Modifications to Determination of Deemed Paid Credit for Taxes Properly Attributable to Tested Income
Section 70312 · Sec. 70312 ·
What this chapter is about
This part raises a foreign tax credit figure from 80 percent to 90 percent. It also blocks a credit for 10 percent of the tax on certain payouts. The first change starts with tax years after December 31, 2025.
“Section 960(d)(1) is amended by striking "80 percent" and inserting "90 percent".”
The section strikes 80 percent and inserts 90 percent in section 960(d)(1) of the Internal Revenue Code of 1986, and makes the matching change in section 78 while narrowing the subsections it names to (a) and (d).
What the document actually says
“Section 960(d)(1) is amended by striking "80 percent" and inserting "90 percent".”
That sentence, in plain words
The figure 80 percent is taken out. The figure 90 percent is put in.
What this is about
The same swap is made in a second rule. Both deal with credit for tax paid abroad. What they do in full is not recorded here.
No action is recorded against this proposal. That is not evidence that none has been taken, and nobody has yet read it against the record. See what the tracker does not yet cover.
The document says “shall not”Who acts: Secretary of the TreasuryHow: statuteSec. 70312 in the PDF
What the document says
“No credit shall be allowed under section 901 for 10 percent of any foreign income taxes paid or accrued (or deemed paid under subsection (b)(1)) with respect to any amount excluded from gross income under section 959(a) by reason of an inclusion in gross income under section 951A(a).”
The section adds a new paragraph (4) to section 960(d) of the Internal Revenue Code of 1986 barring a credit under section 901 for 10 percent of foreign income taxes paid, accrued or deemed paid on an amount excluded from gross income under section 959(a) because of an inclusion under section 951A(a).
What the document actually says
“No credit shall be allowed under section 901 for 10 percent of any foreign income taxes paid or accrued (or deemed paid under subsection (b)(1)) with respect to any amount excluded from gross income under section 959(a) by reason of an inclusion in gross income under section 951A(a).”
That sentence, in plain words
No credit is given for a tenth of the foreign tax. That is tax on money already taxed once and paid out later.
What this is about
The other nine tenths may still be claimed. The rule reaches tax paid and tax treated as paid. The tax code is not indexed here.
No action is recorded against this proposal. That is not evidence that none has been taken, and nobody has yet read it against the record. See what the tracker does not yet cover.
The document says “shall apply”Who acts: Secretary of the TreasuryHow: statuteSec. 70312 in the PDF
What the document says
“The amendments made by subsection (a) shall apply to taxable years beginning after December 31, 2025.”
The section applies the change in percentage to taxable years beginning after December 31, 2025, and applies the disallowance to foreign income taxes paid, accrued or deemed paid on an amount excluded under section 959(a) because of an inclusion under section 951A(a) after June 28, 2025.
What the document actually says
“The amendments made by subsection (a) shall apply to taxable years beginning after December 31, 2025.”
That sentence, in plain words
The change in the figure starts with tax years that begin after December 31, 2025.
What this is about
The other change runs from June 28, 2025. It is tied to when the tax is paid. Both dates are fixed in the law.
No action is recorded against this proposal. That is not evidence that none has been taken, and nobody has yet read it against the record. See what the tracker does not yet cover.
Each distinct thing the section does: raise the deemed paid credit percentage and match the gross up rule, disallow a credit for 10 percent of foreign tax on distributions of previously taxed income, and fix the two effective dates.
Nothing in the section is left out. It has three subsections and each is recorded.
The section works by amending sections 78 and 960 of the Internal Revenue Code of 1986 and points to sections 901, 951A and 959, none of which is indexed here.
