Form 1120b-Me - Maine Franchise Tax Instructions

SPECIFIC INSTRUCTIONS

Maine Seed Capital Tax Credit*:

Enter on this line the tax

Line 1a. Net Income Per Books:

Enter net income per books

credit as authorized by the Finance Authority of Maine. A copy of

from federal Form 1120, 1120S or 1065.

the tax credit certificate must be attached to the return. The amount

of credit is subject to limitations as outlined in 36 M.R.S.A. § 5216-

Line 1b. Maine Net Income:

Financial institutions that are not

part of an affiliated-unitary group and have income solely from ac-

tivity within Maine must enter here the same amount as on line 1a.

Jobs and Investment Tax Credit*:

Financial institutions that are members of an affiliated-unitary group

A tax credit for qualifying

jobs and investment is entered on this line. Eligibility for the credit

must file a combined report (Form CRB). A financial institution that

requires the addition of $5 million of IRC § 38 property based on the

is taxable both in and outside Maine shall apportion its net income

Internal Revenue Code of 1954, as of December 31, 1985, § 38(b)(1),

by completing Schedule A on page 2 of Form 1120B-ME. The in-

and 100 new jobs attributable to that investment in the 24-month

structions for Schedule A are on page 2 of Form 1120B-ME. See

period following the date the property was placed in service. For

paragraph 11 of the General Instructions above and instructions for

further details see 36 M.R.S.A. § 5215. Jobs created between Au-

Form CRB for information on how to file a Maine combined report.

gust 1, 1998 and October 1, 2001 must be covered by qualified

Line 2a. Total End-of-year Assets:

Enter total end-of-year

retirement and health insurance plans, and wages must be greater

than the average per capita income in the labor market area in

assets from federal Form 1120, 1120S or 1065.

which the employee is employed.

Line 2b. Maine Assets:

Financial institutions that are not part

Employer-Assisted Day Care Tax Credit*:

A taxpayer consti-

of an affiliated-unitary group and have income solely from activity

within Maine must enter here the same amount as on line 2a. Finan-

tuting an employing unit is allowed a credit for providing or paying

day care expenses of employees, subject to the limitations of 36

cial institutions that are members of an affiliated-unitary group must

M.R.S.A. § 5217. The tax credit is limited to the lowest of $5,000,

file a combined report (Form CRB). A financial institution that is

20% of the cost incurred, or $100 for each child of an employee of

taxable both in and outside Maine shall apportion its assets by

the taxpayer enrolled on a full-time basis. Carryover provisions

completing Schedule A on page 2 of Form 1120B-ME. The instruc-

apply. This credit is doubled if the day care provided constitutes

tions for Schedule A are on page 2 of Form 1120B-ME. See para-

quality child care. The Maine Department of Human Services

graph 11 of the General Instructions above and instructions for

Form CRB for information on how to file a Maine combined report.

(“DHS”), Office of Head Start and Child Care, certifies quality child

care facilities. Attach a copy of the certificate when claiming this

Line 3a. Tax on Maine Net Income:

credit on the basis of quality child care services. For questions

The tax rate on income is

1% of Maine net income as listed on line 1b.

about quality child care services and the certification process, call

DHS, Office of Head Start and Child Care, at 207-287-5099.

Line 3b. Tax on Assets:

The franchise tax rate on assets is 8

Quality Child Care Investment Credit*:

Corporate taxpayers

cents (8¢) per $1,000 (0.008%) of assets as listed on line 2b.

making certified investment in quality child care services qualify for

a credit equal to 30% of up to $30,000 of eligible expenditures.

Lines 4a, b, c:

These lines are for entities that made estimated tax

Carryover provisions apply. The Maine Department of Human Ser-

payments and deposits with an extension voucher, and for those

taxpayers filing amended returns and claiming credit for tax paid

vices, Office of Head Start and Child Care, must certify eligible in-

vestments. Attach a copy of the certificate when claiming this credit.

with original return.

For more information on quality child care services and the certifica-

Line 4d. Net Operating Loss Credit:

A credit is allowed

tion process, call DHS, Office of Head Start and Child Care, at 207-

287-5099.

against the franchise tax on assets in the case of a taxable entity that

sustains a book net operating loss. The credit is computed by

Employer-Provided Long-Term Care Benefits Credit*:

For

multiplying the book net operating loss by the franchise tax rate on

tax years beginning on or after January 1, 2002, employers are eli-

income (0.01). The total amount of the credit allowed is limited to the

gible for the employer-provided long-term care credit if the policy

franchise tax on assets as listed on line 3b. In any tax year in which

on which premiums are paid is certified by the Maine Bureau of

there is an excess credit, the excess credit shall be carried over for no

Insurance or the policy meets the federal definition of a qualified

more than the next five (5) tax years and can be applied against the

long-term care insurance contract under the Internal Revenue Code.

total tax as listed on line 3c. If you are carrying over an excess credit

Previously, only policies meeting the federal definition of a qualified

from a previous year, attach a carryover schedule to support your

entry.

long-term insurance contract qualified for the tax benefits. If the

qualifying policy is one certified by the Bureau of Insurance, indi-

Line 4e. Other Credits:

cate the policy number when claiming this credit. 36 M.R.S.A. §

Following is a list of allowable tax

credits. Enter the total amount being claimed on line 4e.

5217-C.

Note:

The

total amount claimed is limited to the tax amount on line 3c.

Form 1120b-Me - Maine Franchise Tax Instructions - 2002 Page 4

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