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Internal Revenue Code · 26 U.S.C.

§ 26. Limitation based on tax liability; definition of tax liability

In force Text current through Public Law 119-121 (October 9, 2026) release point 119-121

Official text, no changes From the Office of the Law Revision Counsel, release point 119-121 (current through Public Law 119-121 (October 9, 2026)). Compare it with the official text at uscode.house.gov (external site).

Cite as 26 U.S.C. § 26

At a glance

Read from the text, the source credit and the official notes. Not part of the law.

Status
In force
Added
July 18, 1984 by Pub. L. 98–369
Last amended
March 11, 2021 by Pub. L. 117–2
Amendments
27 dated changes in the source credit
Length
3 subsections · 1,003 words · about 4 min to read
Defines
2 terms
Cross-references
cites 29; cited by 13 Code sections and 16 other regulations
(a) Limitation based on amount of tax The 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 liability For purposes of this part—
(1) In general

The term “regular tax liability” means the tax imposed by this chapter for the taxable year.

(2) Exception for certain taxes For 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 tax

For purposes of this part, the term “tentative minimum tax” means the amount determined under section 55(b)(1).

(Added § 25, renumbered § 26, Pub. L. 98–369, div. A, title IV, § 472, title VI, § 612(a), July 18, 1984, 98 Stat. 827, 905; amended Pub. L. 99–499, title V, § 516(b)(1)(A), Oct. 17, 1986, 100 Stat. 1770; Pub. L. 99–514, title II, § 261(c), title VI, § 632(c)(1), title VII, § 701(c)(1), Oct. 22, 1986, 100 Stat. 2214, 2277, 2340; Pub. L. 100–647, title I, §§ 1006(t)(16)(C), 1007(g)(1), 1011A(c)(10), 1012(q)(8), title IV, § 4005(g)(4), title V, § 5012(b)(2), Nov. 10, 1988, 102 Stat. 3425, 3434, 3476, 3524, 3650, 3662; Pub. L. 101–239, title VII, §§ 7811(c)(1), (2), 7821(a)(4)(A), Dec. 19, 1989, 103 Stat. 2406, 2407, 2424; Pub. L. 104–188, title I, § 1621(b)(1), Aug. 20, 1996, 110 Stat. 1866; Pub. L. 105–34, title II, § 213(e)(1), title XVI, § 1602(a)(1), Aug. 5, 1997, 111 Stat. 817, 1093; Pub. L. 105–277, div. J, title II, § 2001(a), Oct. 21, 1998, 112 Stat. 2681–901; Pub. L. 106–170, title V, § 501(a), Dec. 17, 1999, 113 Stat. 1918; Pub. L. 106–554, § 1(a)(7) [title II, § 202(a)(1)], Dec. 21, 2000, 114 Stat. 2763, 2763A–628; Pub. L. 107–16, title II, §§ 201(b)(2)(D), 202(f)(2)(C), title VI, § 618(b)(2)(C), June 7, 2001, 115 Stat. 46, 49, 108; Pub. L. 107–22, § 1(b)(2)(A), July 26, 2001, 115 Stat. 197; Pub. L. 107–147, title IV, §§ 415(a), 417(23)(B), title VI, § 601(a), Mar. 9, 2002, 116 Stat. 54, 57, 59; Pub. L. 108–311, title III, § 312(a), title IV, §§ 401(a)(1), 408(a)(5)(A), Oct. 4, 2004, 118 Stat. 1181, 1183, 1191; Pub. L. 109–135, title IV, §§ 403(hh)(1), 412(c), Dec. 21, 2005, 119 Stat. 2631, 2636; Pub. L. 109–222, title III, § 302(a), May 17, 2006, 120 Stat. 353; Pub. L. 110–166, § 3(a), Dec. 26, 2007, 121 Stat. 2461; Pub. L. 110–172, § 11(a)(3), Dec. 29, 2007, 121 Stat. 2484; Pub. L. 110–289, div. C, title I, § 3011(b)(1), July 30, 2008, 122 Stat. 2891; Pub. L. 110–343, div. B, title I, § 106(e)(2)(D), title II, § 205(d)(1)(D), div. C, title I, § 101(a), title VIII, § 801(b), Oct. 3, 2008, 122 Stat. 3817, 3839, 3863, 3931; Pub. L. 111–5, div. B, title I, §§ 1004(b)(3), 1011(a), 1142(b)(1)(D), 1144(b)(1)(D), Feb. 17, 2009, 123 Stat. 314, 319, 330, 332; Pub. L. 111–148, title X, § 10909(b)(2)(E), (c), Mar. 23, 2010, 124 Stat. 1023; Pub. L. 111–312, title I, § 101(b)(1), title II, § 202(a), Dec. 17, 2010, 124 Stat. 3298, 3299; Pub. L. 112–240, title I, § 104(c)(1), Jan. 2, 2013, 126 Stat. 2321; Pub. L. 113–295, div. A, title II, § 221(a)(12)(B), div. B, title I, § 102(e)(1), Dec. 19, 2014, 128 Stat. 4038, 4062; Pub. L. 115–97, title I, § 14401(c), Dec. 22, 2017, 131 Stat. 2233; Pub. L. 115–141, div. U, title IV, § 401(b)(2), (d)(1)(D)(ii), Mar. 23, 2018, 132 Stat. 1201, 1206; Pub. L. 117–2, title IX, § 9611(b)(4)(A), Mar. 11, 2021, 135 Stat. 150.)

