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TITLE 26-INTERNAL REVENUE CODE (d) Cross references For disallowance of credits to estates and trusts, see section 642(a)(2). (Added Pub. L. 92-178, title VII, § 701(a), Dec. 10, 1971, 85 Stat. 560, and amended Pub. L. 93- 625, §§ 11(a)-(c), (e), 12(a), Jan. 3, 1975, 88 Stat. 2119, 2120; Pub. L. 94-455, title V, § 503(b)(4), title XIX, §§ 1901(b)(1)(B), (H)(ii), 1906(b)(13)(A), Oct. 4, 1976, 90 Stat. 1562, 1790, 1791, 1834.) AMENDMENTS 1976-Subsec. (b)(2). Pub. L. 94-455, § 503(b)(4), sub- stituted "credit for the elderly" for "retirement income", and § 1901(b)(1)(B) struck out "section 35 (re- lating to partially tax-exempt interest)," following "(relating to foreign tax credit),". Subsec. (b)(3). Pub. L. 94-455, § l906(b)(13)(A), struck out "or his delegate" following "Secretary". Subsec. (d). Pub. L. 94-455, § 1901(b)(1)(H)(ii), substi- tuted "section 642(a)(2)" for "section 642(a)(3)". 1975-Subsec. (a). Pub. L. 93-625, § 11(a), included in the tax credit an amount equal to one half of all news- letter fund contributious. Subsec. (b)(1). Pub. L. 93-625, § 12(a), doubled amount of maximum credit. Subsec. (b)(3). Pub. L. 93-625, § I1(b), inserted "or newsletter fund contribution" following "political con- tribution" where first appearing and deleted "politi- cal" preceding "contribution" appearing thereafter. Subsec. (c)(2)(A). Pub. L. 93-625, § 11(e), substituted "publicly announces before the close of the calendar year following the calendar year in which the contri- bution or gift is made" for "has publicly announced". Subsec. (c)(5). Pub. L. 93-625, § 11(c), added par. (5). EFFECTIVE DATE OF 1976 AMENDMENT Amendment of subsecs. (b)(2), (d) by section 1901(b)(1)(B), (H)(ii) of Pub. L. 94-455 applicable with respect to taxable years beginning after Dec. 31, 1976, see section 1901(d) of Pub. L. 94-455, set out as an Ef- fective Date of 1976 Amendment note under section 2 of this title. Amendment of subsec. (b)(2) by section 503(b)(4) of Pub. L. 94-455 applicable to taxable years beginning after Dec. 31, 1975, see section 508 of Pub. L. 94-455, set out as an Effective Date of 1976 Amendment note under section 3 of this title. EFFECTIVE DATE OF 1975 AMENDMENT Section 11(f) of Pub. L. 93-625 provided that: "The amendments made by this section [to this section and section 218 of this title] shall apply to any contribu- tion payment of which is made after December 31, 1974, in taxable years beginning after such date." Section 12(c) of Pub. L. 93-625 provided that: "The amendments made by subsections (a) and (b) [to this section and section 218 of this title] shall apply with respect to any contribution the payment of which is made after December 31, 1974, in taxable years begin- ninig after such date." EFFECTIVE DATE Section 703 of Pub. L. 92-178 provided that: "The amendments made by this title [enacting sections 41, 218, and 642(a)(3), (i) of this title] shall apply to tax- able years ending after December 31, 1971, but only with respect to political contributions, payment of which is made after such date." SECTION REFERRED TO IN OTHER SECTIONS This section is referred to in sections 42, 44, 44A, 50A, 56, 218, 527, 642, 6096, 6428 of this title. § 42. General tax credit (a) Allowance of credit In the case of an individual, there shall be al- lowed as a credit against the tax imposed by this chapter for the taxable year an amount equal to the greater of- (1) 2 percent of so much of the taxpayer's taxable income for the taxable year as does not exceed $9,000; or (2) $35 multiplied by each exemption for which the taxpayer is entitled to a deduction for the taxable year under subsection (b) or (e) of section 151. (b) 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. In determining the credits allowed under- (1) section 33 (relating to foreign tax credit), (2) section 37 (relating to credit for the el- derly credit), (3) section 38 (relating to investment in cer- tain depreciable property), (4) section 40 (relating to expenses of work incentive programs), and (5) section 41 (relating to contributions to candidates for public office), the tax imposed by this chapter shall (before any other reductions) be reduced by the credit allowed by this section. (c) Special rule for married individuals iling sepa. rate returns (1) In general Notwithstanding subsection (a), in the case of a married individual who files a separate return for the taxable year, the amount of the credit allowable under subsection (a) for the taxable year shall be equal to either- (A) the amount determined under para- graph (1) of subsection (a); or (B) if this subparagraph applies to the in- dividual for the taxable year, the amount determined under paragraph (2) of subsec- tion (a). For purposes of the preceding sentence, para- graph (1) of subsection (a) shall be applied by substituting "$4,500" for "$9,000". (2) Application of paragraph (1)(B) Subparagraph (B) of paragraph (1) shall apply to any taxpayer for any taxable year if- (A) such taxpayer elects to have such sub- paragraph apply for such taxable year, and (B) the spouse of such taxpayer elects to have such subparagraph apply for any tax. able year corresponding, for purposes of section 142(a), to the taxable year of the taxpayer. Any such election shall be made at such time, and in such manner, as the Secretary shall by regulations prescribe. (3) Marital status For purposes of this subsection, the deter- mination of marital status shall be made under section 143. Page 46