Page:United States Statutes at Large Volume 90 Part 2.djvu/119

 PUBLIC LAW 94-455—OCT. 4, 1976

90 STAT. 1587

(d) P L A N REQUIREMENTS FOR TAXPAYERS ELECTING ADDITIONAL O N E - H A L F PERCENT CREDIT.—Section 301 of the T a x Reduction Act of

1975 (relating to increase in investment credit) is amended by adding a t the end thereof the following new subsections: " (e) P L A N REQUIREMENTS FOR TAXPAYERS ELECTING O N E - H A L F PERCENT CREDIT.—

ADDITIONAL

" (1) GENERAL RULE.—For purposes of clause (ii) of section 46 (a)(2)(B) of the I n t e r n a l Revenue Code of 1954, the amount determined under this subsection for a taxable year is an amount equal to the sum of the matching employee contributions for the taxable year which meet the requirements of this subsection. "(2)

ELECTION; BASIC PLAN REQUIREMENTS.—No a m o u n t shall

be determined under this subsection for the taxable year unless the corporation elects to have this subsection apply for that year. A corporation may not elect to have the provisions of this subsection apply for a taxable year unless the corporation meets the requirements of subsection (d) and the requirements of this subsection. " (3) EMPLOYER CONTRIBUTION.—On making a claim for credit, adjustment, or refund under section 38 of the I n t e r n a l Revenue Code of 1954, the employer shall state in such claim that the employer agrees, as a condition of receiving any such credit, adjustment, or refund attributable to the provisions of section 46 (a)(2)(B) (ii) of such Code, to transfer at the time described in subsection (d)(6)(B) employer securities (as defined in subsection (d)(9)(A)) to the plan having an aggregate value a t the time of the transfer of not more than one-half of one percent of the amount of the qualified investment (as determined under subsections (c) and (d) of section 46 of such Code) of the tax p a y e r for the taxable year. For purposes of meeting the requirements of this paragraph, a transfer of cash shall be treated as a transfer of employer securities if the cash is, under the plan, used to purchase employer securities. " (4) REQUIREMENTS RELATING TO MATCHING EMPLOYEE CONTRIBUTIONS.—

" (A) A n amount contributed by an employee under a plan described in subsection (d) for the taxable year may not be treated as a matching employee contribution for that taxable year under this subsection unless— " (i) each employee w h o participates in the plan described in subsection (d) is entitled to make such a contribution, " (ii) the contribution is designated by the employee as a contribution intended to be used for matching employer amounts transferred under paragraph (3) to a plan which meets the requirements of this subsection, and " ( i i i) the contribution is in the form of an amount paid in cash to the employer or plan administrator not later than 24 months after the close of the taxable year in which the portion of the credit allowed by section 38 of such Code ( and determined under clause (ii) of section 4 6 (a)(2)(B) of such Code which the contribution is to match) is allowed, and is invested forthwith in employer securities (as defined in subsection (d)(9) (A)). " (B) The sum of the amounts of matching employee contributions taken into account for purposes of this subsection

26 USC 46 note,

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