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Pub. L.
Notes

Division EE — Taxpayer Certainty and Disaster Tax Relief Act of 2020

116th Congress · Approved Dec 27, 2020 · 134 Stat. 1182

DIVISION EE Taxpayer Certainty and Disaster Tax Relief Act of 2020

SEC. 1. Short Title; Table of Contents.

(a)
Short Title.— This division may be cited as the “Taxpayer Certainty and Disaster Tax Relief Act of 2020”.
(b)
Amendment of 1986 Code.— Except as otherwise expressly provided, whenever in this division an amendment or repeal is expressed in terms of an amendment to, or repeal of, a section or other provision, the reference shall be considered to be made to a section or other provision of the Internal Revenue Code of 1986.
(c)
Table of Contents.— The table of contents of this division is as follows:

Sec. 1. Short title; table of contents.

TITLE I— EXTENSION OF CERTAIN EXPIRING PROVISIONS

Subtitle A— Certain Provisions Made Permanent

Sec. 101. Reduction in medical expense deduction floor.

Sec. 102. Energy efficient commercial buildings deduction.

Sec. 103. Benefits provided to volunteer firefighters and emergency medical responders.

Sec. 104. Transition from deduction for qualified tuition and related expenses to increased income limitation on lifetime learning credit.

Sec. 105. Railroad track maintenance credit.

Sec. 106. Certain provisions related to beer, wine, and distilled spirits.

Sec. 107. Refunds in lieu of reduced rates for certain craft beverages produced outside the United States.

Sec. 108. Reduced rates not allowed for smuggled or illegally produced beer, wine, and spirits.

Sec. 109. Minimum processing requirements for reduced distilled spirits rates.

Sec. 110. Modification of single taxpayer rules.

Subtitle B— Certain Provisions Extended Through 2025

Sec. 111. Look-thru rule for related controlled foreign corporations.

Sec. 112. New markets tax credit.

Sec. 113. Work opportunity credit.

Sec. 114. Exclusion from gross income of discharge of qualified principal residence indebtedness.

Sec. 115. 7-year recovery period for motorsports entertainment complexes.

Sec. 116. Expensing rules for certain productions.

Sec. 117. Oil spill liability trust fund rate.

Sec. 118. Empowerment zone tax incentives.

Sec. 119. Employer credit for paid family and medical leave.

Sec. 120. Exclusion for certain employer payments of student loans.

Sec. 121. Extension of carbon oxide sequestration credit.

Subtitle C— Extension of Certain Other Provisions

Sec. 131. Credit for electricity produced from certain renewable resources.

Sec. 132. Extension and phaseout of energy credit.

Sec. 133. Treatment of mortgage insurance premiums as qualified residence interest.

Sec. 134. Credit for health insurance costs of eligible individuals.

Sec. 135. Indian employment credit.

Sec. 136. Mine rescue team training credit.

Sec. 137. Classification of certain race horses as 3-year property.

Sec. 138. Accelerated depreciation for business property on Indian reservations.

Sec. 139. American Samoa economic development credit.

Sec. 140. Second generation biofuel producer credit.

Sec. 141. Nonbusiness energy property.

Sec. 142. Qualified fuel cell motor vehicles.

Sec. 143. Alternative fuel refueling property credit.

Sec. 144. 2-wheeled plug-in electric vehicle credit.

Sec. 145. Production credit for Indian coal facilities.

Sec. 146. Energy efficient homes credit.

Sec. 147. Extension of excise tax credits relating to alternative fuels.

Sec. 148. Extension of residential energy-efficient property credit and inclusion of biomass fuel property expenditures.

Sec. 149. Black lung disability trust fund excise tax.

TITLE II— OTHER PROVISIONS

Sec. 201. Minimum low-income housing tax credit rate.

Sec. 202. Depreciation of certain residential rental property over 30-year period.

Sec. 203. Waste energy recovery property eligible for energy credit.

Sec. 204. Extension of energy credit for offshore wind facilities.

Sec. 205. Minimum rate of interest for certain determinations related to life insurance contracts.

Sec. 206. Clarifications and technical improvements to CARES Act employee retention credit.

Sec. 207. Extension and modification of employee retention and rehiring tax credit.

Sec. 208. Minimum age for distributions during working retirement.

Sec. 209. Temporary rule preventing partial plan termination.

Sec. 210. Temporary allowance of full deduction for business meals.

Sec. 211. Temporary special rule for determination of earned income.

Sec. 212. Certain charitable contributions deductible by non-itemizers.

Sec. 213. Modification of limitations on charitable contributions.

Sec. 214. Temporary special rules for health and dependent care flexible spending arrangements.

TITLE III— DISASTER TAX RELIEF

Sec. 301. Definitions.

Sec. 302. Special disaster-related rules for use of retirement funds.

Sec. 303. Employee retention credit for employers affected by qualified disasters.

Sec. 304. Other disaster-related tax relief provisions.

Sec. 305. Low-income housing tax credit.

Sec. 306. Treatment of certain possessions.

TITLE I Extension of Certain Expiring Provisions

Subtitle A Certain Provisions Made Permanent

SEC. 101. Reduction in Medical Expense Deduction Floor.

(a)
In General.— Section 213 is amended—
(1)
by striking “ 10 percent” in subsection (a) and inserting “ 7.5 percent”, and
(2)
by striking subsection (f).
(b)
Effective Date.— The amendments made by this section shall apply to taxable years beginning after December 31, 2020.

SEC. 102. Energy Efficient Commercial Buildings Deduction.

(a)
Deduction Made Permanent.— Section 179D is amended by striking subsection (h).
(b)
Inflation Adjustment.— Section 179D, as amended by subsection (a), is amended by redesignating subsection (g) as subsection (h) and by inserting after subsection (f) the following new subsection:

“(g) Inflation Adjustment.—In the case of a taxable year beginning after 2020, each dollar amount in subsection (b) or subsection (d)(1)(A) shall be increased by an amount equal to—

“(1) such dollar amount, multiplied by

“(2) the cost-of-living adjustment determined under section 1(f)(3) for the calendar year in which the taxable year begins, determined by substituting ‘calendar year 2019’ for ‘calendar year 2016’ in subparagraph (A)(ii) thereof.

(c)
Update of Standards.—
(1)
ASHRAE standards.— Section 179D(c) is amended—
(A)
in paragraphs (1)(B)(ii) and (1)(D), by striking “ Standard 90.1–2007” and inserting “ Reference Standard 90.1”, and
(B)
by amending paragraph (2) to read as follows:

“(2) Reference standard 90.1.—The term ‘Reference Standard 90.1’ means, with respect to any property, the most recent Standard 90.1 published by the American Society of Heating, Refrigerating, and Air Conditioning Engineers and the Illuminating Engineering Society of North America which has been affirmed by the Secretary, after consultation with the Secretary of Energy, for purposes of this section not later than the date that is 2 years before the date that construction of such property begins.”

(2)
California nonresidential alternative calculation method approval manual.— Section 179D(d)(2) is amended by striking “ , based on the provisions of the 2005 California Nonresidential Alternative Calculation Method Approval Manual” and inserting “ with respect to any property, based on the provisions of the most recent California Nonresidential Alternative Calculation Method Approval Manual which has been affirmed by the Secretary, after consultation with the Secretary of Energy, for purposes of this section not later than the date that is 2 years before the date that construction of such property begins”.
(d)
Effective Date.— The amendments made by this section shall apply to property placed in service after December 31, 2020.

SEC. 103. Benefits Provided to Volunteer Firefighters and Emergency Medical Responders.

(a)
In General.— Section 139B is amended by striking subsection (d).
(b)
Effective Date.— The amendment made by this section shall apply to taxable years beginning after December 31, 2020.

SEC. 104. Transition from Deduction for Qualified Tuition and Related Expenses to Increased Income Limitation on Lifetime Learning Credit.

(a)
Increased Income Limitations for Phaseout of Lifetime Learning Credit.—
(1)
In general.— Section 25A(d) is amended by striking paragraphs (1) and (2), by redesignating paragraph (3) as paragraph (2), and by inserting before paragraph (2) (as so redesignated) the following new paragraph:

“(1) In general.—The American Opportunity Tax Credit and the Lifetime Learning Credit shall each (determined without regard to this paragraph) be reduced (but not below zero) by the amount which bears the same ratio to each such credit (as so determined) as—

“(A) the excess of—

“(i) the taxpayer’s modified adjusted gross income for such taxable year, over

“(ii) $80,000 ( $160,000 in the case of a joint return), bears to

“(B) $10,000 ( $20,000 in the case of a joint return).”

(2)
Conforming amendment.— Section 25A is amended by striking subsection (h).
(b)
Repeal of Deduction for Qualified Tuition and Related Expenses.—
(1)
In general.— Part VII of subchapter B of chapter 1 is amended by striking section 222 (and by striking the item relating to such section in the table of sections for such part).
(2)
Conforming amendments.—
(A)
Section 62(a) is amended by striking paragraph (18).
(B)
Section 74(d)(2)(B) is amended by striking “ 222,”.
(C)
Section 86(b)(2)(A) is amended by striking “ 222,”.
(D)
Section 135(c)(4)(A) is amended by striking “ 222,”.
(E)
Section 137(b)(3)(A) is amended by striking “ 222,”.
(F)
Section 219(g)(3)(A)(ii) is amended by striking “ 222,”.
(G)
Section 221(b)(2)(C)(i) is amended by striking “ 222,”.
(H)
Section 469(i)(3)(E)(iii) is amended by striking “ 222,”.
(c)
Effective Date.— The amendments made by this section shall apply to taxable years beginning after December 31, 2020.

SEC. 105. Railroad Track Maintenance Credit.

(a)
Made Permanent.— Section 45G is amended by striking subsection (f).
(b)
Modification of Credit Rate.— Section 45G(a) is amended by striking “ 50 percent” and inserting “ 40 percent (50 percent in the case of any taxable year beginning before January 1, 2023)”.
(c)
Effective Date.— The amendments made by this section shall apply to taxable years ending after the date of the enactment of this Act.

SEC. 106. Certain Provisions Related to Beer, Wine, and Distilled Spirits.

(a)
Production Period for Beer, Wine, and Distilled Spirits.—
(1)
In general.— Section 263A(f)(4) is amended to read as follows:

“(4) Exemption for aging process of beer, wine, and distilled spirits.—For purposes of this subsection, the production period shall not include the aging period for—

“(A) beer (as defined in section 5052(a)),

“(B) wine (as described in section 5041(a)), or

“(C) distilled spirits (as defined in section 5002(a)(8)), except such spirits that are unfit for use for beverage purposes.”

(2)
Effective date.— The amendment made by this subsection shall apply to interest costs paid or accrued after December 31, 2020.
(b)
Reduced Rate of Excise Tax on Beer.—
(1)
In general.— Section 5051(a)(1) is amended to read as follows:

“(1) In general.—

“(A) Imposition of tax.—A tax is hereby imposed on all beer brewed or produced, and removed for consumption or sale, within the United States, or imported into the United States. Except as provided in paragraph (2), the rate of such tax shall be—

“(i) $16 on the first 6,000,000 barrels of beer—

“(I) brewed by the brewer and removed during the calendar year for consumption or sale, or

“(II) imported by the importer into the United States during the calendar year, and

“(ii) $18 on any barrels of beer to which clause (i) does not apply.

“(B) Barrel.—For purposes of this section, a barrel shall contain not more than 31 gallons of beer, and any tax imposed under this section shall be applied at a like rate for any other quantity or for fractional parts of a barrel.”

(2)
Reduced rate for certain domestic production.— Section 5051(a)(2)(A) is amended—
(A)
in the heading, by inserting “ $3.50 a barrel” before “ rate”, and
(B)
by striking “ $7” and all that follows through “ January 1, 2021)” and inserting “ $3.50”.
(3)
Application of reduced tax rate for foreign manufacturers and importers.— Section 5051(a) is amended—
(A)
in paragraph (1)(A)(i)(II), as amended by paragraph (1) of this subsection, by inserting “ but only if the importer is an electing importer under paragraph (4) and the barrels have been assigned to the importer pursuant to such paragraph” after “ during the calendar year”, and
(B)
in paragraph (4)—
(i)
in subparagraph (A), by striking “ paragraph (1)(C)” and inserting “ paragraph (1)(A)”, and
(ii)
in subparagraph (B), by striking “ The Secretary” and inserting “ The Secretary, after consultation with the Secretary of the Department of Homeland Security,”.
(4)
Controlled group and single taxpayer rules.— Section 5051(a)(5) is amended by striking “ paragraph (1)(C)(i)” each place it appears and inserting “ paragraph (1)(A)(i)”.
(5)
Effective date.— The amendments made by this subsection shall apply to beer removed after December 31, 2020.
(c)
Transfer of Beer Between Bonded Facilities.—
(1)
In general.— Section 5414 is amended to read as follows:

“SEC. 5414. TRANSFER OF BEER BETWEEN BONDED FACILITIES.

