, including regulations which may require recipients of mortgage credit certificates to pay a reasonable processing fee to defray the expenses incurred in administering the program. (2) ContractsThe Secretary is authorized to enter into contracts with any person to provide services in connection with the administration of this section. (i) Recapture of portion of Federal subsidy from use of mortgage credit certificatesFor provisions increasing the tax imposed by this chapter to recapture a portion of the Federal subsidy from the use of mortgage credit certificates, see section 143(m).

26 U.S.C. § 25A American Opportunity and Lifetime Learning credits

(a) Allowance of creditIn the case of an individual, there shall be allowed as a credit against the tax imposed by this chapter for the taxable year the amount equal to the sum of—(1) the American Opportunity Tax Credit, plus (2) the Lifetime Learning Credit. (b) American Opportunity Tax Credit(1) Per student creditIn the case of any eligible student for whom an election is in effect under this section for any taxable year, the American Opportunity Tax Credit is an amount equal to the sum of—(A) 100 percent of so much of the qualified tuition and related expenses paid by the taxpayer during the taxable year (for education furnished to the eligible student during any academic period beginning in such taxable year) as does not exceed $2,000, plus (B) 25 percent of such expenses so paid as exceeds $2,000 but does not exceed $4,000. (2) Limitations applicable to American Opportunity Tax Credit(A) Credit allowed only for 4 taxable yearsAn election to have this section apply with respect to any eligible student for purposes of the American Opportunity Tax Credit under subsection (a)(1) may not be made for any taxable year if such an election (by the taxpayer or any other individual) is in effect with respect to such student for any 4 prior taxable years. (B) Credit allowed for year only if individual is at least ½ time student for portion of yearThe American Opportunity Tax Credit under subsection (a)(1) shall not be allowed for a taxable year with respect to the qualified tuition and related expenses of an individual unless such individual is an eligible student for at least one academic period which begins during such year. (C) Credit allowed only for first 4 years of postsecondary educationThe American Opportunity Tax Credit under subsection (a)(1) shall not be allowed for a taxable year with respect to the qualified tuition and related expenses of an eligible student if the student has completed (before the beginning of such taxable year) the first 4 years of postsecondary education at an eligible educational institution. (D) Denial of credit if student convicted of a felony drug offenseThe American Opportunity Tax Credit under subsection (a)(1) shall not be allowed for qualified tuition and related expenses for the enrollment or attendance of a student for any academic period if such student has been convicted of a Federal or State felony offense consisting of the possession or distribution of a controlled substance before the end of the taxable year with or within which such period ends. (3) Eligible studentFor purposes of this subsection, the term “eligible student” means, with respect to any academic period, a student who—(A) meets the requirements of section 484(a)(1) of the Higher Education Act of 1965 (20 U.S.C. 1091(a)(1)), as in effect on the date of the enactment of this section, and (B) is carrying at least ½ the normal full-time work load for the course of study the student is pursuing. (4) Restrictions on taxpayers who improperly claimed American Opportunity Tax Credit in prior years(A) Taxpayers making prior fraudulent or reckless claims(i) In generalNo American Opportunity Tax Credit shall be allowed under this section for any taxable year in the disallowance period. (ii) Disallowance periodFor purposes of subparagraph (A), 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 the American Opportunity Tax 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 the American Opportunity Tax Credit under this section was due to reckless or intentional disregard of rules and regulations (but not due to fraud). (B) Taxpayers making improper prior claimsIn the case of a taxpayer who is denied the American Opportunity Tax Credit under this section for any taxable year as a result of the deficiency procedures under subchapter B of chapter 63, no American Opportunity Tax 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. (c) Lifetime Learning Credit(1) Per taxpayer creditThe Lifetime Learning Credit for any taxpayer for any taxable year is an amount equal to 20 percent of so much of the qualified tuition and related expenses paid by the taxpayer during the taxable year (for education furnished during any academic period beginning in such taxable year) as does not exceed $10,000. (2) Special rules for determining expenses(A) Coordination with American Opportunity Tax CreditThe qualified tuition and related expenses with respect to an individual who is an eligible student for whom a 11 So in original. Probably should be “an”. American Opportunity Tax Credit under subsection (a)(1) is allowed for the taxable year shall not be taken into account under this subsection. (B) Expenses eligible for Lifetime Learning CreditFor purposes of paragraph (1), qualified tuition and related expenses shall include expenses described in subsection (f)(1) with respect to any course of instruction at an eligible educational institution to acquire or improve job skills of the individual. (d) Limitations based on modified adjusted gross income(1) In generalThe American Opportunity Tax Credit and the Lifetime Learning Credit shall each (determined without regard to this paragraph) be reduced (but not below zero) by the amount which bears the same ratio to each such credit (as so determined) as—(A) the excess of—(i) the taxpayer’s modified adjusted gross income for such taxable year, over (ii) $80,000 ($160,000 in the case of a joint return), bears to (B) $10,000 ($20,000 in the case of a joint return). (2) Modified adjusted gross incomeFor purposes of this subsection, 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. (e) Election not to have section applyA taxpayer may elect not to have this section apply with respect to the qualified tuition and related expenses of an individual for any taxable