Page 2365 TITLE 26—INTERNAL REVENUE CODE § 1400S (C) Employee Retention Credit for Employers Af- Fected by Hurricane Wilma (1

Page 2365 TITLE 26—INTERNAL REVENUE CODE § 1400S

(c) Employee retention credit for employers af- for any period with respect to any employer if fected by Hurricane Wilma such employer is allowed a credit under sub- (1) In general section (a) or (b) or section 51 with respect to such employee for such period. For purposes of section 38, in the case of an eligible employer, the Hurricane Wilma em- (Added Pub. L. 109–135, title II, § 201(a), Dec. 21, ployee retention credit for any taxable year is 2005, 119 Stat. 2601.) an amount equal to 40 percent of the qualified § 1400S. Additional tax relief provisions wages with respect to each eligible employee of such employer for such taxable year. For (a) Temporary suspension of limitations on char- purposes of the preceding sentence, the itable contributions amount of qualified wages which may be taken (1) In general into account with respect to any individual Except as otherwise provided in paragraph shall not exceed $6,000. (2), section 170(b) shall not apply to qualified (2) Definitions contributions and such contributions shall not For purposes of this subsection— be taken into account for purposes of applying subsections (b) and (d) of section 170 to other (A) Eligible employer contributions. The term ‘‘eligible employer’’ means any (2) Treatment of excess contributions employer— For purposes of section 170— (i) which conducted an active trade or business on October 23, 2005, in the Wilma (A) Individuals GO Zone, and In the case of an individual— (ii) with respect to whom the trade or (i) Limitation business described in clause (i) is inoper- Any qualified contribution shall be al- able on any day after October 23, 2005, and lowed only to the extent that the aggre- before January 1, 2006, as a result of dam- gate of such contributions does not exceed age sustained by reason of Hurricane the excess of the taxpayer’s contribution Wilma. base (as defined in subparagraph (G) of sec- (B) Eligible employee tion 170(b)(1)) over the amount of all other The term ‘‘eligible employee’’ means with charitable contributions allowed under respect to an eligible employer an employee section 170(b)(1). whose principal place of employment on Oc- (ii) Carryover tober 23, 2005, with such eligible employer If the aggregate amount of qualified con- was in the Wilma GO Zone. tributions made in the contribution year (C) Qualified wages (within the meaning of section 170(d)(1)) exceeds the limitation of clause (i), such The term ‘‘qualified wages’’ means wages excess shall be added to the excess de- (as defined in section 51(c)(1), but without scribed in the portion of subparagraph (A) regard to section 3306(b)(2)(B)) paid or in- of such section which precedes clause (i) curred by an eligible employer with respect thereof for purposes of applying such sec- to an eligible employee on any day after Oc- tion. tober 23, 2005, and before January 1, 2006, which occurs during the period— (B) Corporations (i) beginning on the date on which the In the case of a corporation— trade or business described in subpara- (i) Limitation graph (A) first became inoperable at the Any qualified contribution shall be al- principal place of employment of the em- lowed only to the extent that the aggre- ployee immediately before Hurricane gate of such contributions does not exceed Wilma, and the excess of the taxpayer’s taxable in- (ii) ending on the date on which such come (as determined under paragraph (2) trade or business has resumed significant of section 170(b)) over the amount of all operations at such principal place of em- other charitable contributions allowed ployment. under such paragraph. Such term shall include wages paid without (ii) Carryover regard to whether the employee performs no Rules similar to the rules of subpara- services, performs services at a different graph (A)(ii) shall apply for purposes of place of employment than such principal this subparagraph. place of employment, or performs services at (3) Exception to overall limitation on itemized such principal place of employment before deductions significant operations have resumed. So much of any deduction allowed under sec- (3) Certain rules to apply tion 170 as does not exceed the qualified con- For purposes of this subsection, rules simi- tributions paid during the taxable year shall lar to the rules of sections 51(i)(1) and 52 shall not be treated as an itemized deduction for apply. purposes of section 68. (4) Employee not taken into account more than (4) Qualified contributions once (A) In general An employee shall not be treated as an eligi- For purposes of this subsection, the term ble employee for purposes of this subsection ‘‘qualified contribution’’ means any chari- § 1400S TITLE 26—INTERNAL REVENUE CODE Page 2366

