Instructions For Form Ct-603 - Claim For Ez Investment Tax Credit And Ez Employment Incentive Credit - New York State Department Of Taxation And Finance - 2004
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4New York State Department of Taxation and Finance
CT-603-I
Instructions for Form CT-603
Claim for EZ Investment Tax Credit and
EZ Employment Incentive Credit
• is principally used by the taxpayer in the production of
General information
goods by manufacturing, processing, assembling,
The Tax Law allows an empire zone investment tax credit
refining, mining, extracting, farming, agriculture,
(EZ-ITC) for New York C corporations against the tax
horticulture, floriculture, viticulture, or commercial
imposed under Article 9-A (corporation franchise tax), and
fishing; or
for shareholders of New York S corporations against the tax
• is an industrial waste treatment facility or air pollution
imposed under Article 22 (personal income tax). The credit
control facility, used in the taxpayer’s trade or
is allowed for the tax year during which qualified property is
business; or
placed in service in an empire zone (EZ) designated as
such under General Municipal Law Article 18-B. See
• is research and development property.
Qualified property below for a description of property
Types of property that do not qualify for this EZ-ITC are as
eligible for this credit. The corporation claiming the credit
follows:
must also be certified under General Municipal Law
— property leased to others
Article 18-B. Include a copy of the Certificate of Eligibility
with Form CT-603. General business corporations compute
— retail equipment, office furniture and equipment
their EZ-ITC on Form CT-603 by multiplying the cost (or
— excavating and road building equipment
other federal basis) of qualified property by 10%. A
— public warehouses used to store the taxpayer’s goods
corporate partner may claim an EZ-ITC for its allocable
share of the cost or other basis of qualified property
— electricity generating equipment
purchased by a certified partnership(s). New York
Do not include in the investment credit base any amount
S corporations compute their EZ-ITC on Form CT-603 by
that was expensed under IRC section 179(a).
multiplying the cost (or other federal basis) of qualified
property by 8%. Individual shareholders of a New York
When an acquisition, construction, reconstruction, or
S corporation include their pro rata share of the EZ-ITC on
erection is started during the period of designation and
Form IT-603, Claim for EZ Investment Tax Credit and EZ
completed after the expiration of that period, the credit is
Employment Incentive Credit .
computed based on the expenditures paid or incurred
during the period of designation. Expenditures paid or
In addition, an EZ employment incentive credit (EZ-EIC) for
incurred after the designated period may qualify for the ITC
increasing employment is allowed. See the instructions for
under Tax Law section 210.12.
completing Schedule D, Parts I and II.
The EZ-ITC used may not reduce the corporation franchise
A recapture of EZ-ITC and EZ-EIC previously allowed must
tax liability to an amount less than the higher of the tax on
be computed on Schedule E if the property is disposed of or
minimum taxable income or the fixed dollar minimum tax.
ceases to be in qualified use prior to the end of its useful
The EZ-EIC used may reduce your franchise tax liability to
life.
the fixed dollar minimum. Any portion of EZ-ITC or EZ-EIC
If qualified property is acquired to replace other insured
that cannot be used to reduce the current year tax liability
property that was stolen or destroyed by fire, storm,
may be carried over to the following year or years until it is
shipwreck, or other casualty, the basis of the replacement
used up. However, a taxpayer who has been decertified may
property is its cost reduced by any amount of gain not
carry forward the EZ-ITC for only seven years. A
recognized for federal income tax purposes because the
corporation that qualifies as a new business may receive a
insurance proceeds were invested in the replacement.
refund of 50% of the unused ITC.
These credits may not be applied against the metropolitan
You may elect to take the EZ-ITC on qualified property in
transportation business tax (MTA surcharge).
lieu of the ITC.
Qualified property
Definitions
Qualified property means tangible personal property and
Manufacturing means the process of working raw materials
other tangible property, including buildings and structural
into wares suitable for use or giving new shapes, new
components of buildings, that
quality, or new combination to matter that already has gone
— was acquired, constructed, reconstructed, or erected by
through some artificial process by the use of machinery,
the taxpayer on or after the date of designation of the EZ
tools, appliances, and other similar equipment.
and before the expiration of such designation;
Property used in the production of goods includes
— is depreciable under Internal Revenue Code (IRC)
machinery, equipment, or other tangible property that is
section 167;
principally used in the repair and service of other
— has a useful life of four years or more;
machinery; equipment or other tangible property used
principally in the production of goods; and all facilities used
— was acquired by the taxpayer by purchase under IRC
in the production operation, including storage of material to
section 179(d);
be used in production and the products that are produced.
— is located in an EZ; and
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