Deduction for Foreign Subsidiary Employee Benefits

IRC §176

Domestic corporations can deduct payments made under section 3121(l) agreements for Social Security coverage of U.S. citizens working for foreign subsidiaries.

Eligibility

Domestic corporation must have an active 3121(l) agreement in place for its foreign subsidiary's U.S. employees.

Frequently Asked Questions

Who is eligible for the Deduction for Foreign Subsidiary Employee Benefits?

Domestic corporation must have an active 3121(l) agreement in place for its foreign subsidiary's U.S. employees.

How does the Deduction for Foreign Subsidiary Employee Benefits work?

Domestic corporations can deduct payments made under section 3121(l) agreements for Social Security coverage of U.S. citizens working for foreign subsidiaries.

What law authorizes the Deduction for Foreign Subsidiary Employee Benefits?

The Deduction for Foreign Subsidiary Employee Benefits is authorized under IRC §176 of the Internal Revenue Code (Title 26, United States Code).

Statutory Text — IRC §176

Source: Internal Revenue Code, Title 26, United States Code

§ 176. Payments with respect to employees of certain foreign corporations In the case of a domestic corporation, there shall be allowed as a deduction amounts (to the extent not compensated for) paid or incurred pursuant to an agreement entered into under section 3121(l) with respect to services performed by United States citizens employed by foreign subsidiary corporations. Any reimbursement of any amount previously allowed as a deduction under this section shall be included in gross income for the taxable year in which received. (Added Sept. 1, 1954, ch. 1206, title II, § 210(a), 68 Stat. 1096.)

Legal Sources

US Code (Official) — 26 USC §176 → Cornell Law Institute — 26 USC §176 → Search IRS.gov for IRC §176 → Treasury Regulations (26 CFR) →

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