§ 280C. Certain expenses for which credits are allowable
(a)
Rule for employment credits
No deduction shall be allowed for that portion of the wages or salaries paid or incurred for the taxable year which is equal to the sum of the credits determined for the taxable year under sections
45A
(a),
45P
(a),
51
(a), and [1] 1396(a), 1400P(b), and 1400R. In the case of a corporation which is a member of a controlled group of corporations (within the meaning of section
52
(a)) or a trade or business which is treated as being under common control with other trades or businesses (within the meaning of section
52
(b)), this subsection shall be applied under rules prescribed by the Secretary similar to the rules applicable under subsections (a) and (b) of section
52.
(b)
Credit for qualified clinical testing expenses for certain drugs
(1)
In general
No deduction shall be allowed for that portion of the qualified clinical testing expenses (as defined in section
45C
(b)) otherwise allowable as a deduction for the taxable year which is equal to the amount of the credit allowable for the taxable year under section
45C (determined without regard to section
38
(c)).
(2)
Similar rule where taxpayer capitalizes rather than deducts expenses
If—
(A)
the amount of the credit allowable for the taxable year under section
45C (determined without regard to section
38
(c)), exceeds
(B)
the amount allowable as a deduction for the taxable year for qualified clinical testing expenses (determined without regard to paragraph (1)),
the amount chargeable to capital account for the taxable year for such expenses shall be reduced by the amount of such excess.
(3)
Controlled groups
In the case of a corporation which is a member of a controlled group of corporations (within the meaning of section
41
(f)(5)) or a trade or business which is treated as being under common control with other trades or business (within the meaning of section
41
(f)(1)(B)), this subsection shall be applied under rules prescribed by the Secretary similar to the rules applicable under subparagraphs (A) and (B) of section
41
(f)(1).
(c)
Credit for increasing research activities
(1)
In general
No deduction shall be allowed for that portion of the qualified research expenses (as defined in section
41
(b)) or basic research expenses (as defined in section
41
(e)(2)) otherwise allowable as a deduction for the taxable year which is equal to the amount of the credit determined for such taxable year under section
41
(a).
(2)
Similar rule where taxpayer capitalizes rather than deducts expenses
If—
(B)
the amount allowable as a deduction for such taxable year for qualified research expenses or basic research expenses (determined without regard to paragraph (1)),
the amount chargeable to capital account for the taxable year for such expenses shall be reduced by the amount of such excess.
(3)
Election of reduced credit
(B)
Amount of reduced credit
The amount of credit determined under this subparagraph for any taxable year shall be the amount equal to the excess of—
(C)
Election
An election under this paragraph for any taxable year shall be made not later than the time for filing the return of tax for such year (including extensions), shall be made on such return, and shall be made in such manner as the Secretary may prescribe. Such an election, once made, shall be irrevocable.
(h)
Credit for employee health insurance expenses of small employers
No deduction shall be allowed for that portion of the premiums for qualified health plans (as defined in section 1301(a) of the Patient Protection and Affordable Care Act), or for health insurance coverage in the case of taxable years beginning in 2010, 2011, 2012, or 2013, paid by an employer which is equal to the amount of the credit determined under section
45R
(a) with respect to the premiums.
(g)
3 Qualifying therapeutic discovery project credit
(1)
In general
No deduction shall be allowed for that portion of the qualified investment (as defined in section
48D
(b)) otherwise allowable as a deduction for the taxable year which—
(A)
would be qualified research expenses (as defined in section
41
(b)), basic research expenses (as defined in section
41
(e)(2)), or qualified clinical testing expenses (as defined in section
45C
(b)) if the credit under section
41 or section
45C were allowed with respect to such expenses for such taxable year, and
(2)
Similar rule where taxpayer capitalizes rather than deducts expenses
In the case of expenses described in paragraph (1)(A) taken into account in determining the credit under section
48D for the taxable year, if—
(A)
the amount of the portion of the credit determined under such section with respect to such expenses, exceeds
(B)
the amount allowable as a deduction for such taxable year for such expenses (determined without regard to paragraph (1)),
the amount chargeable to capital account for the taxable year for such expenses shall be reduced by the amount of such excess.
[1] So in original. The word “and” probably should not appear.
[2] Another subsec. (g) is set out after subsec. (h).
[3] Another subsec. (g) is set out before subsec. (h).