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TITLE 26-INTERNAL REVENUE CODE § 40. Expenses of work incentive programs (a) General rule There shall be allowed, as a credit against the tax imposed by this chapter, the amount deter- mined under subpart C of this part. (b) Regulations The Secretary shall prescribe such regula- tions as may be necessary to carry out the pur- poses of this section and subpart C. (Added Pub. L. 92-178, title VI, § 601(a), Dec. 10, 1971, 85 Stat. 553, and amended Pub. L. 94- 455, title XIX, § 1906(b)(13)(A), Oct. 4, 1976, 90 Stat. 1834.) PRIOR PROVISIONS A prior section 40 was renumbered section 45 of this title. AMENDMENTS 1976-Subsec. (b). Pub. L. 94-455 struck out "or his delegate" following "Secretary". EFFECTIVE DATE Section applicable to taxable years beginning after Dec. 31, 1971, see section 601(f) of Pub. L. 92-178, set out as an Effective Date note under section 50A of this title. SECTION REFERRED TO IN OTHER SECTIONS This section Is referred to in sections 42, 44, 44A, 50A, 56, 381, 6096, 6428, 6601 of this title. § 41. Contributions to candidates for public office (a) General rule In the case of an individual, there shall be al- lowed, subject to the limitations of subsection (b), as a credit against the tax imposed by this chapter for the taxable year, an amount equal to one-half of all political contributions and all newsletter fund contributions, payment of which is made by the taxpayer within the tax- able year. (b) Limitations (I) Maximum credit The credit allowed by subsection (a) for a taxable year shall not exceed $25 ($50 in the case of a joint return under section 6013). (2) Application with other credits The credit allowed by subsection (a) shall not exceed the amount of the tax imposed by this chapter for the taxable year reduced by the sum of the credits allowable under section 33 (relating to foreign tax credit), section 37 (relating to credit for the elderly), and section 38 (relating t,. investment in certain deprecia- ble property). (3) Verification The credit allowed by subsection (a) shall be allowed, with respect to any political con- tribution or newsletter fund contribution, only if such contribution is verified in such manner as the Secretary shall prescribe by regulations. (c) Definitions For purposes of this section- (1) Political contribution The term "political contribution" means a contribution or gift of money to- (A) an individual who is a candidate for nomination or election to any Federal, State, or local elective public office in any primary, general, or special election, for use by such individual to further his candidacy for nomination or election to such office; (B) any committee, association, or organi- zation (whether or not incorporated) orga- nized and operated exclusively for the pur- pose of influencing, or attempting to influ- ence, the nomination or election of one or more individuals who are candidates for nomination or election to any Federal, State, or local elective public office, for use by such committee, association, or organiza- tion to further the candidacy of such indi- vidual or individuals for nomination or elec- tion to such office; (C) the national committee of a national political party; (D) the State committee of a national po- litical party as designated by the national committee of such party; or (E) a local committee of a national politi- cal party as designated by the State com- mittee of such party designated under sub- paragraph (D). (2) Candidate The term "candidate" means, with respect to any Federal, State, or local elective public office, an individual who- (A) publicly announces before the close of the calendar year following the calendar year in which the contribution or gift is made that he is a candidate for nomination or election to such office; and (B) meets the qualifications prescribed by law to hold such office. (3) National political party The term "national political party" means- (A) in the case of contributions made during a taxable year of the taxpayer in which the electors of President and Vice President are chosen, a political party pre- senting candidates or electors for such of- fices on the official election ballot of ten or more States, or (B) in the case of contributions made during any other taxable year of the tax- payer, a political party which met the quali- fications described in subparagraph (A) in the last preceding election of a President and Vice President. (4) State and local The term "State" means the various States and the District of Columbia; and the term "local" means a political subdivision or part thereof, or two or more political subdivisions or parts thereof, of a State. (5) Newsletter fund contribution The term "newsletter fund contribution" means a contribution or gift of money to a fund established and maintained by an indi- vidual who holds, has been elected to, or is a candidate for nomination or election to, any Federal, State, or local elective public office for use by such individual exclusively for the preparation and circulation of a newsletter. Page 45