year. (f) DefinitionsFor purposes of this section—(1) Qualified tuition and related expenses(A) In generalThe term “qualified tuition and related expenses” means tuition and fees required for the enrollment or attendance of—(i) the taxpayer, (ii) the taxpayer’s spouse, or (iii) any dependent of the taxpayer with respect to whom the taxpayer is allowed a deduction under section 151, at an eligible educational institution for courses of instruction of such individual at such institution. (B) Exception for education involving sports, etc.Such term does not include expenses with respect to any course or other education involving sports, games, or hobbies, unless such course or other education is part of the individual’s degree program. (C) Exception for nonacademic feesSuch term does not include student activity fees, athletic fees, insurance expenses, or other expenses unrelated to an individual’s academic course of instruction. (D) Required course materials taken into account for American Opportunity Tax CreditFor purposes of determining the American Opportunity Tax Credit, subparagraph (A) shall be applied by substituting “tuition, fees, and course materials” for “tuition and fees”. (2) Eligible educational institutionThe term “eligible educational institution” means an institution—(A) which is described in section 481 of the Higher Education Act of 1965 (20 U.S.C. 1088), as in effect on the date of the enactment of this section, and (B) which is eligible to participate in a program under title IV of such Act. (g) Special rules(1) Identification requirement(A) Social security number requirementNo credit shall be allowed under subsection (a) to an individual unless the individual includes on the return of tax for the taxable year—(i) such individual’s social security number, and (ii) in the case of a credit with respect to the qualified tuition and related expenses of an individual other than the taxpayer or the taxpayer’s spouse, the name and social security number of such individual. (B) InstitutionNo American Opportunity Tax Credit shall be allowed under this section unless the taxpayer includes the employer identification number of any institution to which the taxpayer paid qualified tuition and related expenses taken into account under this section on the return of tax for the taxable year. (C) Social security number definedFor purposes of this paragraph, the term “social security number” shall have the meaning given such term in section 24(h)(7). (2) Adjustment for certain scholarships, etc.The amount of qualified tuition and related expenses otherwise taken into account under subsection (a) with respect to an individual for an academic period shall be reduced (before the application of subsections (b), (c), and (d)) by the sum of any amounts paid for the benefit of such individual which are allocable to such period as—(A) a qualified scholarship which is excludable from gross income under section 117, (B) an educational assistance allowance under chapter 30, 31, 32, 34, or 35 of title 38, United States Code, or under chapter 1606 of title 10, United States Code, and (C) a payment (other than a gift, bequest, devise, or inheritance within the meaning of section 102(a)) for such individual’s educational expenses, or attributable to such individual’s enrollment at an eligible educational institution, which is excludable from gross income under any law of the United States. (3) Treatment of expenses paid by dependentIf a deduction under section 151 with respect to an individual is allowed to another taxpayer for a taxable year beginning in the calendar year in which such individual’s taxable year begins—(A) no credit shall be allowed under subsection (a) to such individual for such individual’s taxable year, (B) qualified tuition and related expenses paid by such individual during such individual’s taxable year shall be treated for purposes of this section as paid by such other taxpayer, and (C) a statement described in paragraph (8) and received by such individual shall be treated as received by the taxpayer. (4) Treatment of certain prepaymentsIf qualified tuition and related expenses are paid by the taxpayer during a taxable year for an academic period which begins during the first 3 months following such taxable year, such academic period shall be treated for purposes of this section as beginning during such taxable year. (5) Denial of double benefitNo credit shall be allowed under this section for any expense for which a deduction is allowed under any other provision of this chapter. (6) No credit for married individuals filing separate returnsIf the taxpayer is a married individual (within the meaning of section 7703), this section shall apply only if the taxpayer and the taxpayer’s spouse file a joint return for the taxable year. (7) Nonresident aliensIf the taxpayer is a nonresident alien individual for any portion of the taxable year, this section shall apply only if such individual is treated as a resident alien of the United States for purposes of this chapter by reason of an election under subsection (g) or (h) of section 6013. (8) Payee statement requirementExcept as otherwise provided by the Secretary, no credit shall be allowed under this section unless the taxpayer receives a statement furnished under section 6050S(d) which contains all of the information required by paragraph (2) thereof. [(h) Repealed. Pub. L. 116–260, div. EE, title I, § 104(a)(2), Dec. 27, 2020, 134 Stat. 3041] (i) Portion of American Opportunity Tax Credit made refundableForty percent of so much of the credit allowed under subsection (a) as is attributable to the American Opportunity Tax Credit (determined after application of subsection (d) and without regard to this paragraph 22 So in original. Probably should be “this subsection”. and section 26(a)) shall be treated as a credit allowable under subpart C (and not allowed under subsection (a)). The preceding sentence shall not apply to any taxpayer for any taxable year if such taxpayer is a child to whom subsection (g) of section 1 applies for such taxable year. (j) RegulationsThe Secretary may prescribe such regulations as may be necessary or appropriate to carry out this section, including regulations providing for a recapture of the credit allowed under this section in cases where there is a refund in a subsequent taxable year of any amount which was taken into account in determining the amount of such credit.

