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26 U.S.C. § 419 — Treatment of funded welfare benefit plans
Federal law — U.S. Code and appendices · legal_authorities
**(a) General rule** Contributions paid or accrued by an employer to a welfare benefit fund—
(1) shall not be deductible under this chapter, but
(2) if they would otherwise be deductible, shall (subject to the limitation of subsection (b)) be deductible under this section for the taxable year in which paid.
**(b) Limitation** The amount of the deduction allowable under subsection (a)(2) for any taxable year shall not exceed the welfare benefit fund’s qualified cost for the taxable year.
**(c) Qualified cost** For purposes of this section—
(1) **In general** — Except as otherwise provided in this subsection, the term “qualified cost” means, with respect to any taxable year, the sum of—
(A) the qualified direct cost for such taxable year, and
(B) subject to the limitation of section 419A(b), any addition to a qualified asset account for the taxable year.
(2) **Reduction for funds after-tax income** — In the case of any welfare benefit fund, the qualified cost for any taxable year shall be reduced by such fund’s after-tax income for such taxable year.
(3) **Qualified direct cost**
(A) *In general* — The term “qualified direct cost” means, with respect to any taxable year, the aggregate amount (including administrative expenses) which would have been allowable as a deduction to the employer with respect to the benefits provided during the taxable year, if—
(i) such benefits were provided directly by the employer, and
(ii) the employer used the cash receipts and disbursements method of accounting.
(B) *Time when benefits provided* — For purposes of subparagraph (A), a benefit shall be treated as provided when such benefit would be includible in the gross income of the employee if provided directly by the employer (or would be so includible but fo
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Source file: Laws/federal/codes/united-states-code/title-26/section-419-treatment-of-funded-welfare-benefit-plans--54e2afa443.md
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Source location: Title 26, Chapter 1, § 419; chapter-001-normal-taxes-and-surtaxes.md
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**(a) General rule** Contributions paid or accrued by an employer to a welfare benefit fund—
(1) shall not be deductible under this chapter, but
(2) if they would otherwise be deductible, shall (subject to the limitation of subsection (b)) be deductible under this section for the taxable year in which paid.
**(b) Limitation** The amount of the deduction allowable under subsection (a)(2) for any taxable year shall not exceed the welfare benefit fund’s qualified cost for the taxable year.
**(c) Qualified cost** For purposes of this section—
(1) **In general** — Except as otherwise provided in this subsection, the term “qualified cost” means, with respect to any taxable year, the sum of—
(A) the qualified direct cost for such taxable year, and
(B) subject to the limitation of section 419A(b), any addition to a qualified asset account for the taxable year.
(2) **Reduction for funds after-tax income** — In the case of any welfare benefit fund, the qualified cost for any taxable year shall be reduced by such fund’s after-tax income for such taxable year.
(3) **Qualified direct cost**
(A) *In general* — The term “qualified direct cost” means, with respect to any taxable year, the aggregate amount (including administrative expenses) which would have been allowable as a deduction to the employer with respect to the benefits provided during the taxable year, if—
(i) such benefits were provided directly by the employer, and
(ii) the employer used the cash receipts and disbursements method of accounting.
(B) *Time when benefits provided* — For purposes of subparagraph (A), a benefit shall be treated as provided when such benefit would be includible in the gross income of the employee if provided directly by the employer (or would be so includible but for any provision of this chapter excluding such benefit from gross income).
(C) *60-month amortization of child care facilities*
(i) *In general* — In determining qualified direct costs with respect to any child care facility for purposes of subparagraph (A), in lieu of depreciation the adjusted basis of such facility shall be allowable as a deduction ratably over a period of 60 months beginning with the month in which the facility is placed in service.
(ii) *Child care facility* — The term “child care facility” means any tangible property which qualifies under regulations prescribed by the Secretary as a child care center primarily for children of employees of the employer; except that such term shall not include any property—
(I) not of a character subject to depreciation; or
(II) located outside the United States.
