26 U.S.C. § 419
Contributions paid or accrued by an employer to a welfare benefit fund-
The amount of the deduction allowable under subsection (a)(2) for any taxable year shall not exceed the welfare benefit fund's qualified cost for the taxable year.
For purposes of this section-
Except as otherwise provided in this subsection, the term "qualified cost" means, with respect to any taxable year, the sum of-
In the case of any welfare benefit fund, the qualified cost for any taxable year shall be reduced by such fund's after-tax income for such taxable year.
The term "qualified direct cost" means, with respect to any taxable year, the aggregate amount (including administrative expenses) which would have been allowable as a deduction to the employer with respect to the benefits provided during the taxable year, if-
For purposes of subparagraph (A), a benefit shall be treated as provided when such benefit would be includible in the gross income of the employee if provided directly by the employer (or would be so includible but for any provision of this chapter excluding such benefit from gross income).
In determining qualified direct costs with respect to any child care facility for purposes of subparagraph (A), in lieu of depreciation the adjusted basis of such facility shall be allowable as a deduction ratably over a period of 60 months beginning with the month in which the facility is placed in service.
The term "child care facility" means any tangible property which qualifies under regulations prescribed by the Secretary as a child care center primarily for children of employees of the employer; except that such term shall not include any property-
The term "after-tax income" means, with respect to any taxable year, the gross income of the welfare benefit fund reduced by the sum of-
In determining the gross income of any welfare benefit fund-
No item may be taken into account more than once in determining the qualified cost of any welfare benefit fund.
If-
such excess shall be treated as an amount paid by the employer to such fund during the succeeding taxable year.
For purposes of this section-
The term "welfare benefit fund" means any fund-
The term "welfare benefit" means any benefit other than a benefit with respect to which-
The term "fund" means-
Notwithstanding paragraph (3)(C), the term "fund" shall not include amounts held by an insurance company pursuant to an insurance contract if-
For purposes of this paragraph, the term "qualified nonguaranteed contract" means any insurance contract (including a reasonable premium stabilization reserve held thereunder) if-
In the case of any qualified nonguaranteed contract, subparagraph (A) shall not apply unless the amount of any experience rated refund or policy dividend payable to an employer with respect to a policy year is treated by the employer as received or accrued in the taxable year in which the policy year ends.
If-
this section shall apply as if there were a plan.
If any fund would be a welfare benefit fund (as modified by subsection (f)) but for the fact that there is no employee-employer relationship-
26 U.S.C. § 419
EDITORIAL NOTES
AMENDMENTS2018-Subsec. (e)(3)(A). Pub. L. 115-141 substituted "or (17)" for "(17), or (20)".1988-Subsec. (a)(1). Pub. L. 100-647 substituted "chapter" for "subchapter". 1987-Subsec. (e)(2)(D). Pub. L. 100-203 struck out subpar. (D) which related to a benefit with respect to which an election under section 463 applies.1986-Subsec. (a)(1). Pub. L. 99-514, §1851(b)(2)(C)(iv)(I), substituted "under this subchapter" for "under section 162 or 212".Subsec. (a)(2). Pub. L. 99-514, §1851(b)(2)(C)(iv)(II), substituted "they would otherwise be deductible" for "they satisfy the requirements of either of such sections". Subsec. (e)(4). Pub. L. 99-514, §1851(a)(8)(A), added par. (4).Subsec. (g)(1). Pub. L. 99-514, §1851(a)(1), substituted "such a relationship" for "such a plan".
STATUTORY NOTES AND RELATED SUBSIDIARIES
EFFECTIVE DATE OF 1988 AMENDMENT Amendment by Pub. L. 100-647 effective, except as otherwise provided, as if included in the provision of the Tax Reform Act of 1986, Pub. L. 99-514, to which such amendment relates, see section 1019(a) of Pub. L. 100-647, set out as a note under section 1 of this title.
EFFECTIVE DATE OF 1987 AMENDMENT Amendment by Pub. L. 100-203 applicable to taxable years beginning after Dec. 31, 1987, see section 10201(c)(1) of Pub. L. 100-203, set out as a note under section 404 of this title.
EFFECTIVE DATE OF 1986 AMENDMENT Amendment by Pub. L. 99-514 effective, except as otherwise provided, as if included in the provisions of the Tax Reform Act of 1984, Pub. L. 98-369, div. A, to which such amendment relates, see section 1881 of Pub. L. 99-514, set out as a note under section 48 of this title.