“(a) In General.—Beer may be removed from one brewery to another brewery, without payment of tax, and may be mingled with beer at the receiving brewery, subject to such conditions, including payment of the tax, and in such containers, as the Secretary by regulations shall prescribe, which shall include—

“(1) any removal from one brewery to another brewery belonging to the same brewer,

“(2) any removal from a brewery owned by one corporation to a brewery owned by another corporation when—

“(A) one such corporation owns the controlling interest in the other such corporation, or

“(B) the controlling interest in each such corporation is owned by the same person or persons, and

“(3) any removal from one brewery to another brewery when—

“(A) the proprietors of transferring and receiving premises are independent of each other and neither has a proprietary interest, directly or indirectly, in the business of the other, and

“(B) the transferor has divested itself of all interest in the beer so transferred and the transferee has accepted responsibility for payment of the tax.

“(b) Transfer of Liability for Tax.—For purposes of subsection (a)(3), such relief from liability shall be effective from the time of removal from the transferor’s premises, or from the time of divestment of interest, whichever is later.”

(2)
Effective date.— The amendment made by this subsection shall apply to any calendar quarters beginning after December 31, 2020.
(d)
Reduced Rate of Excise Tax on Certain Wine.—
(1)
In general.— Section 5041(c) is amended—
(A)
in the heading, by striking “ for Small Domestic Producers”,
(B)
by amending paragraph (1) to read as follows:

“(1) Allowance of credit.—

“(A) In general.—There shall be allowed as a credit against any tax imposed by this title (other than chapters 2, 21, and 22) an amount equal to the sum of—

“(i) $1 per wine gallon on the first 30,000 wine gallons of wine, plus

“(ii) 90 cents per wine gallon on the first 100,000 wine gallons of wine to which clause (i) does not apply, plus

“(iii) 53.5 cents per wine gallon on the first 620,000 wine gallons of wine to which clauses (i) and (ii) do not apply,

“(B) Adjustment of credit for hard cider.—In the case of wine described in subsection (b)(6), subparagraph (A) of this paragraph shall be applied—

“(i) in clause (i) of such subparagraph, by substituting ‘6.2 cents’ for ‘ $1’,

“(ii) in clause (ii) of such subparagraph, by substituting ‘5.6 cents’ for ‘90 cents’, and

“(iii) in clause (iii) of such subparagraph, by substituting ‘3.3 cents’ for ‘53.5 cents’.”

(C)
by striking paragraphs (2) and (8),
(D)
by redesignating paragraphs (3) through (6) as paragraphs (2) through (5), respectively,
(E)
by redesignating paragraph (9) as paragraph (6), and
(F)
by amending paragraph (7) to read as follows:

“(7) Regulations.—The Secretary may prescribe such regulations as may be necessary to carry out the purposes of this subsection, including regulations to ensure proper calculation of the credit provided in this subsection.”

(2)
Allowance of credit for foreign manufacturers and importers.— Section 5041(c), as amended by paragraph (1), is amended—
(A)
in paragraph (1)(A), by inserting “ but only if the importer is an electing importer under paragraph (6) and the wine gallons of wine have been assigned to the importer pursuant to such paragraph” after “ into the United States during the calendar year”, and
(B)
in paragraph (6)—
(i)
in subparagraph (A), by striking “ paragraph (8)” and inserting “ paragraph (1)”,
(ii)
in subparagraph (B), by striking “ The Secretary” and inserting “ The Secretary of the Treasury, after consultation with the Secretary of the Department of Homeland Security,”, and
(iii)
in subparagraph (C), by striking “ paragraph (4)” and inserting “ paragraph (3)”.
(3)
Effective date.— The amendments made by this subsection shall apply to wine removed after December 31, 2020.
(e)
Adjustment of Alcohol Content Level for Application of Excise Tax Rates.—
(1)
In general.— Paragraphs (1) and (2) of section 5041(b) are each amended by striking “ 14 percent” and all that follows through “ January 1, 2021” and inserting “ 16 percent”.
(2)
Effective date.— The amendments made by this subsection shall apply to wine removed after December 31, 2020.
(f)
Definition of Mead and Low Alcohol by Volume Wine.—
(1)
In general.— Section 5041(h) is amended—
(A)
in paragraph (2), by striking “ the Secretary shall” each place it appears and inserting “ the Secretary may”, and
(B)
by striking paragraph (3).
(2)
Effective date.— The amendments made by this subsection shall apply to wine removed after December 31, 2020.
(g)
Reduced Rate of Excise Tax on Certain Distilled Spirits.—
(1)
In general.— Section 5001(c) is amended—
(A)
in the heading, by striking “ Temporary Reduced Rate” and inserting “ Reduced Rate”,
(B)
in paragraph (3)(B), by striking “ The Secretary” and inserting “ The Secretary of the Treasury, after consultation with the Secretary of the Department of Homeland Security,”, and
(C)
by striking paragraph (4).
(2)
Effective date.— The amendments made by this subsection shall apply to distilled spirits removed after December 31, 2020.
(h)
Bulk Distilled Spirits.—
(1)
In general.— Section 5212 is amended by striking “ and before January 1, 2021,” and inserting “ between bonded premises belonging to the same person or members of the same controlled group (within the meaning of section 5001(c)(2))”.
(2)
Non-bulk transfers related to bottling or storage.— Section 5212 is amended by adding at the end the following new sentence: “ In the case of distilled spirits transferred in bond from the person who distilled or processed such distilled spirits (hereinafter referred to as ‘transferor’) to another person for bottling or storage of such distilled spirits, and returned to the transferor for removal, this section shall be applied without regard to whether distilled spirits are bulk distilled spirits, but only if the transferor retains title during the entire period between such distillation, or processing, and removal.”.
(3)
Effective date.— The amendments made by this subsection shall apply to distilled spirits transferred in bond after December 31, 2020.
(i)
Simplification of Rules Regarding Records, Statements, and Returns.—
(1)
In general.— Section 5555(a) is amended by striking “ For calendar quarters beginning after the date of the enactment of this sentence, and before January 1, 2021, the Secretary” and inserting “ The Secretary”.
(2)
Effective date.— The amendment made by this subsection shall apply to calendar quarters beginning after December 31, 2020.

SEC. 107. Refunds in Lieu of Reduced Rates for Certain Craft Beverages Produced Outside the United States.

(a)
Distilled Spirits.—
(1)
In general.— Section 5001(c), as amended by the preceding provisions of this Act, is amended by adding at the end the following new paragraph:

“(4) Refunds in lieu of reduced rates for foreign production removed after december 31, 2022.—

“(A) In general.—In the case of any proof gallons of distilled spirits which have been produced outside the United States and imported into the United States, if such proof gallons of distilled spirits are removed after December 31, 2022—

“(i) paragraph (1) shall not apply, and

“(ii) the amount determined under subparagraph (B) shall be allowed as a refund, determined for periods not less frequently than quarterly, to the importer in the same manner as if such amount were an overpayment of tax imposed by this section.

“(B) Amount of refund.—The amount determined under this subparagraph with respect to any importer for any period is an amount equal to the sum of—

“(i) the excess (if any) of—

“(I) the amount of tax imposed under this subpart on proof gallons of distilled spirits referred to in subparagraph (A) which were removed during such period, over

“(II) the amount of tax which would have been imposed under this subpart on such proof gallons of distilled spirits if this section were applied without regard to this paragraph, plus

“(ii) the amount of interest which would be allowed and paid on an overpayment of tax at the overpayment rate established under section 6621(a)(1) (without regard to the second sentence thereof) were such rate applied to the excess (if any) determined under clause (i) for the number of days in the filing period for which the refund under this paragraph is being determined.

“(C) Application of rules related to elections and assignments.—Subparagraph (A)(ii) shall apply only if the importer is an electing importer under paragraph (3) and the proof gallons of distilled spirits have been assigned to the importer pursuant to such paragraph.

“(D) Rules for refunds within 90 days.—For purposes of refunds allowed under this paragraph, section 6611(e) shall be applied by substituting ‘90 days’ for ‘45 days’ each place it appears.”

(2)
Coordination with determination for cover over to puerto rico and virgin islands.—
(A)
In general.— Section 7652 is amended by adding at the end the following new subsection:

“(i) Determination of Taxes Collected.—For purposes of subsections (a)(3), (b)(3), and (e)(1), refunds under section 5001(c)(4) shall not be taken into account as a refund, and the amount of taxes imposed by and collected under section 5001(a)(1) shall be determined without regard to section 5001(c).”

(B)
Conforming amendment.— Section 7652(e) is amended by striking paragraph (5).
(3)
Effective date.— The amendments made by this subsection shall apply to distilled spirits brought into the United States and removed after December 31, 2022.
(b)
Beer.—
(1)
In general.— Section 5051(a) is amended by adding at the end the following new paragraph:

“(6) Refunds in lieu of reduced rates for foreign production removed after december 31, 2022.—

“(A) In general.—In the case of any barrels of beer which have been produced outside the United States and imported into the United States, if such barrels of beer are removed after December 31, 2022—

“(i) paragraph (1)(A)(i) shall not apply, and

“(ii) the amount determined under subparagraph (B) shall be allowed as a refund, determined for periods not less frequently than quarterly, to the importer in the same manner as if such amount were an overpayment of tax imposed by this section.

“(B) Amount of refund.—The amount determined under this subparagraph with respect to any importer for any period is an amount equal to the sum of—

“(i) excess (if any) of—

“(I) the amount of tax imposed under this section on barrels of beer referred to in subparagraph (A) which were removed during such period, over

“(II) the amount of tax which would have been imposed under this section on such barrels of beer if this section were applied without regard to this paragraph, plus

“(ii) the amount of interest which would be allowed and paid on an overpayment of tax at the overpayment rate established under section 6621(a)(1) (without regard to the second sentence thereof) were such rate applied to the excess (if any) determined under clause (i) for the number of days in the filing period for which the refund under this paragraph is being determined.

“(C) Application of rules related to elections and assignments.—Subparagraph (A)(ii) shall apply only if the importer is an electing importer under paragraph (4) and the barrels of beer have been assigned to the importer pursuant to such paragraph.

“(D) Rules for refunds within 90 days.—For purposes of refunds allowed under this paragraph, section 6611(e) shall be applied by substituting ‘90 days’ for ‘45 days’ each place it appears.”

(2)
Effective date.— The amendment made by this subsection shall apply to beer removed after December 31, 2022.
(c)
Wine.—
(1)
In general.— Section 5041(c), as amended by the preceding provisions of this Act, is amended by redesignating paragraph (7) as paragraph (8) and by inserting after paragraph (6) the following new paragraph:

“(7) Refunds in lieu of tax credits for foreign production removed after december 31, 2022.—

“(A) In general.—In the case of any wine gallons of wine which have been produced outside the United States and imported into the United States, if such wine gallons are removed after December 31, 2022—

“(i) paragraph (1) shall not apply, and

“(ii) the amount determined under subparagraph (B) shall be allowed as a refund, determined for periods not less frequently than quarterly, to the importer in the same manner as if such amount were an overpayment of tax imposed by this section.

“(B) Amount of refund.—The amount determined under this subparagraph with respect to any importer for any period is an amount equal to the sum of—

“(i) excess (if any) of—

“(I) the amount of tax imposed under this section on wine gallons of wine referred to in subparagraph (A) which were removed during such period, over

“(II) the amount of tax which would have been imposed under this section (including any allowable credits) on such gallons of wine if this section were applied without regard to this paragraph, plus

“(ii) the amount of interest which would be allowed and paid on an overpayment of tax at the overpayment rate established under section 6621(a)(1) (without regard to the second sentence thereof) were such rate applied to the excess (if any) determined under clause (i) for the number of days in the filing period for which the refund under this paragraph is being determined.

“(C) Application of rules related to elections and assignments.—Subparagraph (A)(ii) shall apply only if the importer is an electing importer under paragraph (6) and the wine gallons of wine have been assigned to the importer pursuant to such paragraph.

“(D) Rules for refunds within 90 days.—For purposes of refunds allowed under this paragraph, section 6611(e) shall be applied by substituting ‘90 days’ for ‘45 days’ each place it appears.”

(2)
Effective date.— The amendments made by this subsection shall apply to wine removed after December 31, 2022.
(d)
Information Reporting in Case of Assignment of Lower Rates or Refunds by Foreign Producers of Beer, Wine, and Distilled Spirits.—
(1)
In general.— Subpart A of part III of subchapter A of chapter 61 is amended by inserting after section 6038D the following new section:

“SEC. 6038E. INFORMATION WITH RESPECT TO ASSIGNMENT OF LOWER RATES OR REFUNDS BY FOREIGN PRODUCERS OF BEER, WINE, AND DISTILLED SPIRITS.

“Any foreign producer that elects to make an assignment described in section 5001(c), 5041(c), or 5051(a) shall provide such information, at such time and in such manner, as the Secretary may prescribe in order to make such assignment, including information about the controlled group structure of such foreign producer.”

(2)
Clerical amendment.— Table of sections for subpart A of part III of subchapter A of chapter 61 is amended by inserting after the item relating to section 6038D the following new item:

“Sec. 6038E. Information with respect to assignment of lower rates or refunds by foreign producers of beer, wine, and distilled spirits.”.

