Title 26, Internal Revenue CodeRelease 119-110
§561 Definition of Deduction for Dividends Paid
Title 26 › Subtitle A — Income Taxes › CHAPTER 1 — NORMAL TAXES AND SURTAXES › Subchapter G — Corporations Used to Avoid Income Tax on Shareholders › PART IV — DEDUCTION FOR DIVIDENDS PAID › § 561
Summary
Deductible dividends equal dividends paid that year, consent dividends (see section 565), plus any personal-holding-company dividend carryover (see section 564); rules in sections 562 and 563 decide which dividends qualify and how to treat late payments.
Full Legal Text
Title 26, §561
Internal Revenue Code, Source: USLM XML via OLRC
(a)General rule
The deduction for dividends paid shall be the sum of— (1)
(2)the consent dividends for the taxable year (determined under section 565), and
(3)in the case of a personal holding company, the dividend carryover described in section 564.
(b)Special rules applicable
In determining the deduction for dividends paid, the rules provided in section 562 (relating to rules applicable in determining dividends eligible for dividends paid deduction) and section 563 (relating to dividends paid after the close of the taxable year) shall be applicable.
Legislative History
Notes & Related Subsidiaries
Editorial Notes
Amendments
1976—Subsec. (b). Pub. L. 94–455 redesignated existing provisions of par. (1) as subsec. (b) and struck out par. (2) relating to special adjustment on disposition of antitrust stock as a dividend. 1962—Subsec. (b). Pub. L. 87–403 designated existing provisions as par. (1) and added par. (2).
Statutory Notes and Related Subsidiaries
Effective Date
of 1976 AmendmentAmendment by Pub. L. 94–455 applicable with respect to taxable years beginning after Dec. 31, 1976, see section 1901(d) of Pub. L. 94–455, set out as a note under section 2 of this title.
Effective Date
of 1962 AmendmentAmendment by Pub. L. 87–403 applicable only with respect to distributions made after Feb. 2, 1962, see section 3(g) of Pub. L. 87–403, set out as a note under section 312 of this title.
Reference
Citations & Metadata
Citation
26 U.S.C. § 561
Title 26, Internal Revenue Code
Last Updated
Sep 22, 2026
Release point: 119-110