Treasury Regulations · 26 CFR
§ 1.404(c)-1. Certain negotiated plans; effect of section 404(c).
Regulation text, no changes From the eCFR, current as of October 15, 2026. The eCFR is an authoritative but unofficial editorial compilation of the Code of Federal Regulations; the official text is the annual CFR on govinfo. Compare it with this section on ecfr.gov (external site) or the official annual CFR on govinfo (external site).
Regulation under 26 U.S.C. § 404(c)
Cite as 26 CFR § 1.404(c)-1
At a glance
Read from the text and its source citation. Not part of the regulation.
- Status
- In the current eCFR
- Issued
- November 26, 1960 by T.D. 6500
- Issued under
- 26 U.S.C. § 404(c)
- Length
- 333 words · about 1 min to read
- Cross-references
- cites 3 Code sections and 0 regulations; cited by 1
¶(a) Section 404(a) does not apply to deductions for contributions paid by an employer under a negotiated plan which meets the following conditions:
¶(1) The contributions under the plan are held in trust for the purpose of paying, either from principal or income or both, for the benefit of employees and their families, at least medical or hospital care, and pensions on retirement or death of employees; and
¶(2) Such plan was established before January 1, 1954, as a result of an agreement between employee representatives and the Government of the United States during a period of Government operation, under seizure powers, of a major part of the productive facilities of the industry in which such employer is engaged.
If these conditions are met, such contributions shall be deductible under section 162, to the extent that they constitute ordinary and necessary business expenses.
¶(b) The term “as a result of an agreement” is intended primarily to cover a trust established under the terms of an agreement referred to in paragraph (a)(2) of this section. It will also include a trust established under a plan of an employer, or group of employers, who are in competition with the employers whose facilities were seized by reason of producing the same commodity, and who would therefore be expected to establish such a trust as a reasonable measure to maintain a sound position in the labor market producing the commodity. Thus, for example, if a trust was established under such an agreement in the bituminous coal industry, a similar trust established about the same time in the anthracite coal industry would be covered by this provision.
¶(c) If any such trust becomes qualified for exemption under section 501(a), the deductibility of contributions by an employer to such trust on or after the date of such qualification would no longer be governed by section 404(c), even though the trust may later lose its exemption under section 501(a).
[T.D. 6500, 25 FR 11690, Nov. 26, 1960]
Cross-references
Computed from the citations in the text of 26 CFR.
Code sections it cites
- § 404 Deduction for contributions of an employer to an employees’ trust or annuity plan and compensation under a deferred-payment plan
- § 162 Trade or business expenses
- § 501 Exemption from tax on corporations, certain trusts, etc.
Cited by 1 other regulation
Amendment history
From the source citation at the end of the section, newest first. T.D. is a Treasury decision; FR is the Federal Register.
- Issued by T.D. 6500 (25 FR 11690)
Where it sits in 26 CFR
- Subchapter A Income tax
- Part 1 Income taxes
Nearby sections
- § 1.404(a)-13 Contributions of an employer where deductions are allowable under section 404(a) (1) or (2) and also under section 404(a)(3); application of section 404(a)(7).
- § 1.404(a)-14 Special rules in connection with the Employee Retirement Income Security Act of 1974.
- § 1.404(b)-1 Method of contribution, etc., having the effect of a plan; effect of section 404(b).
- § 1.404(b)-1T Method or arrangement of contributions, etc., deferring the receipt of compensation or providing for deferred benefits. (Temporary)
- § 1.404(c)-1 Certain negotiated plans; effect of section 404(c).
- § 1.404(d)-1T Questions and answers relating to deductibility of deferred compensation and deferred benefits for independent contractors. (Temporary)
- § 1.404(e)-1A Contributions on behalf of a self-employed individual to or under a qualified pension, annuity, or profit-sharing plan.
- § 1.404(g)-1 Deduction of employer liability payments.
- § 1.404(k)-1T Questions and answers relating to the deductibility of certain dividend distributions. (Temporary)