(3)
Effective date.— The amendments made by this subsection shall apply to elections to make an assignment under section 5001(c), 5041(c), or 5051(a) of the Internal Revenue Code of 1986 after December 31, 2020.
(e)
Administration of Refunds.— The Secretary of the Treasury (or the Secretary’s delegate within the Department of the Treasury) shall implement and administer sections 5001(c)(4), 5041(c)(7), and 5051(a)(6) of the Internal Revenue Code of 1986, as added by this Act, in coordination with the United States Customs and Border Protection of the Department of Homeland Security.
(f)
Regulations.— The Secretary of the Treasury (or the Secretary’s delegate within the Department of the Treasury) shall prescribe such regulations as may be necessary or appropriate to carry out the purposes of this section, including regulations to require foreign producers to provide information necessary to enforce the volume limitations under sections 5001(c), 5041(c), and 5051(a) of such Code.
(g)
Report.— Not later than 180 days after the date of the enactment of this Act, the Secretary of the Treasury (or the Secretary’s delegate within the Department of the Treasury) shall, in coordination with the United States Customs and Border Protection of the Department of Homeland Security, prepare, submit to Congress, and make publicly available a report detailing the plans for implementing and administering sections 5001(c)(4), 5041(c)(7), and 5051(a)(6) of such Code, as added by this Act.

SEC. 108. Reduced Rates Not Allowed for Smuggled or Illegally Produced Beer, Wine, and Spirits.

(a)
In General.— Subpart E of part I of subchapter A of chapter 51 is amended by redesignating section 5067 as section 5068 and by inserting after section 5066 the following new section:

“SEC. 5067. REDUCED RATES NOT ALLOWED FOR SMUGGLED OR ILLEGALLY PRODUCED BEER, WINE, OR SPIRITS.

“In the case of beer, wine, or distilled spirits that are smuggled into the United States or produced other than as authorized by this chapter—

“(1) the rates of tax under paragraphs (1)(A)(i) and (2) of section 5051(a) shall not apply in the case of any such beer,

“(2) the credit under section 5041(c) shall not apply in the case of any such wine, and

“(3) the rates of tax under section 5001(c) shall not apply in the case of any such distilled spirits.”

(b)
Clerical Amendment.— The table of sections for subpart E of part I of subchapter A of chapter 51 is amended by striking the last item and inserting the following new items:

“Sec. 5067. Reduced rates not allowed for illegally produced beer, wine, or spirits.

“Sec. 5068. Cross reference.”.

(c)
Effective Date.— The amendments made by this section shall apply to beer, wine, or distilled spirits, as the case may be, produced after the date of the enactment of this Act.

SEC. 109. Minimum Processing Requirements for Reduced Distilled Spirits Rates.

(a)
In General.— Section 5001(c), as amended by the preceding provisions of this Act, is amended by adding at the end the following:

“(5) Processed distilled spirits.—A distilled spirit shall not be treated as processed for purposes of this subsection unless a process described in section 5002(a)(5)(A) (other than bottling) is performed with respect to such distilled spirit.”

(b)
Effective Date.— The amendment made by this section shall apply to distilled spirits removed after December 31, 2021.

SEC. 110. Modification of Single Taxpayer Rules.

(a)
Beer.— Section 5051(a)(5)(C) is amended by striking “ marketed under a similar brand, license” and inserting “ under a license”.
(b)
Wine.— For single taxpayer rules relating to wine, see cross reference under section 5041(c)(3) of the Internal Revenue Code of 1986, as redesignated by this Act.
(c)
Distilled Spirits.—
(1)
In general.— Section 5001(c)(2)(D) is amended by striking “ marketed under a similar brand, license” and inserting “ under a license”.
(2)
Application to processors.— Section 5001(c)(2)(D) is further amended by inserting “ or process” after “ that produce”.
(d)
Effective Date.— The amendments made by this section shall apply to beer, wine, and distilled spirits removed after December 31, 2020.

Subtitle B Certain Provisions Extended Through 2025

SEC. 111. Look-Thru Rule for Related Controlled Foreign Corporations.

(a)
In General.— Section 954(c)(6)(C) is amended by striking “ January 1, 2021” and inserting “ January 1, 2026”.
(b)
Effective Date.— The amendment made by this section shall apply to taxable years of foreign corporations beginning after December 31, 2020, and to taxable years of United States shareholders with or within which such taxable years of foreign corporations end.

SEC. 112. New Markets Tax Credit.

(a)
In General.— Section 45D(f)(1)(H) is amended by striking “ 2020” and inserting “ for each of calendar years 2020 through 2025”.
(b)
Carryover of Unused Limitation.— Section 45D(f)(3) is amended by striking “ 2025” and inserting “ 2030”.
(c)
Effective Date.— The amendments made by this section shall apply to calendar years beginning after December 31, 2020.

SEC. 113. Work Opportunity Credit.

(a)
In General.— Section 51(c)(4) is amended by striking “ December 31, 2020” and inserting “ December 31, 2025”.
(b)
Effective Date.— The amendment made by this section shall apply to individuals who begin work for the employer after December 31, 2020.

SEC. 114. Exclusion from Gross Income of Discharge of Qualified Principal Residence Indebtedness.

(a)
In General.— Section 108(a)(1)(E) is amended by striking “ January 1, 2021” both places it appears and inserting “ January 1, 2026”.
(b)
Modification of Maximum Acquisition Indebtedness Taken Into Account.— Section 108(h)(2) is amended by striking “ $2,000,000 ( $1,000,000” and inserting “ $750,000 ( $375,000”.
(c)
Effective Date.— The amendments made by this section shall apply to discharges of indebtedness after December 31, 2020.

SEC. 115. 7-Year Recovery Period for Motorsports Entertainment Complexes.

(a)
In General.— Section 168(i)(15)(D) is amended by striking “ December 31, 2020” and inserting “ December 31, 2025”.
(b)
Effective Date.— The amendment made by this section shall apply to property placed in service after December 31, 2020.

SEC. 116. Expensing Rules for Certain Productions.

(a)
Extension.— Section 181(g) is amended by striking “ December 31, 2020” and inserting “ December 31, 2025”.
(b)
Effective Date.— The amendment made by this section shall apply to productions commencing after December 31, 2020.

SEC. 117. Oil Spill Liability Trust Fund Rate.

(a)
In General.— Section 4611(f)(2) is amended by striking “ December 31, 2020” and inserting “ December 31, 2025”.
(b)
Effective Date.— The amendment made by this section shall apply on and after January 1, 2021.

SEC. 118. Empowerment Zone Tax Incentives.

(a)
In General.— Section 1391(d)(1)(A)(i) is amended by striking “ December 31, 2020” and inserting “ December 31, 2025”.
(b)
Termination of Increase in Expensing Under Section 179.— Section 1397A is amended by adding at the end the following new subsection:

“(c) Termination.—This section shall not apply to any property placed in service in taxable years beginning after December 31, 2020.”

(c)
Termination of Nonrecognition of Gain on Rollover of Empowerment Zone Investments.— Section 1397B is amended by adding at the end the following new subsection:

“(c) Termination.—This section shall not apply to sales in taxable years beginning after December 31, 2020.”

(d)
Treatment of Certain Termination Dates Specified in Nominations.— In the case of a designation of an empowerment zone the nomination for which included a termination date which is contemporaneous with the date specified in subparagraph (A)(i) of section 1391(d)(1) of the Internal Revenue Code of 1986 (as in effect before the enactment of this Act), subparagraph (B) of such section shall not apply with respect to such designation if, after the date of the enactment of this section, the entity which made such nomination amends the nomination to provide for a new termination date in such manner as the Secretary of the Treasury (or the Secretary’s designee) may provide.
(e)
Effective Date.— The amendments made by this section shall apply to taxable years beginning after December 31, 2020.

SEC. 119. Employer Credit for Paid Family and Medical Leave.

(a)
In General.— Section 45S(i) is amended by striking “ December 31, 2020” and inserting “ December 31, 2025”.
(b)
Effective Date.— The amendment made by this section shall apply to wages paid in taxable years beginning after December 31, 2020.

SEC. 120. Exclusion for Certain Employer Payments of Student Loans.

(a)
In General.— Section 127(c)(1)(B) is amended by striking “ January 1, 2021” and inserting “ January 1, 2026”.
(b)
Effective Date.— The amendment made by this section shall apply to payments made after December 31, 2020.

SEC. 121. Extension of Carbon Oxide Sequestration Credit.

Section 45Q(d)(1) is amended by striking “ January 1, 2024” and inserting “ January 1, 2026”.

Subtitle C Extension of Certain Other Provisions

SEC. 131. Credit for Electricity Produced from Certain Renewable Resources.

(a)
In General.— The following provisions of section 45(d) are each amended by striking “ January 1, 2021” each place it appears and inserting “ January 1, 2022”:
(1)
Paragraph (1).
(2)
Paragraph (2)(A).
(3)
Paragraph (3)(A).
(4)
Paragraph (4)(B).
(5)
Paragraph (6).
(6)
Paragraph (7).
(7)
Paragraph (9).
(8)
Paragraph (11)(B).
(b)
Extension of Election to Treat Qualified Facilities as Energy Property.— Section 48(a)(5)(C)(ii) is amended by striking “ January 1, 2021” and inserting “ January 1, 2022”.
(c)
Conforming Amendments Related to Application of Phaseout Percentage.—
(1)
Section 45(b)(5)(D) is amended by striking “ January 1, 2021” and inserting “ January 1, 2022”.
(2)
Section 48(a)(5)(E)(iv) is amended by striking “ January 1, 2021” and inserting “ January 1, 2022”.
(d)
Effective Date.— The amendments made by this section shall take effect on January 1, 2021.

SEC. 132. Extension and Phaseout of Energy Credit.

(a)
Extensions.— Section 48 is amended—
(1)
in subsection (a)—
(A)
in paragraph (2)(A)(i)(II), by striking “ January 1, 2022” and inserting “ January 1, 2024”, and
(B)
in paragraph (3)(A)—
(i)
in clause (ii), by striking “ January 1, 2022” and inserting “ January 1, 2024”, and
(ii)
in clause (vii), by striking “ January 1, 2022” and inserting “ January 1, 2024”, and
(2)
in subsection (c)—
(A)
in paragraph (1)(D), by striking “ January 1, 2022” and inserting “ January 1, 2024”,
(B)
in paragraph (2)(D), by striking “ January 1, 2022” and inserting “ January 1, 2024”,
(C)
in paragraph (3)(A)(iv), by striking “ January 1, 2022” and inserting “ January 1, 2024”, and
(D)
in paragraph (4)(C), by striking “ January 1, 2022” and inserting “ January 1, 2024”.
(b)
Phaseouts.—
(1)
Solar energy property.— Section 48(a)(6) is amended—
(A)
in subparagraph (A)—
(i)
by striking “ January 1, 2022, the energy percentage” and inserting “ January 1, 2024, the energy percentage”,
(ii)
in clause (i), by striking “ January 1, 2021” and inserting “ January 1, 2023”, and
(iii)
in clause (ii), by striking “ after December 31, 2020, and before January 1, 2022” and inserting “ after December 31, 2022, and before January 1, 2024”, and
(B)
in subparagraph (B), by striking “ begins before January 1, 2022, and which is not placed in service before January 1, 2024” and inserting “ begins before January 1, 2024, and which is not placed in service before January 1, 2026”.
(2)
Fiber-optic solar, qualified fuel cell, and qualified small wind energy property.— Section 48(a)(7) is amended—
(A)
in subparagraph (A)—
(i)
in clause (i), by striking “ January 1, 2021” and inserting “ January 1, 2023”, and
(ii)
in clause (ii), by striking “ after December 31, 2020, and before January 1, 2022” and inserting “ after December 31, 2022, and before January 1, 2024”, and
(B)
in subparagraph (B), by striking “ January 1, 2024” and inserting “ January 1, 2026”.
(c)
Effective Date.— The amendments made by this section shall take effect on January 1, 2020.

SEC. 133. Treatment of Mortgage Insurance Premiums as Qualified Residence Interest.

(a)
In General.— Section 163(h)(3)(E)(iv)(I) is amended by striking “ December 31, 2020” and inserting “ December 31, 2021”.
(b)
Effective Date.— The amendment made by this section shall apply to amounts paid or accrued after December 31, 2020.

SEC. 134. Credit for Health Insurance Costs of Eligible Individuals.

(a)
In General.— Section 35(b)(1)(B) is amended by striking “ January 1, 2021” and inserting “ January 1, 2022”.
(b)
Effective Date.— The amendment made by this section shall apply to months beginning after December 31, 2020.

SEC. 135. Indian Employment Credit.

(a)
In General.— Section 45A(f) is amended by striking “ December 31, 2020” and inserting “ December 31, 2021”.
(b)
Effective Date.— The amendment made by this section shall apply to taxable years beginning after December 31, 2020.

SEC. 136. Mine Rescue Team Training Credit.

(a)
In General.— Section 45N(e) is amended by striking “ December 31, 2020” and inserting “ December 31, 2021”.
(b)
Effective Date.— The amendment made by this section shall apply to taxable years beginning after December 31, 2020.

SEC. 137. Classification of Certain Race Horses as 3-Year Property.

(a)
In General.— Section 168(e)(3)(A)(i) is amended—
(1)
by striking “ January 1, 2021” in subclause (I) and inserting “ January 1, 2022”, and
(2)
by striking “ December 31, 2020” in subclause (II) and inserting “ December 31, 2021”.
(b)
Effective Date.— The amendments made by this section shall apply to property placed in service after December 31, 2020.

SEC. 138. Accelerated Depreciation for Business Property on Indian Reservations.

(a)
In General.— Section 168(j)(9) is amended by striking “ December 31, 2020” and inserting “ December 31, 2021”.
(b)
Effective Date.— The amendment made by this section shall apply to property placed in service after December 31, 2020.

