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136 STAT. 2014 PUBLIC LAW 117–169—AUG. 16, 2022 (D) by adding at the end the following new subpara- graph: ‘‘(B) there shall be allowed as a credit against the tax imposed by subsection (b) for the first calendar quarter which begins after the date on which the taxpayer files the return specified in section 41(h)(4)(A)(ii) an amount equal to so much of the payroll tax credit portion deter- mined under section 41(h)(2) as is not allowed as a credit under subparagraph (A).’’. (2) LIMITATION.—Paragraph (2) of section 3111(f) is amended— (A) by striking ‘‘paragraph (1)’’ and inserting ‘‘para- graph (1)(A)’’, and (B) by inserting ‘‘, and the credit allowed by paragraph (1)(B) shall not exceed the tax imposed by subsection (b) for any calendar quarter,’’ after ‘‘calendar quarter’’. (3) CARRYOVER.—Paragraph (3) of section 3111(f) is amended by striking ‘‘the credit’’ and inserting ‘‘any credit’’. (4) DEDUCTION ALLOWED.—Paragraph (4) of section 3111(f) is amended— (A) by striking ‘‘credit’’ and inserting ‘‘credits’’, and (B) by striking ‘‘subsection (a)’’ and inserting ‘‘sub- section (a) or (b)’’. (c) AGGREGATION RULES.—Clause (ii) of section 41(h)(5)(B) is amended by striking ‘‘the $250,000 amount’’ and inserting ‘‘each of the $250,000 amounts’’. (d) EFFECTIVE DATE.—The amendments made by this section shall apply to taxable years beginning after December 31, 2022. SEC. 13903. REINSTATEMENT OF LIMITATION RULES FOR DEDUCTION FOR STATE AND LOCAL, ETC., TAXES; EXTENSION OF LIMITATION ON EXCESS BUSINESS LOSSES OF NONCOR- PORATE TAXPAYERS. (a) REINSTATEMENT OF LIMITATION RULES FOR DEDUCTION FOR STATE AND LOCAL, ETC., TAXES.— (1) IN GENERAL.—Section 164(b)(6), as amended by section 13904, is further amended— (A) in the heading, by striking ‘‘2026’’ and inserting ‘‘2025’’, and (B) by striking ‘‘2027’’ and inserting ‘‘2026’’. (2) EFFECTIVE DATE.—The amendments made by this sub- section shall apply to taxable years beginning after December 31, 2022. (b) EXTENSION OF LIMITATION ON EXCESS BUSINESS LOSSES OF NONCORPORATE TAXPAYERS.— (1) IN GENERAL.—Section 461(l)(1) is amended by striking ‘‘January 1, 2027’’ each place it appears and inserting ‘‘January 1, 2029’’. (2) EFFECTIVE DATE.—The amendments made by this sub- section shall apply to taxable years beginning after December 31, 2026. SEC. 13904. REMOVAL OF HARMFUL SMALL BUSINESS TAXES; EXTEN- SION OF LIMITATION ON DEDUCTION FOR STATE AND LOCAL, ETC., TAXES. (a) REMOVAL OF HARMFUL SMALL BUSINESS TAXES.—Subpara- graph (D) of section 59(k)(1), as added by section 10101, is amended to read as follows: 26 USC 461 note. 26 USC 164 note. 26 USC 41 note. 26 USC 3111. VerDate Sep 11 2014 15:35 Oct 25, 2022 Jkt 029139 PO 00169 Frm 00198 Fmt 6580 Sfmt 6581 E:\PUBLAW\PUBL169.117 PUBL169 jmbennett on LAP3P8D0R2PROD with Publaw