EFFECTIVE DATEPub. L. 98-369, div. A, title V, §511(e), July 18, 1984, 98 Stat. 862, as amended by Pub. L. 99-514, title XVIII, §1851(a)(12), (14), Oct. 22, 1986, 100 Stat. 2862, provided that:"(1) IN GENERAL.-Except as otherwise provided in this subsection, the amendments made by this section [enacting this subpart] shall apply to contributions paid or accrued after December 31, 1985, in taxable years ending after such date."(2) SPECIAL RULE FOR COLLECTIVE BARGAINING AGREEMENTS.-In the case of plan maintained pursuant to 1 or more collective bargaining agreements-"(A) between employee representatives and 1 or more employers, and"(B) in effect on July 1, 1985 (or ratified on or before such date), the amendments made by this section shall not apply to years beginning before the date on which the last of the collective bargaining agreements relating to the plan terminates (determined without regard to any extension thereof agreed to after July 1, 1985)."(3) SPECIAL RULE FOR PARAGRAPH (2).-For purposes of paragraph (2), any plan amendment made pursuant to a collective bargaining agreement relating to the plan which amends the plan solely to conform to any requirement added by this section shall not be treated as a termination of such collective bargaining agreement. "(4) SPECIAL EFFECTIVE DATE FOR CONTRIBUTIONS OF FACILITIES.-Notwithstanding paragraphs (1) and (2), the amendments made by this section shall apply in the case of-"(A) any contribution after June 22, 1984, of a facility to a welfare benefit fund, and "(B) any other contribution after June 22, 1984, to a welfare benefit fund to be used to acquire or improve a facility."(5) BINDING CONTRACT EXCEPTIONS TO PARAGRAPH (4).-Paragraph (4) shall not apply to any facility placed in service before January 1, 1987-"(A) which is acquired or improved by the fund (or contributed to the fund) pursuant to a binding contract in effect on June 22, 1984, and at all times thereafter, or"(B) the construction of which by or for the fund began before June 22, 1984."(6) AMENDMENTS RELATED TO TAX ON UNRELATED BUSINESS INCOME.-The amendments made by subsection (b) [amending section 512 of this title] shall apply with respect to taxable years ending after December 31, 1985. For purposes of section 15 of the Internal Revenue Code of 1954 [now 1986], such amendments shall be treated as a change in the rate of a tax imposed by chapter 1 of such Code."(7) AMENDMENTS RELATED TO EXCISE TAXES ON CERTAIN WELFARE BENEFIT PLANS.-The amendments made by subsection (c) [enacting section 4976 of this title] shall apply to benefits provided after December 31, 1985."
SAVINGS PROVISIONFor provisions that nothing in amendment by Pub. L. 115-141 be construed to affect treatment of certain transactions occurring, property acquired, or items of income, loss, deduction, or credit taken into account prior to Mar. 23, 2018, for purposes of determining liability for tax for periods ending after Mar. 23, 2018, see section 401(e) of Pub. L. 115-141, set out as a note under section 23 of this title.
PLAN AMENDMENTS NOT REQUIRED UNTIL JANUARY 1, 1989For provisions directing that if any amendments made by subtitle A or subtitle C of title XI [§§1101-1147 and 1171-1177] or title XVIII [§§1800-1899A] of Pub. L. 99-514 require an amendment to any plan, such plan amendment shall not be required to be made before the first plan year beginning on or after Jan. 1, 1989, see section 1140 of Pub. L. 99-514, as amended, set out as a note under section 401 of this title.
EFFECTIVE DATE OF REGULATIONS Pub. L. 99-514, title XVIII, §1851(a)(8)(B), Oct. 22, 1986, 100 Stat. 2860, provided that: "Except in the case of a reserve for post-retirement medical or life insurance benefits and any other arrangement between an insurance company and an employer under which the employer has a contractual right to a refund or dividend based solely on the experience of such employer, any account held for an employer by any person and defined as a fund in regulations issued pursuant to section 419(e)(3)(C) of the Internal Revenue Code of 1954 [now 1986] shall be considered a 'fund' no earlier than 6 months following the date such regulations are published in final form."
- Secretary
- The term "Secretary" means the Secretary of the Treasury or his delegate.
- corporation
- The term "corporation" includes associations, joint-stock companies, and insurance companies.
- person
- The term "person" shall be construed to mean and include an individual, a trust, estate, partnership, association, company or corporation.
- taxable year
- The term "taxable year" means the calendar year, or the fiscal year ending during such calendar year, upon the basis of which the taxable income is computed under subtitle A. "Taxable year" means, in the case of a return made for a fractional part of a year under the provisions of subtitle A or under regulations prescribed by the Secretary, the period for which such return is made.