Form 506 Draft - Investment/new Jobs Credit

2016 Form 506 - Page 2

Investment/New Jobs Credit Instructions

Draft

68 Oklahoma Statutes (OS) Sec. 2357.4 and Rule 710:50-15-74

9/29/16

General

Taxpayers who may claim the credit are individuals (including the pass-through credit from Partnerships and Sub-Chapter

S Corporations), Partnerships, Fiduciaries, Corporations and Sub-Chapter S Corporations. When this credit is claimed as

a pass-through from a partnership or Sub-Chapter S Corporation, the Form 506 must have the name of the Partnership

or Sub-Chapter S Corporation entered in the space provided at the top of the Form. The pass-through entity shall provide

to each partner, shareholder or member, documentation showing their share of the credit. Such documentation must be

provided with the partner’s, shareholder’s or member’s income tax return when their share of the credit is being claimed.

New Jobs Credit

(Web search portal establishments do not qualify for the New Jobs portion of the credit).

a) For Column 1 and Column 2, “full-time-employee” refers to job positions that pay at least $7,000 and in which

someone is employed during the final quarter regardless of whether the person occupying the job position has

actually earned $7,000.

b) No employee may be included in Column 3, for which a credit is being claimed on any other Form 506.

c) No employee may be included in Column 3, if the increase in employees is the result of an investment in qualified

depreciable property for which an income tax credit has been claimed and allowed on any other Form 506.

d) No employee may be included in Columns 1 or 2, who is not actually engaged in manufacturing or support of

the manufacturing of a product. Employees engaged in administrative, legal, accounting, clerical, sales, delivery,

housekeeping and yard upkeep are not generally considered support personnel and may not be included.

e) In the first year a credit is claimed based on jobs, a new employee may be included in Column 1 if the

employee’s wages are less than the $7,000 only if the following conditions are met:

1) the employee was hired in any of the last three quarters of the tax year, and

2) has wages or salary which will result in annual paid wages in excess of $7,000, and

3) the taxpayer submits an affidavit stating that the employee’s position will be retained the following tax year

and result in the payment of wages in excess of $7,000.

A company that engages in manufacturing or processing may still qualify for the Oklahoma New Jobs Credit even

though they lease their employees through an employee leasing company. See Rule 710:50-15-74 for additional

guidance if the employees included in Columns 1 or 2 are leased through an employee leasing company.

Column 1: Enter the average number of qualified full-time employees engaged in manufacturing, including support,

employed in the State of Oklahoma during the 4th quarter and during the taxable year who received at least

$7,000 in wages or salary subject to Oklahoma income tax withholding. The fourth quarter is generally defined

as the last quarter of your taxable year.

Column 2: Enter the average number of qualified full-time employees engaged in manufacturing, including support,

employed in the State of Oklahoma during the 4th quarter and during the base year who received at least

$7,000 in wages or salary subject to Oklahoma income tax withholding. The base year is the preceding

taxable year before the increase in employees.

Column 3: Net increase or decrease in employees. Subtract Column 2 from Column 1. The credit, once established, is

also allowed in each of the four subsequent years if the level of new employees is maintained. For subsequent

tax years, Column 3 is limited to the number of new employees in Column 3 of the initial tax year. Provide

a schedule showing the computation of the employee count for all columns. Include name, social

security number, brief job description, annual wages for each employee and the date the new job was

created.

Column 4: The credit is $500* per new employee engaged in manufacturing including support personnel. Multiply the

amount of Column 3 by $500. This is the amount of the allowable credit if you qualify for the New Jobs Credit.

*NOTE:

If the box on page 1 is checked, indicating the facility is located in an enterprise zone, the credit is $1,000 per

new employee.

Form 506 Draft - Investment/new Jobs Credit - 2016 Page 2

Related Articles

Related forms

Related Categories