Title 26, Internal Revenue CodeRelease 119-110
§169 Amortization of Pollution Control Facilities
Title 26 › Subtitle A — Income Taxes › CHAPTER 1 — NORMAL TAXES AND SURTAXES › Subchapter B — Computation of Taxable Income › PART VI — ITEMIZED DEDUCTIONS FOR INDIVIDUALS AND CORPORATIONS › § 169
Summary
You can choose to spread the eligible cost of a certified pollution control facility over 60 months and take a monthly tax deduction. For certain air-pollution controls on mainly coal-fired plants put in service after April 11, 2005, and tied to plants placed in operation after December 31, 1975, the period is 84 months. Each month’s deduction is the facility’s remaining amortizable basis divided by the remaining months, and that calculation does not count the deduction for that month. These amortization deductions replace depreciation under section 167 for the same months. To start, you must file an election with the Secretary in the form and time the Secretary requires. You can stop the amortization later by filing written notice before the month you want it to end; after that, regular depreciation rules apply and you can’t take more amortization for that facility. Key defined terms in one line each: certified pollution control facility — a new, identifiable treatment unit used with an older plant (in operation before January 1, 1976) that has state and federal certification and does not significantly increase output, extend useful life, cut total operating costs, or change the process; state certifying authority — the state water or air pollution agency (or an authorized interstate agency); federal certifying authority — the Secretary of the Interior for water or the Secretary of Health and Human Services for air; new identifiable treatment facility — tangible depreciable treatment equipment completed or first used after December 31, 1968 (or, for some facilities, after April 11, 2005); amortizable basis — the part of the adjusted basis you can spread out under this rule (if useful life is over 15 years, reduce this part by the ratio 15 divided by the number of years). Additions after the amortization period starts do not increase the amortizable basis. The federal authority will not certify property if profits from waste recovery or similar sources will let costs be recovered over its useful life. If property is held by a life tenant with a remainder, the life tenant gets the deduction as if they owned the property. See section 1245 for special rules about gain on disposition.
Full Legal Text
Title 26, §169
Internal Revenue Code, Source: USLM XML via OLRC
(a)Allowance of deduction
Every person, at his election, shall be entitled to a deduction with respect to the amortization of the amortizable basis of any certified pollution control facility (as defined in subsection (d)), based on a period of 60 months. Such amortization deduction shall be an amount, with respect to each month of such period within the taxable year, equal to the amortizable basis of the pollution control facility at the end of such month divided by the number of months (including the month for which the deduction is computed) remaining in the period. Such amortizable basis at the end of the month shall be computed without regard to the amortization deduction for such month. The amortization deduction provided by this section with respect to any month shall be in lieu of the depreciation deduction with respect to such pollution control facility for such month provided by section 167. The 60-month period shall begin, as to any pollution control facility, at the election of the taxpayer, with the month following the month in which such facility was completed or acquired, or with the succeeding taxable year.
(b)Election of amortization
The election of the taxpayer to take the amortization deduction and to begin the 60-month period with the month following the month in which the facility is completed or acquired, or with the taxable year succeeding the taxable year in which such facility is completed or acquired, shall be made by filing with the Secretary, in such manner, in such form, and within such time, as the Secretary may by regulations prescribe, a statement of such election.
(c)Termination of amortization deduction
A taxpayer which has elected under subsection (b) to take the amortization deduction provided in subsection (a) may, at any time after making such election, discontinue the amortization deduction with respect to the remainder of the amortization period, such discontinuance to begin as of the beginning of any month specified by the taxpayer in a notice in writing filed with the Secretary before the beginning of such month. The depreciation deduction provided under section 167 shall be allowed, beginning with the first month as to which the amortization deduction does not apply, and the taxpayer shall not be entitled to any further amortization deduction under this section with respect to such pollution control facility.
(d)Definitions and special rules
For purposes of this section
(1) Certified pollution control facility
(2)State certifying authority
The term “State certifying authority” means, in the case of water pollution, the State water pollution control agency as defined in section 13(a) of the Federal Water Pollution Control Act and, in the case of air pollution, the air pollution control agency as defined in section 302(b) of the Clean Air Act. The term “State certifying authority” includes any interstate agency authorized to act in place of a certifying authority of the State.
(3)Federal certifying authority
The term “Federal certifying authority” means, in the case of water pollution, the Secretary of the Interior and, in the case of air pollution, the Secretary of Health and Human Services.
