26 U.S. Code § 54AA - Build America bonds
If a taxpayer holds a build America bond on one or more interest payment dates of the bond during any taxable year, there shall be allowed as a credit against the tax imposed by this chapter for the taxable year an amount equal to the sum of the credits determined under subsection (b) with respect to such dates.
The amount of the credit determined under this subsection with respect to any interest payment date for a build America bond is 35 percent of the amount of interest payable by the issuer with respect to such date.
If the credit allowable under subsection (a) exceeds the limitation imposed by paragraph (1) for such taxable year, such excess shall be carried to the succeeding taxable year and added to the credit allowable under subsection (a) for such taxable year (determined before the application of paragraph (1) for such succeeding taxable year).
For purposes of this section, the term “interest payment date” means any date on which the holder of record of the build America bond is entitled to a payment of interest under such bond.
For purposes of this title, interest on any build America bond shall be includible in gross income.
In lieu of any credit allowed under this section with respect to such bond, the issuer of such bond shall be allowed a credit as provided in section 6431.
The Secretary may prescribe such regulations and other guidance as may be necessary or appropriate to carry out this section and section 6431.