table contribution (as defined in section (A) such earned income for the preceding 170(c)) if— taxable year, for (i) such contribution is paid during the (B) such earned income for the taxable period beginning on August 28, 2005, and year which includes the applicable date. ending on December 31, 2005, in cash to an (2) Qualified individual organization described in section 170(b)(1)(A) (other than an organization de- For purposes of this subsection— scribed in section 509(a)(3)), (A) In general (ii) in the case of a contribution paid by The term ‘‘qualified individual’’ means a corporation, such contribution is for re- any qualified Hurricane Katrina individual, lief efforts related to Hurricane Katrina, any qualified Hurricane Rita individual, and Hurricane Rita, or Hurricane Wilma, and any qualified Hurricane Wilma individual. (iii) the taxpayer has elected the applica- tion of this subsection with respect to such (B) Qualified Hurricane Katrina individual contribution. The term ‘‘qualified Hurricane Katrina in- (B) Exception dividual’’ means any individual whose prin- cipal place of abode on August 25, 2005, was Such term shall not include a contribution located— if the contribution is for establishment of a (i) in the GO Zone, or new, or maintenance in an existing, seg- (ii) in the Hurricane Katrina disaster regated fund or account with respect to area (but outside the GO Zone) and such which the donor (or any person appointed or individual was displaced from such prin- designated by such donor) has, or reasonably cipal place of abode by reason of Hurricane expects to have, advisory privileges with re- Katrina. spect to distributions or investments by rea- son of the donor’s status as a donor. (C) Qualified Hurricane Rita individual (C) Application of election to partnerships The term ‘‘qualified Hurricane Rita indi- and S corporations vidual’’ means any individual (other than a qualified Hurricane Katrina individual) In the case of a partnership or S corpora- whose principal place of abode on September tion, the election under subparagraph 23, 2005, was located— (A)(iii) shall be made separately by each (i) in the Rita GO Zone, or partner or shareholder. (ii) in the Hurricane Rita disaster area (b) Suspension of certain limitations on personal (but outside the Rita GO Zone) and such casualty losses individual was displaced from such prin- Paragraphs (1) and (2)(A) of section 165(h) shall cipal place of abode by reason of Hurricane not apply to losses described in section Rita. 165(c)(3)— (D) Qualified Hurricane Wilma individual (1) which arise in the Hurricane Katrina dis- aster area on or after August 25, 2005, and The term ‘‘qualified Hurricane Wilma indi- which are attributable to Hurricane Katrina, vidual’’ means any individual whose prin- (2) which arise in the Hurricane Rita disas- cipal place of abode on October 23, 2005, was ter area on or after September 23, 2005, and located— which are attributable to Hurricane Rita, or (i) in the Wilma GO Zone, or (3) which arise in the Hurricane Wilma disas- (ii) in the Hurricane Wilma disaster area ter area on or after October 23, 2005, and which (but outside the Wilma GO Zone) and such are attributable to Hurricane Wilma. individual was displaced from such prin- cipal place of abode by reason of Hurricane In the case of any other losses, section Wilma. 165(h)(2)(A) shall be applied without regard to (3) Applicable date the losses referred to in the preceding sentence. For purposes of this subsection, the term (c) Required exercise of authority under section ‘‘applicable date’’ means— 7508A (A) in the case of a qualified Hurricane In the case of any taxpayer determined by the Katrina individual, August 25, 2005, Secretary to be affected by the Presidentially (B) in the case of a qualified Hurricane declared disaster relating to Hurricane Katrina, Rita individual, September 23, 2005, and Hurricane Rita, or Hurricane Wilma, any relief (C) in the case of a qualified Hurricane provided by the Secretary under section 7508A Wilma individual, October 23, 2005. shall be for a period ending not earlier than Feb- (4) Earned income ruary 28, 2006. (d) Special rule for determining earned income For purposes of this subsection, the term ‘‘earned income’’ has the meaning given such (1) In general term under section 32(c). In the case of a qualified individual, if the (5) Special rules earned income of the taxpayer for the taxable year which includes the applicable date is less (A) Application to joint returns than the earned income of the taxpayer for the For purposes of paragraph (1), in the case preceding taxable year, the credits allowed of a joint return for a taxable year which in- under sections 24(d) and 32 may, at the elec- cludes the applicable date— tion of the taxpayer, be determined by sub- (i) such paragraph shall apply if either stituting— spouse is a qualified individual, and Page 2367 TITLE 26—INTERNAL REVENUE CODE § 1400U–1