(4)New identifiable treatment facility
(A)In general
For purposes of paragraph (1), the term “new identifiable treatment facility” includes only tangible property (not including a building and its structural components, other than a building which is exclusively a treatment facility) which is of a character subject to the allowance for depreciation provided in section 167, which is identifiable as a treatment facility, and which is property—
(i)the construction, reconstruction, or erection of which is completed by the taxpayer after December 31, 1968, or
(ii)acquired after December 31, 1968, if the original use of the property commences with the taxpayer and commences after such date.
In applying this section in the case of property described in clause (i) there shall be taken into account only that portion of the basis which is properly attributable to construction, reconstruction, or erection after December 31, 1968.
(B)Certain facilities placed in operation after April 11, 2005
In the case of any facility described in paragraph (1) solely by reason of paragraph (5), subparagraph (A) shall be applied by substituting “April 11, 2005” for “December 31, 1968” each place it appears therein.
(5)Special rule relating to certain atmospheric pollution control facilities
In the case of any atmospheric pollution control facility which is placed in service after April 11, 2005, and used in connection with an electric generation plant or other property which is primarily coal fired—
(A)paragraph (1) shall be applied without regard to the phrase “in operation before January 1, 1976”, and
(B)in the case of a facility placed in service in connection with a plant or other property placed in operation after December 31, 1975, this section shall be applied by substituting “84” for “60” each place it appears in subsections (a) and (b).
(e)Profitmaking abatement works, etc.
The Federal certifying authority shall not certify any property under subsection (d)(1)(B) to the extent it appears that by reason of profits derived through the recovery of wastes or otherwise in the operation of such property, its costs will be recovered over its actual useful life.
(f)Amortizable basis
(1)Defined
For purposes of this section, the term “amortizable basis” means that portion of the adjusted basis (for determining gain) of a certified pollution control facility which may be amortized under this section.
(2)Special rules
(A)If a certified pollution control facility has a useful life (determined as of the first day of the first month for which a deduction is allowable under this section) in excess of 15 years, the amortizable basis of such facility shall be equal to an amount which bears the same ratio to the portion of the adjusted basis of such facility, which would be eligible for amortization but for the application of this subparagraph, as 15 bears to the number of years of useful life of such facility.
(B)The amortizable basis of a certified pollution control facility with respect to which an election under this section is in effect shall not be increased, for purposes of this section, for additions or improvements after the amortization period has begun.
(g)Depreciation deduction
The depreciation deduction provided by section 167 shall, despite the provisions of subsection (a), be allowed with respect to the portion of the adjusted basis which is not the amortizable basis.
[(h)Repealed. Pub. L. 92–178, title I, § 104(f)(2), Dec. 10, 1971, 85 Stat. 502]
(i)Life tenant and remainderman
In the case of property held by one person for life with remainder to another person, the deduction under this section shall be computed as if the life tenant were the absolute owner of the property and shall be allowable to the life tenant.
(j)Cross reference
For special rule with respect to certain gain derived from the disposition of property the adjusted basis of which is determined with regard to this section, see section 1245.
Legislative History
Notes & Related Subsidiaries
Editorial Notes
References in Text
The Federal Water Pollution Control Act, as amended (33 U.S.C. 466 et seq.), referred to in subsec. (d)(1)(B), is act June 30, 1948, ch. 758, as amended generally by Pub. L. 92–500, § 2, Oct. 18, 1972, 86 Stat. 816, which is classified generally to chapter 26 (§ 1251 et seq.) of Title 33, Navigation and Navigable Waters. The subject matter of section 13(a) of the act, referred to in subsec. (d)(2), is covered by section 1362(1) of Title 33. For complete classification of this Act to the Code, see
Short Title
note set out under section 1251 of Title 33 and Tables. The Clean Air Act, referred to in subsec. (d)(1)(B), is act July 14, 1955, ch. 360, 69 Stat. 322, which is classified generally to chapter 85 (§ 7401 et seq.) of Title 42, The Public Health and Welfare. For complete classification of this Act to the Code, see
Short Title
note set out under section 7401 of Title 42 and Tables. section 302(b) of the Clean Air Act, referred to in subsec. (d)(2), formerly classified to section 1857h(b) of Title 42, was reclassified to section 7602(b) of Title 42 on enactment of Pub. L. 95–95.
Prior Provisions
A prior section 169, act Aug. 16, 1954, ch. 736, 68A Stat. 55, related to amortization of grain-storage facilities, prior to the reorganization of part VI of subchapter B of chapter 1 of this title by Pub. L. 91–172.