(4) **After-tax income**
(A) *In general* — The term “after-tax income” means, with respect to any taxable year, the gross income of the welfare benefit fund reduced by the sum of—
(i) the deductions allowed by this chapter which are directly connected with the production of such gross income, and
(ii) the tax imposed by this chapter on the fund for the taxable year.
(B) *Treatment of certain amounts* — In determining the gross income of any welfare benefit fund—
(i) contributions and other amounts received from employees shall be taken into account, but
(ii) contributions from the employer shall not be taken into account.
(5) **Item only taken into account once** — No item may be taken into account more than once in determining the qualified cost of any welfare benefit fund.
**(d) Carryover of excess contributions** If—
(1) the amount of the contributions paid (or deemed paid under this subsection) by the employer during any taxable year to a welfare benefit fund, exceeds
(2) the limitation of subsection (b),
such excess shall be treated as an amount paid by the employer to such fund during the succeeding taxable year.
**(e) Welfare benefit fund** For purposes of this section—
(1) **In general** — The term “welfare benefit fund” means any fund—
(A) which is part of a plan of an employer, and
(B) through which the employer provides welfare benefits to employees or their beneficiaries.
(2) **Welfare benefit** — The term “welfare benefit” means any benefit other than a benefit with respect to which—
(A) section 83(h) applies,
(B) section 404 applies (determined without regard to section 404(b)(2)), or
(C) section 404A applies.
(3) **Fund** — The term “fund” means—
(A) any organization described in paragraph (7), (9), or (17) of section 501(c),
(B) any trust, corporation, or other organization not exempt from the tax imposed by this chapter, and
(C) to the extent provided in regulations, any account held for an employer by any person.
(4) **Treatment of amounts held pursuant to certain insurance contracts**
(A) *In general* — Notwithstanding paragraph (3)(C), the term “fund” shall not include amounts held by an insurance company pursuant to an insurance contract if—
(i) such contract is a life insurance contract described in section 264(a)(1), or
(ii) such contract is a qualified nonguaranteed contract.
(B) *Qualified nonguaranteed contract*
(i) *In general* — For purposes of this paragraph, the term “qualified nonguaranteed contract” means any insurance contract (including a reasonable premium stabilization reserve held thereunder) if—
(I) there is no guarantee of a renewal of such contract, and
(II) other than insurance protection, the only payments to which the employer or employees are entitled are experience rated refunds or policy dividends which are not guaranteed and which are determined by factors other than the amount of welfare benefits paid to (or on behalf of) the employees of the employer or their beneficiaries.
(ii) *Limitation* — In the case of any qualified nonguaranteed contract, subparagraph (A) shall not apply unless the amount of any experience rated refund or policy dividend payable to an employer with respect to a policy year is treated by the employer as received or accrued in the taxable year in which the policy year ends.
**(f) Method of contributions, etc., having the effect of a plan** If—
(1) there is no plan, but
(2) there is a method or arrangement of employer contributions or benefits which has the effect of a plan,
this section shall apply as if there were a plan.
**(g) Extension to plans for independent contractors** If any fund would be a welfare benefit fund (as modified by subsection (f)) but for the fact that there is no employee-employer relationship—
(1) this section shall apply as if there were such a relationship, and
(2) any reference in this section to the employer shall be treated as a reference to the person for whom services are provided, and any reference in this section to an employee shall be treated as a reference to the person providing the services.
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Federal law — U.S. Code and appendices · legal_authorities
**(a) Definition** For purposes of this title—
(1) **General rule** — Except as otherwise provided in this subsection, the term “unrelated business taxable income” means the gross income derived by any organization from any unrelated trade or business (as defined in section 513) regularly carried on by it, less the deductions allowed by this chapter which are directly connected with the carrying on of such trade or business, both computed with the modifications provided in subsection (b).