26 U.S.C. § 25B Elective deferrals and IRA contributions by certain individuals

(a) Allowance of creditIn 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 applicable percentage of so much of the qualified retirement savings contributions of the eligible individual for the taxable year as do not exceed $2,000. (b) Applicable percentageFor purposes of this section—(1) Joint returnsIn the case of a joint return, the applicable percentage is—(A) if the adjusted gross income of the taxpayer is not over $30,000, 50 percent, (B) if the adjusted gross income of the taxpayer is over $30,000 but not over $32,500, 20 percent, (C) if the adjusted gross income of the taxpayer is over $32,500 but not over $50,000, 10 percent, and (D) if the adjusted gross income of the taxpayer is over $50,000, zero percent. (2) Other returnsIn the case of—(A) a head of household, the applicable percentage shall be determined under paragraph (1) except that such paragraph shall be applied by substituting for each dollar amount therein (as adjusted under paragraph (3)) a dollar amount equal to 75 percent of such dollar amount, and (B) any taxpayer not described in paragraph (1) or subparagraph (A), the applicable percentage shall be determined under paragraph (1) except that such paragraph shall be applied by substituting for each dollar amount therein (as adjusted under paragraph (3)) a dollar amount equal to 50 percent of such dollar amount. (3) Inflation adjustmentIn the case of any taxable year beginning in a calendar year after 2006, each of the dollar amounts in paragraph (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 “calendar year 2005” for “calendar year 2016” in subparagraph (A)(ii) thereof. Any increase determined under the preceding sentence shall be rounded to the nearest multiple of $500. (c) Eligible individualFor purposes of this section—(1) In generalThe term “eligible individual” means any individual if such individual has attained the age of 18 as of the close of the taxable year. (2) Dependents and full-time students not eligibleThe term “eligible individual” shall not include—(A) any individual with respect to whom a deduction under section 151 is allowed to another taxpayer for a taxable year beginning in the calendar year in which such individual’s taxable year begins, and (B) any individual who is a student (as defined in section 152(f)(2)). (d) Qualified retirement savings contributionsFor purposes of this section—(1) In generalThe term “qualified retirement savings contributions” means, with respect to any taxable year, the sum of—(A) the amount of contributions made by the eligible individual during such taxable year to the ABLE account (within the meaning of section 529A) of which such individual is the designated beneficiary, and (B) in the case of any taxable year beginning before January 1, 2027—(i) the amount of the qualified retirement contributions (as defined in section 219(e)) made by the eligible individual, (ii) the amount of—(I) any elective deferrals (as defined in section 402(g)(3)) of such individual, and (II) any elective deferral of compensation by such individual under an eligible deferred compensation plan (as defined in section 457(b)) of an eligible employer described in section 457(e)(1)(A), and (iii) the amount of voluntary employee contributions by such individual to any qualified retirement plan (as defined in section 4974(c)). (2) Reduction for certain distributions(A) In generalThe qualified retirement savings contributions determined under paragraph (1) shall be reduced (but not below zero) by the aggregate distributions received by the individual during the testing period from any entity of a type to which contributions under paragraph (1) may be made. The preceding sentence shall not apply to the portion of any distribution which is not includible in gross income by reason of a trustee-to-trustee transfer or a rollover distribution. (B) Testing periodFor purposes of subparagraph (A), the testing period, with respect to a taxable year, is the period which includes—(i) such taxable year, (ii) the 2 preceding taxable years, and (iii) the period after such taxable year and before the due date (including extensions) for filing the return of tax for such taxable year. (C) Excepted distributionsThere shall not be taken into account under subparagraph (A)—(i) any distribution referred to in section 72(p), 401(k)(8), 401(m)(6), 402(g)(2), 404(k), or 408(d)(4), and (ii) any distribution to which section 408A(d)(3) applies. (D) Treatment of distributions received by spouse of individualFor purposes of determining distributions received by an individual under subparagraph (A) for any taxable year, any distribution received by the spouse of such individual shall be treated as received by such individual if such individual and spouse file a joint return for such taxable year and for the taxable year during which the spouse receives the distribution. (e) Adjusted gross incomeFor purposes of this section, adjusted gross income shall be determined without regard to sections 911, 931, and 933. (f) Investment in the contractNotwithstanding any other provision of law, a qualified retirement savings contribution shall not fail to be included in determining the investment in the contract for purposes of section 72 by reason of the credit under this section.

