Form 1 - Schedule Instructions - 2006 (Page 5 of 7) in pdf

2006 Form 1 — Schedule Instructions

Line 16. Commuter Deduction

Line 2. Economic Opportunity Area

2005. As a result of the recent legislation, the envi-

ronmental response action commencement cut-off

A deduction is allowed for certain amounts paid by

Massachusetts allows a credit equal to 5% of the

date is changed from August 5, 2005 to August 5,

an individual for tolls paid for through a FastLane

cost of qualifying property purchased for business

2011, and the time for incurring eligible costs that

account or for weekly or monthly transit commuter

use within an Economic Opportunity Area (EOA).

qualify for the credit is extended to January 1, 2012.

passes for MBTA transit or commuter rail, not in-

If you qualify for the credit, complete Schedule

See TIR 06-16 for more information. If you qualify

cluding amounts reimbursed or otherwise deduct-

EOAC and enter the amount of credit in line 2.

for this credit, complete Massachusetts Schedule

ible. In the case of a single person or a married

Line 3. Full Employment

BC, Brownfields Credit, and enter the amount of

person filing a separate return or a head of house-

credit in line 5. Also, be sure to enter the DOR-

Every employer who participates in the Full Em-

hold filing a separate return, this deduction applies

issued certificate number in the space provided on

ployment Program and continues to employ a par-

only to the portion of such expended amount that

line 5. Certificate application forms and additional

ticipant for at least one full month after any Full

exceeds $150, and the total amount deducted can-

information are available at

Employment Program subsidy for that participant

not exceed $750. In the case of a married couple fil-

has expired may claim the Full Employment Credit.

ing a joint return, this deduction applies only to the

Line 6. Low-Income Housing

A qualified employer may claim a credit equal to

portion of such amount expended by each individual

A low-income housing credit is available to indi-

$100 per month of eligible employment per partic-

that exceeds $150, and the total amount deducted

vidual taxpayers. The Department of Housing and

ipant, with a maximum credit of $1,200 per partic-

cannot exceed $750 for each individual. Also, one

Community Development will allocate the low-in-

ipant. Qualified participants and employers are

spouse cannot transfer his or her excess deduction

come housing credit from a pool of available

those who participate in the Full Employment Pro-

to the other spouse; separate worksheets must be

credits granted under section 42 of the Internal

gram under the rules of the Department of Transi-

completed to calculate the deduction. See TIR 06-14

Revenue Code among qualified low-income hous-

tional Assistance (DTA). A five-year carryover of

for additional information. Complete the worksheet

ing projects. A taxpayer allocated a federal low-in-

any unused credit is allowed. If you qualify for this

below to calculate the commuter deduction.

come housing credit may also be eligible for a state

credit, complete Massachusetts Schedule FEC, Full

credit based on the credit amount allocated to a

Schedule Y, Line 16 Worksheet —

Employment Credit, and enter the amount of credit

low-income housing project that the taxpayer owns.

Commuter Deduction

in line 3.

A five-year carryforward of unused credit is al-

1. Enter amount paid in 2006 for tolls through

Line 4. Septic

lowed. See TIR 99-19 for more information. If you

a FastLane account . . . . . . . . . . . . .

qualify for the credit, enter the amount in line 6.

An owner of residential property located in Mass-

2. Enter amount paid in 2006 for weekly or

achusetts who occupies the property as his or her

monthly transit commuter passes for MBTA

Line 7. Historic Rehabilitation

principal residence is allowed a credit of a maxi-

transit or commuter rail. (Do not include amounts

Effective for tax years beginning on January 1,

mum of $1,500 per taxable year for expenses in-

reimbursed or otherwise deductible)

2005 and ending on or before December 31, 2011,

curred to comply with the sewer system require-

3. Add lines 1 and 2. If $150 or less, you do not

taxpayers may be eligible for the Historic Rehabili-

qualify for this deduction. Omit remainder of

ments of Title V as promulgated by the Department

tation Credit (HRC). To claim this credit, a historic

this worksheet. Otherwise, complete lines 4

of Environmental Protection or to connect to a mu-

rehabilitation project must be complete and have

through 6 . . . . . . . . . . . . . . . . . . . . .

nicipal sewer system pursuant to a federal court

been certified by the Massachusetts Historical

4. Enter $150 . . . . . . . . . . . . . . . . .

order, administrative consent order, state court

5. Subtract line 4 from line 3 . . . . . .

Commission. Unused portions of the credit may be

order, consent decree or similar mandate. The

6. Enter the lesser of line 5 or $750 here and

carried forward for 5 years. The credit may be

amount of the credit is 40% of the cost, up to

on Schedule Y, line 16 . . . . . . . . . . .

transferred or sold to another taxpayer. The HRC is

$15,000, for design and construction expenses for

not subject to the 50% limitation rule for corporate

repair or replacement of a failed cesspool or sep-

taxpayers. If the taxpayer disposes of the property

tic system. The maximum aggregate amount of

Schedule Z

generating the HRC, a portion of the credit may be

the credit is $6,000. A five-year carryover of any

subject to recapture. For further information, see

unused credit is allowed. See TIRs 97-12, 98-8,

Other Credits

TIR 06-16 and 830 CMR 63.38R.1, Massachusetts

99-5, 99-20 and DOR Directive 01-6 for more in-

Be sure to enclose with Form 1.

Historic Rehabilitation Credit. If you qualify for

formation. If you qualify for this credit, complete

this credit, enter the amount in line 7.

Massachusetts Schedule SC, Septic Credit, and

Part 1 Credits

enter the amount of credit in line 4.

Line 8. Home Energy Efficiency

Line 1. Lead Paint

Line 5. Brownfields

Recent legislation provides the owner of residential

If you incurred expenses for covering or remov-

property located in Massachusetts a credit for cer-

Recent legislation extends the Brownfields credit

ing lead paint on residential premises in Mass-

tain energy efficient heating items purchased be-

to nonprofit organizations, extends the time frame

achusetts, you may claim a credit for expenses up

tween November 1, 2005 and March 31, 2006 for

for eligibility for the credit, and permits the credit to

to $1,500 for each residential unit. The basic rules

installation in such property. Qualifying purchases

be transferred, sold, or assigned. Under prior law,

are explained on Massachusetts Schedule LP,

include home insulation, new window installation,

net response and removal costs incurred by a tax-

Credit for Removing or Covering Lead Paint on

advanced programmable thermostats, solar hot

payer between August 1, 1998 and August 5,

Residential Premises. If you qualify for the credit,

water systems, fuel-efficient furnaces, boilers, oil,

2005, were eligible for the credit provided that the

complete Schedule LP and enter the amount of

gas, propane, or electric heating systems, certain

environmental response action before August 5,

credit in line 1.

weather sealing, and other approved purchases.

Form 1 - Schedule Instructions - 2006 Page 5

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