(2) **Special rule for foreign organizations** — In the case of an organization described in section 511 which is a foreign organization, the unrelated business taxable income shall be—
(A) its unrelated business taxable income which is derived from sources within the United States and which is not effectively connected with the conduct of a trade or business within the United States, plus
(B) its unrelated business taxable income which is effectively connected with the conduct of a trade or business within the United States.
(3) **Special rules applicable to organizations described in paragraph (7), (9), or (17) of section 501(c)**
(A) *General rule* — In the case of an organization described in paragraph (7), (9), or (17) of section 501(c), the term “unrelated business taxable income” means the gross income (excluding any exempt function income), less the deductions allowed by this chapter which are directly connected with the production of the gross income (excluding exempt function income), both computed with the modifications provided in paragraphs (6), (10), (11), and (12) of subsection (b). For purposes of the preceding sentence, the deductions provided by sections 243 and 245 (relating to dividends received by corporations) shall be treated as not directly connected
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Federal law — U.S. Code and appendices · legal_authorities
**(a) Allowance of credit**
(1) **In general** — In 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 allowed** — The 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 expenses** — In 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 refundable** — So 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 limitation** — The 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 general* —
Source: Supplied U.S. Code snapshot — release unconfirmed · 26 U.S.C. § 23
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Federal law — U.S. Code and appendices · legal_authorities
**(a) Married individuals filing joint returns and surviving spouses** There is hereby imposed on the taxable income of—
(1) every married individual (as defined in section 7703) who makes a single return jointly with his spouse under section 6013, and
(2) every surviving spouse (as defined in section 2(a)),
a tax determined in accordance with the following table: If taxable income is:The tax is: Not over $36,90015% of taxable income. Over $36,900 but not over $89,150$5,535, plus 28% of the excess over $36,900. Over $89,150 but not over $140,000$20,165, plus 31% of the excess over $89,150. Over $140,000 but not over $250,000$35,928.50, plus 36% of the excess over $140,000. Over $250,000$75,528.50, plus 39.6% of the excess over $250,000.
**(b) Heads of households** There is hereby imposed on the taxable income of every head of a household (as defined in section 2(b)) a tax determined in accordance with the following table: If taxable income is:The tax is: Not over $29,60015% of taxable income. Over $29,600 but not over $76,400$4,440, plus 28% of the excess over $29,600. Over $76,400 but not over $127,500$17,544, plus 31% of the excess over $76,400. Over $127,500 but not over $250,000$33,385, plus 36% of the excess over $127,500. Over $250,000$77,485, plus 39.6% of the excess over $250,000.
**(c) Unmarried individuals (other than surviving spouses and heads of households)** There is hereby imposed on the taxable income of every individual (other than a surviving spouse as defined in section 2(a) or the head of a household as defined in section 2(b)) who is not a married individual (as defined in section 7703) a tax determined in accordance with the following table: If taxable income is:The tax is: Not over $22,10015% of taxable income. Over $22,100 but not over $53,50
Source: Supplied U.S. Code snapshot — release unconfirmed · 26 U.S.C. § 1
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Federal law — U.S. Code and appendices · legal_authorities
**(a) Energy credit**
(1) **In general** — For purposes of section 46, except as provided in paragraphs (1)(B), (2)(B), and (3)(B) of subsection (c), the energy credit for any taxable year is the energy percentage of the basis of each energy property placed in service during such taxable year.
(2) **Energy percentage**
(A) *In general* — Except as provided in paragraphs (6) and (7), the energy percentage is—
(i) 6 percent in the case of—
(I) qualified fuel cell property,
(II) energy property described in clause (i) or (iii) of paragraph (3)(A) but only with respect to property the construction of which begins before January 1, 2025,
(III) energy property described in paragraph (3)(A)(ii),
(IV) qualified small wind energy property,
(V) waste energy recovery property,
(VI) energy storage technology,
(VII) qualified biogas property,
(VIII) microgrid controllers, and
(IX) energy property described in clauses (v) and (vii) of paragraph (3)(A), and
(ii) in the case of any energy property to which clause (i) does not apply, 0 percent.
