§ 54AA. Build America bonds
(a)
In general
If a taxpayer holds a build America bond on one or more interest payment dates of the bond during any taxable year, 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 credits determined under subsection (b) with respect to such dates.
(b)
Amount of credit
The amount of the credit determined under this subsection with respect to any interest payment date for a build America bond is 35 percent of the amount of interest payable by the issuer with respect to such date.
(c)
Limitation based on amount of tax
(1)
In general
The credit allowed under subsection (a) for any taxable year shall not exceed the excess of—
(2)
Carryover of unused credit
If the credit allowable under subsection (a) exceeds the limitation imposed by paragraph (1) for such taxable year, such excess shall be carried to the succeeding taxable year and added to the credit allowable under subsection (a) for such taxable year (determined before the application of paragraph (1) for such succeeding taxable year).
(d)
Build America bond
(1)
In general
For purposes of this section, the term “build America bond” means any obligation (other than a private activity bond) if—
(A)
the interest on such obligation would (but for this section) be excludable from gross income under section
103,
(2)
Applicable rules
For purposes of applying paragraph (1)—
(A)
for purposes of section
149
(b), a build America bond shall not be treated as federally guaranteed by reason of the credit allowed under subsection (a) or section
6431,
(B)
for purposes of section
148, the yield on a build America bond shall be determined without regard to the credit allowed under subsection (a), and
(e)
Interest payment date
For purposes of this section, the term “interest payment date” means any date on which the holder of record of the build America bond is entitled to a payment of interest under such bond.
(f)
Special rules
(1)
Interest on build America bonds includible in gross income for Federal income tax purposes
For purposes of this title, interest on any build America bond shall be includible in gross income.
(2)
Application of certain rules
Rules similar to the rules of subsections (f), (g), (h), and (i) of section
54A shall apply for purposes of the credit allowed under subsection (a).
(g)
Special rule for qualified bonds issued before 2011
In the case of a qualified bond issued before January 1, 2011—
(1)
Issuer allowed refundable credit
In lieu of any credit allowed under this section with respect to such bond, the issuer of such bond shall be allowed a credit as provided in section
6431.
(2)
Qualified bond
For purposes of this subsection, the term “qualified bond” means any build America bond issued as part of an issue if—
(h)
Regulations
The Secretary may prescribe such regulations and other guidance as may be necessary or appropriate to carry out this section and section
6431.