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New York State Department of Taxation and Finance

CT-604-CP-I

Instructions for Form CT-604-CP

Claim for QEZE Credit for Real Property Taxes and

QEZE Tax Reduction Credit for Corporate Partners

The QEZE tax reduction credit may not reduce the tax to less than:

General information

• the fixed dollar minimum tax under Article 9-A (however, a

For tax years beginning on or after January 1, 2001, the Empire

partner in a QEZE that has a zone allocation factor of 100% is

Zones Program Act provides tax credits for a qualified empire zone

not subject to this limitation and may reduce the tax to zero); or

enterprise (QEZE): the QEZE credit for real property taxes, and the

• $250 for Article 32 or 33 filers.

QEZE tax reduction credit.

The QEZE tax reduction credit is not refundable. Any amount not

This form has been provided for corporate partners of a QEZE to

deductible in the current tax year may not be refunded, carried

claim the QEZE tax credits. All other corporations should complete

over, or applied as an overpayment against next year’s tax.

Form CT-604.

Definitions

New York S corporations that are corporate partners do not

complete this form. However, the S corporation must provide all

For additional definitions, see Form CT-604-I.

shareholders with their pro rata share of the real property tax credit

A qualified empire zone enterprise (QEZE) is a business enterprise

that the S corporation derived from the partnership. It also must

that is certified as eligible to receive benefits under the General

provide all shareholders with the benefit period factor, the

Municipal Law, Article 18-B prior to July 1, 2005, and that annually

employment increase factor, and the zone allocation factor of the

meets the employment test.

partnership, so that the individual shareholder can compute the tax

Employment increase factor is an amount which cannot exceed

reduction credit on Form IT-604.

one. Obtain this factor from the partnership.

Note: If you are a partner in more than one partnership, complete a

Benefit period factor is a number from zero to one, based on the tax

separate Form CT-604-CP for each partnership.

year of the benefit period. Obtain this factor from the partnership.

QEZE credit for real property taxes

Zone allocation factor is a percentage that represents the

The QEZE credit for real property taxes is a credit against

economic presence of the partnership in the EZ in which it is

New York State corporate franchise and personal income taxes.

certified. Obtain this factor from the partnership.

The credit is computed on eligible real property taxes paid or

Eligible real property taxes are the taxes for the current tax year

incurred on real property owned by the QEZE that is located in the

imposed on the QEZE partnership’s real property located in the EZ

empire zone (EZ) in which the QEZE is certified. The amount of the

for which the QEZE partnership is certified, provided that the taxes

credit is the product of (1) the benefit period factor, (2) the

become a lien on the real property during the tax year in which the

employment increase factor, and (3) the eligible real property taxes

owner of the property is both certified and a QEZE. In addition,

paid or incurred by the QEZE during the current tax year.

eligible real property taxes include payments in lieu of taxes,

For any QEZE certified on or after August 1, 2002, the real

(PILOT payments) made by the QEZE partnership to the state, to a

property tax credit may not exceed the credit limitation, which is the

municipal corporation, or to a public benefit corporation. However,

greater of the employment increase limitation or the capital

PILOT payments made by the QEZE partnership under a written

increase limitation. The limitation will be computed by the

agreement executed or amended on or after January 1, 2001, will

partnership. The corporate partner will report its share of the credit

not constitute eligible real property taxes unless both the

after limitation on Form CT-604-CP, line 1.

Department of Economic Development and the Office of Real

Property Services approve the written agreement.

If the QEZE’s eligible real property taxes, which were the basis for

a QEZE credit for real property taxes, are subsequently reduced as

Tax factor is the tax calculated under each applicable article of the

a result of a final order in any proceeding under the Real Property

Tax Law that is based on income. If an article provides for two tax

Tax Law, Article 7 or other provision of law, the QEZE must

measures based on income, the higher of the two is the tax factor.

recapture a portion of the credit allowed in the year the final order

Corporate partners compute this factor on line 14.

is issued. The recapture amount is equal to the amount of credit

Specific instructions

originally taken, less the amount of credit recalculated using the

reduced property taxes. If the taxes are reduced for more than one

Enter on the front of Form CT-604-CP the name and the employer

year, the QEZE must determine how much of the reduction is

identification number of the QEZE partnership.

attributable to each year covered by the final order, and calculate

Line 3 — If you are applying multiple credits, see your franchise

the amount of credit which is required to be recaptured for each

tax return instructions to determine the order of credits that applies.

year based on the reduction. The recapture will be computed by the

If filing Form CT-604, and/or more than one Form CT-604-CP,

partnership. The corporate partner will report its share of the credit

include any amount of QEZE credit for real property taxes and

after recapture on Form CT-604-CP, line 1.

QEZE tax reduction credit that you are claiming that you wish to

The QEZE credit for real property taxes may not reduce the tax to

apply before the QEZE credit for real property taxes being claimed

less than:

on this form. Life insurance corporations do not include EZ wage

tax credit, EZ capital tax credit, or zone equivalent area (ZEA)

• the larger of the tax on minimum taxable income or the fixed

wage tax credit on this line.

dollar minimum tax as computed under Article 9-A; or

• $250 for Article 32 or 33 filers.

Line 7

Any amount of the QEZE credit for real property taxes not

Article 9-A filers — Include this amount on your franchise tax

deductible in the current tax year may be refunded without interest

return. For Form CT-3, use the box labeled Form CT-604, line 33

or applied as an overpayment against next year’s tax.

under Summary of credits claimed on line 79 against current year’s

franchise tax. If you are filing Form CT-3-A, use the box labeled

QEZE tax reduction credit

Form CT-604, line 33 , under Summary of credits claimed on line 78

against current year’s franchise tax.

The QEZE tax reduction credit is allowed against the New York

State corporate franchise tax under Article 9-A, 32, or 33, and is

Article 32 filers — Include this amount on your franchise tax

the product of (1) the benefit period factor, (2) the employment

return. For Form CT-32 or CT-32-A, use the box labeled

increase factor, (3) the zone allocation factor, and (4) the tax factor.

Form CT-604 QEZE credit for real property taxes under Recap of

tax credits claimed on line 6 against current year’s franchise tax.

Instructions For Form Ct-604-Cp - Claim For Qeze Credit For Real Property Taxes And Qeze Tax Reduction Credit For Corporate Partners - 2003

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