deductions (1) In general If the aggregate deductions for any taxable year exceed the gross active income for such taxable year, the credit-equivalent of such excess shall be allowed as a credit against the tax imposed by this section for the following taxable year. (2) Credit-equivalent of excess deductions For purposes of paragraph (1), the credit-equivalent of the excess described in paragraph (1) for any taxable year is an amount equal to— (A) the sum of— (i) such excess, plus (ii) the product of such excess and the 3-month Treasury rate for the last month of such taxable year, multiplied by (B) the rate of the tax imposed by subsection (a) for such taxable year. (3) Carryover of unused credit If the credit allowable for any taxable year by reason of this subsection exceeds the tax imposed by this section for such year, then (in lieu of treating such excess as an overpayment) the sum of— (A) such excess, plus (B) the product of such excess and the 3-month Treasury rate for the last month of such taxable year, shall be allowed as a credit against the tax imposed by this section for the following taxable year. (4) 3-month Treasury rate For purposes of this subsection, the 3-month Treasury rate is the rate determined by the Secretary based on the average market yield (during any 1-month period selected by the Secretary and ending in the calendar month in which the determination is made) on outstanding marketable obligations of the United States with remaining periods to maturity of 3 months or less. . (b) Tax on noncash compensation provided to employees not engaged in business activity Section 4977 of such Code is amended to read as follows: 4977. Tax on noncash compensation provided to employees not engaged in business activity (a) Imposition of tax There is hereby imposed a tax equal to 17 percent of the value of excludable compensation provided during the calendar year by an employer for the benefit of employees to whom this section applies. (b) Liability for tax The tax imposed by this section shall be