Instructions For Idaho Form 55 - 2000 printable pdf download

TC55003

11-27-00

Instructions For Idaho Form 55

Idaho Form 55 is used by individuals, corporations, partner-

number is rounded to the nearest one-tenth (1/10).

ships, estates or trusts that have earned the Idaho credit for

qualifying new employees. Each member of a unitary com-

Line 6. The credit is limited to 3.25% of the net income of

bined group that files a group return must complete a separate

the qualifying business in which the new employment oc-

Form 55 to compute its earned credit.

curred. If one business is engaged in two activities, one that

qualifies as a "revenue-producing enterprise" and one that

A partnership, S corporation, estate or trust must prepare and

does not, and at least 50% of the taxpayer's total Idaho

distribute to each owner or beneficiary a schedule that shows

employees are performing personal services in the revenue-

his proportionate share of any pass through of the Idaho credit

producing enterprise, the taxpayer may treat the entire Idaho

for qualifying new employees as well as any other applicable

business as a revenue-producing enterprise. Enter the amount

credits. A copy of this schedule and the federal Schedule K-1

of net income from the proprietorship, farm, partnership, fi-

that is furnished to each owner or beneficiary must be attached

duciary or corporation income tax return that is from Idaho

to the Idaho partnership, S corporation, fiduciary income tax

activities.

return. Each partner, shareholder, member or beneficiary must

attach a copy of this schedule to his individual Idaho income

If one business is engaged in two activities, one that quali-

tax return.

fies as a "revenue-producing enterprise" and one that does

not, and less than 50% of the taxpayer's total Idaho employ-

The maximum credit available is $500 for each qualifying new

ees are performing services in the revenue-producing enter-

employee. "New employee" means a person who is subject to

prise, the taxpayer must calculate qualifying employees and

Idaho income tax withholding, employed by the taxpayer in a

the net income limitation based on that portion of the Idaho

revenue-producing enterprise, and covered for unemployment

business that qualifies as a revenue-producing enterprise. The

purposes under Idaho Code. A person shall be considered em-

amount of net income for the portion of the business that

ployed by the taxpayer in a revenue-producing enterprise if the

qualifies as a revenue-producing enterprise is calculated by

person is employed by the taxpayer on a full-time basis or on a

dividing the number of employees in the revenue-producing

part-time basis if the person works at least 20 hours per week.

enterprise by the total number of employees in the entire

business. Multiply the net income from the proprietorship,

No credit will be earned unless the new employee has worked

farm, partnership, fiduciary or corporation income tax return

for the taxpayer for a minimum of nine months during the tax

that is from Idaho activities by this percentage. Enter the

year for which the credit is claimed.

result on line 6.

Idaho unemployment reports will be the basis for computing

Line 8. The earned credit is the smaller of line 5 or line 7.

the number of employees. However, only employees meeting

the definition of "new employee" can be included in the compu-

Line 9. Enter the pass-through share of credit from S corpora-

tation of the credit for qualifying new employees. Records must

tion, partnership or fiduciary return.

be maintained to support the computation.

Line 11. For S corporations, partnerships, estates or trusts,

The number of qualifying new employees is the excess of the

enter the credit passing through to the shareholders, partners,

average number of qualifying employees during the tax year

members or beneficiaries. Idaho tax credits must pass through

over the greater of the average number of qualifying employees

to the shareholders, partners, members or beneficiaries in the

during the three preceding tax years or the average number of

same manner and to the extent that income or loss passes

qualifying employees during the preceding tax year. The num-

through.

ber of qualifying new employees must be rounded to the near-

est tenth (1/10).

PART II - CREDIT LIMITATIONS

The credit may not exceed 3.25% of the net income of the

Any taxpayer earning the Idaho credit for qualifying new em-

revenue-producing enterprise. A "revenue-producing enterprise"

ployees must complete Part II to determine the limitation on the

means an Idaho business that begins with a natural resource

credit for qualifying new employees and all other nonrefundable

and produces, assembles, fabricates, manufactures, or processes

credits. The limitation is 45% of the income tax after credit for

a value-added product.

taxes paid to other states.

Operations involving wholesale or retail sales, professional,

Idaho Code Section 63-3029H provides that credits must be

managerial, repairs or services generally do not qualify. Idaho

claimed in the following order:

businesses that consume a natural resource in a process, but

do not add value to the natural resource do not qualify.

1. Credit for taxes paid to other states (individuals, estates or

trusts),

PART I - CREDIT AVAILABLE SUBJECT TO LIMITATION

2. Credit for contributions to Idaho educational institutions,

3. Idaho investment tax credit,

Lines 1 and 3. Determine the average number of qualifying

4. Credit for contributions to Idaho youth facilities, rehabilita-

employees during the tax year by adding the number of qualify-

tion facilities and nonprofit substance abuse centers,

ing employees reported for each month on your Idaho unem-

5. Credit for equipment using post-consumer waste or post-

ployment reports and dividing that sum by the number of months

industrial waste,

of operation during the year.

6. Natural resources conservation credit,

7. Promoter-sponsored event credit.

Line 2. Determine the average number of qualifying employees

during the three preceding tax years by dividing the total of the

These credits must be applied to the tax before the credit for

average number of qualifying employees reported for each pre-

qualifying new employees. Refer to instructions for the appro-

ceding year by 3.

priate income tax return to compute the credits.

Line 4. No credit is allowed unless the number on this line

If a taxpayer claims both an Idaho investment tax credit and an

equals or exceeds one (1). If it is greater than one (1), the

Idaho credit for qualifying new employees, the 45% limitation

applies to the Idaho investment tax credit as well.

Instructions For Idaho Form 55 - 2000

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