2009 Credit For Educational Opportunity Worksheet Instructions For Employers

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2009
CREDIT FOR EDUCATIONAL OPPORTUNITY
WORKSHEET INSTRUCTIONS FOR EMPLOYERS
GENERAL INSTRUCTIONS
Note: The Credit for Educational Opportunity Worksheet for Employers and the related instructions below are for em-
ployers, including employers that are pass-through entities, making eligible education loan payments on behalf of qualifi ed
employees. Employers that are pass-through entities must also provide specifi c owner information to assist each owner in
claiming their portion of the credit.
The Credit for Educational Opportunity is a component of the Job Creation Through Educational Opportunity Program avail-
able after 2007. Generally, the Maine Board of Education oversees the program, except for the credit, which is administered
by Maine Revenue Services. The purpose of the program is to provide an income tax credit for education-related costs for
Maine residents who obtain an associate or bachelor’s degree from a Maine college, junior college or university and who,
after graduation, live, work and pay taxes in Maine. The credit is available to qualifying graduates making eligible educa-
tion loan payments and to employers located in Maine making eligible education loan payments on behalf of qualifi ed
employees. Students participate in the program by signing a Student Opportunity Contract after enrolling in a Maine college
or university and by fi ling a copy of that contract with the Maine Secretary of State after graduation.
A qualifi ed employee is a qualifying graduate who worked for you (the employer) an average of 16 hours or more per week
during your tax year beginning in 2009.
Qualifying graduates are those individuals who:
• were Maine residents at the time of enrollment in the Educational Opportunity Program (a person can meet this standard
even if he or she began living in Maine at the time of enrollment);
• attended a Maine college or university in pursuit of an associate’s or bachelor’s degree;
• lived in Maine while in pursuit of an associate’s or bachelor’s degree from a Maine college or university;
• obtained an associate’s or bachelor’s degree from a Maine college or university; and
• after graduation, are Maine resident individuals working for an employer located in Maine.
The fi rst four criteria listed above are evidenced by the employee’s Student Opportunity Contract fi led with the Maine Sec-
retary of State. Maine Revenue Services suggests that you obtain a copy of this contract, as well as an affi davit from the
employee that they were a Maine resident individual (as defi ned by Maine income tax law) during that portion of the year
you made eligible education loan payments for which you are claiming a credit. Copies of the contract and affi davit should
be kept on fi le with your Maine income tax return or pass-through entity information return.
Credit amount. The credit for employers is equal to the eligible education loan payments (defi ned below) paid by the
employer during the period of employment of the employee in the tax year, limited to the benchmark loan payment amount
stated in the Student Opportunity Contract. The benchmark loan payment amount relates to a principal cap imposed on
loans included in the individual’s fi nancial aid package. If the eligible education loan payments are made by the qualifying
graduate and the graduate’s employer(s), the total combined credit of the graduate and all employers may not exceed the
benchmark loan payment amount. Also, a qualifying graduate and an employer may each claim a credit only on the basis
of eligible education loan payments they each made. For example, an employer may not claim a credit for a loan payment
made by the qualifying graduate. The credit may not reduce the tax otherwise due to less than zero, but any unused credit
amount may be carried forward for up to 10 years.
Eligible education loan payments, for purposes of this worksheet, are payments made by an employer during the em-
ployer’s tax year on behalf of a qualifying graduate with respect to education loans that are part of a fi nancial aid package
for attendance at a Maine college or university. Payments made on loans with a term fewer than 8 years do not qualify as
eligible education loan payments. Generally, loans eligible for the credit are those loans listed in the Student Opportunity
Contract. Payments made on refi nanced eligible education loans qualify for the credit as long as the refi nanced loan re-
mains separate from any debt incurred outside of the individual’s fi nancial aid package, and only if the refi nancing results in
a decrease in overall indebtedness and annual repayment amount.
Ineligibility to claim credit. An employer is not eligible to claim the Credit for Educational Opportunity if they, their em-
ployee or anyone else in any way accelerates otherwise eligible education loan payments. Ineligibility for the credit com-
mences with the tax year that the accelerated payments were made and for any future tax year. Also, any payments made
by the employee on those loans do not qualify for the individual credit beginning with the tax year the accelerated payments
Rev. 11/09

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