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2006 Form 1-NR/PY Instructions — Schedule Instructions

Schedule Z

97-12, 98-8, 99-5, 99-20 and DOR Directive 01-6

Line 8. Home Energy Efficiency

for more information. If you qualify for this credit,

Recent legislation provides the owner of residen-

complete Massachusetts Schedule SC, Septic

tial property located in Massachusetts a credit for

Other Credits

Credit, and enter the amount of credit in line 4.

certain energy efficient heating items purchased

Be sure to enclose with Form 1-NR/PY.

between November 1, 2005 and March 31, 2006

Line 5. Brownfields

for installation in such property. Qualifying pur-

Part 1 Credits

Recent legislation extends the Brownfields credit

chases include home insulation, new window in-

to nonprofit organizations, extends the time frame

Line 1. Lead Paint

stallation, advanced programmable thermostats,

for eligibility for the credit, and permits the credit to

If you incurred expenses for covering or remov-

solar hot water systems, fuel-efficient furnaces,

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

ing lead paint on residential premises in Mass-

boilers, oil, gas, propane, or electric heating sys-

net response and removal costs incurred by a tax-

achusetts, you may claim a credit for expenses up

tems, certain weather sealing, and other approved

payer between August 1, 1998 and August 5,

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

purchases. The credit allowed for installation of

2005, were eligible for the credit provided that the

are explained on Massachusetts Schedule LP,

qualifying purchases in any one residential build-

environmental response action before August 5,

Credit for Removing or Covering Lead Paint on

ing is 30% of the cost; however, the credit cannot

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

Residential Premises. If you qualify for the credit,

exceed $600 for a residential dwelling or $1,000

ronmental response action commencement cut-off

complete Schedule LP and enter the amount of

for a multi-unit dwelling. Joint owners of a resi-

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

credit in line 1.

dential property share any credit available to the

2011, and the time for incurring eligible costs that

property in the same proportion as their owner-

Line 2. Economic Opportunity Area

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

ship interest. The credit allowed under this sec-

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

Massachusetts allows a credit equal to 5% of the

tion may be taken in 2005 or 2006, regardless of

for this credit, complete Massachusetts Schedule

cost of qualifying property purchased for business

the exact date on which any qualifying purchases

BC, Brownfields Credit, and enter the amount of

use within an Economic Opportunity Area (EOA). If

were made. The amount of credit that exceeds the

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

you qualify for the credit, complete Schedule EOAC

total tax due for 2005 may be carried over, as re-

issued certificate number in the space provided on

and enter the amount of credit in line 2.

duced, and applied against the tax liability for

line 5. Certificate application forms and additional

2006. For more information, see TIR 05-18. If you

Line 3. Full Employment

information are available at

qualify for this credit, complete Massachusetts

Every employer who participates in the Full Em-

Schedule HEEC, Home Energy Efficiency Credit,

Line 6. Low-Income Housing

ployment Program and continues to employ a

and enter the amount of credit in line 8.

A low-income housing credit is available to indi-

participant for at least one full month after any

vidual taxpayers. The Department of Housing and

Full Employment Program subsidy for that par-

Line 9. Film Incentive

Community Development will allocate the low-in-

ticipant has expired may claim the Full Employ-

For tax years beginning on or after January 1,

come housing credit from a pool of available cred-

ment Credit. A qualified employer may claim a

2006 and before January 1, 2013, motion picture

its granted under section 42 of the Internal Rev-

credit equal to $100 per month of eligible em-

production companies may claim (1) a credit equal

enue Code among qualified low-income housing

ployment per participant, with a maximum credit

to 20% of the total qualifying aggregate payroll for

projects. A taxpayer allocated a federal low-income

of $1,200 per participant. Qualified participants

employing persons within the Commonwealth in

housing credit may also be eligible for a state credit

and employers are those who participate in the

connection with the filming and production of a

based on the credit amount allocated to a low-in-

Full Employment Program under the rules of the

motion picture and (2) a credit equal to 25% of their

come housing project that the taxpayer owns. A

Department of Transitional Assistance (DTA). A

Massachusetts production expenses. Each credit

five-year carryforward of unused credit is allowed.

five-year carryover of any unused credit is al-

has its own qualification requirements and a tax-

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

lowed. If you qualify for this credit, complete

payer is allowed to qualify for and claim both

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

Massachusetts Schedule FEC, Full Employment

credits. However, the total amount of tax credits

Credit, and enter the amount of credit in line 3.

allowed for any one motion picture may not ex-

Line 7. Historic Rehabilitation

ceed $7,000,000. The credits are also transferable.

Line 4. Septic

Effective for tax years beginning on January 1,

For more information, see TIR 06-1. If you qualify

2005 and ending on or before December 31, 2011,

An owner of residential property located in Mass-

for this credit, enter the amount of credit in line 9.

taxpayers may be eligible for the Historic Rehabili-

achusetts who occupies the property as his or her

Also, be sure to enter the DOR-issued certificate

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

principal residence is allowed a credit of a maxi-

number in the space provided on line 9. Certificate

rehabilitation project must be complete and have

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

application forms and additional information are

been certified by the Massachusetts Historical

curred to comply with the sewer system

available at

Commission. Unused portions of the credit may be

requirements of Title V as promulgated by the De-

carried forward for 5 years. The credit may be

Line 10. Medical Device

partment of Environmental Protection or to con-

transferred or sold to another taxpayer. The HRC is

nect to a municipal sewer system pursuant to a

For tax years beginning on or after January 1,

not subject to the 50% limitation rule for corporate

federal court order, administrative consent order,

2006, medical device companies that develop or

taxpayers. If the taxpayer disposes of the property

state court order, consent decree or similar man-

manufacture medical devices in Massachusetts can

generating the HRC, a portion of the credit may be

date. The amount of the credit is 40% of the cost,

claim a credit equal to 100% of the user fees paid

subject to recapture. For further information, see

up to $15,000, for design and construction ex-

by them when submitting certain medical device

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

penses for repair or replacement of a failed

applications and supplements to the United States

Historic Rehabilitation Credit. If you qualify for

cesspool or septic system. The maximum aggre-

Food and Drug Administration. The credit is also

this credit, enter the amount in line 7.

gate amount of the credit is $6,000. A five-year

transferable. For more information, see TIR 06-22.

carryover of any unused credit is allowed. See TIRs

Instructions For Form 1-Nr/py - Massachusetts Nonresident Or Part-Year Resident Income Tax - 2006 Page 26

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