26 U.S.C. § 25C Energy efficient home improvement credit

(a) Allowance of creditIn the case of an individual, there shall be allowed as a credit against the tax imposed by this chapter for the taxable year an amount equal to 30 percent of the sum of—(1) the amount paid or incurred by the taxpayer for qualified energy efficiency improvements installed during such taxable year, (2) the amount of the residential energy property expenditures paid or incurred by the taxpayer during such taxable year, and (3) the amount paid or incurred by the taxpayer during the taxable year for home energy audits. (b) Limitations(1) In generalThe credit allowed under this section with respect to any taxpayer for any taxable year shall not exceed $1,200. (2) Energy propertyThe credit allowed under this section by reason of subsection (a)(2) with respect to any taxpayer for any taxable year shall not exceed, with respect to any item of qualified energy property, $600. (3) WindowsThe credit allowed under this section by reason of subsection (a)(1) with respect to any taxpayer for any taxable year shall not exceed, in the aggregate with respect to all exterior windows and skylights, $600. (4) DoorsThe credit allowed under this section by reason of subsection (a)(1) with respect to any taxpayer for any taxable year shall not exceed—(A) $250 in the case of any exterior door, and (B) $500 in the aggregate with respect to all exterior doors. (5) Heat pump and heat pump water heaters; biomass stoves and boilersNotwithstanding paragraphs (1) and (2), the credit allowed under this section by reason of subsection (a)(2) with respect to any taxpayer for any taxable year shall not, in the aggregate, exceed $2,000 with respect to amounts paid or incurred for property described in clauses (i) and (ii) of subsection (d)(2)(A) and in subsection (d)(2)(B). (6) Home energy audits(A) Dollar limitationThe amount of the credit allowed under this section by reason of subsection (a)(3) shall not exceed $150. (B) Substantiation requirementNo credit shall be allowed under this section by reason of subsection (a)(3) unless the taxpayer includes with the taxpayer’s return of tax such information or documentation as the Secretary may require. (c) Qualified energy efficiency improvementsFor purposes of this section—(1) In generalThe term “qualified energy efficiency improvements” means any energy efficient building envelope component, if—(A) such component is installed in or on a dwelling unit located in the United States and owned and used by the taxpayer as the taxpayer’s principal residence (within the meaning of section 121), (B) the original use of such component commences with the taxpayer, and (C) such component reasonably can be expected to remain in use for at least 5 years. (2) Energy efficient building envelope componentThe term “energy efficient building envelope component” means a building envelope component which meets—(A) in the case of an exterior window or skylight, Energy Star most efficient certification requirements, (B) in the case of an exterior door, applicable Energy Star requirements, and (C) in the case of any other component, the prescriptive criteria for such component established by the most recent International Energy Conservation Code standard in effect as of the beginning of the calendar year which is 2 years prior to the calendar year in which such component is placed in service. (3) Building envelope componentThe term “building envelope component” means—(A) any insulation material or system, including air sealing material or system, which is specifically and primarily designed to reduce the heat loss or gain of a dwelling unit when installed in or on such dwelling unit, (B) exterior windows (including skylights), and (C) exterior doors. (4) Manufactured homes includedThe term “dwelling unit” includes a manufactured home which conforms to Federal Manufactured Home Construction and Safety Standards (part 3280 of title 24, Code of Federal Regulations). (d) Residential energy property expendituresFor purposes of this section—(1) In generalThe term “residential energy property expenditures” means expenditures made by the taxpayer for qualified energy property which is—(A) installed on or in connection with a dwelling unit located in the United States and used as a residence by the taxpayer, and (B) originally placed in service by the taxpayer. Such term includes expenditures for labor costs properly allocable to the onsite preparation, assembly, or original installation of the property. (2) Qualified energy propertyThe term “qualified energy property” means any of the following:(A) Any of the following which meet or exceed the highest efficiency tier (not including any advanced tier) established by the Consortium for Energy Efficiency which is in effect as of the beginning of the calendar year in which the property is placed in service:(i) An electric or natural gas heat pump water heater. (ii) An electric or natural gas heat pump. (iii) A central air conditioner. (iv) A natural gas, propane, or oil water heater. (v) A natural gas, propane, or oil furnace or hot water boiler. (B) A biomass stove or boiler which—(i) uses the burning of biomass fuel to heat a dwelling unit located in the United States and used as a residence by the taxpayer, or to heat water for use in such a dwelling unit, and (ii) has a thermal efficiency rating of at least 75 percent (measured by the higher heating value of the fuel). (C) Any oil furnace or hot water boiler which—(i) meets or exceeds 2021 Energy Star efficiency criteria, and (ii) is rated by the manufacturer for use with fuel blends at least 20 percent of the volume of which consists of an eligible fuel. (D) Any improvement to, or replacement of, a panelboard, sub-panelboard, branch circuits, or feeders which—(i) is installed in a manner consistent with the National Electric Code, (ii) has a load capacity of not less than 200 amps, (iii) is installed in conjunction with—(I) any qualified energy efficiency improvements, or (II) any qualified energy property described in subparagraphs (A) through (C) for which a credit is allowed under this section for expenditures with respect to such property, and (iv) enables the installation and use of any property described in subclause (I) or (II) of clause (iii). (3) Eligible fuelFor purposes of paragraph (2), the term “eligible fuel” means—(A) biodiesel and renewable diesel (within the meaning of section 40A), (B) second generation biofuel (within the meaning of section 40), and (C) transportation fuel (as defined in section 45Z(d)(5)). (e) Home energy