26 U.S.C. § 194A: Contributions to employer liability trusts

(a) Allowance of deduction There shall be allowed as a deduction for the taxable year an amount equal to the amount—

Textual readingALL OF= an amount allowed as deductionGate Wizard 🧙

(1) which is contributed by an employer to a trust described in section 501(c)(22) (relating to withdrawal liability payment fund) which meets the requirements of section 4223(h) of the Employee Retirement Income Security Act of 1974, and needs § 501(c)(22)

(2) which is properly allocable to such taxable year.

§ 501(c)(22)

A trust created or organized in the United States and established in writing by the plan sponsors of multiemployer plans if—

Textual readingALL OF= Trust is a (c)(22) organization

“the purpose of such trust is exclusively— to pay any amount described in section 4223(c) or (h) of the Employee Retirement Income Security Act of 1974, and to pay reasonable and necessary administrative expenses in connection with the establishment and operation of the trust and the processing of claims against the trust,” § 501(c)(22)(A)

“Reasonable” implies facts and circumstances. No regulation cites this provision (eCFR, Oct 19, 2026)

“no part of the assets of the trust may be used for, or diverted to, any purpose other than— the purposes described in subparagraph (A), or the investment in securities, obligations, or time or demand deposits described in clause (ii) of paragraph (21)(D),” § 501(c)(22)(B)

“such trust meets the requirements of paragraphs (2), (3), and (4) of section 4223(b), 4223(h), or, if applicable, section 4223(c) of the Employee Retirement Income Security Act of 1974, and” § 501(c)(22)(C)

“the trust instrument provides that, on dissolution of the trust, assets of the trust may not be paid other than to plans which have participated in the plan or, in the case of a trust established under section 4223(h) of such Act, to plans with respect to which employers have participated in the fund.” § 501(c)(22)(D)

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(b) Allocation to taxable year In the case of a contribution described in subsection (a) which relates to any specified period of time which includes more than one taxable year, the amount properly allocable to any taxable year in such period shall be determined by prorating such amounts to such taxable years under regulations prescribed by the Secretary.

(c) Disallowance of deduction No deduction shall be allowed under subsection (a) with respect to any contribution described in subsection (a) which does not relate to any specified period of time.