# 26 U.S.C. § 1561: Limitation on accumulated earnings credit in the case of certain controlled corporations

Source: OLRC release point 119-134 <https://uscode.house.gov/us/usc/119-134/t26/s1561>. Cite pinpoints as 26 U.S.C. § 1561(a)(1).

## § 1561(a) In general

The component members of a controlled group of corporations on a December 31 shall, for their taxable years which include such December 31, be limited for purposes of this subtitle to one $250,000 ($150,000 if any component member is a corporation described in section 535(c)(2)(B)) amount for purposes of computing the accumulated earnings credit under section 535(c)(2) and (3). Such amount shall be divided equally among the component members of such group on such December 31 unless the Secretary prescribes regulations permitting an unequal allocation of such amount.

## § 1561(b) Certain short taxable years

If a corporation has a short taxable year which does not include a December 31 and is a component member of a controlled group of corporations with respect to such taxable year, then for purposes of this subtitle, the amount to be used in computing the accumulated earnings credit under section 535(c)(2) and (3) of such corporation for such taxable year shall be the amount specified in subsection (a) with respect to such group, divided by the number of corporations which are component members of such group on the last day of such taxable year. For purposes of the preceding sentence, section 1563(b) shall be applied as if such last day were substituted for December 31.

## Regulations

- [Treas. Reg. § 1.1561-0](/26/reg/1.1561-0.md): Table of contents. (interprets § 1561)
- [Treas. Reg. § 1.1561-1](/26/reg/1.1561-1.md): General rules regarding certain tax benefits available to the component members of a controlled group of corporations. (interprets § 1561)
- [Treas. Reg. § 1.1561-2](/26/reg/1.1561-2.md): Special rules for allocating reductions of certain section 1561(a) tax-benefit items. (interprets § 1561)
- [Treas. Reg. § 1.1561-3](/26/reg/1.1561-3.md): Allocation of the section 1561(a) tax items. (interprets § 1561)

## Final rules

- [77 FR 18686](https://www.federalregister.gov/documents/2012/03/28/2012-7533/apportionment-of-tax-items-among-the-members-of-a-controlled-group-of-corporations) (2012): Apportionment of Tax Items Among the Members of a Controlled Group of Corporations
- [74 FR 68530](https://www.federalregister.gov/documents/2009/12/28/E9-30547/apportionment-of-tax-items-among-the-members-of-a-controlled-group-of-corporations) (2009): Apportionment of Tax Items Among the Members of a Controlled Group of Corporations
- [72 FR 72929](https://www.federalregister.gov/documents/2007/12/26/E7-24874/calculating-and-apportioning-the-section-11b1-additional-tax-under-section-1561-for-controlled) (2007): Calculating and Apportioning the Section 11(b)(1) Additional Tax under Section 1561 for Controlled Groups.
- [71 FR 76904](https://www.federalregister.gov/documents/2006/12/22/06-9758/guidance-necessary-to-facilitate-business-electronic-filing-under-section-1561) (2006): Guidance Necessary To Facilitate Business Electronic Filing Under Section 1561

## Leading cases

- [United States v. Vogel Fertilizer Co., 455 U.S. 16 (1982)](https://www.courtlistener.com/opinion/110637/united-states-v-vogel-fertilizer-co/)

## Connections

Cites: § 535 Accumulated taxable income; § 1563 Definitions and special rules

Cited by: § 535 Accumulated taxable income; § 4980B Failure to satisfy continuation coverage requirements of group health plans; § 4980D Failure to meet certain group health plan requirements; § 4980F Failure of applicable plans reducing benefit accruals to satisfy notice requirements; § 6655 Failure by corporation to pay estimated income tax

## Amendments

- 1964-02-26: [Pub. L. 88-272](/26/act/88-272.md), 78 Stat. 116
- 1969-12-30: [Pub. L. 91-172](/26/act/91-172.md), 83 Stat. 599
- 1975-03-29: [Pub. L. 94-12](/26/act/94-12.md), 89 Stat. 44
- 1975-12-23: [Pub. L. 94-164](/26/act/94-164.md), 89 Stat. 974
- 1976-10-04: [Pub. L. 94-455](/26/act/94-455.md), 90 Stat. 1607
- 1978-11-06: [Pub. L. 95-600](/26/act/95-600.md), 92 Stat. 2823
- 1981-08-13: [Pub. L. 97-34](/26/act/97-34.md), 95 Stat. 250
- 1982-09-03: [Pub. L. 97-248](/26/act/97-248.md), 96 Stat. 539
- 1984-07-18: [Pub. L. 98-369](/26/act/98-369.md), 98 Stat. 585
- 1986-10-17: [Pub. L. 99-499](/26/act/99-499.md), 100 Stat. 1771
- 1986-10-22: [Pub. L. 99-514](/26/act/99-514.md), 100 Stat. 2342
- 1988-11-10: [Pub. L. 100-647](/26/act/100-647.md), 102 Stat. 3606
- 1996-08-20: [Pub. L. 104-188](/26/act/104-188.md), 110 Stat. 1876
- 2014-12-19: [Pub. L. 113-295](/26/act/113-295.md), 128 Stat. 4038
- 2017-12-22: [Pub. L. 115-97](/26/act/115-97.md), 131 Stat. 2094