SEC. 139. American Samoa Economic Development Credit.

(a)
In General.— Section 119(d) of division A of the Tax Relief and Health Care Act of 2006 is amended—
(1)
by striking “ January 1, 2021” each place it appears and inserting “ January 1, 2022”,
(2)
by striking “ first 15 taxable years” in paragraph (1) and inserting “ first 16 taxable years”, and
(3)
by striking “ first 9 taxable years” in paragraph (2) and inserting “ first 10 taxable years”.
(b)
Effective Date.— The amendments made by this section shall apply to taxable years beginning after December 31, 2020.

SEC. 140. Second Generation Biofuel Producer Credit.

(a)
In General.— Section 40(b)(6)(J)(i) is amended by striking “ January 1, 2021” and inserting “ January 1, 2022”.
(b)
Effective Date.— The amendment made by this section shall apply to qualified second generation biofuel production after December 31, 2020.

SEC. 141. Nonbusiness Energy Property.

(a)
In General.— Section 25C(g)(2) is amended by striking “ December 31, 2020” and inserting “ December 31, 2021”.
(b)
Effective Date.— The amendment made by this section shall apply to property placed in service after December 31, 2020.

SEC. 142. Qualified Fuel Cell Motor Vehicles.

(a)
In General.— Section 30B(k)(1) is amended by striking “ December 31, 2020” and inserting “ December 31, 2021”.
(b)
Effective Date.— The amendment made by this section shall apply to property purchased after December 31, 2020.

SEC. 143. Alternative Fuel Refueling Property Credit.

(a)
In General.— Section 30C(g) is amended by striking “ December 31, 2020” and inserting “ December 31, 2021”.
(b)
Effective Date.— The amendment made by this section shall apply to property placed in service after December 31, 2020.

SEC. 144. 2-Wheeled Plug-In Electric Vehicle Credit.

(a)
In General.— Section 30D(g)(3)(E)(ii) is amended by striking “ January 1, 2021” and inserting “ January 1, 2022”.
(b)
Effective Date.— The amendment made by this section shall apply to vehicles acquired after December 31, 2020.

SEC. 145. Production Credit for Indian Coal Facilities.

(a)
In General.— Section 45(e)(10)(A) is amended by striking “ 15-year period” each place it appears and inserting “ 16-year period”.
(b)
Effective Date.— The amendments made by this section shall apply to coal produced after December 31, 2020.

SEC. 146. Energy Efficient Homes Credit.

(a)
In General.— Section 45L(g) is amended by striking “ December 31, 2020” and inserting “ December 31, 2021”.
(b)
Effective Date.— The amendment made by this section shall apply to homes acquired after December 31, 2020.

SEC. 147. Extension of Excise Tax Credits Relating to Alternative Fuels.

(a)
In General.— Sections 6426(d)(5) and 6426(e)(3) are each amended by striking “ December 31, 2020” and inserting “ December 31, 2021”.
(b)
Outlay Payments for Alternative Fuels.— Section 6427(e)(6)(C) is amended by striking “ December 31, 2020” and inserting “ December 31, 2021”.
(c)
Effective Date.— The amendments made by this subsection shall apply to fuel sold or used after December 31, 2020.

SEC. 148. Extension of Residential Energy-Efficient Property Credit and Inclusion of Biomass Fuel Property Expenditures.

(a)
Extension.—
(1)
In general.— Section 25D(h) is amended by striking “ December 31, 2021” and inserting “ December 31, 2023”.
(2)
Phasedown.— Section 25D(g) is amended—
(A)
by striking “ January 1, 2021” in paragraph (2) and inserting “ January 1, 2023”, and
(B)
by striking “ after December 31, 2020, and before January 1, 2022” in paragraph (3) and inserting “ after December 31, 2022, and before January 1, 2024”.
(b)
Qualified Biomass Fuel Property Expenditures.—
(1)
In general.— Section 25D(a) is amended by striking “ and” at the end of paragraph (4), by inserting “ and” at the end of paragraph (5), and by inserting after paragraph (5) the following new paragraph:

“(6) the qualified biomass fuel property expenditures, and”

(2)
Qualified biomass fuel property expenditures defined.— Section 25D(d) is amended by adding at the end the following new paragraph:

“(6) Qualified biomass fuel property expenditure.—

“(A) In general.—The term ‘qualified biomass fuel property expenditure’ means an expenditure for property—

“(i) which uses the burning of biomass fuel to heat a dwelling unit located in the United States and used as a residence by the taxpayer, or to heat water for use in such a dwelling unit, and

“(ii) which has a thermal efficiency rating of at least 75 percent (measured by the higher heating value of the fuel).

“(B) Biomass fuel.—For purposes of this section, the term ‘biomass fuel’ means any plant-derived fuel available on a renewable or recurring basis.”

(3)
Denial of double benefit for biomass stoves.—
(A)
In general.— Section 25C(d)(3) is amended by adding “ and” at the end of subparagraph (C), by striking “ , and” at the end of subparagraph (D) and inserting a period, and by striking subparagraph (E).
(B)
Conforming amendment.— Section 25C(d) is amended by striking paragraph (6).
(c)
Effective Date.—
(1)
Extension.— The amendments made by subsection (a) shall apply to property placed in service after December 31, 2020.
(2)
Qualified biomass fuel property expenditures.— The amendments made by subsection (b) shall apply to expenditures paid or incurred in taxable years beginning after December 31, 2020.

SEC. 149. Black Lung Disability Trust Fund Excise Tax.

(a)
In General.— Section 4121(e)(2)(A) is amended by striking “ December 31, 2020” and inserting “ December 31, 2021”.
(b)
Effective Date.— The amendment made by this section shall apply to sales after December 31, 2020.

TITLE II Other Provisions

SEC. 201. Minimum Low-Income Housing Tax Credit Rate.

(a)
In General.— Subsection (b) of section 42 is amended—
(1)
by redesignating paragraph (3) as paragraph (4), and
(2)
by inserting after paragraph (2) the following new paragraph:

“(3) Minimum credit rate.—In the case of any new or existing building to which paragraph (2) does not apply and which is placed in service by the taxpayer after December 31, 2020, the applicable percentage shall not be less than 4 percent.”

(b)
Effective Date.— The amendments made by this section shall apply to—
(1)
any building which receives an allocation of housing credit dollar amount after December 31, 2020, and
(2)
in the case of any building any portion of which is financed with an obligation described in section 42(h)(4)(A), any such building if any such obligation which so finances such building is issued after December 31, 2020.

SEC. 202. Depreciation of Certain Residential Rental Property Over 30-Year Period.

Section 13204(b) of Public Law 115–97 is amended—
(1)
in paragraph (1), by striking “ paragraph (2)” and inserting “ paragraphs (2) and (3)”, and
(2)
by adding at the end the following:

“(3) Certain residential rental property.—In the case of any residential rental property—

“(A) which was placed in service before January 1, 2018,

“(B) which is held by an electing real property trade or business (as defined in section 163(j)(7)(B) of the Internal Revenue Code of 1986), and

“(C) for which subparagraph (A), (B), (C), (D), or (E) of section 168(g)(1) of the Internal Revenue Code of 1986 did not apply prior to such date,

SEC. 203. Waste Energy Recovery Property Eligible for Energy Credit.

(a)
In General.— Section 48(a)(3)(A) is amended by striking “ or” at the end of clause (vi), by inserting “ or” at the end of clause (vii), and by adding at the end the following new clause:

“(viii) waste energy recovery property,”

(b)
Application of 30 Percent Credit.— Section 48(a)(2)(A)(i) is amended by striking “ and” at the end of subclause (III) and by adding at the end the following new subclause:

“(V) waste energy recovery property, and”

(c)
Application of Phaseout.— Section 48(a)(7) is amended—
(1)
by inserting “ waste energy recovery property,” after “ qualified small wind property,”, and
(2)
by striking “ fiber-optic solar, qualified fuel cell, and qualified small wind” in the heading thereof and inserting “ certain other”.
(d)
Definition.— Section 48(c) is amended by adding at the end the following new paragraphs:

“(5) Waste energy recovery property.—

“(A) In general.—The term ‘waste energy recovery property’ means property that generates electricity solely from heat from buildings or equipment if the primary purpose of such building or equipment is not the generation of electricity.

“(B) Capacity limitation.—The term ‘waste energy recovery property’ shall not include any property which has a capacity in excess of 50 megawatts.

“(C) No double benefit.—Any waste energy recovery property (determined without regard to this subparagraph) which is part of a system which is a combined heat and power system property shall not be treated as waste energy recovery property for purposes of this section unless the taxpayer elects to not treat such system as a combined heat and power system property for purposes of this section.

“(D) Termination.—The term ‘waste energy recovery property’ shall not include any property the construction of which does not begin before January 1, 2024.”

(e)
Effective Date.— The amendments made by this section shall apply to periods after December 31, 2020, under rules similar to the rules of section 48(m) as in effect on the day before the date of the enactment of the Revenue Reconciliation Act of 1990.

SEC. 204. Extension of Energy Credit for Offshore Wind Facilities.

(a)
In General.— Section 48(a)(5) is amended by adding at the end the following new subparagraph:

“(F) Qualified offshore wind facilities.—

“(i) In general.—In the case of any qualified offshore wind facility—

“(I) subparagraph (C)(ii) shall be applied by substituting ‘January 1, 2026’ for ‘January 1, 2022’,

“(II) subparagraph (E) shall not apply, and

“(III) for purposes of this paragraph, section 45(d)(1) shall be applied by substituting ‘January 1, 2026” for ‘January 1, 2022’.

“(ii) Qualified offshore wind facility.—For purposes of this subparagraph, the term ‘qualified offshore wind facility’ means a qualified facility (within the meaning of section 45) described in paragraph (1) of section 45(d) (determined without regard to any date by which the construction of the facility is required to begin) which is located in the inland navigable waters of the United States or in the coastal waters of the United States.”

(b)
Effective Date.— The amendment made by this section shall apply to periods after December 31, 2016, under rules similar to the rules of section 48(m) of the Internal Revenue Code of 1986 (as in effect on the day before the date of the enactment of the Revenue Reconciliation Act of 1990).

SEC. 205. Minimum Rate of Interest for Certain Determinations Related to Life Insurance Contracts.

(a)
Modification of Minimum Rate for Purposes of Cash Value Accumulation Test.—
(1)
In general.— Section 7702(b)(2)(A) is amended by striking “ an annual effective rate of 4 percent” and inserting “ the applicable accumulation test minimum rate”.
(2)
Applicable accumulation test minimum rate.— Section 7702(b) is amended by adding at the end the following new paragraph:

“(3) Applicable accumulation test minimum rate.—For purposes of paragraph (2)(A), the term ‘applicable accumulation test minimum rate’ means the lesser of—

“(A) an annual effective rate of 4 percent, or

“(B) the insurance interest rate (as defined in subsection (f)(11)) in effect at the time the contract is issued.”

(b)
Modification of Minimum Rate for Purposes of Guideline Premium Requirements.—
(1)
In general.— Section 7702(c)(3)(B)(iii) is amended by striking “ an annual effective rate of 6 percent” and inserting “ the applicable guideline premium minimum rate”.
(2)
Applicable guideline premium minimum rate.— Section 7702(c)(3) is amended by adding at the end the following new subparagraph:

“(E) Applicable guideline premium minimum rate.—For purposes of subparagraph (B)(iii), the term ‘applicable guideline premium minimum rate’ means the applicable accumulation test minimum rate (as defined in subsection (b)(3)) plus 2 percentage points.”

(c)
Application of Modified Minimum Rates to Determination of Guideline Level Premium.— Section 7702(c)(4) is amended—
(1)
by striking “ 4 percent” and inserting “ the applicable accumulation test minimum rate”, and
(2)
by striking “ 6 percent” and inserting “ the applicable guideline premium minimum rate”.
(d)
Insurance Interest Rate.— Section 7702(f) is amended by adding at the end the following new paragraph:

“(11) Insurance interest rate.—For purposes of this section—

“(A) In general.—The term ‘insurance interest rate’ means, with respect to any contract issued in any calendar year, the lesser of—

“(i) the section 7702 valuation interest rate for such calendar year (or, if such calendar year is not an adjustment year, the most recent adjustment year), or

“(ii) the section 7702 applicable Federal interest rate for such calendar year (or, if such calendar year is not an adjustment year, the most recent adjustment year).

“(B) Section 7702 valuation interest rate.—The term ‘section 7702 valuation interest rate’ means, with respect to any adjustment year, the prescribed U.S. valuation interest rate for life insurance with guaranteed durations of more than 20 years (as defined in the National Association of Insurance Commissioners’ Standard Valuation Law) as effective in the calendar year immediately preceding such adjustment year.

“(C) Section 7702 applicable federal interest rate.—The term ‘section 7702 applicable Federal interest rate’ means, with respect to any adjustment year, the average (rounded to the nearest whole percentage point) of the applicable Federal mid-term rates (as defined in section 1274(d) but based on annual compounding) effective as of the beginning of each of the calendar months in the most recent 60-month period ending before the second calendar year prior to such adjustment year.

“(D) Adjustment year.—The term ‘adjustment year’ means the calendar year following any calendar year that includes the effective date of a change in the prescribed U.S. valuation interest rate for life insurance with guaranteed durations of more than 20 years (as defined in the National Association of Insurance Commissioners’ Standard Valuation Law).

