Internal Revenue Code · 26 U.S.C.
§ 962. Election by individuals to be subject to tax at corporate rates
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. § 962
At a glance
Read from the text, the source credit and the official notes. Not part of the law.
- Status
- In force
- Added
- October 16, 1962 by Pub. L. 87–834
- Last amended
- December 22, 2017 by Pub. L. 115–97
- Amendments
- 6 dated changes in the source credit
- Length
- 4 subsections · 471 words · about 2 min to read
- Cross-references
- cites 6; cited by 2 Code sections and 12 other regulations
- Regulations
- 3 issued under this section
An election to have the provisions of this section apply for any taxable year shall be made by a United States shareholder at such time and in such manner as the Secretary shall prescribe by regulations. An election made for any taxable year may not be revoked except with the consent of the Secretary.
For purposes of applying subsection (a)(1), the amount in each taxable income bracket in the tax table in section 11(b) shall not exceed an amount which bears the same ratio to such bracket amount as the amount included in the gross income of the United States shareholder under section 951(a) for the taxable year bears to such shareholder’s pro rata share of the earnings and profits for the taxable year of all controlled foreign corporations with respect to which such shareholder includes any amount in gross income under section 951(a).
The earnings and profits of a foreign corporation attributable to amounts which were included in the gross income of a United States shareholder under section 951(a) and with respect to which an election under this section applied shall, when such earnings and profits are distributed, notwithstanding the provisions of section 959(a)(1), be included in gross income to the extent that such earnings and profits so distributed exceed the amount of tax paid under this chapter on the amounts to which such election applied.
(Added Pub. L. 87–834, § 12(a), Oct. 16, 1962, 76 Stat. 1023; amended Pub. L. 94–12, title III, § 303(c)(3), Mar. 29, 1975, 89 Stat. 45; Pub. L. 94–164, § 4(d)(1), Dec. 23, 1975, 89 Stat. 975; Pub. L. 94–455, title XIX, § 1906(b)(13)(A), Oct. 4, 1976, 90 Stat. 1834; Pub. L. 95–600, title III, § 301(b)(16), Nov. 6, 1978, 92 Stat. 2822; Pub. L. 100–647, title I, § 1007(g)(11), Nov. 10, 1988, 102 Stat. 3435; Pub. L. 115–97, title I, § 12001(b)(15), Dec. 22, 2017, 131 Stat. 2094.)
Regulations under this section
Treasury regulations (26 CFR) issued under § 962
Cross-references
Computed from the citations in the text of Title 26 and 26 CFR.
This section cites 6 other sections
- § 951(a) Amounts included in gross income of United States shareholders
- § 1 Tax imposed
- § 55 Alternative minimum tax imposed
- § 11 Tax imposed
- § 960 Deemed paid credit for subpart F inclusions
- § 959(a)(1) Exclusion from gross income of previously taxed earnings and profits
Cited by 2 Code sections
- § 951A(d)(1)(A) Net CFC tested income included in gross income of United States shareholders
- § 961(a) Adjustments to basis of stock in controlled foreign corporations and of other property
Cited in 12 regulations not issued under it
- § 1.250(a)-1 Deduction for foreign-derived intangible income (FDII) and global intangible low-taxed income (GILTI).
- § 1.901-1 Allowance of credit for foreign income taxes.
- § 1.960-1 Overview, definitions, and computational rules for determining foreign income taxes deemed paid under section 960(a), (b), and (d).
- § 1.961-1 Increase in basis of stock in controlled foreign corporations and of other property.
- § 1.961-2 Reduction in basis of stock in foreign corporations and of other property.
- § 1.965-0 Outline of section 965 regulations.
- § 1.965-1 Overview, general rules, and definitions.
- § 1.965-2 Adjustments to earnings and profits and basis.
- § 1.965-3 Section 965(c) deductions.
- § 1.986(a)-1 Translation of foreign income taxes for purposes of the foreign tax credit.