auditsFor purposes of this section, the term “home energy audit” means an inspection and written report with respect to a dwelling unit located in the United States and owned or used by the taxpayer as the taxpayer’s principal residence (within the meaning of section 121) which—(1) identifies the most significant and cost-effective energy efficiency improvements with respect to such dwelling unit, including an estimate of the energy and cost savings with respect to each such improvement, and (2) is conducted and prepared by a home energy auditor that meets the certification or other requirements specified by the Secretary in regulations or other guidance (as prescribed by the Secretary not later than 365 days after the date of the enactment of this subsection). (f) Special rulesFor purposes of this section—(1) Application of rulesRules similar to the rules under paragraphs (4), (5), (6), (7), and (8) of section 25D(e) shall apply. (2) Joint ownership of energy items(A) In generalAny expenditure otherwise qualifying as an expenditure under this section shall not be treated as failing to so qualify merely because such expenditure was made with respect to two or more dwelling units. (B) Limits applied separatelyIn the case of any expenditure described in subparagraph (A), the amount of the credit allowable under subsection (a) shall (subject to paragraph (1)) be computed separately with respect to the amount of the expenditure made for each dwelling unit. (3) Property financed by subsidized energy financingFor purposes of determining the amount of expenditures made by any individual with respect to any property, there shall not be taken into account expenditures which are made from subsidized energy financing (as defined in section 48(a)(4)(C)). (g) Basis adjustmentsFor purposes of this subtitle, if a credit is allowed under this section for any expenditure with respect to any property, the increase in the basis of such property which would (but for this subsection) result from such expenditure shall be reduced by the amount of the credit so allowed. (h) Product identification number requirement(1) In generalNo credit shall be allowed under subsection (a) with respect to any item of specified property placed in service after December 31, 2024, unless—(A) such item is produced by a qualified manufacturer, and (B) the taxpayer includes the qualified product identification number of such item on the return of tax for the taxable year. (2) Qualified product identification numberFor purposes of this section, the term “qualified product identification number” means, with respect to any item of specified property, the product identification number assigned to such item by the qualified manufacturer pursuant to the methodology referred to in paragraph (3). (3) Qualified manufacturerFor purposes of this section, the term “qualified manufacturer” means any manufacturer of specified property which enters into an agreement with the Secretary which provides that such manufacturer will—(A) assign a product identification number to each item of specified property produced by such manufacturer utilizing a methodology that will ensure that such number (including any alphanumeric) is unique to each such item (by utilizing numbers or letters which are unique to such manufacturer or by such other method as the Secretary may provide), (B) label such item with such number in such manner as the Secretary may provide, and (C) make periodic written reports to the Secretary (at such times and in such manner as the Secretary may provide) of the product identification numbers so assigned and including such information as the Secretary may require with respect to the item of specified property to which such number was so assigned. (4) Specified propertyFor purposes of this subsection, the term “specified property” means any qualified energy property and any property described in subparagraph (B) or (C) of subsection (c)(3). (i) TerminationThis section shall not apply with respect to any property placed in service after December 31, 2025.

26 U.S.C. § 25D Residential clean energy credit

(a) Allowance of creditIn the case of an individual, there shall be allowed as a credit against the tax imposed by this chapter for the taxable year an amount equal to the sum of the applicable percentages of—(1) the qualified solar electric property expenditures, (2) the qualified solar water heating property expenditures, (3) the qualified fuel cell property expenditures, (4) the qualified small wind energy property expenditures, (5) the qualified geothermal heat pump property expenditures, and (6) the qualified battery storage technology expenditures, made by the taxpayer during such year. (b) Limitations(1) Maximum credit for fuel cellsIn the case of any qualified fuel cell property expenditure, the credit allowed under subsection (a) (determined without regard to subsection (c)) for any taxable year shall not exceed $500 with respect to each half kilowatt of capacity of the qualified fuel cell property (as defined in section 48(c)(1)) to which such expenditure relates. (2) Certification of solar water heating propertyNo credit shall be allowed under this section for an item of property described in subsection (d)(1) unless such property is certified for performance by the non-profit Solar Rating Certification Corporation or a comparable entity endorsed by the government of the State in which such property is installed. (c) Carryforward of unused creditIf the credit allowable under subsection (a) exceeds the limitation imposed by section 26(a) for such taxable year reduced by the sum of the credits allowable under this subpart (other than this section), such excess shall be carried to the succeeding taxable year and added to the credit allowable under subsection (a) for such succeeding taxable year. (d) DefinitionsFor purposes of this section—(1) Qualified solar water heating property expenditureThe term “qualified solar water heating property expenditure” means an expenditure for property to heat water for use in a dwelling unit located in the United States and used as a residence by the taxpayer if at least half of the energy used by such property for such purpose is derived from the sun. (2) Qualified solar electric property expenditureThe term “qualified solar electric property expenditure” means an expenditure for property which uses solar energy to generate electricity for use in a dwelling unit located in the United States and used as a residence by the taxpayer. (3) Qualified fuel cell property expenditureThe term “qualified fuel cell property