Statute section
IRC section 163
Interest
Country
United States
Section
163
Updated
2026-05-20
Operative text
Section 163 allows a deduction for interest expense subject to several limitations. Section 163(j), substantially revised by the Tax Cuts and Jobs Act, limits business-interest deductions to the sum of business-interest income, 30 percent of adjusted taxable income (calculated without depreciation through 2021), and floor-plan financing interest, with carryforward of disallowed amounts.
Amendment history
2017-12-22
Pub. L. 115-97
TCJA materially revised Section 163(j) to apply a 30-percent-of-ATI limit on business-interest deductions for most taxpayers.
2020-03-27
Pub. L. 116-136
CARES Act temporarily raised the Section 163(j) limit to 50 percent of ATI for 2019 and 2020.
Cross-references
Related guides
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Computed from the cross-reference graph. Links open the related entity on this site.
This entry cites
- StatuteIRC §162
- StatuteIRC §168
- CaseKnetsch v. United States
Cited by
Primary sources
- 26 U.S.C. section 163Verified 2026-05-20
Important disclaimer
This library is for general tax education only. Always verify filing obligations, due dates, and tax consequences against the cited primary source or with a qualified tax professional.