- § 1.1248-2 Earnings and profits attributable to a block of stock in simple cases.
- § 1.1248-3 Earnings and profits attributable to stock in complex cases.
Amendment history
From the source credit and the official notes, newest first.
- Amended by Pub. L. 115–97Parts changed in 2017: (a)(1)
- Amended by Pub. L. 100–647Parts changed in 1988: (a)(1)
- Amended by Pub. L. 95–600Parts changed in 1978: (c)
- Amended by Pub. L. 94–455Parts changed in 1976: (a)
- Amended by Pub. L. 94–164Parts changed in 1975: (c)
- Amended by Pub. L. 94–12
- Added by Pub. L. 87–834
Where it sits in the Code
- Subtitle A Income Taxes
- Chapter 1 NORMAL TAXES AND SURTAXES
- Subchapter N Tax Based on Income From Sources Within or Without the United States
- Part III INCOME FROM SOURCES WITHOUT THE UNITED STATES
- Subpart F Controlled Foreign Corporations
Nearby sections
- § 958 Rules for determining stock ownership
- § 959 Exclusion from gross income of previously taxed earnings and profits
- § 960 Deemed paid credit for subpart F inclusions
- § 961 Adjustments to basis of stock in controlled foreign corporations and of other property
- § 962 Election by individuals to be subject to tax at corporate rates
- § 963 Repealed
- § 964 Miscellaneous provisions
- § 965 Treatment of deferred foreign income upon transition to participation exemption system of taxation
Official notes
Show the Law Revision Counsel's notes (amendments, effective dates)
Editorial Notes
References in Text
Section 960, referred to in subsec. (a)(2), was amended extensively by Pub. L. 115–97, and, as so amended, relates to deemed paid credit for subpart F inclusions.
Amendments
2017—Subsec. (a)(1). Pub. L. 115–97 substituted “section 11” for “sections 11 and 55”.
1988—Subsec. (a)(1). Pub. L. 100–647 substituted “sections 1 and 55” and “sections 11 and 55” for “section 1” and “section 11”, respectively.
1978—Subsec. (c). Pub. L. 95–600 substituted provisions relating to the pro ration of each section 11 bracket amount for provisions relating to the surtax exemption.
1976—Subsecs. (a), (b). Pub. L. 94–455 struck out “or his delegate” after “Secretary” wherever appearing.
1975—Subsec. (c). Pub. L. 94–164 substituted “same ratio to the surtax exemption” for “same ratio to $25,000” in subsec. (c) as such subsec. (c) is in effect for taxable years ending after Dec. 31, 1975.
Pub. L. 94–12 substituted “$50,000” for “$25,000”.
Statutory Notes and Related Subsidiaries
Effective Date of 2017 Amendment
Amendment by Pub. L. 115–97 applicable to taxable years beginning after Dec. 31, 2017, see section 12001(c) of Pub. L. 115–97, set out as a note under section 11 of this title.
Effective Date of 1988 Amendment
Amendment by Pub. L. 100–647 effective, except as otherwise provided, as if included in the provision of the Tax Reform Act of 1986, Pub. L. 99–514, to which such amendment relates, see section 1019(a) of Pub. L. 100–647, set out as a note under section 1 of this title.
Effective Date of 1978 Amendment
Amendment by Pub. L. 95–600 applicable to taxable years beginning after Dec. 31, 1978, see section 301(c) of Pub. L. 95–600, set out as a note under section 11 of this title.
Effective and Termination Dates of 1975 Amendments
Amendment by Pub. L. 94–164 applicable to taxable years beginning after Dec. 31, 1975, see section 4(e) of Pub. L. 94–164, set out as a note under section 11 of this title.
Amendment by Pub. L. 94–12 applicable to taxable years ending after Dec. 31, 1974, but to cease to apply for taxable years ending after Dec. 31, 1975, see section 305(b)(1) of Pub. L. 94–12, set out as a note under section 11 of this title.