“(E) Transition rule.—Notwithstanding subparagraph (A), the insurance interest rate shall be 2 percent in the case of any contract which is issued during the period that—

“(i) begins on January 1, 2021, and

“(ii) ends immediately before the beginning of the first adjustment year that beings after December 31, 2021.”

(e)
Effective Date.— The amendments made by this section shall apply to contracts issued after December 31, 2020.

SEC. 206. Clarifications and Technical Improvements to Cares Act Employee Retention Credit.

(a)
Gross Receipts of Tax-exempt Organizations.— Section 2301(c)(2)(C) of the CARES Act is amended—
(1)
by striking “ of such Code, clauses (i) and (ii)(I)” and inserting

“(i) clauses (i) and (ii)(I)”

(2)
by striking the period at the end and inserting “ , and”, and
(3)
by adding at the end the following new clause:

“(ii) any reference in this section to gross receipts shall be treated as a reference to gross receipts within the meaning of section 6033 of such Code.”

(b)
Modification of Treatment of Health Plan Expenses.— Section 2301(c) of the CARES Act is amended—
(1)
by striking subparagraph (C) of paragraph (3), and
(2)
in paragraph (5)—
(A)
by striking “ The term” and inserting the following:

“(A) In general.—The term”

, and

(B)
by adding at the end the following new subparagraph:

“(B) Allowance for certain health plan expenses.—

“(i) In general.—Such term shall include amounts paid by the eligible employer to provide and maintain a group health plan (as defined in section 5000(b)(1) of the Internal Revenue Code of 1986), but only to the extent that such amounts are excluded from the gross income of employees by reason of section 106(a) of such Code.

“(ii) Allocation rules.—For purposes of this section, amounts treated as wages under clause (i) shall be treated as paid with respect to any employee (and with respect to any period) to the extent that such amounts are properly allocable to such employee (and to such period) in such manner as the Secretary may prescribe. Except as otherwise provided by the Secretary, such allocation shall be treated as properly made if made on the basis of being pro rata among periods of coverage.”

(c)
Improved Coordination Between Paycheck Protection Program and Employee Retention Tax Credit.—
(1)
Amendment to paycheck protection program.— Section 7A(a)(12) of the Small Business Act, as redesignated, transferred, and amended by the Economic Aid to Hard-Hit Small Businesses, Nonprofits, and Venues Act, is amended by adding at the end the following: “ Such payroll costs shall not include qualified wages taken into account in determining the credit allowed under section 2301 of the CARES Act or qualified wages taken into account in determining the credit allowed under subsection (a) or (d) of section 303 of the Taxpayer Certainty and Disaster Relief Act of 2020.”.
(2)
Amendments to employee retention tax credit.—
(A)
In general.— Section 2301(g) of the CARES Act is amended to read as follows:

“(g) Election to Not Take Certain Wages Into Account.—

“(1) In general.—This section shall not apply to so much of the qualified wages paid by an eligible employer as such employer elects (at such time and in such manner as the Secretary may prescribe) to not take into account for purposes of this section.

“(2) Coordination with paycheck protection program.—The Secretary, in consultation with the Administrator of the Small Business Administration, shall issue guidance providing that payroll costs paid during the covered period shall not fail to be treated as qualified wages under this section by reason of an election under paragraph (1) to the extent that a covered loan of the eligible employer is not forgiven by reason of a decision under section 7A(g) of the Small Business Act. Terms used in the preceding sentence which are also used in section 7A of the Small Business Act shall have the same meaning as when used in such section.”

(B)
Conforming amendments.—
(i)
Section 2301 of the CARES Act is amended by striking subsection (j).
(ii)
Section 2301(l) of the CARES Act is amended by striking paragraph (3) and by redesignating paragraphs (4) and (5) as paragraphs (3) and (4), respectively.
(d)
Regulations and Guidance.— Section 2301(l) of the CARES Act, as amended by subsection (c)(2)(B)(ii), is amended by striking “ and” at the end of paragraph (3), by striking the period at the end of paragraph (4) and inserting “ , and”, and by adding at the end the following new paragraph:

“(5) to prevent the avoidance of the purposes of the limitations under this section, including through the leaseback of employees.”

(e)
Effective Date.—
(1)
In general.— The amendments made by this section shall take effect as if included in the provisions of the CARES Act to which they relate.
(2)
Special rule.—
(A)
In general.— For purposes of section 2301 of the CARES Act, an employer who has filed a return of tax with respect to applicable employment taxes (as defined in section 2301(c)(1) of division A of such Act) before the date of the enactment of this Act may elect (in such manner as the Secretary of the Treasury (or the Secretary’s delegate) shall prescribe) to treat any applicable amount as an amount paid in the calendar quarter which includes the date of the enactment of this Act.
(B)
Applicable amount.— For purposes of subparagraph (A), the term “applicable amount” means the amount of wages which—
(i)
are—
(I)
described in section 2301(c)(5)(B) of the CARES Act, as added by the amendments made by subsection (b), or
(II)
permitted to be treated as qualified wages under guidance issued pursuant to section 2301(g)(2) of the CARES Act (as added by subsection (c)), and
(ii)
were—
(I)
paid in a calendar quarter beginning after December 31, 2019, and before October 1, 2020, and
(II)
not taken into account by the taxpayer in calculating the credit allowed under section 2301(a) of division A of such Act for such calendar quarter.

SEC. 207. Extension and Modification of Employee Retention and Rehiring Tax Credit.

(a)
Extension.—
(1)
In general.— Section 2301(m) of the CARES Act is amended by striking “ January 1, 2021” and inserting “ July 1, 2021”.
(2)
Conforming amendment.— Section 2301(c)(2)(A)(i) of the CARES Act is amended by striking “ during calendar year 2020” and inserting “ during the calendar quarter for which the credit is determined under subsection (a)”.
(b)
Increase in Credit Percentage.— Section 2301(a) of the CARES Act is amended by striking “ 50 percent” and inserting “ 70 percent”.
(c)
Increase in Per Employee Limitation.— Section 2301(b)(1) of the CARES Act is amended by striking “ for all calendar quarters shall not exceed $10,000” and inserting “ for any calendar quarter shall not exceed $10,000”.
(d)
Modifications to Definition of Eligible Employer.—
(1)
Decrease in reduction in gross receipts necessary to qualify as eligible employer.—
(A)
In general.— Section 2301(c)(2)(A)(ii)(II) of the CARES Act is amended to read as follows:

“(II) the gross receipts (within the meaning of section 448(c) of the Internal Revenue Code of 1986) of such employer for such calendar quarter are less than 80 percent of the gross receipts of such employer for the same calendar quarter in calendar year 2019.”

(B)
Application to employers not in existence in 2019.— Section 2301(c)(2)(A) of the CARES Act, as amended by subparagraph (A), is amended by adding at the end the following new flush sentence: “With respect to any employer for any calendar quarter, if such employer was not in existence as of the beginning of the same calendar quarter in calendar year 2019, clause (ii)(II) shall be applied by substituting ‘2020’ for ‘2019’.”.
(2)
Election to determine gross receipts test based on prior quarter.—
(A)
In general.— Subparagraph (B) of section 2301(c)(2) of the CARES Act is amended to read as follows:

“(B) Election to use alternative quarter.—At the election of the employer—

“(i) subparagraph (A)(ii)(II) shall be applied—

“(I) by substituting ‘for the immediately preceding calendar quarter’ for ‘for such calendar quarter’, and

“(II) by substituting ‘the corresponding calendar quarter in calendar year 2019’ for ‘the same calendar quarter in calendar year 2019’, and

“(ii) the last sentence of subparagraph (A) shall be applied by substituting ‘the corresponding calendar quarter in calendar year 2019’ for ‘the same calendar quarter in calendar year 2019’.

(B)
Conforming amendment.— Section 2301(l) of the CARES Act, as amended by section 206, is amended by inserting “ and” at the end of paragraph (3), by striking paragraph (4), and by redesignating paragraph (5) as paragraph (4).
(3)
Application to certain governmental employers.—
(A)
In general.— Section 2301(f) of the CARES Act is amended—
(i)
by striking “ This” and inserting the following:

“(1) In general.—This”

, and

(ii)
by adding at the end the following new paragraph:

“(2) Exception.—Paragraph (1) shall not apply to—

“(A) any organization described in section 501(c)(1) of the Internal Revenue Code of 1986 and exempt from tax under section 501(a) of such Code, or

“(B) any entity described in paragraph (1) if —

“(i) such entity is a college or university, or

“(ii) the principal purpose or function of such entity is providing medical or hospital care.

(B)
Conforming amendment.— Section 2301(c)(5)(A) of the CARES Act, as amended by section 206(b)(2), is amended by adding at the end the following new sentence: “ For purposes of the preceding sentence, in the case of any organization or entity described in subsection (f)(2), wages as defined in section 3121(a) of the Internal Revenue Code of 1986 shall be determined without regard to paragraphs (5), (6), (7), (10), and (13) of section 3121(b) of such Code (except with respect to services performed in a penal institution by an inmate thereof).”.
(e)
Modification of Determination of Qualified Wages.—
(1)
Modification of threshold for treatment as a large employer.— Section 2301(c)(3)(A) of the CARES Act is amended by striking “ 100” each place it appears in clauses (i) and (ii) and inserting “ 500”.
(2)
Elimination of limitation.— Section 2301(c)(3) of the CARES Act is amended—
(A)
by striking subparagraph (B), and
(B)
by striking “ Such term” in the second sentence of subparagraph (A) and inserting the following:

“(B) Exception.—The term ‘qualified wages’ ”

(f)
Denial of Double Benefit.— Section 2301(h) of the CARES Act is amended—
(1)
by striking paragraphs (1) and (2) and inserting the following:

“(1) Denial of double benefit.—Any wages taken into account in determining the credit allowed under this section shall not be taken into account as wages for purposes of sections 41, 45A, 45P, 45S, 51, and 1396 of the Internal Revenue Code of 1986.”

(2)
by redesignating paragraph (3) as paragraph (2).
(g)
Advance Payments.—
(1)
In general.— Section 2301 of the CARES Act, as amended by section 206(c)(2)(B)(i), is amended by inserting after subsection (i) the following new subsection:

“(j) Advance Payments.—

“(1) In general.—Except as provided in paragraph (2), no advance payment of the credit under subsection (a) shall be allowed.

“(2) Advance payments to small employers.—

“(A) In general.—Under rules provided by the Secretary, an eligible employer for which the average number of full-time employees (within the meaning of section 4980H of the Internal Revenue Code of 1986) employed by such eligible employer during 2019 was not greater than 500 may elect for any calendar quarter to receive an advance payment of the credit under subsection (a) for such quarter in an amount not to exceed 70 percent of the average quarterly wages paid by the employer in calendar year 2019.

“(B) Special rule for seasonal employers.—In the case of any employer who employs seasonal workers (as defined in section 45R(d)(5)(B) of the Internal Revenue Code of 1986), the employer may elect to substitute ‘the wages for the calendar quarter in 2019 which corresponds to the calendar quarter to which the election relates’ for ‘the average quarterly wages paid by the employer in calendar year 2019’.

“(C) Special rule for employers not in existence in 2019.—In the case of any employer that was not in existence in 2019, subparagraphs (A) and (B) shall each be applied by substituting ‘2020’ for ‘2019’ each place it appears.

“(3) Reconciliation of credit with advance payments.—

“(A) In general.—The amount of credit which would (but for this subsection) be allowed under this section shall be reduced (but not below zero) by the aggregate payment allowed to the taxpayer under paragraph (2). Any failure to so reduce the credit shall be treated as arising out of a mathematical or clerical error and assessed according to section 6213(b)(1) of the Internal Revenue Code of 1986.

“(B) Excess advance payments.—If the advance payments to a taxpayer under paragraph (2) for a calendar quarter exceed the credit allowed by this section (determined without regard to subparagraph (A)), the tax imposed by chapter 21 or 22 of the Internal Revenue Code of 1986 (whichever is applicable) for the calendar quarter shall be increased by the amount of such excess.”

(2)
Conforming amendments.— Section 2301(l) of the CARES Act, as amended by section 206 and subsection (d)(2)(B), is amended—
(A)
by inserting “ as provided in subsection (j)(2)” after “ subsection (a)” in paragraph (1),
(B)
by striking paragraph (2), and
(C)
by redesignating paragraphs (3) and (4) as paragraphs (2) and (3), respectively.
(h)
Third-party Payors.— Section 2301(l) of the CARES Act, as amended by section 206 and subsections (d)(2)(B) and (g)(2), is amended by adding at the end the following flush sentence: “Any forms, instructions, regulations, or guidance described in paragraph (2) shall require the customer to be responsible for the accounting of the credit and for any liability for improperly claimed credits and shall require the certified professional employer organization or other third party payor to accurately report such tax credits based on the information provided by the customer.”.
(i)
Public Awareness Campaign.— Section 2301 of the CARES Act is amended by adding at the end the following new subsection:

“(n) Public Awareness Campaign.—

“(1) In general.—The Secretary shall conduct a public awareness campaign, in coordination with the Administrator of the Small Business Administration, to provide information regarding the availability of the credit allowed under this section.

