Form 25-120 - Texas Certified Investor Annual Notification Of Credit Transfer Page 2
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1
2INSTRUCTIONS
Form 25-120 (Back)(Rev.1-12/2)
This form must be filed annually by all certified investors who elect to transfer CAPCO tax credits during the year. A certified
investor tranferring credits from investments in more than one CAPCO must file a separate NOTIFICATION form for credit
transfers from each CAPCO.
A Transfer Affidavit for EACH insurer receiving a credit transfer must accompany this form.
Certfied investors must report transferred credits to the Comptroller only once per tax year for each CAPCO.
Once filed, this notification cannot be revoked for any purpose.
This form is due no later than January 10 following the tax year that credits are transferred. Forms received after this date
will be considered as the filing for the next tax year.
Only certified investors may transfer CAPCO tax credits.
Retroactive transfers are not allowed.
All transfers must comply with the requirements of and are subject to the limitations in Rule 34 TAC §3.830.
Insurers receiving a transfer of CAPCO credits are limited to using their proportionate share of the CAPCO credits that the
original certified investor would have been entitled to use during a tax year. (See example, below.)
EXAMPLE of Maximum Annual Credit Allowed determination
Company A (certified investor) has $4 million in tax credits and is therefore entitled to use a maximum of $1 million in tax
credits per year over 4 years. Company A is only able to use $500,000 in the first year of the credits, but is allowed to roll the
unused $500,000 forward to future years.
For the second tax year, Company A has a balance of $3.5 million in tax credits and is allowed to use a maximum of $1 million
in tax credits that year, except that it transfers $1 million in credits to Company B and $1 million in credits to Company C. In
the subsequent tax years, the total allowable credits are $1 million between the three companies. Assuming that beginning
in Year 2, the three companies use the maximum annual credit allowed, the credits would be applied as follows:
MAXIMUM ANNUAL
COMPANY
CREDIT BALANCE
CREDIT ALLOWED
$1,500,000
$ 333,334
($500,000 carried forward to future years)
Year 2
A
B
$1,000,000
333,333
C
$1,000,000
333,333
$1,000,000
Year 3
A
$1,166,666
$ 333,334
B
$ 666,667
333,333
C
$ 666,667
333,333
$1,000,000
Year 4
A
$833,332
$ 333,332
B
333,334
333,334
C
333,334
333,334
$1,000,000
Year 5
A
$500,000
$ 500,000
(unused balance from year 1)
B
0
0
0
C
0
$ 500,000
Questions regarding submission of the Annual Notification of Credit Transfer or the Transfer Affidavit should be directed to:
CAPCO PROGRAM ADMINISTRATOR
Phone: ....................................... 512-463-4124
FAX: ........................................... 512-463-4368
Email: ............... corrine.hall@cpa.state.tx.us
Return form to:
STATE COMPTROLLER
111 E. 17th Street
Austin, TX 78774-0100
1-800-531-5441, ext. 3-4124
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