Amendments
2018—Subsec. (d)(5)(B). Pub. L. 115–141 inserted “a” before “facility”. 2005—Subsec. (d). Pub. L. 109–58, § 1309(c), inserted “and special rules” after “Definitions” in heading. Subsec. (d)(3). Pub. L. 109–58, § 1309(d), substituted “Health and Human Services” for “Health, Education, and Welfare”. Subsec. (d)(4)(B). Pub. L. 109–58, § 1309(b), amended heading and text of subpar. (B) generally. Prior to amendment, text read as follows: “In the case of any treatment facility used in connection with any plant or other property not in operation before
January 1, 1969, the preceding sentence shall be applied by substituting
December 31, 1975, for
December 31, 1968.” Subsec. (d)(5). Pub. L. 109–58, § 1309(a), added par. (5). Subsec. (d)(5)(B). Pub. L. 109–135 inserted “in the case of facility placed in service in connection with a plant or other property placed in operation after
December 31, 1975,” before “this section”. 1976—Subsecs. (b), (c). Pub. L. 94–455, § 1906(b)(13)(A), struck out “or his delegate” after “Secretary”. Subsec. (d)(1). Pub. L. 94–455, §§ 1906(b)(13)(A), 2112(b), substituted in provisions preceding subpar. (A) “
January 1, 1976,” for “
January 1, 1969,” and “storing, or preventing the creation or emission of” for “or storing”, struck out in subpar. (B) “or his delegate” after “Secretary”, and added subpar. (C). Subsec. (d)(4). Pub. L. 94–455, § 2112(c), among other changes, struck out provisions relating to treatment facilities placed in service by taxpayer before Jan. 1, 1976, and inserted provisions that in case of treatment facilities used in connection with any plan or other property not in operation before Jan. 1, 1969, Dec. 31, 1975, shall be substituted for Dec. 31, 1968, as the cut-off date for taking into account that portion of the basis which is attributable to
Construction
, re
Construction
, or erection. 1975—Subsec. (d)(4)(B). Pub. L. 93–625 substituted “
January 1, 1976” for “
January 1, 1975”. 1971—Subsec. (h). Pub. L. 92–178 struck out provision that investment credit not be allowed. See section 48(a)(8) of this title.
Statutory Notes and Related Subsidiaries
Effective Date
of 2005 AmendmentAmendment by Pub. L. 109–135 effective as if included in the provision of the Energy Policy Act of 2005, Pub. L. 109–58, to which such amendment relates, see section 402(m)(1) of Pub. L. 109–135, set out as an Effective and Termination Dates of 2005
Amendments
note under section 23 of this title. Pub. L. 109–58, title XIII, § 1309(e), Aug. 8, 2005, 119 Stat. 1007, provided that: “The
Amendments
made by this section [amending this section] shall apply to facilities placed in service after April 11, 2005.”
Effective Date
of 1976 Amendment Pub. L. 94–455, title XXI, § 2112(d)(2), Oct. 4, 1976, 90 Stat. 1907, as amended by Pub. L. 99–514, § 2, Oct. 22, 1986, 100 Stat. 2095, provided that: “The
Amendments
made by subsection (b) [amending this section] shall apply to taxable years beginning after December 31, 1975. Such
Amendments
shall not apply in the case of any property with respect to which the amortization period under section 169 of the Internal Revenue Code of 1986 [formerly I.R.C. 1954] has begun before January 1, 1976.”
Effective Date
Pub. L. 91–172, title VII, § 704(c), Dec. 30, 1969, 83 Stat. 670, provided that: “The
Amendments
made by this section [enacting this section and amending section 642, 1082, 1245, and 1250 of this title] shall apply with respect to taxable years ending after December 31, 1968.”
Executive Documents
Transfer of Functions
Functions vested in Secretary of the Interior and Secretary of Health, Education, and Welfare by subsec. (d)(1)(B), (3) of this section transferred to Administrator of Environmental Protection Agency by Reorg. Plan No. 3, of 1970, § 2(a)(9), eff. Dec. 2, 1970, 35 F.R. 15623, 84 Stat. 2086, set out in the Appendix to Title 5, Government Organization and Employees.
Reference
Citations & Metadata
Citation
26 U.S.C. § 169
Title 26, Internal Revenue Code
Last Updated
Sep 22, 2026
Release point: 119-110