“(2) Outreach.—Under the campaign conducted under paragraph (1), the Secretary shall—

“(A) provide to all employers which reported not more than 500 employees on the most recently filed return of applicable employment taxes a notice about the credit allowed under this section and the requirements for eligibility to claim the credit, and

“(B) not later than 30 days after the date of the enactment of this subsection, provide to all employers educational materials relating to the credit allowed under this section, including specific materials for businesses with not more than 500 employees.”

(j)
Coordination With Certain Payroll Protection Program Loans.— Section 2301(g)(2) of the CARES Act, as added by section 206(c)(2)(A), is amended by striking “ section 7A(g) of the Small Business Act” and all that follows and inserting “ section 7A(g) of the Small Business Act or the application of section 7(a)(37)(J) of the Small Business Act. Terms used in the preceding sentence which are also used in section 7A(g) or 7(a)(37)(J) of the Small Business Act shall, when applied in connection with either such section, have the same meaning as when used in such section, respectively.”.
(k)
Effective Date.— The amendments made by this section shall apply to calendar quarters beginning after December 31, 2020.

SEC. 208. Minimum Age for Distributions During Working Retirement.

(a)
In General.— Paragraph (36) of section 401(a) is amended to read as follows:

“(36) Distributions during working retirement.—

“(A) In general.—A trust forming part of a pension plan shall not be treated as failing to constitute a qualified trust under this section solely because the plan provides that a distribution may be made from such trust to an employee who has attained age 59½ and who is not separated from employment at the time of such distribution.

“(B) Certain employees in the building and construction industry.—Subparagraph (A) shall be applied by substituting ‘age 55’ for ‘age 59½’ in the case of a multiemployer plan described in section 4203(b)(1)(B)(i) of the Employee Retirement Income Security Act of 1974, with respect to individuals who were participants in such plan on or before April 30, 2013, if—

“(i) the trust to which subparagraph (A) applies was in existence before January 1, 1970, and

“(ii) before December 31, 2011, at a time when the plan provided that distributions may be made to an employee who has attained age 55 and who is not separated from employment at the time of such distribution, the plan received at least 1 written determination from the Internal Revenue Service that the trust to which subparagraph (A) applies constituted a qualified trust under this section.”

(b)
Effective Date.— The amendment made by this section shall apply to distributions made before, on, or after the date of the enactment of this Act.

SEC. 209. Temporary Rule Preventing Partial Plan Termination.

A plan shall not be treated as having a partial termination (within the meaning of 411(d)(3) of the Internal Revenue Code of 1986) during any plan year which includes the period beginning on March 13, 2020, and ending on March 31, 2021, if the number of active participants covered by the plan on March 31, 2021 is at least 80 percent of the number of active participants covered by the plan on March 13, 2020.

SEC. 210. Temporary Allowance of Full Deduction for Business Meals.

(a)
In General.— Section 274(n)(2) of the Internal Revenue Code of 1986 is amended by striking “ or” at the end of subparagraph (B), by striking the period at the end of subparagraph (C)(iv) and inserting “ , or”, and by inserting after subparagraph (C) the following new subparagraph:

“(D) such expense is—

“(i) for food or beverages provided by a restaurant, and

“(ii) paid or incurred before January 1, 2023.”

(b)
Effective Date.— The amendments made by this section shall apply to amounts paid or incurred after December 31, 2020.

SEC. 211. Temporary Special Rule for Determination of Earned Income.

(a)
In General.— If the earned income of the taxpayer for the taxpayer’s first taxable year beginning in 2020 is less than the earned income of the taxpayer for the preceding taxable year, the credits allowed under sections 24(d) and 32 of the Internal Revenue Code of 1986 may, at the election of the taxpayer, be determined by substituting—
(1)
such earned income for the preceding taxable year, for
(2)
such earned income for the taxpayer’s first taxable year beginning in 2020.
(b)
Earned Income.—
(1)
In general.— For purposes of this section, the term “earned income” has the meaning given such term under section 32(c) of the Internal Revenue Code of 1986.
(2)
Application to joint returns.— For purposes of subsection (a), in the case of a joint return, the earned income of the taxpayer for the preceding taxable year shall be the sum of the earned income of each spouse for such preceding taxable year.
(c)
Special Rules.—
(1)
Errors treated as mathematical error.— For purposes of section 6213 of the Internal Revenue Code of 1986, an incorrect use on a return of earned income pursuant to subsection (a) shall be treated as a mathematical or clerical error.
(2)
No effect on determination of gross income, etc.— Except as otherwise provided in this section, the Internal Revenue Code of 1986 shall be applied without regard to any substitution under subsection (a).

SEC. 212. Certain Charitable Contributions Deductible by Non-Itemizers.

(a)
In General.— Section 170 is amended by redesignating subsection (p) as subsection (q) and by inserting after subsection (o) the following new subsection:

“(p) Special Rule for Taxpayers Who Do Not Elect to Itemize Deductions.—In the case of any taxable year beginning in 2021, if the individual does not elect to itemize deductions for such taxable year, the deduction under this section shall be equal to the deduction, not in excess of $300 ( $600 in the case of a joint return), which would be determined under this section if the only charitable contributions taken into account in determining such deduction were contributions made in cash during such taxable year (determined without regard to subsections (b)(1)(G)(ii) and (d)(1)) to an organization described in section 170(b)(1)(A) and not—

“(1) to an organization described in section 509(a)(3), or

“(2) for the establishment of a new, or maintenance of an existing, donor advised fund (as defined in section 4966(d)(2)).”

(b)
Penalty for Underpayments Attributable to Overstated Deduction.—
(1)
In general.— Section 6662(b) is amended by inserting after paragraph (8) the following:

“(9) Any overstatement of the deduction provided in section 170(p).”

(2)
Increased penalty.— Section 6662 is amended by adding at the end the following new subsection:

“(l) Increase in Penalty in Case of Overstatement of Qualified Charitable Contributions.—In the case of any portion of an underpayment which is attributable to one or more overstatements of the deduction provided in section 170(p), subsection (a) shall be applied with respect to such portion by substituting ‘50 percent’ for ‘20 percent’.”

(3)
Exception to approval of assessment.— Section 6751(b)(2)(A) is amended by striking “ or 6655” and inserting “ 6655, or 6662 (but only with respect to an addition to tax by reason of subsection (b)(9) thereof)”.
(b)
Conforming Amendments.—
(1)
Section 63(b) is amended by striking “ and” at the end of paragraph (2), by striking the period at the end of paragraph (3) and inserting “ , and”, and by adding at the end the following new paragraph:

“(4) the deduction provided in section 170(p).”

(2)
Section 63(d) is amended by adding “ and” at the end of paragraph (1), by striking paragraphs (2) and (3), and by inserting after paragraph (1) the following new paragraph:

“(2) any deduction referred to in any paragraph of subsection (b).”

(c)
Repeal of Superseded Provisions.—
(1)
In general.— Section 62(a) is amended by striking paragraph (22).
(2)
Conforming amendment.— Section 62 is amended by striking subsection (f).
(d)
Effective Date.— The amendments made by this section shall apply to taxable years beginning after December 31, 2020.

SEC. 213. Modification of Limitations on Charitable Contributions.

(a)
In General.— Subsections (a)(3)(A)(i) and (b) of section 2205 of the CARES Act are each amended by inserting “ or 2021” after “ 2020”.
(b)
Conforming Amendment.— The heading of section 2205 of the CARES Act is amended by striking “ modification of limitations on charitable contributions during 2020” and inserting “ temporary modification of limitations on charitable contributions”.
(c)
Effective Date.— The amendments made by this section shall apply to contributions made after December 31, 2020.

SEC. 214. Temporary Special Rules for Health and Dependent Care Flexible Spending Arrangements.

(a)
Carryover From 2020 Plan Year.— For plan years ending in 2020, a plan that includes a health flexible spending arrangement or dependent care flexible spending arrangement shall not fail to be treated as a cafeteria plan under the Internal Revenue Code of 1986 merely because such plan or arrangement permits participants to carry over (under rules similar to the rules applicable to health flexible spending arrangements) any unused benefits or contributions remaining in any such flexible spending arrangement from such plan year to the plan year ending in 2021.
(b)
Carryover From 2021 Plan Year.— For plan years ending in 2021, a plan that includes a health flexible spending arrangement or dependent care flexible spending arrangement shall not fail to be treated as a cafeteria plan under the Internal Revenue Code of 1986 merely because such plan or arrangement permits participants to carry over (under rules similar to the rules applicable to health flexible spending arrangements) any unused benefits or contributions remaining in any such flexible spending arrangement from such plan year to the plan year ending in 2022.
(c)
Extension of Grace Periods, etc.—
(1)
In general.— A plan that includes a health flexible spending arrangement or dependent care flexible spending arrangement shall not fail to be treated as a cafeteria plan under the Internal Revenue Code of 1986 merely because such plan or arrangement extends the grace period for a plan year ending in 2020 or 2021 to 12 months after the end of such plan year, with respect to unused benefits or contributions remaining in a health flexible spending arrangement or a dependent care flexible spending arrangement.
(2)
Post-termination reimbursements from health FSAs.— A plan that includes a health flexible spending arrangement shall not fail to be treated as a cafeteria plan under the Internal Revenue Code of 1986 merely because such plan or arrangement allows (under rules similar to the rules applicable to dependent care flexible spending arrangements) an employee who ceases participation in the plan during calendar year 2020 or 2021 to continue to receive reimbursements from unused benefits or contributions through the end of the plan year in which such participation ceased (including any grace period, taking into account any modification of a grace period permitted under paragraph (1)).
(d)
Special Carry Forward Rule for Dependent Care Flexible Spending Arrangements Where Dependent Aged Out During Pandemic.—
(1)
In general.— In the case of any eligible employee, section 21(b)(1)(A) of the Internal Revenue Code of 1986 shall be applied by substituting “age 14” for “age 13” for purposes of determining the dependent care assistance which may be paid or reimbursed with respect to such employee under the dependent care flexible spending arrangement referred to in paragraph (3)(A) with respect to such employee during—
(A)
the plan year described in paragraph (3)(A), and
(B)
in the case of an employee described in paragraph (3)(B)(ii), the subsequent plan year.
(2)
Application to subsequent plan year limited to unused balance from preceding plan year.— Paragraph (1)(B) shall only apply to so much of the amounts paid for dependent care assistance with respect to the dependents referred to in paragraph (3)(B) as does not exceed the unused balance described in paragraph (3)(B)(ii).
(3)
Eligible employee.— For purposes of this section, the term “eligible employee” means any employee who—
(A)
is enrolled in a dependent care flexible spending arrangement for the last plan year with respect to which the end of the regular enrollment period for such plan year was on or before January 31, 2020, and
(B)
has one or more dependents (as defined in section 152(a)(1) of the Internal Revenue Code of 1986) who attain the age of 13—
(i)
during such plan year, or
(ii)
in the case of an employee who (after the application of this section) has an unused balance in the employee’s account under such arrangement for such plan year (determined as of the close of the last day on which, under the terms of the plan, claims for reimbursement may be made with respect to such plan year), the subsequent plan year.
(e)
Change in Election Amount.— For plan years ending in 2021, a plan that includes a health flexible spending arrangement or dependent care flexible spending arrangement shall not fail to be treated as a cafeteria plan under the Internal Revenue Code of 1986 merely because such plan or arrangement allows an employee to make an election to modify prospectively the amount (but not in excess of any applicable dollar limitation) of such employee’s contributions to any such flexible spending arrangement (without regard to any change in status).
(f)
Definitions.— Any term used in this section which is also used in section 106, 125, or 129 of the Internal Revenue Code of 1986, or the regulations or guidance thereunder, shall have the same meaning as when used in such section, regulations, or guidance.
(g)
Plan Amendments.— A plan that includes a health flexible spending arrangement or dependent care flexible spending arrangement shall not fail to be treated as a cafeteria plan under the Internal Revenue Code of 1986 merely because such plan or arrangement is amended pursuant to a provision under this section and such amendment is retroactive, if—
(1)
such amendment is adopted not later than the last day of the first calendar year beginning after the end of the plan year in which the amendment is effective, and
(2)
the plan or arrangement is operated consistent with the terms of such amendment during the period beginning on the effective date of the amendment and ending on the date the amendment is adopted.

TITLE III Disaster Tax Relief

SEC. 301. Definitions.

For purposes of this title—
(1)
Qualified disaster area.—
(A)
In general.— The term “qualified disaster area” means any area with respect to which a major disaster was declared, during the period beginning on January 1, 2020, and ending on the date which is 60 days after the date of the enactment of this Act, by the President under section 401 of the Robert T. Stafford Disaster Relief and Emergency Assistance Act if the incident period of the disaster with respect to which such declaration is made begins on or after December 28, 2019, and on or before the date of the enactment of this Act.
(B)
COVID–19 exception.— Such term shall not include any area with respect to which such a major disaster has been so declared only by reason of COVID–19.
(2)
Qualified disaster zone.— The term “qualified disaster zone” means that portion of any qualified disaster area which was determined by the President, during the period beginning on January 1, 2020, and ending on the date which is 60 days after the date of the enactment of this Act, to warrant individual or individual and public assistance from the Federal Government under the Robert T. Stafford Disaster Relief and Emergency Assistance Act by reason of the qualified disaster with respect to such disaster area.
(3)
Qualified disaster.— The term “qualified disaster” means, with respect to any qualified disaster area, the disaster by reason of which a major disaster was declared with respect to such area.
(4)
Incident period.— The term “incident period” means, with respect to any qualified disaster, the period specified by the Federal Emergency Management Agency as the period during which such disaster occurred (except that for purposes of this title such period shall not be treated as ending after the date which is 30 days after the date of the enactment of this Act).

