§ 1400S TITLE 26—INTERNAL REVENUE CODE Page 2306

September 23, 2005, and before January 1, regard to section 3306(b)(2)(B)) paid or in- 2006, which occurs during the period— curred by an eligible employer with respect (i) beginning on the date on which the to an eligible employee on any day after Oc- trade or business described in subpara- tober 23, 2005, and before January 1, 2006, graph (A) first became inoperable at the which occurs during the period— principal place of employment of the em- (i) beginning on the date on which the ployee immediately before Hurricane Rita, trade or business described in subpara- and graph (A) first became inoperable at the (ii) ending on the date on which such principal place of employment of the em- trade or business has resumed significant ployee immediately before Hurricane operations at such principal place of em- Wilma, and ployment. (ii) ending on the date on which such Such term shall include wages paid without trade or business has resumed significant regard to whether the employee performs no operations at such principal place of em- services, performs services at a different ployment. place of employment than such principal Such term shall include wages paid without place of employment, or performs services at regard to whether the employee performs no such principal place of employment before services, performs services at a different significant operations have resumed. place of employment than such principal (3) Certain rules to apply place of employment, or performs services at For purposes of this subsection, rules simi- such principal place of employment before lar to the rules of sections 51(i)(1) and 52 shall significant operations have resumed. apply. (3) Certain rules to apply (4) Employee not taken into account more than For purposes of this subsection, rules simi- once lar to the rules of sections 51(i)(1) and 52 shall An employee shall not be treated as an eligi- apply. ble employee for purposes of this subsection (4) Employee not taken into account more than for any period with respect to any employer if once such employer is allowed a credit under sub- An employee shall not be treated as an eligi- section (a) or section 51 with respect to such ble employee for purposes of this subsection employee for such period. for any period with respect to any employer if (c) Employee retention credit for employers af- such employer is allowed a credit under sub- fected by Hurricane Wilma section (a) or (b) or section 51 with respect to (1) In general such employee for such period. For purposes of section 38, in the case of an (Added Pub. L. 109–135, title II, § 201(a), Dec. 21, eligible employer, the Hurricane Wilma em- 2005, 119 Stat. 2601.) ployee retention credit for any taxable year is 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 (A) Eligible employer subsections (b) and (d) of section 170 to other contributions. The term ‘‘eligible employer’’ means any employer— (2) Treatment of excess contributions (i) which conducted an active trade or For purposes of section 170— business on October 23, 2005, in the Wilma (A) Individuals GO Zone, and (ii) with respect to whom the trade or In the case of an individual— business described in clause (i) is inoper- (i) Limitation able on any day after October 23, 2005, and Any qualified contribution shall be al- before January 1, 2006, as a result of dam- lowed only to the extent that the aggre- age sustained by reason of Hurricane gate of such contributions does not exceed Wilma. the excess of the taxpayer’s contribution (B) Eligible employee base (as defined in subparagraph (G) of sec- The term ‘‘eligible employee’’ means with tion 170(b)(1)) over the amount of all other respect to an eligible employer an employee charitable contributions allowed under whose principal place of employment on Oc- section 170(b)(1). tober 23, 2005, with such eligible employer (ii) Carryover was in the Wilma GO Zone. If the aggregate amount of qualified con- (C) Qualified wages tributions made in the contribution year The term ‘‘qualified wages’’ means wages (within the meaning of section 170(d)(1)) (as defined in section 51(c)(1), but without exceeds the limitation of clause (i), such Page 2307 TITLE 26—INTERNAL REVENUE CODE § 1400S

