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2016 Education Opportunity Tax Credit Worksheet for Employers Instructions, continued

Note – Lines 1 and 2: Upon review of the credit claimed, Maine Revenue Services may ask you to provide documentation from each

employee or lender showing the monthly payments due and the monthly payments made during your 2016 tax year.

Line 3. Enter the smallest of lines 1 or 2. This is the monthly amount allowed toward the credit.

Line 4. Eligible education loan payments include only those payments made during your 2016 tax year the employee was a resident of

Maine working in Maine or was a Maine resident deployed for military service in the U.S. Armed Forces.

Enter on line 4a the number of months during your 2016 tax year the employee was a Maine resident. With respect to the months on

line 4a, enter on line 4b the number of months the employee worked in Maine or was deployed for military service or was employed at

least part-time on a vessel at sea. With respect to the months on line 4b, enter on line 4c the number of months you and your employee

made eligible education loan payments directly to the lender.

Line 7. Modiﬁ ed gross credit. Multiply line 5 by line 6c. This is the amount of education loan payments eligible for the credit.

Line 8. Enter the number of credit hours the employee earned toward the degree after 2007. If the employee started school after

2007, skip lines 8, 9 and 10 and enter on line 11 the amount from line 7.

Line 9. Enter the total number of credit hours earned toward the degree. This number should be included on the employee's transcript.

Line 10. Divide line 8 by line 9. This is the portion of the degree earned after 2007 and is the basis for the credit.

Line 11. Multiply line 7 by the ratio on line 10. If the employee started school after 2007, enter on line 11 the amount from line 7.

This is the gross amount of the credit for eligible payments made during your 2016 tax year.

Line 12. If the qualiﬁ ed employee worked for you an average of less than 32 hours per week during your tax year, but at least 16 hours

per week, enter 0.5 on this line. Otherwise, enter 1.0. Note: You cannot claim a credit for an employee that does not work for

you at least an average of 16 hours weekly during the tax year.

Example: If your tax year is January through December, the qualiﬁ ed employee worked for you January 1 through December 31, and

the employee worked 12 hours weekly for 18 weeks, 20 hours weekly for 17 weeks and 36 hours weekly for 17 weeks, the average

number of hours worked weekly would be calculated as follows: ([12 x 18] + [20 x 17] + [36 x 17]) / 52 = (216 + 340 + 612) / 52 = 1,168

/ 52 = 22.46 average number of hours worked weekly. Since this employee worked on average at least 16 hours weekly, but not more

than 31 hours weekly, you would enter 0.5 on line 13. If this employee started work July 1 (and, therefore, only worked for you 26

weeks during the year) and worked 10 hours weekly for 17 weeks, 20 hours weekly for 6 weeks and 36 hours weekly for 3 weeks, the

average number of hours worked weekly would be calculated as follows: ([10 x 17] + [20 x 6] + [36 x 3]) / 26 = (170 + 120 + 108) / 26 =

398 / 26 = 15.31 average number of hours worked weekly. In this second example, educational loan payments made for the employee

would not qualify for the credit because the employee worked less than 16 hours weekly on average during the time of employment.

Line 14. Carryforward of unused credit from prior tax years. Unused credit amounts may be carried forward for up to 10 years.

Enter the amount of any unused credit from prior tax years not exceeding the 10-year carryforward limit.

Line 15. Pass-through entities must provide each shareholder, partner or member a copy of the credit worksheet(s) completed and a

schedule showing the assignment/distribution of the credit to each owner. The assignment/distribution must be based on ownership

interest in the entity. If multiple worksheets are completed, the employer may aggregate the credit amount of all worksheets for

purposes of completing the schedule of assignment/distribution. The schedule must also include the name, address and EIN of the

pass-through entity, and the name and SSN/EIN of each partner, shareholder or member. Owners claiming the credit must attach a

copy of the credit worksheet(s) and schedule of assignment/distribution.

Carryforward amount. The credit amount on line 13 that you cannot use this year may be carried forward to future tax years for up to

10 years. You may also carry forward the amount on line 14 that you cannot use this year, as long as the carryforward year is within the

10-year period following the year the credit was calculated. Keep a record of the unused credit amount available for future tax years.

Educational Opportunity Tax Credit Worksheet For Employers - Maine Department Of Revenue - 2016 Page 3