CODIFICATION OF INTERNAL REVENUE LAWS the taxable year) into an unemployment fund under a State law. Credit shall be allowed only for contributions made under the laws of States certified for the taxable year as provided in section 1603. The total credit allowed to a taxpayer under this subsection for all contributions paid into unemployment funds with respect to employ- ment during such taxable year shall not exceed 90 per centum of the tax against which it is credited. (b) ADDITIONAL CREDIT.- (1) ALLOWANCE.- In addition to the credit allowed under sub- section (a), a taxpayer may, subject to the conditions imposed by section 1602, credit against the tax imposed by section 1600 for any taxable year, an amount, with respect to each State law, equal to the amount, if any, by which the contributions, with respect to employment in such taxable year, actually paid by the taxpayer under such law before the date of filing his return for such taxable year, is exceeded by whichever of the following is the lesser- (A) The amount of contributions which he would have been required to pay under such law for such taxable year if he had been subject to the highest rate applicable from time to time throughout such year to any employer under such law; or (B) Two and seven-tenths per centum of the wages payable by him with respect to employment with respect to which contri- butions for such year were required under such law. (2) REDuCTION.-If the amount of the contributions actually so paid by the taxpayer is less than the amount which he should have paid under the State law, the additional credit under sub- section (b) shall be reduced proportionately. (c) LIMIT ON TOTAL CREDITS. -The total credits allowed to a tax- payer under this subchapter shall not exceed 90 per centum of the tax against which such credits are taken. SEC. 1602. CONDITIONS OF ADDITIONAL CREDIT ALLOWANCE. (a) CONTRIBUTIONS WITHIN RECOGNIZED STATE LAW REQUIRE- MENTS. -A taxpayer shall be allowed the additional credit under sec- tion 1601 (b) and (c), with respect to his contribution rate under a State law being lower, for any taxable year, than that of another em- ployer subject to such law, only if the Board finds that under such law- (1) Such lower rate, with respect to contributions to a pooled fund, is permitted on the basis of not less than three years of com- pensation experience; (2) Such lower rate, with respect to contributions to a guaran- teed employment account, is permitted only when his guaranty of employment was fulfilled in the preceding calendar year, and such guaranteed employment account amounts to not less than 71/2 per centum of the total wages payable by him, in accordance with such guaranty, with respect to employment in such State in the preced- ing calendar year; (3) Such lower rate, with respect to contributions to a separate reserve account, is permitted only when (A) compensation has been payable from such account throughout the preceding calendar year, and (B) such account amounts to not less than five times the largest amount of compensation paid from such account within any one of the three preceding calendar years, and (C) such account amounts to not less than 71/2 per centum of the total wages payable by him (plus the total wages payable by any other employers who may be contributing to such account) with respect to employment in such State in the preceding calendar year. (b) OTIER CoNTRIBUTIONS.-Such additional credit shall be re- duced, if any contributions under such law are made by such taxpayer at a lower rate under conditions not fulfilling the requirements of sub- 184
�
