US Code

Public Law 119-102 (07/12/2026)

26 U.S.C. § 1372

Partnership rules to apply for fringe benefit purposes

Section text and notes

(a)

General rule

For purposes of applying the provisions of this subtitle which relate to employee fringe benefits—
(1)
the S corporation shall be treated as a partnership, and
(2)
any 2-percent shareholder of the S corporation shall be treated as a partner of such partnership.
(b)

2-percent shareholder defined

For purposes of this section, the term “2-percent shareholder” means any person who owns (or is considered as owning within the meaning of section 318) on any day during the taxable year of the S corporation more than 2 percent of the outstanding stock of such corporation or stock possessing more than 2 percent of the total combined voting power of all stock of such corporation.

Pub. L. 97–354, § 296 Stat. 1682 (Added , , .)

Editorial Notes

Prior Provisions

Pub. L. 85–866, title I, § 64(a)72 Stat. 1650 Pub. L. 87–29, § 275 Stat. 64 Pub. L. 89–38980 Stat. 114 Pub. L. 91–683, § 1(a)84 Stat. 2067 Pub. L. 94–455, title IX, § 902(c)(3)90 Stat. 1609 Pub. L. 95–600, title III, § 34392 Stat. 2843 Pub. L. 95–628, § 5(a)92 Stat. 3628 section 2 of Pub. L. 97–354A prior section 1372, added , , ; amended , , ; , §§ 2(b)(2), 3(a), , ; , , ; , title XIX, §§ 1901(a)(149), 1906(b)(13)(A), , , 1788, 1834; , , ; , (b), , , related to manner, effect, termination, etc., of an election not to be subject to taxes imposed under this chapter, prior to the general revision of this subchapter by .

Statutory Notes and Related Subsidiaries

Effective Date

Pub. L. 97–354section 1361 of this titlesection 6(d) of Pub. L. 97–354section 1361 of this titleSection applicable to taxable years beginning after , except that in the case of a taxable year beginning during 1982, sections 1362(d)(3), 1366(f)(3), and 1375 of this title shall apply and subsec. (e)(5) of this section as in effect on the day before , shall not apply, see section 6(a), (b)(3), of , set out as a note under . For additional provisions relating to the treatment of existing fringe benefit plans and the application of this section, see , set out as a note under .