expenditure” means an expenditure for qualified fuel cell property (as defined in section 48(c)(1), without regard to subparagraph (D) thereof) installed on or in connection with a dwelling unit located in the United States and used as a principal residence (within the meaning of section 121) by the taxpayer. (4) Qualified small wind energy property expenditureThe term “qualified small wind energy property expenditure” means an expenditure for property which uses a wind turbine to generate electricity for use in connection with a dwelling unit located in the United States and used as a residence by the taxpayer. (5) Qualified geothermal heat pump property expenditure(A) In generalThe term “qualified geothermal heat pump property expenditure” means an expenditure for qualified geothermal heat pump property installed on or in connection with a dwelling unit located in the United States and used as a residence by the taxpayer. (B) Qualified geothermal heat pump propertyThe term “qualified geothermal heat pump property” means any equipment which—(i) uses the ground or ground water as a thermal energy source to heat the dwelling unit referred to in subparagraph (A) or as a thermal energy sink to cool such dwelling unit, and (ii) meets the requirements of the Energy Star program which are in effect at the time that the expenditure for such equipment is made. (6) Qualified battery storage technology expenditureThe term “qualified battery storage technology expenditure” means an expenditure for battery storage technology which—(A) is installed in connection with a dwelling unit located in the United States and used as a residence by the taxpayer, and (B) has a capacity of not less than 3 kilowatt hours. (e) Special rulesFor purposes of this section—(1) Labor costsExpenditures for labor costs properly allocable to the onsite preparation, assembly, or original installation of the property described in subsection (d) and for piping or wiring to interconnect such property to the dwelling unit shall be taken into account for purposes of this section. (2) Solar panelsNo expenditure relating to a solar panel or other property installed as a roof (or portion thereof) shall fail to be treated as property described in paragraph (1) or (2) of subsection (d) solely because it constitutes a structural component of the structure on which it is installed. (3) Swimming pools, etc., used as storage mediumExpenditures which are properly allocable to a swimming pool, hot tub, or any other energy storage medium which has a function other than the function of such storage shall not be taken into account for purposes of this section. (4) Fuel cell expenditure limitations in case of joint occupancyIn the case of any dwelling unit with respect to which qualified fuel cell property expenditures are made and which is jointly occupied and used during any calendar year as a residence by two or more individuals, the following rules shall apply:(A) Maximum expenditures for fuel cellsThe maximum amount of such expenditures which may be taken into account under subsection (a) by all such individuals with respect to such dwelling unit during such calendar year shall be $1,667 in the case of each half kilowatt of capacity of qualified fuel cell property (as defined in section 48(c)(1)) with respect to which such expenditures relate. (B) Allocation of expendituresThe expenditures allocated to any individual for the taxable year in which such calendar year ends shall be an amount equal to the lesser of—(i) the amount of expenditures made by such individual with respect to such dwelling during such calendar year, or (ii) the maximum amount of such expenditures set forth in subparagraph (A) multiplied by a fraction—(I) the numerator of which is the amount of such expenditures with respect to such dwelling made by such individual during such calendar year, and (II) the denominator of which is the total expenditures made by all such individuals with respect to such dwelling during such calendar year. (5) Tenant-stockholder in cooperative housing corporationIn the case of an individual who is a tenant-stockholder (as defined in section 216) in a cooperative housing corporation (as defined in such section), such individual shall be treated as having made his tenant-stockholder’s proportionate share (as defined in section 216(b)(3)) of any expenditures of such corporation. (6) Condominiums(A) In generalIn the case of an individual who is a member of a condominium management association with respect to a condominium which the individual owns, such individual shall be treated as having made the individual’s proportionate share of any expenditures of such association. (B) Condominium management associationFor purposes of this paragraph, the term “condominium management association” means an organization which meets the requirements of paragraph (1) of section 528(c) (other than subparagraph (E) thereof) with respect to a condominium project substantially all of the units of which are used as residences. (7) Allocation in certain casesIf less than 80 percent of the use of an item is for nonbusiness purposes, only that portion of the expenditures for such item which is properly allocable to use for nonbusiness purposes shall be taken into account. (8) When expenditure made; amount of expenditure(A) In generalExcept as provided in subparagraph (B), an expenditure with respect to an item shall be treated as made when the original installation of the item is completed. (B) Expenditures part of building constructionIn the case of an expenditure in connection with the construction or reconstruction of a structure, such expenditure shall be treated as made when the original use of the constructed or reconstructed structure by the taxpayer begins. (f) Basis adjustmentsFor purposes of this subtitle, if a credit is allowed under this section for any expenditure with respect to any property, the increase in the basis of such property which would (but for this subsection) result from such expenditure shall be reduced by the amount of the credit so allowed. (g) Applicable percentageFor purposes of subsection (a), the applicable percentage shall be—(1) in the case of property placed in service after December 31, 2016, and before January 1, 2020, 30 percent, (2) in the case of property placed in service after December 31, 2019, and before January 1, 2022, 26 percent, and (3) in the case of property placed in service after December 31, 2021, 30 percent. (h) TerminationThe credit allowed under this section shall not apply with respect to any expenditures made after December 31, 2025.