SEC. 302. Special Disaster-Related Rules for Use of Retirement Funds.

(a)
Tax-favored Withdrawals From Retirement Plans.—
(1)
In general.— Section 72(t) of the Internal Revenue Code of 1986 shall not apply to any qualified disaster distribution.
(2)
Aggregate dollar limitation.—
(A)
In general.— For purposes of this subsection, the aggregate amount of distributions received by an individual which may be treated as qualified disaster distributions for any taxable year shall not exceed the excess (if any) of—
(i)
$100,000, over
(ii)
the aggregate amounts treated as qualified disaster distributions received by such individual for all prior taxable years.
(B)
Treatment of plan distributions.— If a distribution to an individual would (without regard to subparagraph (A)) be a qualified disaster distribution, a plan shall not be treated as violating any requirement of the Internal Revenue Code of 1986 merely because the plan treats such distribution as a qualified disaster distribution, unless the aggregate amount of such distributions from all plans maintained by the employer (and any member of any controlled group which includes the employer) to such individual exceeds $100,000.
(C)
Controlled group.— For purposes of subparagraph (B), the term “controlled group” means any group treated as a single employer under subsection (b), (c), (m), or (o) of section 414 of the Internal Revenue Code of 1986.
(D)
Special rule for individuals affected by more than one disaster.— The limitation of subparagraph (A) shall be applied separately with respect to distributions made with respect to each qualified disaster.
(3)
Amount distributed may be repaid.—
(A)
In general.— Any individual who receives a qualified disaster distribution may, at any time during the 3-year period beginning on the day after the date on which such distribution was received, make 1 or more contributions in an aggregate amount not to exceed the amount of such distribution to an eligible retirement plan of which such individual is a beneficiary and to which a rollover contribution of such distribution could be made under section 402(c), 403(a)(4), 403(b)(8), 408(d)(3), or 457(e)(16), of the Internal Revenue Code of 1986, as the case may be.
(B)
Treatment of repayments of distributions from eligible retirement plans other than iras.— For purposes of the Internal Revenue Code of 1986, if a contribution is made pursuant to subparagraph (A) with respect to a qualified disaster distribution from an eligible retirement plan other than an individual retirement plan, then the taxpayer shall, to the extent of the amount of the contribution, be treated as having received the qualified disaster distribution in an eligible rollover distribution (as defined in section 402(c)(4) of such Code) and as having transferred the amount to the eligible retirement plan in a direct trustee to trustee transfer within 60 days of the distribution.
(C)
Treatment of repayments of distributions from iras.— For purposes of the Internal Revenue Code of 1986, if a contribution is made pursuant to subparagraph (A) with respect to a qualified disaster distribution from an individual retirement plan (as defined by section 7701(a)(37) of such Code), then, to the extent of the amount of the contribution, the qualified disaster distribution shall be treated as a distribution described in section 408(d)(3) of such Code and as having been transferred to the eligible retirement plan in a direct trustee to trustee transfer within 60 days of the distribution.
(4)
Definitions.— For purposes of this subsection—
(A)
Qualified disaster distribution.— Except as provided in paragraph (2), the term “qualified disaster distribution” means any distribution from an eligible retirement plan made—
(i)
on or after the first day of the incident period of a qualified disaster and before the date which is 180 days after the date of the enactment of this Act, and
(ii)
to an individual whose principal place of abode at any time during the incident period of such qualified disaster is located in the qualified disaster area with respect to such qualified disaster and who has sustained an economic loss by reason of such qualified disaster.
(B)
Eligible retirement plan.— The term “eligible retirement plan” shall have the meaning given such term by section 402(c)(8)(B) of the Internal Revenue Code of 1986.
(5)
Income inclusion spread over 3-year period.—
(A)
In general.— In the case of any qualified disaster distribution, unless the taxpayer elects not to have this paragraph apply for any taxable year, any amount required to be included in gross income for such taxable year shall be so included ratably over the 3-taxable-year period beginning with such taxable year.
(B)
Special rule.— For purposes of subparagraph (A), rules similar to the rules of subparagraph (E) of section 408A(d)(3) of the Internal Revenue Code of 1986 shall apply.
(6)
Special rules.—
(A)
Exemption of distributions from trustee to trustee transfer and withholding rules.— For purposes of sections 401(a)(31), 402(f), and 3405 of the Internal Revenue Code of 1986, qualified disaster distributions shall not be treated as eligible rollover distributions.
(B)
Qualified disaster distributions treated as meeting plan distribution requirements.— For purposes of the Internal Revenue Code of 1986, a qualified disaster distribution shall be treated as meeting the requirements of sections 401(k)(2)(B)(i), 403(b)(7)(A)(i), 403(b)(11), and 457(d)(1)(A) of such Code and section 8433(h)(1) of title 5, United States Code, and, in the case of a money purchase pension plan, a qualified disaster distribution which is an in-service withdrawal shall be treated as meeting the distribution rules of section 401(a) of such Code.
(b)
Recontributions of Withdrawals for Home Purchases.—
(1)
Recontributions.—
(A)
In general.— Any individual who received a qualified distribution may, during the applicable period, make 1 or more contributions in an aggregate amount not to exceed the amount of such qualified distribution to an eligible retirement plan (as defined in section 402(c)(8)(B) of the Internal Revenue Code of 1986) of which such individual is a beneficiary and to which a rollover contribution of such distribution could be made under section 402(c), 403(a)(4), 403(b)(8), or 408(d)(3), of such Code, as the case may be.
(B)
Treatment of repayments.— Rules similar to the rules of subparagraphs (B) and (C) of subsection (a)(3) shall apply for purposes of this subsection.
(2)
Qualified distribution.— For purposes of this subsection, the term “qualified distribution” means any distribution—
(A)
described in section 401(k)(2)(B)(i)(IV), 403(b)(7)(A)(i)(V), 403(b)(11)(B), or 72(t)(2)(F), of the Internal Revenue Code of 1986,
(B)
which was to be used to purchase or construct a principal residence in a qualified disaster area, but which was not so used on account of the qualified disaster with respect to such area, and
(C)
which was received during the period beginning on the date which is 180 days before the first day of the incident period of such qualified disaster and ending on the date which is 30 days after the last day of such incident period.
(3)
Applicable period.— For purposes of this subsection, the term “applicable period” means, in the case of a principal residence in a qualified disaster area with respect to any qualified disaster, the period beginning on the first day of the incident period of such qualified disaster and ending on the date which is 180 days after the date of the enactment of this Act.
(c)
Loans From Qualified Plans.—
(1)
Increase in limit on loans not treated as distributions.— In the case of any loan from a qualified employer plan (as defined under section 72(p)(4) of the Internal Revenue Code of 1986) to a qualified individual made during the 180-day period beginning on the date of the enactment of this Act—
(A)
clause (i) of section 72(p)(2)(A) of such Code shall be applied by substituting “ $100,000” for “ $50,000”, and
(B)
clause (ii) of such section shall be applied by substituting “the present value of the nonforfeitable accrued benefit of the employee under the plan” for “one-half of the present value of the nonforfeitable accrued benefit of the employee under the plan”.
(2)
Delay of repayment.— In the case of a qualified individual (with respect to any qualified disaster) with an outstanding loan (on or after the first day of the incident period of such qualified disaster) from a qualified employer plan (as defined in section 72(p)(4) of the Internal Revenue Code of 1986)—
(A)
if the due date pursuant to subparagraph (B) or (C) of section 72(p)(2) of such Code for any repayment with respect to such loan occurs during the period beginning on the first day of the incident period of such qualified disaster and ending on the date which is 180 days after the last day of such incident period, such due date shall be delayed for 1 year (or, if later, until the date which is 180 days after the date of the enactment of this Act),
(B)
any subsequent repayments with respect to any such loan shall be appropriately adjusted to reflect the delay in the due date under subparagraph (A) and any interest accruing during such delay, and
(C)
in determining the 5-year period and the term of a loan under subparagraph (B) or (C) of section 72(p)(2) of such Code, the period described in subparagraph (A) of this paragraph shall be disregarded.
(3)
Qualified individual.— For purposes of this subsection, the term “qualified individual” means any individual—
(A)
whose principal place of abode at any time during the incident period of any qualified disaster is located in the qualified disaster area with respect to such qualified disaster, and
(B)
who has sustained an economic loss by reason of such qualified disaster.
(d)
Provisions Relating to Plan Amendments.—
(1)
In general.— If this subsection applies to any amendment to any plan or annuity contract, such plan or contract shall be treated as being operated in accordance with the terms of the plan during the period described in paragraph (2)(B)(i).
(2)
Amendments to which subsection applies.—
(A)
In general.— This subsection shall apply to any amendment to any plan or annuity contract which is made—
(i)
pursuant to any provision of this section, or pursuant to any regulation issued by the Secretary or the Secretary of Labor under any provision of this section, and
(ii)
on or before the last day of the first plan year beginning on or after January 1, 2022, or such later date as the Secretary may prescribe.

In the case of a governmental plan (as defined in section 414(d) of the Internal Revenue Code of 1986), clause (ii) shall be applied by substituting the date which is 2 years after the date otherwise applied under clause (ii).

(B)
Conditions.— This subsection shall not apply to any amendment unless—
(i)
during the period—
(I)
beginning on the date that this section or the regulation described in subparagraph (A)(i) takes effect (or in the case of a plan or contract amendment not required by this section or such regulation, the effective date specified by the plan), and
(II)
ending on the date described in subparagraph (A)(ii) (or, if earlier, the date the plan or contract amendment is adopted),

the plan or contract is operated as if such plan or contract amendment were in effect, and

(ii)
such plan or contract amendment applies retroactively for such period.

SEC. 303. Employee Retention Credit for Employers Affected by Qualified Disasters.

(a)
In General.— For purposes of section 38 of the Internal Revenue Code of 1986, in the case of an eligible employer, the 2020 qualified disaster employee retention credit shall be treated as a credit listed at the end of subsection (b) of such section. For purposes of this subsection, the 2020 qualified disaster employee retention credit for any taxable year is an amount equal to 40 percent of the qualified wages with respect to each eligible employee of such employer for such taxable year. The amount of qualified wages with respect to any employee which may be taken into account under this subsection by the employer for any taxable year shall not exceed $6,000 (reduced by the amount of qualified wages with respect to such employee taken into account for any prior taxable year).
(b)
Definitions.— For purposes of this section—
(1)
Eligible employer.— The term “eligible employer” means any employer—
(A)
which conducted an active trade or business in a qualified disaster zone at any time during the incident period of the qualified disaster with respect to such qualified disaster zone, and
(B)
with respect to whom the trade or business described in subparagraph (A) is inoperable at any time during the period beginning on the first day of the incident period of such qualified disaster and ending on the date of the enactment of this Act, as a result of damage sustained by reason of such qualified disaster.
(2)
Eligible employee.— The term “eligible employee” means with respect to an eligible employer an employee whose principal place of employment with such eligible employer (determined immediately before the qualified disaster referred to in paragraph (1)) was in the qualified disaster zone referred to in such paragraph.
(3)
Qualified wages.— The term “qualified wages” means wages (as defined in section 51(c)(1) of the Internal Revenue Code of 1986, but without regard to section 3306(b)(2)(B) of such Code) paid or incurred by an eligible employer with respect to an eligible employee at any time on or after the date on which the trade or business described in paragraph (1) first became inoperable at the principal place of employment of the employee (determined immediately before the qualified disaster referred to in such paragraph) and before the earlier of—
(A)
the date on which such trade or business has resumed significant operations at such principal place of employment, or
(B)
the date which is 150 days after the last day of the incident period of the qualified disaster referred to in paragraph (1).

Such term shall include wages paid without regard to whether the employee performs no services, performs services at a different place of employment than such principal place of employment, or performs services at such principal place of employment before significant operations have resumed. Such term shall not include any wages taken into account under section 2301 of the CARES Act.

