96 STAT. 586
PUBLIC LAW 97-248—SEPT. 3, 1982 recipient of the income as a credit against the tax imposed by this subtitle. "(b)
W I T H H O L D I N G F R O M INTEREST, DIVIDENDS, AND P A T R O N A G E
DIVIDENDS.—The a m o u n t withheld under section 3451 as tax on interest, dividends, and p a t r o n a g e dividends shall be allowed to the recipient of the income as a credit against the tax imposed by this subtitle. "(c) CREDIT FOR SPECIAL R E F U N D S OF SOCIAL SECURITY T A X. — The
Secretary may prescribe regulations providing for the crediting against the tax imposed by this subtitle of the a m o u n t determined by the tax p a y e r or the Secretary to be allowable under section 6413(c) as a special refund of tax imposed on wages. The a m o u n t allowed as a credit under such regulations shall, for purposes of this subtitle, be considered a n a m o u n t withheld a t source as tax under section 3402. "(d) Y E A R FOR W H I C H CREDIT A L L O W E D. —
"(1) IN GENERAL.—Except as otherwise provided in paragraph (2), any credit allowed by this section shall be allowed for the tax a b l e year beginning in the c a l e n d a r year in which the a m o u n t was withheld (or, in the case of subsection (c), in which the wages were received). If more than 1 taxable year begins in a c a l e n d a r year, such a m o u n t shall be allowed as a credit for the last taxable year so beginning. "(2) SPECIAL RULE FOR CERTAIN DISTRIBUTIONS OF SUBCHAPTER S
CORPORATIONS.—The a m o u n t withheld with respect to a distribution by an electing small business corporation (within the m e a n i n g of section 1371(b)) which is t r e a t e d as a distribution of such corporation's u n d i s t r i b u t e d taxable income for the preceding year under section 1375(f)(1) shall be allowed as a credit for the taxable year of the recipient beginning in the c a l e n d a r year in which the preceding year of the corporation e n d s. " (b) T R E A T M E N T OF ESTATES AND T R U S T S. —
26 USC 643.
(1) IN GENERAL.—Section 643 (relating to definitions applicable to estates and trusts) is amended by adding a t the end thereof the following new subsection: "(d)
COORDINATION W I T H W I T H H O L D I N G ON INTEREST AND D IV I -
DENDS.—Except to the e x t e n t otherwise provided in regulations, this subchapter shall be applied with respect to payments subject to withholding under subchapter B of chapter 24— "(1) by allocating between the e s t a t e or t r u s t and its beneficiaries any credit allowable under section 31(b) (on the basis of the i r respective s h a r e s of interest, dividends, and p a t r o n a g e dividends t a k e n into account under this subchapter), "(2) by t r e a t i n g each beneficiary to whom such credit is allocated as if an a m o u n t equal to such credit had been paid to him by the e s t a t e or trust, and "(3) by allowing the estate or t r u s t a deduction in an a m o u n t equal to the credit so allocated to beneficiaries." 26 USC 661.
26 USC 6413
(2) TECHNICAL AMENDMENT.—Subsection (a) of section
661
(relating to deduction for estates and t r u s t s a c c u m u l a t i n g income or distributing corpus) is amended by adding a t the end thereof the following new sentence: "For purposes of paragraph (1), the a m o u n t of distributable net income shall be computed without the deduction allowed by section 642(c)." (c) CONFORMING AMENDMENT. — Paragraph (1) of section 6413(c) is amended by striking out "section 31(b)" and inserting in lieu thereof "section 31(c)".
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