26 U.S.C. § 25E Previously-owned clean vehicles

(a) Allowance of creditIn the case of a qualified buyer who during a taxable year places in service a previously-owned clean vehicle, there shall be allowed as a credit against the tax imposed by this chapter for the taxable year an amount equal to the lesser of—(1) $4,000, or (2) the amount equal to 30 percent of the sale price with respect to such vehicle. (b) Limitation based on modified adjusted gross income(1) In generalNo credit shall be allowed under subsection (a) for any taxable year if—(A) the lesser of—(i) the modified adjusted gross income of the taxpayer for such taxable year, or (ii) the modified adjusted gross income of the taxpayer for the preceding taxable year, exceeds (B) the threshold amount. (2) Threshold amountFor purposes of paragraph (1)(B), the threshold amount shall be—(A) in the case of a joint return or a surviving spouse (as defined in section 2(a)), $150,000, (B) in the case of a head of household (as defined in section 2(b)), $112,500, and (C) in the case of a taxpayer not described in subparagraph (A) or (B), $75,000. (3) Modified adjusted gross incomeFor purposes of this subsection, the term “modified adjusted gross income” means adjusted gross income increased by any amount excluded from gross income under section 911, 931, or 933. (c) DefinitionsFor purposes of this section—(1) Previously-owned clean vehicleThe term “previously-owned clean vehicle” means, with respect to a taxpayer, a motor vehicle—(A) the model year of which is at least 2 years earlier than the calendar year in which the taxpayer acquires such vehicle, (B) the original use of which commences with a person other than the taxpayer, (C) which is acquired by the taxpayer in a qualified sale, and (D) which—(i) meets the requirements of subparagraphs (C), (D), (E), (F), and (H) (except for clause (iv) thereof) of section 30D(d)(1), or (ii) is a motor vehicle which—(I) satisfies the requirements under subparagraphs (A) and (B) of section 30B(b)(3), and (II) has a gross vehicle weight rating of less than 14,000 pounds. (2) Qualified saleThe term “qualified sale” means a sale of a motor vehicle—(A) by a dealer (as defined in section 30D(g)(8)), (B) for a sale price which does not exceed $25,000, and (C) which is the first transfer since the date of the enactment of this section to a qualified buyer other than the person with whom the original use of such vehicle commenced. (3) Qualified buyerThe term “qualified buyer” means, with respect to a sale of a motor vehicle, a taxpayer—(A) who is an individual, (B) who purchases such vehicle for use and not for resale, (C) with respect to whom no deduction is allowable with respect to another taxpayer under section 151, and (D) who has not been allowed a credit under this section for any sale during the 3-year period ending on the date of the sale of such vehicle. (4) Motor vehicle; capacityThe terms “motor vehicle” and “capacity” have the meaning given such terms in paragraphs (2) and (4) of section 30D(d), respectively. (d) VIN number requirementNo credit shall be allowed under subsection (a) with respect to any vehicle unless the taxpayer includes the vehicle identification number of such vehicle on the return of tax for the taxable year. (e) Application of certain rulesFor purposes of this section, rules similar to the rules of section 30D(f) (without regard to paragraph (10) or (11) thereof) shall apply for purposes of this section. (f) Transfer of creditRules similar to the rules of section 30D(g) shall apply. (g) TerminationNo credit shall be allowed under this section with respect to any vehicle acquired after September 30, 2025.

26 U.S.C. § 25F Qualified elementary and secondary education scholarships

(a) Allowance of creditIn the case of an individual who is a citizen or resident of the United States (within the meaning of section 7701(a)(9)), there shall be allowed as a credit against the tax imposed by this chapter for the taxable year an amount equal to the aggregate amount of qualified contributions made by the taxpayer during the taxable year. (b) Limitations(1) In generalThe credit allowed under subsection (a) to any taxpayer for any taxable year shall not exceed $1,700. (2) Reduction based on State creditThe amount allowed as a credit under subsection (a) for a taxable year shall be reduced by the amount allowed as a credit on any State tax return of the taxpayer for qualified contributions made by the taxpayer during the taxable year. (c) DefinitionsFor purposes of this section—(1) Covered StateThe term “covered State” means one of the States, or the District of Columbia, that, for a calendar year, voluntarily elects to participate under this section and to identify scholarship granting organizations in the State, in accordance with subsection (g). (2) Eligible studentThe term “eligible student” means an individual who—(A) is a member of a household with an income which, for the calendar year prior to the date of the application for a scholarship, is not greater than 300 percent of the area median gross income (as such term is used in section 42), and (B) is eligible to enroll in a public elementary or secondary school. (3) Qualified contributionThe term “qualified contribution” means a charitable contribution of cash to a scholarship granting organization that uses the contribution to fund scholarships for eligible students solely within the State in which the organization is listed pursuant to subsection (g). (4) Qualified elementary or secondary education expenseThe term “qualified elementary or secondary education expense” means any expense of an eligible student which is described in section 530(b)(3)(A). (5) Scholarship granting organizationThe term “scholarship granting organization” means any organization—(A) which—(i) is described in section 501(c)(3) and exempt from tax under section 501(a), and (ii) is not a private foundation, (B) which prevents the co-mingling of qualified contributions with other amounts by maintaining one or more separate accounts exclusively for qualified contributions, (C) which satisfies the requirements of subsection (d), and (D) which is included on the list submitted for the applicable covered State under subsection (g) for the applicable year. (d) Requirements for scholarship granting organizations(1) In generalAn organization meets the requirements of this subsection if—(A) such organization provides scholarships to 10 or more students who do not all attend the same school, (B) such organization spends not less than 90 percent of the income of the organization on scholarships for eligible students, (C) such organization does not provide scholarships for any expenses other than qualified elementary