US Code

Public Law 119-73 (01/23/2026)

26 U.S.C. § 78

Gross up for deemed paid foreign tax credit

If a domestic corporation chooses to have the benefits of subpart A of part III of subchapter N (relating to foreign tax credit) for any taxable year, an amount equal to the taxes deemed to be paid by such corporation under subsections (a) and (d) of section 960 (determined without regard to the phrase “90 percent of” in subsection (d)(1) thereof) for such taxable year shall be treated for purposes of this title (other than sections 245 and 245A) as a dividend received by such domestic corporation from the foreign corporation.

Pub. L. 87–834, § 9(b)76 Stat. 1001Pub. L. 94–455, title X, § 1033(b)(1)90 Stat. 1628Pub. L. 115–97, title I, § 14301(c)(1)131 Stat. 2222Pub. L. 119–21, title VII, § 70312(a)(2)139 Stat. 203(Added , , ; amended , , ; , , ; , , .)

Editorial Notes

Amendments

Pub. L. 119–212025— substituted “subsections (a) and (d)” for “subsections (a), (b), and (d)” and “90 percent” for “80 percent”.

Pub. L. 115–972017— amended section generally. Prior to amendment, text read as follows: “If a domestic corporation chooses to have the benefits of subpart A of part III of subchapter N (relating to foreign tax credit) for any taxable year, an amount equal to the taxes deemed to be paid by such corporation under section 902(a) (relating to credit for corporate stockholder in foreign corporation) or under section 960(a)(1) (relating to taxes paid by foreign corporation) for such taxable year shall be treated for purposes of this title (other than section 245) as a dividend received by such domestic corporation from the foreign corporation.”

Pub. L. 94–4551976— substituted “section 902(a)” for “section 902(a)(1)” and “section 960(a)(1)” for “section 960(a)(1)(C)”.

Statutory Notes and Related Subsidiaries

Effective Date of 2025 Amendment

Pub. L. 119–21, title VII, § 70312(c)139 Stat. 203

“(1)

In general .—

section 960 of this titleThe amendments made by subsection (a) [amending this section and ] shall apply to taxable years beginning after .
“(2)

Disallowance .—

section 960 of this titleThe amendment made by subsection (b) [amending ] shall apply to foreign income taxes paid or accrued (or deemed paid under section 960(b)(1) of the Internal Revenue Code of 1986) with respect to any amount excluded from gross income under section 959(a) of such Code by reason of an inclusion in gross income under section 951A(a) of such Code after .”
, , , provided that:

Effective Date of 2017 Amendment

Pub. L. 115–97, title I, § 14301(d)131 Stat. 2225

section 902 of this title“The amendments made by this section [amending this section and sections 245, 535, 545, 814, 865, 901, 904 to 909, 958 to 960, 1291, 1293, and 6038 of this title and repealing ] shall apply to taxable years of foreign corporations beginning after , and to taxable years of United States shareholders in which or with which such taxable years of foreign corporations end.”
, , , provided that:

Effective Date of 1976 Amendment

Pub. L. 94–455section 1033(c) of Pub. L. 94–455section 960 of this titleAmendment by applicable on different dates depending on the date the distributions were received, see , set out as a note under .

Effective Date

Pub. L. 87–834, § 9(e)76 Stat. 1001

“The amendments made by this section [enacting this section and amending sections 535, 545, 861, 901, and 902 of this title] shall apply—
“(1)
in respect of any distribution received by a domestic corporation after , and
“(2)
in respect of any distribution received by a domestic corporation before , in a taxable year of such corporation beginning after , but only to the extent that such distribution is made out of the accumulated profits of a foreign corporation for a taxable year (of such foreign corporation) beginning after .
For purposes of paragraph (2), a distribution made by a foreign corporation out of its profits which are attributable to a distribution received from a foreign subsidiary to which [former] section 902(b) applies shall be treated as made out of the accumulated profits of a foreign corporation for a taxable year beginning before , to the extent that such distribution was paid out of the accumulated profits of such foreign subsidiary for a taxable year beginning before .”
, , , provided that: