Code Section 39

Code Section	Effective Date	Name of Act	Name of Provision	10yr Revenue Estimate ($millions)
39	12/31/2009	The Small Business Jobs Act of 2010	Five-year carryback of general business credit of eligible small business	-107

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Five-year carryback of general business credit of eligible small business

Explanation of Provision

The provision extends the carryback period for eligible small business credits from one to five years. Under the provision, eligible small business credits are defined as the sum of the general business credits determined for the taxable year with respect to an eligible small business. An eligible small business is, with respect to any taxable year, a corporation, the stock of which is not publicly traded, or a partnership which meets the gross receipts test of section 448(c), substituting $50 million for $5 million each place it appears.¹³²¹ In the case of a sole proprietorship, the gross receipts test is applied as if it were a corporation. Credits determined with respect to a partnership or S corporation are not treated as eligible small business credits by a partner or shareholder unless the partner or shareholder meets the gross receipts test for the taxable year in which the credits are treated as current year business credits.

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1321- For example, a calendar year corporation meets the $50 million gross receipts test for the 2010 taxable year, if as of January 1, 2010, its average annual gross receipts for the 3-taxable year period ending December 31, 2009, does not exceed $50 million. The aggregation and special rules under sections 448(c)(2) and (3) apply in applying the test.
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