or secondary education expenses, (D) such organization provides a scholarship to eligible students with a priority for—(i) students awarded a scholarship the previous school year, and (ii) after application of clause (i), any eligible students who have a sibling who was awarded a scholarship from such organization, (E) such organization does not earmark or set aside contributions for scholarships on behalf of any particular student, and (F) such organization—(i) verifies the annual household income and family size of eligible students who apply for scholarships to ensure such students meet the requirement of subsection (c)(2)(A), and (ii) limits the awarding of scholarships to eligible students who are a member of a household for which the income does not exceed the amount established under subsection (c)(2)(A). (2) Prohibition on self-dealing(A) In generalA scholarship granting organization may not award a scholarship to any disqualified person. (B) Disqualified personFor purposes of this paragraph, a disqualified person shall be determined pursuant to rules similar to the rules of section 4946. (e) Denial of double benefitAny qualified contribution for which a credit is allowed under this section shall not be taken into account as a charitable contribution for purposes of section 170. (f) Carryforward of unused credit(1) In generalIf the credit allowable under subsection (a) for any taxable year exceeds the limitation imposed by section 26(a) for such taxable year reduced by the sum of the credits allowable under this subpart (other than this section, section 23, and section 25D), such excess shall be carried to the succeeding taxable year and added to the credit allowable under subsection (a) for such taxable year. (2) LimitationNo credit may be carried forward under this subsection to any taxable year following the fifth taxable year after the taxable year in which the credit arose. For purposes of the preceding sentence, credits shall be treated as used on a first-in first-out basis. (g) State list of scholarship granting organizations(1) List(A) In generalNot later than January 1 of each calendar year (or, with respect to the first calendar year for which this section applies, as early as practicable), a State that voluntarily elects to participate under this section shall provide to the Secretary a list of the scholarship granting organizations that meet the requirements described in subsection (c)(5) and are located in the State. (B) ProcessThe election under this paragraph shall be made by the Governor of the State or by such other individual, agency, or entity as is designated under State law to make such elections on behalf of the State with respect to Federal tax benefits. (2) CertificationEach list submitted under paragraph (1) shall include a certification that the individual, agency, or entity submitting such list on behalf of the State has the authority to perform this function. (h) Regulations and guidanceThe 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—(1) providing for enforcement of the requirements under subsections (d) and (g), and (2) with respect to recordkeeping or information reporting for purposes of administering the requirements of this section.

26 U.S.C. § 26 Limitation based on tax liability; definition of tax liability

(a) Limitation based on amount of taxThe aggregate amount of credits allowed by this subpart for the taxable year shall not exceed the sum of—(1) the taxpayer’s regular tax liability for the taxable year reduced by the foreign tax credit allowable under section 27, and (2) the tax imposed by section 55(a) for the taxable year. (b) Regular tax liabilityFor purposes of this part—(1) In generalThe term “regular tax liability” means the tax imposed by this chapter for the taxable year. (2) Exception for certain taxesFor purposes of paragraph (1), any tax imposed by any of the following provisions shall not be treated as tax imposed by this chapter:(A) section 55 (relating to minimum tax), (B) section 59A (relating to base erosion and anti-abuse tax), (C) subsection (m)(5)(B), (q), (t), or (v) of section 72 (relating to additional taxes on certain distributions), (D) section 143(m) (relating to recapture of proration of Federal subsidy from use of mortgage bonds and mortgage credit certificates), (E) section 530(d)(4) (relating to additional tax on certain distributions from Coverdell education savings accounts), (F) section 531 (relating to accumulated earnings tax), (G) section 541 (relating to personal holding company tax), (H) section 1351(d)(1) (relating to recoveries of foreign expropriation losses), (I) section 1374 (relating to tax on certain built-in gains of S corporations), (J) section 1375 (relating to tax imposed when passive investment income of corporation having subchapter C earnings and profits exceeds 25 percent of gross receipts), (K) subparagraph (A) of section 7518(g)(6) (relating to nonqualified withdrawals from capital construction funds taxed at highest marginal rate), (L) sections 871(a) and 881 (relating to certain income of nonresident aliens and foreign corporations), (M) section 860E(e) (relating to taxes with respect to certain residual interests), (N) section 884 (relating to branch profits tax), (O) sections 453(l)(3) and 453A(c) (relating to interest on certain deferred tax liabilities), [(P) Repealed. Pub. L. 115–141, div. U, title IV, § 401(b)(2), Mar. 23, 2018, 132 Stat. 1201.] (Q) section 220(f)(4) (relating to additional tax on Archer MSA distributions not used for qualified medical expenses), (R) section 138(c)(2) (relating to penalty for distributions from Medicare Advantage MSA not used for qualified medical expenses if minimum balance not maintained), (S) sections 106(e)(3)(A)(ii), 223(b)(8)(B)(i)(II), and 408(d)(9)(D)(i)(II) (relating to certain failures to maintain high deductible health plan coverage), (T) section 170(o)(3)(B) (relating to recapture of certain deductions for fractional gifts), (U) section 223(f)(4) (relating to additional tax on health savings account distributions not used for qualified medical expenses), (V) subsections (a)(1)(B)(i) and (b)(4)(A) of section 409A (relating to interest and additional tax with respect to certain deferred compensation), (W) section 36(f) (relating to recapture of homebuyer credit), (X) section 457A(c)(1)(B) (relating to determinability of amounts of compensation), (Y) section 529A(c)(3)(A) (relating to additional tax on ABLE account distributions not used for qualified disability expenses), and (Z) section 24(j)(2) (relating to excess advance payments). (c) Tentative minimum taxFor purposes of this part, the term “tentative minimum tax” means the amount determined under section 55(b)(1).