excess shall be added to the excess de- (1) which arise in the Hurricane Katrina dis- scribed in the portion of subparagraph (A) aster area on or after August 25, 2005, and of such section which precedes clause (i) which are attributable to Hurricane Katrina, thereof for purposes of applying such sec- (2) which arise in the Hurricane Rita disas- tion. ter area on or after September 23, 2005, and (B) Corporations which are attributable to Hurricane Rita, or (3) which arise in the Hurricane Wilma disas- In the case of a corporation— ter area on or after October 23, 2005, and which (i) Limitation are attributable to Hurricane Wilma. Any qualified contribution shall be al- In the case of any other losses, section lowed only to the extent that the aggre- 165(h)(2)(A) shall be applied without regard to gate of such contributions does not exceed the losses referred to in the preceding sentence. the excess of the taxpayer’s taxable in- (c) Required exercise of authority under section come (as determined under paragraph (2) 7508A of section 170(b)) over the amount of all other charitable contributions allowed In the case of any taxpayer determined by the under such paragraph. Secretary to be affected by the Presidentially declared disaster relating to Hurricane Katrina, (ii) Carryover Hurricane Rita, or Hurricane Wilma, any relief Rules similar to the rules of subpara- provided by the Secretary under section 7508A graph (A)(ii) shall apply for purposes of shall be for a period ending not earlier than Feb- this subparagraph. ruary 28, 2006. (3) Exception to overall limitation on itemized (d) Special rule for determining earned income deductions (1) In general So much of any deduction allowed under sec- In the case of a qualified individual, if the tion 170 as does not exceed the qualified con- earned income of the taxpayer for the taxable tributions paid during the taxable year shall year which includes the applicable date is less not be treated as an itemized deduction for than the earned income of the taxpayer for the purposes of section 68. preceding taxable year, the credits allowed (4) Qualified contributions under sections 24(d) and 32 may, at the elec- (A) In general tion of the taxpayer, be determined by sub- For purposes of this subsection, the term stituting— ‘‘qualified contribution’’ means any chari- (A) such earned income for the preceding table contribution (as defined in section taxable year, for (B) such earned income for the taxable 170(c)) if— (i) such contribution is paid during the year which includes the applicable date. period beginning on August 28, 2005, and (2) Qualified individual ending on December 31, 2005, in cash to an For purposes of this subsection— organization described in section (A) In general 170(b)(1)(A) (other than an organization de- The term ‘‘qualified individual’’ means scribed in section 509(a)(3)), any qualified Hurricane Katrina individual, (ii) in the case of a contribution paid by any qualified Hurricane Rita individual, and a corporation, such contribution is for re- any qualified Hurricane Wilma individual. lief efforts related to Hurricane Katrina, Hurricane Rita, or Hurricane Wilma, and (B) Qualified Hurricane Katrina individual (iii) the taxpayer has elected the applica- The term ‘‘qualified Hurricane Katrina in- tion of this subsection with respect to such dividual’’ means any individual whose prin- contribution. cipal place of abode on August 25, 2005, was (B) Exception located— (i) in the GO Zone, or Such term shall not include a contribution (ii) in the Hurricane Katrina disaster if the contribution is for establishment of a area (but outside the GO Zone) and such new, or maintenance in an existing, seg- individual was displaced from such prin- regated fund or account with respect to cipal place of abode by reason of Hurricane which the donor (or any person appointed or Katrina. designated by such donor) has, or reasonably (C) Qualified Hurricane Rita individual expects to have, advisory privileges with re- spect to distributions or investments by rea- The term ‘‘qualified Hurricane Rita indi- son of the donor’s status as a donor. vidual’’ means any individual (other than a qualified Hurricane Katrina individual) (C) Application of election to partnerships whose principal place of abode on September and S corporations 23, 2005, was located— In the case of a partnership or S corpora- (i) in the Rita GO Zone, or tion, the election under subparagraph (ii) in the Hurricane Rita disaster area (A)(iii) shall be made separately by each (but outside the Rita GO Zone) and such partner or shareholder. individual was displaced from such prin- (b) Suspension of certain limitations on personal cipal place of abode by reason of Hurricane casualty losses Rita. Paragraphs (1) and (2)(A) of section 165(h) shall (D) Qualified Hurricane Wilma individual not apply to losses described in section The term ‘‘qualified Hurricane Wilma indi- 165(c)(3)— vidual’’ means any individual whose prin- § 1400T TITLE 26—INTERNAL REVENUE CODE Page 2308

cipal place of abode on October 23, 2005, was § 1400T. Special rules for mortgage revenue located— bonds (i) in the Wilma GO Zone, or (ii) in the Hurricane Wilma disaster area (a) In general (but outside the Wilma GO Zone) and such In the case of financing provided with respect individual was displaced from such prin- to owner-occupied residences in the GO Zone, cipal place of abode by reason of Hurricane the Rita GO Zone, or the Wilma GO Zone, sec- Wilma. tion 143 shall be applied— (3) Applicable date (1) by treating any such residence in the For purposes of this subsection, the term Rita GO Zone or the Wilma GO Zone as a tar- ‘‘applicable date’’ means— geted area residence, (A) in the case of a qualified Hurricane (2) by applying subsection (f)(3) thereof with- Katrina individual, August 25, 2005, out regard to subparagraph (A) thereof, and (B) in the case of a qualified Hurricane (3) by substituting ‘‘$150,000’’ for ‘‘$15,000’’ in Rita individual, September 23, 2005, and subsection (k)(4) thereof. (C) in the case of a qualified Hurricane (b) Application Wilma individual, October 23, 2005. Subsection (a) shall not apply to financing (4) Earned income provided after December 31, 2010. For purposes of this subsection, the term (Added Pub. L. 109–135, title II, § 201(a), Dec. 21, ‘‘earned income’’ has the meaning given such 2005, 119 Stat. 2607.) term under section 32(c). (5) Special rules PART III—RECOVERY ZONE BONDS (A) Application to joint returns Sec. For purposes of paragraph (1), in the case 1400U–1. Allocation of recovery zone bonds. of a joint return for a taxable year which in- 1400U–2. Recovery zone economic development bonds. cludes the applicable date— 1400U–3. Recovery zone facility bonds. (i) such paragraph shall apply if either spouse is a qualified individual, and § 1400U–1. Allocation of recovery zone bonds (ii) the earned income of the taxpayer (a) Allocations for the preceding taxable year shall be the sum of the earned income of each spouse (1) In general for such preceding taxable year. (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 State employment decline bears to the ag- For purposes of section 6213, an incorrect gregate of the 2008 State employment de- use on a return of earned income pursuant to clines for all of the States. paragraph (1) shall be treated as a mathe- 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 or 2006, the Secretary may make such adjust- For purposes of this subsection, the term ments in the application of the internal revenue ‘‘2008 State employment decline’’ means, with laws as may be necessary to ensure that tax- respect to any State, the excess (if any) of— payers do not lose any deduction or credit or ex- (A) the number of individuals employed in perience a change of filing status by reason of such State determined for December 2007, temporary relocations by reason of Hurricane over Katrina, Hurricane Rita, or Hurricane Wilma. (B) the number of individuals employed in Any adjustments made under the preceding sen- such State determined for December 2008. 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 AMENDMENTS proportion to 1 each such county’s or munici- 2007—Subsec. (a)(2)(A)(i). Pub. L. 110–172 substituted ‘‘subparagraph (G)’’ for ‘‘subparagraph (F)’’. 1 So in original.