Instructions For Form Ct-605 - Claim For Ez Investment Tax Credit And Ez Employment Incentive Credit For The Financial Services Industry - New York State Department Of Taxation And Finance - 2004
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4New York State Department of Taxation and Finance
CT-605-I
Instructions for Form CT-605
Claim for EZ Investment Tax Credit and EZ Employment
Incentive Credit for the Financial Services Industry
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General information
of providing investment advisory services for a regulated
investment company (IRC section 851); or
For property placed in service on or after October 1, 1998, and on
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as an exchange registered as a national securities
or before October 1, 2008, the Tax Law allows an empire zone
exchange (sections 3(a)(1) and 6(a) of the Securities
(EZ) investment tax credit (EZ-ITC) for the financial services
Exchange Act of 1934); or
industry against the tax imposed by Articles 9-A and 22,
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respectively, for the tax year during which qualified property is
as a board of trade (section 1410(a) of the Not-for-Profit
placed in service in an EZ designated as such under Article 18-B
Corporation Law); or
of the General Municipal Law. The EZ-ITC allowed under Articles
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as an entity that is wholly owned by one or more such
9-A and 22 is computed at different rates. For New York C
national securities exchanges or boards of trade and that
corporations taxable under Article 9-A (corporation franchise tax),
provides automation or technical services thereto (available
the credit rate is 10%; for New York S corporation shareholders
to Article 9-A taxpayers only).
taxable under Article 22 (personal income tax), the credit rate is
It is not necessary for the users of the property to be located in the
8%. Compute the EZ-ITC by multiplying the appropriate credit
EZ. For example, a computer system placed in service in an EZ
rate by the cost (or other federal basis) of qualified property that
would qualify for the credit even if the brokers accessing the
was acquired, constructed, reconstructed, or erected in an EZ
system are located outside the EZ.
after its date of designation and before its date of expiration as an
EZ. The taxpayer claiming this credit must also be certified under
Property leased to a broker, dealer, national securities exchange,
Article 18-B of the General Municipal Law. Submit a copy of the
or board of trade that is an affiliate of the taxpayer, that principally
documentation or certificate proving certification when claiming
uses the property in the qualifying activities listed above, qualifies
this credit.
for the credit provided it otherwise meets the criteria for qualified
property. Any contract or agreement to lease or rent, or for a
In addition, to claim this credit, all, or a substantial portion, of the
license to use the property, is considered a lease. In addition,
employees performing the administrative and support functions
property qualifies if it meets the criteria and is purchased by the
resulting from or related to the qualifying uses of such property
taxpayer but is principally used by a broker, dealer, national
must be located in New York State. See Schedule A for more
securities exchange, or board of trade that is an affiliate of the
information.
taxpayer, in the qualifying activities listed above.
When an acquisition, construction, reconstruction, or erection is
started during the period of designation and completed
A recapture of EZ-ITC and EZ-EIC previously allowed must be
subsequent to the expiration of such period, the credit is
computed if the property is disposed of or ceases to be in
computed based on the expenditures paid or incurred during the
qualified use prior to the end of its useful life.
period of designation. Expenditures paid or incurred after the
If qualified property is acquired to replace other insured property
designated period may qualify for the investment tax credit under
that was stolen or was destroyed by fire, storm, shipwreck, or other
Tax Law section 210.12.
casualty, the basis of the replacement property is its cost reduced
Also, an EZ employment incentive credit (EZ-EIC) for increasing
by any amount of gain not recognized for federal income tax
employment is allowed. See the instructions for completing
purposes because the insurance proceeds were invested in the
Schedule B.
replacement.
The EZ-ITC used may not reduce the corporation franchise tax
You may elect to take the EZ-ITC on qualified property in lieu of the
liability to an amount less than the higher of the tax on minimum
investment tax credit.
taxable income or the fixed dollar minimum.
The EZ-EIC used may reduce your franchise tax liability to the
Definitions
fixed dollar minimum.
An affiliate is any of the following:
Any portion of EZ-ITC or EZ-EIC that cannot be used to reduce the
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A partnership in which 80% or more of the interest in the
current year tax liability may be carried over to the following year or
partnership’s capital or profits is owned or controlled, directly or
years until it is used up. However, a taxpayer who has been
indirectly, by the taxpayer.
decertified may carry forward the EZ-ITC for only seven years.
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A corporation in which 80% or more of the voting stock is owned
A corporation that is a new business may elect for a refund of
or controlled, directly or indirectly, by the taxpayer.
50% of the current year EZ-ITC. However, the EZ-EIC is not
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A corporation that owns or controls, directly or indirectly, 80% or
refundable to corporations.
more of the voting stock of the taxpayer.
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A corporation in which 80% or more of the voting stock is
Qualified property
owned or controlled, directly or indirectly, by the entity that
Qualified property for the EZ-ITC is tangible property, including
owns or controls, directly or indirectly, 80% or more of the
buildings and structural components of buildings, that:
voting stock of the taxpayer.
A.
was acquired, constructed, reconstructed, or erected by the
Commodities as referred to in these instructions are defined in IRC
taxpayer on or after the date of designation of the EZ and prior
section 475(e)(2).
to the expiration of such designation, and on or after
October 1, 1998, and on or before October 1, 2008; and
Cost is the basis of property as defined in IRC section 1012.
B.
is depreciable according to Internal Revenue Code (IRC)
Life or useful life (of property) means the depreciable life as
section 167; and
provided by IRC section 167 or 168.
C. has a useful life of four years or more; and
Other basis means the adjusted basis for determining gain or loss
D.
was acquired by the taxpayer by purchase according to IRC
used as the basis for depreciation under IRC section 167(g).
section 179(d); and
E.
is located in an EZ; and
Principally used means more than 50%. A building or an addition to
F.
is principally used in the ordinary course of the taxpayer’s
a building is principally used in qualifying activities when more than
business:
50% of its usable business floor space is used in qualifying
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activities. Floor space used for bathrooms, cafeterias, and lounges
as a broker or dealer in connection with the purchase or
is not usable business floor space. Equipment is principally used in
sale of stocks, bonds, other securities (IRC
qualifying activities when it is used in such activities more than
section 475(c)(2)), or of commodities (IRC section 475(e)),
50% of its operating time. Operating time may be determined
or in providing lending, loan arrangement, or loan
based on actual time, cost allocations to individual business units,
origination services to customers in connection with the
or any other reasonable method that accurately reflects operating
purchase or sale of securities (IRC section 475(c)(2)); or
time.
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