(ii) the earned income of the taxpayer § 1400U–1. Allocation of recovery zone bonds for the preceding taxable year shall be the (a) Allocations sum of the earned income of each spouse for such preceding taxable year. (1) In general (A) General allocation (B) Uniform application of election The Secretary shall allocate the national Any election made under paragraph (1) recovery zone economic development bond shall apply with respect to both sections limitation and the national recovery zone 24(d) and section 32. facility bond limitation among the States in (C) Errors treated as mathematical error the proportion that each such State’s 2008 For purposes of section 6213, an incorrect State employment decline bears to the ag- use on a return of earned income pursuant to gregate of the 2008 State employment de- paragraph (1) shall be treated as a mathe- clines for all of the States. matical or clerical error. (B) Minimum allocation (D) No effect on determination of gross in- The Secretary shall adjust the allocations come, etc. under subparagraph (A) for any calendar Except as otherwise provided in this sub- year for each State to the extent necessary section, this title shall be applied without to ensure that no State receives less than 0.9 regard to any substitution under paragraph percent of the national recovery zone eco- (1). nomic development bond limitation and 0.9 percent of the national recovery zone facil- (e) Secretarial authority to make adjustments re- ity bond limitation. garding taxpayer and dependency status (2) 2008 State employment decline With respect to taxable years beginning in 2005 For purposes of this subsection, the term or 2006, the Secretary may make such adjust- ‘‘2008 State employment decline’’ means, with ments in the application of the internal revenue respect to any State, the excess (if any) of— laws as may be necessary to ensure that tax- (A) the number of individuals employed in payers do not lose any deduction or credit or ex- such State determined for December 2007, perience a change of filing status by reason of over temporary relocations by reason of Hurricane (B) the number of individuals employed in Katrina, Hurricane Rita, or Hurricane Wilma. such State determined for December 2008. Any adjustments made under the preceding sen- tence shall ensure that an individual is not (3) Allocations by States taken into account by more than one taxpayer (A) In general with respect to the same tax benefit. Each State with respect to which an allo- (Added Pub. L. 109–135, title II, § 201(a), Dec. 21, cation is made under paragraph (1) shall re- 2005, 119 Stat. 2604; amended Pub. L. 110–172, allocate such allocation among the counties § 11(a)(14)(C), Dec. 29, 2007, 121 Stat. 2485.) and large municipalities in such State in the proportion to 1 each such county’s or munici- AMENDMENTS pality’s 2008 employment decline bears to 2007—Subsec. (a)(2)(A)(i). Pub. L. 110–172 substituted the aggregate of the 2008 employment de- ‘‘subparagraph (G)’’ for ‘‘subparagraph (F)’’. clines for all the counties and municipalities in such State. A county or municipality may § 1400T. Special rules for mortgage revenue waive any portion of an allocation made bonds under this subparagraph. (a) In general (B) Large municipalities In the case of financing provided with respect For purposes of subparagraph (A), the term to owner-occupied residences in the GO Zone, ‘‘large municipality’’ means a municipality the Rita GO Zone, or the Wilma GO Zone, sec- with a population of more than 100,000. tion 143 shall be applied— (C) Determination of local employment de- (1) by treating any such residence in the clines Rita GO Zone or the Wilma GO Zone as a tar- For purposes of this paragraph, the em- geted area residence, ployment decline of any municipality or (2) by applying subsection (f)(3) thereof with- county shall be determined in the same out regard to subparagraph (A) thereof, and manner as determining the State employ- (3) by substituting ‘‘$150,000’’ for ‘‘$15,000’’ in ment decline under paragraph (2), except subsection (k)(4) thereof. that in the case of a municipality any por- (b) Application tion of which is in a county, such portion Subsection (a) shall not apply to financing shall be treated as part of such municipality provided after December 31, 2010. and not part of such county. (4) National limitations (Added Pub. L. 109–135, title II, § 201(a), Dec. 21, (A) Recovery zone economic development 2005, 119 Stat. 2607.) bonds PART III—RECOVERY ZONE BONDS There is a national recovery zone eco- nomic development bond limitation of Sec. 1400U–1. Allocation of recovery zone bonds. $10,000,000,000. 1400U–2. Recovery zone economic development bonds. 1400U–3. Recovery zone facility bonds. 1 So in original.