Employee Stock Ownership Improvements Act of 1979

Employee Stock Ownership Improvements Act of 1979 - Amends the Revenue Act of 1978 and the Internal Revenue Code to establish, without expiration dates, a credit against the corporate income tax for contributions by an employer to an employee stock ownership plan (ESOP). Sets the amount of such credit at a sum equal to the amount transferred to such a plan, not to exceed the taxpayer's income tax liability. Excludes certain taxes from the calculation of such liability. Provides for the carryover of any credit in excess of such liability. Denies such credit to certain regulated public utilities. Denies business expense, production of income expense, or contribution to deferred-payment plan deductions for amounts required to a tax credit ESOP.

Provides for an additional tax credit for contributions to certain ESOPs.

Allows an income tax deduction to an employer for any dividend paid with respect to employer securities held by a tax credit ESOP, if the dividend is distributed to the employees participating in the plan.

Deems contributions, bequests, or similar transfers of employer securities, under certain conditions, to a tax credit ESOP as a deductible charitable contribution.

Eliminates specified voting rights and stock distribution demand rights requirements for certain qualifying ESOPs.

Allows a special income tax credit to a small business employer who establishes an ESOP in an amount equal to the actual cost of establishing the plan, not to exceed $5,000.

Continues to allow a deduction for retirement savings to individuals, including certain married individuals, who also participate in tax credit ESOPs.

Allows an employer unlimited deductions for qualified matching employee contributions on behalf of its employees made to a tax credit ESOP.

Excludes from the gross income of a tax credit ESOP participant any lump-sum distribution of employer securities (not to exceed $5,000) made from a qualified trust which is part of a tax credit ESOP.

Prescribes the use of nonvoting stock acquired by a tax credit ESOP.

Eliminates limitations on deductions for employer contributions to a combination of one or more stock bonus and one or more profit-sharing plans.

Requires one of the alternative benefits in a qualified cafeteria plan to be cash, property, or another currently taxable benefit. Defines a cafeteria plan to include deferred compensation plans which are part of a qualified profit-sharing or stock bonus plan.