(B) *Coordination with rehabilitation credit* — The energy percentage shall not apply to that portion of the basis of any property which is attributable to qualified rehabilitation expenditures.
(C) *Nonapplication of increases to energy percentage* — For purposes of energy property described in subparagraph (A)(ii), the energy percentage applicable to such property pursuant to such subparagraph shall not be increased or otherwise adjusted by any provision of this section.
(3) **Energy property** — For purposes of this subpart, the term “energy property” means any property—
(A) which is—
(i) equipment which uses solar energy to generate electricity, to he
Source: Supplied U.S. Code snapshot — release unconfirmed · 26 U.S.C. § 48
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Federal law — U.S. Code and appendices · legal_authorities
**(a) General rule** If—
(1) an employer maintains a welfare benefit fund, and
(2) there is a disqualified benefit provided during any taxable year,
there is hereby imposed on such employer a tax equal to 100 percent of such disqualified benefit.
**(b) Disqualified benefit** For purposes of subsection (a)—
(1) **In general** — The term “disqualified benefit” means—
(A) any post-retirement medical benefit or life insurance benefit provided with respect to a key employee if a separate account is required to be established for such employee under section 419A(d) and such payment is not from such account,
(B) any post-retirement medical benefit or life insurance benefit provided with respect to an individual in whose favor discrimination is prohibited unless the plan meets the requirements of section 505(b) with respect to such benefit (whether or not such requirements apply to such plan), and
(C) any portion of a welfare benefit fund reverting to the benefit of the employer.
(2) **Exception for collective bargaining plans** — Paragraph (1)(B) shall not apply to any plan maintained pursuant to an agreement between employee representatives and 1 or more employers if the Secretary finds that such agreement is a collective bargaining agreement and that the benefits referred to in paragraph (1)(B) were the subject of good faith bargaining between such employee representatives and such employer or employers.
(3) **Exception for nondeductible contributions** — Paragraph (1)(C) shall not apply to any amount attributable to a contribution to the fund which is not allowable as a deduction under section 419 for the taxable year or any prior taxable year (and such contribution shall not be included in any carryover under section 419(d)).
(4) **Exception for certain amo
Source: Supplied U.S. Code snapshot — release unconfirmed · 26 U.S.C. § 4976
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Federal law — U.S. Code and appendices · legal_authorities
**(a) General rule** If contributions are paid by an employer to or under a stock bonus, pension, profit-sharing, or annuity plan, or if compensation is paid or accrued on account of any employee under a plan deferring the receipt of such compensation, such contributions or compensation shall not be deductible under this chapter; but, if they would otherwise be deductible, they shall be deductible under this section, subject, however, to the following limitations as to the amounts deductible in any year:
(1) **Pension trusts**
(A) *In general* — In the taxable year when paid, if the contributions are paid into a pension trust (other than a trust to which paragraph (3) applies), and if such taxable year ends within or with a taxable year of the trust for which the trust is exempt under section 501(a), in the case of a defined benefit plan other than a multiemployer plan, in an amount determined under subsection (o), and in the case of any other plan in an amount determined as follows:
(i) the amount necessary to satisfy the minimum funding standard provided by section 412(a) for plan years ending within or with such taxable year (or for any prior plan year), if such amount is greater than the amount determined under clause (ii) or (iii) (whichever is applicable with respect to the plan),
