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Title 26 — Internal Revenue CodeRelease 119-73

§194A Contributions to employer liability trusts

Title 26 › Subtitle Subtitle A— - Income Taxes › Chapter CHAPTER 1— - NORMAL TAXES AND SURTAXES › Subchapter Subchapter B— - Computation of Taxable Income › Part PART VI— - ITEMIZED DEDUCTIONS FOR INDIVIDUALS AND CORPORATIONS › § 194A

Last updated Apr 6, 2026|Official source

Summary

Employers may deduct amounts they put into a trust that is described in Internal Revenue Code section 501(c)(22) and that meets ERISA section 4223(h). Only the part of a contribution that is assigned to the tax year can be deducted. If a payment covers more than one year, it must be divided among those years using rules the Secretary issues. No deduction is allowed for contributions that are not tied to any specific time period.

Full Legal Text

Title 26, §194A

Internal Revenue Code — Source: USLM XML via OLRC

(a)There shall be allowed as a deduction for the taxable year an amount equal to the amount—
(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
(2)which is properly allocable to such taxable year.
(b)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)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.

Legislative History

Notes & Related Subsidiaries

Editorial Notes

References in Text

section 4223(h) of the Employee Retirement Income Security Act of 1974, referred to in subsec. (a), is classified to section 1403(h) of Title 29, Labor.

Statutory Notes and Related Subsidiaries

Effective Date

of 1983 Amendment Pub. L. 97–448, title III, § 311(c)(2), Jan. 12, 1983, 96 Stat. 2411, provided that: “The

Amendments

made by subsection (b) of section 305 [redesignating section 194 of this title, relating to contributions to employer liability trusts, as this section] shall take effect on October 14, 1980.”

Effective Date

Pub. L. 96–364, title II, § 210, Sept. 26, 1980, 94 Stat. 1291, provided that: “(a) Except as otherwise provided in this section, the

Amendments

made by this title [amending section 401, 404, 411 to 414, 4971, and 4975 of this title] shall take effect on the date of the enactment of this Act [Sept. 26, 1980]. “(b) Subpart C of part I of subchapter D of chapter 1 of such Code (as added by this Act) [sections 418 to 418E of this title] shall take effect, with respect to each plan, on the first day of the first plan year beginning on or after the earlier of—“(1) the date on which the last collective-bargaining agreement providing for employer contributions under the plan, which was in effect on the date of the enactment of this Act [Sept. 26, 1980], expires, without regard to extensions agreed to after such date of enactment, or “(2) 3 years after the date of the enactment of this Act [Sept. 26, 1980]. “(c) The

Amendments

made by section 209 [enacting this section and amending section 501 and 4975 of this title] shall apply to taxable years ending after the date of the enactment of this Act [Sept. 26, 1980].”

Reference

Citations & Metadata

Citation

26 U.S.C. § 194A

Title 26 — Internal Revenue Code

Last Updated

Apr 6, 2026

Release point: 119-73