(c)
Special Rules.—
(1)
Denial of double benefit.— Any wages taken into account in determining any credit allowed under this section shall not be taken into account as wages for purposes of sections 41, 45A, 45P, 45S, 51, and 1396 of the Internal Revenue Code of 1986.
(2)
Certain other rules to apply.— For purposes of this section, rules similar to the rules of sections 51(i)(1), 52, and 280C(a) of the Internal Revenue Code of 1986 shall apply.
(d)
Payroll Tax Credit for Certain Tax-exempt Organizations.—
(1)
In general.— In the case of any qualified tax-exempt organization, there shall be allowed as a credit against the tax imposed by section 3111(a) of the Internal Revenue Code of 1986 on wages paid with respect to employment of all employees of the organization during the calendar quarter an amount equal to 40 percent of the qualified wages paid to eligible employees of such organization during such calendar quarter.
(2)
Application of aggregate dollar limitation per employee.— The amount of qualified wages with respect to any employee which may be taken into account under this subsection by the employer for any calendar quarter shall not exceed $6,000 (reduced by the amount of qualified wages with respect to which credit was allowed under this subsection for any prior calendar quarter with respect to such employee).
(3)
Overall limitation.—
(A)
In general.— The aggregate amount allowed as a credit under this subsection for all eligible employees of any employer for any calendar quarter shall not exceed the amount of the tax imposed by section 3111(a) of the Internal Revenue Code of 1986 on wages paid with respect to employment of all employees of such employer during such calendar quarter (reduced by any credits allowed under subsections (e) and (f) of section 3111 of such Code for such quarter).
(B)
Carryforward.— If the amount of the credit under paragraph (1) exceeds the limitation of subparagraph (A) for any calendar quarter, such excess shall be carried to the succeeding calendar quarter and allowed as a credit under paragraph (1) for such quarter.
(C)
Coordination with other payroll tax credits.—
(i)
Section 7001(b)(3) of the Families First Coronavirus Response Act is amended by inserting “ , and section 303(d) of the Taxpayer Certainty and Disaster Tax Relief Act of 2020,” after “ subsections (e) and (f) of section 3111 of such Code”.
(ii)
Section 7003(b)(2) of the Families First Coronavirus Response Act is amended by striking “ and section 7001 of this Act,” and inserting “ section 7001 of this Act, and section 303(d) of the Taxpayer Certainty and Disaster Tax Relief Act of 2020,”.
(iii)
Section 2301(b)(2) of the CARES Act is amended by striking “ and sections 7001 and 7003 of the Families First Coronavirus Response Act” and inserting “ , sections 7001 and 7003 of the Families First Coronavirus Response Act, and section 303(d) of the Taxpayer Certainty and Disaster Tax Relief Act of 2020”.
(4)
Definitions.—
(A)
Qualified tax-exempt organization.— For purposes of this subsection, the term “qualified tax-exempt organization” means an organization described in section 501(c) of the Internal Revenue Code of 1986 and exempt from taxation under section 501(a) of such Code if such organization would be an eligible employer if the activities of such organization were an active trade or business.
(B)
Application of certain terms with respect to qualified tax-exempt organizations.— For purposes of this subsection, the terms “eligible employee” and “qualified wages” shall be applied with respect to any qualified tax-exempt organization—
(i)
by treating the activities of such organization as an active trade or business, and
(ii)
by substituting “wages (within the meaning of subsection (d)(4)(C))” for “wages (as defined in section 51(c)(1) of the Internal Revenue Code of 1986, but without regard to section 3306(b)(2)(B) of such Code)” in subsection (b)(3).
(C)
Other terms.— Except as otherwise provided in this subsection, any term used in this subsection which is also used in chapter 21 or 22 of the Internal Revenue Code of 1986 shall have the same meaning as when used in such chapter.
(5)
Transfers to certain trust funds.— There are hereby appropriated to the Federal Old-Age and Survivors Insurance Trust Fund and the Federal Disability Insurance Trust Fund established under section 201 of the Social Security Act (42 U.S.C. 401) and the Social Security Equivalent Benefit Account established under section 15A(a) of the Railroad Retirement Act of 1974 (45 U.S.C. 231n–1(a)) amounts equal to the reduction in revenues to the Treasury by reason of this subsection (without regard to this paragraph). Amounts appropriated by the preceding sentence shall be transferred from the general fund at such times and in such manner as to replicate to the extent possible the transfers which would have occurred to such Trust Fund or Account had this subsection not been enacted.
(6)
Treatment of deposits.— The Secretary shall waive any penalty under section 6656 of such Code for any failure to make a deposit of applicable employment taxes if the Secretary determines that such failure was due to the anticipation of the credit allowed under this subsection.
(7)
Third party payors.— Any credit allowed under this subsection shall be treated as a credit described in section 3511(d)(2) of such Code.
(8)
Coordination with subsection (a) credit.— Any wages taken into account in determining the credit allowed under this subsection shall not be take into account as wages for purposes of subsection (a).
(9)
Regulations and guidance.— The Secretary shall issue such forms, instructions, regulations, and guidance as are necessary—
(A)
to allow the advance payment of the credit under paragraph (1), subject to the limitations provided in this subsection, based on such information as the Secretary shall require,
(B)
regulations or other guidance to provide for the reconciliation of such advance payment with the amount of the credit under this subsection at the time of filing the return of tax for the applicable quarter or taxable year,
(C)
with respect to the application of the credit under paragraph (1) to third party payors (including professional employer organizations, certified professional employer organizations, or agents under section 3504 of the Internal Revenue Code of 1986), including regulations or guidance allowing such payors to submit documentation necessary to substantiate the eligible employer status of employers that use such payors, and
(D)
for recapturing the benefit of credits determined under this subsection in cases where there is a subsequent adjustment to the credit determined under paragraph (1).
(e)
Election to Not Take Certain Wages Into Account.—
(1)
In general.— This section shall not apply to qualified wages paid by an eligible employer with respect to which such employer makes an election (at such time and in such manner as the Secretary may prescribe) to have this section not apply to such wages.
(2)
Coordination with paycheck protection program.— The Secretary, in consultation with the Administrator of the Small Business Administration, shall issue guidance providing that payroll costs paid or incurred during the covered period shall not fail to be treated as qualified wages under this section by reason of an election under paragraph (1) to the extent that a covered loan of the eligible employer is not forgiven by reason of a decision under section 7A(g) of the Small Business Act. Terms used in the preceding sentence which are also used in section 7A(g) of such Act shall have the same meaning as when used in such section.
(f)
Certain Governmental Employers.—
(1)
In general.— The credits under this section shall not apply to the Government of the United States, the government of any State or political subdivision thereof, or any agency or instrumentality of any of the foregoing.
(2)
Exception.— Paragraph (1) shall not apply to—
(A)
any organization described in section 501(c)(1) of the Internal Revenue Code of 1986 and exempt from tax under section 501(a) of such Code, or
(B)
any entity described in paragraph (1) if —
(i)
such entity is a college or university, or
(ii)
the principal purpose or function of such entity is providing medical or hospital care.

An entity described in subparagraph (B) shall be treated for purposes of this section in the same manner as an organization described in section 501(c) of the Internal Revenue Code of 1986 and exempt from tax under section 501(a) of such Code.

(g)
Amendment to Paycheck Protection Program.— Section 7A(a)(12) of the Small Business Act (as redesignated, transferred, and amended by the Economic Aid to Hard-Hit Small Businesses, Nonprofits, and Venues Act and as amended by section 206(c) of this division) is amended by adding at the end the following: “ Such payroll costs shall not include qualified wages taken into account in determining the credit allowed under subsection (a) or (d) of section 303 of the Taxpayer Certainty and Disaster Tax Relief Act of 2020.”.

SEC. 304. Other Disaster-Related Tax Relief Provisions.

(a)
Special Rules for Qualified Disaster Relief Contributions.—
(1)
In general.— In the case of a qualified disaster relief contribution made by a corporation—
(A)
section 2205(a)(2)(B) of the CARES Act shall be applied first to qualified contributions without regard to any qualified disaster relief contributions and then separately to such qualified disaster relief contribution, and
(B)
in applying such section to such qualified disaster relief contributions, clause (i) thereof shall be applied—
(i)
by substituting “100 percent” for “25 percent”, and
(ii)
by treating qualified contributions other than qualified disaster relief contributions as contributions allowed under section 170(b)(2) of the Internal Revenue Code of 1986.
(2)
Qualified disaster relief contribution.— For purposes of this subsection, the term “qualified disaster relief contribution” means any qualified contribution (as defined in section 2205(a)(3) of the CARES Act) if—
(A)
such contribution—
(i)
is paid, during the period beginning on January 1, 2020, and ending on the date which is 60 days after the date of the enactment of this Act, and
(ii)
is made for relief efforts in one or more qualified disaster areas,
(B)
the taxpayer obtains from such organization contemporaneous written acknowledgment (within the meaning of section 170(f)(8) of such Code) that such contribution was used (or is to be used) for relief efforts described in subparagraph (A)(ii), and
(C)
the taxpayer has elected the application of this subsection with respect to such contribution.
(3)
Cross-reference.— For the suspension of the limitation on qualified disaster relief contributions made by an individual during 2020, see section 2205(a) of the CARES Act.
(b)
Special Rules for Qualified Disaster-related Personal Casualty Losses.—
(1)
In general.— If an individual has a net disaster loss for any taxable year—
(A)
the amount determined under section 165(h)(2)(A)(ii) of the Internal Revenue Code of 1986 shall be equal to the sum of—
(i)
such net disaster loss, and
(ii)
so much of the excess referred to in the matter preceding clause (i) of section 165(h)(2)(A) of such Code (reduced by the amount in clause (i) of this subparagraph) as exceeds 10 percent of the adjusted gross income of the individual,
(B)
in the case of qualified disaster-related personal casualty losses, section 165(h)(1) of such Code shall be applied to by substituting “ $500” for “ $500 ( $100 for taxable years beginning after December 31, 2009)”,
(C)
the standard deduction determined under section 63(c) of such Code shall be increased by the net disaster loss, and
(D)
section 56(b)(1)(E) of such Code shall not apply to so much of the standard deduction as is attributable to the increase under subparagraph (C) of this paragraph.
(2)
Net disaster loss.— For purposes of this subsection, the term “net disaster loss” means the excess of qualified disaster-related personal casualty losses over personal casualty gains (as defined in section 165(h)(3)(A) of the Internal Revenue Code of 1986).
(3)
Qualified disaster-related personal casualty losses.— For purposes of this subsection, the term “qualified disaster-related personal casualty losses” means losses described in section 165(c)(3) of the Internal Revenue Code of 1986 which arise in a qualified disaster area on or after the first day of the incident period of the qualified disaster to which such area relates, and which are attributable to such qualified disaster.

SEC. 305. Low-Income Housing Tax Credit.

(a)
Additional Low-income Housing Credit Allocations.—
(1)
In general.— For purposes of section 42 of the Internal Revenue Code of 1986, the State housing credit ceiling for any State for each of calendar years 2021 and 2022 shall be increased by the aggregate housing credit dollar amount allocated by the State housing credit agencies of such State for such calendar year to buildings located in any qualified disaster zone in such State.
(2)
Limitation.—
(A)
Application of aggregate limitation.— The increase determined under paragraph (1) with respect to any State shall not exceed—
(i)
in the case of any such increase determined for calendar year 2021, the applicable dollar limitation for such State, and
(ii)
in the case of any such increase determined for calendar year 2022, the applicable dollar limitation for such State reduced by the amount of any increase determined under paragraph (1) with respect to such State for calendar year 2021.
(B)
Applicable dollar limitation.— For purposes of this paragraph, the term “applicable dollar limitation” means, with respect to any State, the lesser of—
(i)
the product of $3.50 multiplied by the population of such State (as determined for calendar year 2020) which resides in qualified disaster zones in such State, or
(ii)
65 percent of the State housing credit ceiling for such State for calendar year 2020.
(3)
Extension of placed in service deadline for designated housing credit dollar amounts.—
(A)
In general.— In the case of any housing credit dollar amount which is allocated by a State housing credit agency of a State for calendar year 2021 or 2022 to a building located in a qualified disaster zone in such State and which is designated (at such time and in such manner as the Secretary may provide) by such State housing credit agency as housing credit dollar amount to which this paragraph applies, section 42(h)(1)(E) of the Internal Revenue Code of 1986 shall be applied—
(i)
by substituting “third calendar year” for “second calendar year” both places it appears, and
(ii)
by substituting “2 years” for “1 year” in clause (ii) thereof.
(B)
Application of limitation.— The aggregate amount of housing credit dollar amount designated under subparagraph (A) for any calendar year by all State housing credit agencies of a State shall not exceed the amount determined under paragraph (2)(A) with respect to such State for such calendar year.
(4)
Allocations treated as made first from additional allocation for purposes of determining carryover.— For purposes of determining the unused State housing credit ceiling for any calendar year under section 42(h)(3)(C) of the Internal Revenue Code of 1986, any increase in the State housing credit ceiling under paragraph (1) shall be treated as an amount described in clause (ii) of such section.

SEC. 306. Treatment of Certain Possessions.

(a)
Payments to Possessions With Mirror Code Tax Systems.— The Secretary of the Treasury shall pay to each possession of the United States which has a mirror code tax system amounts equal to the loss (if any) to that possession by reason of the application of the provisions of this title. Such amounts shall be determined by the Secretary of the Treasury based on information provided by the government of the respective possession.
(b)
Payments to Other Possessions.— The Secretary of the Treasury shall pay to each possession of the United States which does not have a mirror code tax system amounts estimated by the Secretary of the Treasury as being equal to the aggregate benefits (if any) that would have been provided to residents of such possession by reason of the provisions of this title if a mirror code tax system had been in effect in such possession. The preceding sentence shall not apply unless the respective possession has a plan, which has been approved by the Secretary of the Treasury, under which such possession will promptly distribute such payments to its residents.
(c)
Mirror Code Tax System.— For purposes of this section, the term “mirror code tax system” means, with respect to any possession of the United States, the income tax system of such possession if the income tax liability of the residents of such possession under such system is determined by reference to the income tax laws of the United States as if such possession were the United States.
(d)
Treatment of Payments.— For purposes of section 1324 of title 31, United States Code, the payments under this section shall be treated in the same manner as a refund due from a credit provision referred to in subsection (b)(2) of such section.