(ii) the amount necessary to provide with respect to all of the employees under the trust the remaining unfunded cost of their past and current service credits distributed as a level amount, or a level percentage of compensation, over the remaining future service of each such employee, as determined under regulations prescribed by the Secretary, but if such remaining unfunded cost with respect to any 3 individuals is more than 50 percent of such remaining unfunded cost, the
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Federal law — U.S. Code and appendices · legal_authorities
**(a) Requirements for qualification** A trust created or organized in the United States and forming part of a stock bonus, pension, or profit-sharing plan of an employer for the exclusive benefit of his employees or their beneficiaries shall constitute a qualified trust under this section—
(1) if contributions are made to the trust by such employer, or employees, or both, or by another employer who is entitled to deduct his contributions under section 404(a)(3)(B) (relating to deduction for contributions to profit-sharing and stock bonus plans), or by a charitable remainder trust pursuant to a qualified gratuitous transfer (as defined in section 664(g)(1)), for the purpose of distributing to such employees or their beneficiaries the corpus and income of the fund accumulated by the trust in accordance with such plan;
(2) if under the trust instrument it is impossible, at any time prior to the satisfaction of all liabilities with respect to employees and their beneficiaries under the trust, for any part of the corpus or income to be (within the taxable year or thereafter) used for, or diverted to, purposes other than for the exclusive benefit of his employees or their beneficiaries (but this paragraph shall not be construed, in the case of a multiemployer plan, to prohibit the return of a contribution within 6 months after the plan administrator determines that the contribution was made by a mistake of fact or law (other than a mistake relating to whether the plan is described in section 401(a) or the trust which is part of such plan is exempt from taxation under section 501(a), or the return of any withdrawal liability payment determined to be an overpayment within 6 months of such determination));
(3) if the plan of which such trust is a part satisfies the requireme
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Federal law — U.S. Code and appendices · legal_authorities
Page 1459
TITLE 26—INTERNAL REVENUE CODE
§ 419
(Added Pub. L. 96–364, title II, § 202(a), Sept. 26,
1980, 94 Stat. 1282; amended Pub. L. 109–280, title
II, § 213(a), Aug. 17, 2006, 120 Stat. 917; Pub. L.
113–235, div. O, title I, § 108(b)(2), Dec. 16, 2014, 128
Stat. 2787; Pub. L. 115–141, div. U, title IV,
§ 401(a)(92)–(94), Mar. 23, 2018, 132 Stat. 1188.)
Editorial Notes
REFERENCES IN TEXT
Section 4022A(g)(5) of the Employee Retirement In-
come Security Act of 1974, referred to in subsec. (a), is
classified to section 1322a(g)(5) of Title 29, Labor.
Section 4261 of the Employee Retirement Income Se-
curity Act of 1974, referred to in subsecs. (b)(3) and (f),
is classified to section 1431 of Title 29, Labor.
Section 101(f)(1) of the Employee Retirement Income
Security Act of 1974, referred to in subsec. (e)(1), is clas-
sified to section 1021(f)(1) of Title 29, Labor.
AMENDMENTS
2018—Pub. L. 115–141, § 401(a)(92), substituted ‘‘section
432(b)(2)’’ for ‘‘subsection 432(b)(2)’’ wherever appearing.
Subsec. (d)(1). Pub. L. 115–141, § 401(a)(93), substituted
‘‘section 432(b)(2),’’ for ‘‘section 432(b)(2),,’’, ‘‘section
432(b)(2))’’ for ‘‘section 432(b)(2),)’’, and ‘‘compare the
value of plan assets for that plan year with’’ for ‘‘com-
pare the value of plan assets (determined in accordance
with section 418B(b)(3)(B)(ii)) for that plan year with’’.
Subsec. (e)(1)(A). Pub. L. 115–141, § 401(a)(94), amended
subpar. (A) generally. Prior to amendment, subpar. (A)
read as follows: ‘‘notify the Secretary, the Pension
Benefit Guaranty Corporation, the parties described in
section 418A(a)(2), and the plan participants and bene-
ficiaries of that determination, and’’.
2014—Subsec. (c)(1). Pub. L. 113–235, § 108(b)(2)(A), sub-
stituted ‘‘critical status, as d
Source: Supplied 2024 U.S. Code historical extraction · 26 U.S.C. § 419
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