Terms defined here

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Cross-references

Computed from the citations in the text of Title 26 and 26 CFR.

This section cites 29 other sections

Show 5 more

Cited by 13 Code sections

Cited in 16 regulations not issued under it

Amendment history

From the source credit and the official notes, newest first.

  1. Amended by Pub. L. 117–2Parts changed in 2021: (b)(2)(Z)
  2. Amended by Pub. L. 115–141Parts changed in 2018: (a)(1) (b)(2)(P)
  3. Amended by Pub. L. 115–97Parts changed in 2017: (b)(2)(B)
  4. Amended by Pub. L. 113–295Parts changed in 2014: (b)(2)(B) (b)(2)(Y)
  5. Amended by Pub. L. 112–240Parts changed in 2013: (a)
  6. Amended by Pub. L. 111–312Parts changed in 2010: (a)(1) (a)(2)
  7. Amended by Pub. L. 111–148
  8. Amended by Pub. L. 111–5Parts changed in 2009: (a)(1) (a)(2)
  9. Amended by Pub. L. 110–343Parts changed in 2008: (a)(1) (a)(2) (b)(2)(W) (b)(2)(X)
  10. Amended by Pub. L. 110–289
  11. Amended by Pub. L. 110–172Parts changed in 2007: (a)(2) (b)(2)(S)
  12. Amended by Pub. L. 110–166
  13. Amended by Pub. L. 109–222Parts changed in 2006: (a)(2)
  14. Amended by Pub. L. 109–135Parts changed in 2005: (b)(2)(E) (b)(2)(T)
  15. Amended by Pub. L. 108–311Parts changed in 2004: (a)(2) (b)(2)(R) (b)(2)(S)
  16. Amended by Pub. L. 107–147Parts changed in 2002: (a)(1) (a)(2) (b)(2)(P) (b)(2)(R)
  17. Amended by Pub. L. 107–22Parts changed in 2001: (a)(1) (b)(2)(E)
  18. Amended by Pub. L. 107–16
  19. Amended by Pub. L. 106–554Parts changed in 2000: (b)(2)(Q)
  20. Amended by Pub. L. 106–170Parts changed in 1999: (a)
  21. Amended by Pub. L. 105–277Parts changed in 1998: (a)
  22. Amended by Pub. L. 105–34Parts changed in 1997: (b)(2)(E) (b)(2)(P) (b)(2)(Q)
  23. Amended by Pub. L. 104–188Parts changed in 1996: (b)(2)(O)
  24. Amended by Pub. L. 101–239Parts changed in 1989: (b)(2)(C) (b)(2)(K) (b)(2)(L) (b)(2)(N)
  25. Amended by Pub. L. 100–647Parts changed in 1988: (b)(2)(C) (b)(2)(D) (b)(2)(K) (b)(2)(L) (b)(2)(M)
  26. Amended by Pub. L. 99–514Parts changed in 1986: (a) (b) (b)(1) (b)(2) (c)
  27. Amended by Pub. L. 99–499
  28. Added by Pub. L. 98–369

Where it sits in the Code

  1. Subtitle A Income Taxes
  2. Chapter 1 NORMAL TAXES AND SURTAXES
  3. Subchapter A Determination of Tax Liability
  4. Part IV CREDITS AGAINST TAX
  5. Subpart A Nonrefundable Personal Credits

Nearby sections

Official notes

The Law Revision Counsel's notes for this section (amendments, effective dates and related laws) are long, so they have their own page.