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NC-478 Instructions, Web

two-year period, reduce the amount on Part 1, Line 6, by the amount entered on

Part 3. If Line 12 exceeds Line 16, your total credits in Part 1 exceed 50%

Line 5 of the 2000 Form NC-478B. S corporations claiming the credit against

of your tax less other credits and must be reduced to the amount on Line 17.

income tax complete Parts 1 and 2 as one taxpayer, then allocate the amount

You may choose how to allocate the allowable amount of credit (Line 17)

from Part 1, Line 9 among the shareholders. Complete Parts 3 and 4 by including

among the credits for which you are eligible (Lines 1 through 11) by completing

the amounts allocated to those nonresident shareholders on whose behalf a

Lines 18 through 28. If the amount of eligible credit in Part 1 exceeds the

composite return is being filed. On Part 3, Line 6, include only the carryforwards

amount of allocated credit in Part 3, you may be eligible to carry forward the

for those nonresident shareholders on whose behalf a composite return is

excess amount to next year.

filed in both the prior year and the current year. Partnerships complete Parts

Line 29 - Add Lines 18 through 28 and enter the total. This amount must

1 and 2 as one taxpayer, then allocate the amount from Part 1, Line 9 among

equal the amount on Part 2, Line 17. Individuals enter this amount on

the partners. Complete Parts 3 and 4 by including the amounts allocated to those

Form D-400TC, Part 4, Line 29. Partnerships enter this amount on

nonresident partners on whose behalf the managing partner pays the tax. On

Form D-403TC, Part 2, Line 8. Trusts and estates enter this amount

Part 3, Line 6, include only the carryforwards for those nonresident partners on

on Form D-407TC, Part 2, Line 9. Corporations enter the total

whose behalf the partnership pays tax in both the prior year and the current

amount of tax credits applied against Franchise Tax on Form CD-

year. Trusts and estates complete Parts 1 and 2 as one taxpayer, then allocate

425, Part 2, Line 8, and the total amount of tax credits applied against

the amount from Part 1, Line 9 among the fiduciary and the beneficiaries. Complete

Income Tax on Form CD-425, Part 4, Line 21. Insurance companies

Parts 3 and 4 by including only the amount allocated to the fiduciary.

claim this amount on Line 16 on the gross premiums tax return.

NC-478C - Research and Development

Part 4. If you claimed a tax credit for investing in business property on Line 6,

enter on Line 30 the cost of business property placed in service during the

The credit for research and development is claimed in the tax year the

current year for which the credit is allowed.

If you claimed a tax credit for

research and development expenses are incurred.

investing in renewable energy property on Line 7, enter on Line 31 the cost of

renewable energy property placed in service during the current year for which

Individuals, S corporations claiming this credit against franchise tax,C

the credit is allowed. If you claimed a tax credit for investing in non-hazardous

corporations and insurance companies, complete NC-478C and enter the amount

dry-cleaning equipment on Line 10, enter on Line 32 the cost of non-hazardous

from Part 3, Line 4 on Form NC-478, Line 3. S corporations claiming the

dry-cleaning equipment placed in service during the current year for which the

credit against income tax complete Parts 1 and 2 as one taxpayer, then

credit is allowed. Enter the amounts even if you were required to allocate credits

allocate the amount from Part 1, Line 7 or Part 2, Line 6 among the shareholders.

in Part 3 and elected to enter $0 on Lines 23, 24, or 27. Partnerships enter only

Complete Part 3 by including the amounts allocated to those nonresident

the portion of the cost of business property, renewable energy property, or

shareholders on whose behalf a composite return is being filed. On Part 3, Line

non-hazardous dry-cleaning equipment that is allocable to the nonresident

3, include only the carryforwards for those nonresident shareholders on

partners on whose behalf the managing partner pays the tax. Trusts and

whose behalf a composite return is filed in both the prior year and the

estates enter only the portion of the cost of business property, renewable

current year. Partnerships complete Parts 1 and 2 as one taxpayer, then

energy property, or non-hazardous dry-cleaning equipment that is allocated

allocate the amount from Part 1, Line 7 or Part 2, Line 6 among the partners.

to the fiduciary. S corporations enter the total cost of business property,

Complete Part 3 by including the amounts allocated to those nonresident

renewable energy property, or non-hazardous dry-cleaning equipment if the

partners on whose behalf the managing partner pays the tax. On Part 3,

credit is being applied against franchise tax. If the credit is being applied against

Line 3, include only the carryforwards for those nonresident partners on whose

income tax, enter only the portion of the cost of business property, renewable

behalf the partnership pays tax in both the prior year and the current year.

energy property, or non-hazardous dry-cleaning equipment that is allocable to

Trusts and estates complete Parts 1 and 2 as one taxpayer, then allocate

the nonresident shareholders on whose behalf a composite return is filed.

the amount from Part 1, Line 7 or Part 2, Line 6 among the fiduciary and the

beneficiaries. Complete Part 3 by including only the amount allocated to the

NC-478A - Creating New Jobs

fiduciary.

The credit for creating new jobs is taken in four equal installments beginning

NC-478D - Worker Training

in the tax year following the year in which the job is created.

The credit for worker training is claimed in the tax year the workers are trained.

Individuals, S corporations claiming this credit against franchise tax, and C

corporations complete NC-478A and enter the amount from Part 3, Line 6 on

Individuals, S corporations claiming this credit against franchise tax, and C

Form NC-478, Line 1. S corporations claiming the credit against income tax

corporations complete NC-478D and enter the amount from Part 2, Line 3 on

complete Parts 1 and 2 as one taxpayer, then allocate the amount from Part 1,

Form NC-478, Line 4. S corporations claiming the credit against income tax

Line 7 among the shareholders. Complete Parts 3 and 4 by including the

complete Parts 1 and 3 as one taxpayer. Add Part 1, Lines 4 and 8, and allocate

amounts allocated to those nonresident shareholders on whose behalf a

the total amount among the shareholders. Complete Part 2 by including the

composite return is being filed. On Part 3, Line 5, include only the

amounts allocated to those nonresident shareholders on whose behalf a

carryforwards for those nonresident shareholders on whose behalf a

composite return is being filed. On Part 2, Line 2, include only the carryforwards

composite return is filed in both the prior year and the current year.

for those nonresident shareholders on whose behalf a composite return is filed

Partnerships complete Parts 1 and 2 as one taxpayer, then allocate the

in both the prior year and the current year. Partnerships complete Part 1, Lines

amount from Part 1, Line 7 among the partners. Complete Parts 3 and 4 by

1 and 5, and Part 3 as one taxpayer. Part 1, Lines 2 through 4 and Lines 6 through

including the amounts allocated to those nonresident partners on whose

8, must be completed on a partner-by-partner basis. (Note: The maximum credit

behalf the managing partner pays the tax. On Part 3, Line 5, include only the

of $1,000 for Line 2 and $500 for Line 6 applies to each partner.) For those lines,

carryforwards for those nonresident partners on whose behalf the

add the amounts calculated for each partner and enter the total on this form.

partnership pays tax in both the prior year and the current year. Trusts and

Complete Part 2 by including the amounts calculated for those nonresident

estates complete Parts 1 and 2 as one taxpayer, then allocate the amount

partners on whose behalf the managing partner pays the tax. On Part 2, Line

from Part 1, Line 7 among the fiduciary and the beneficiaries. Complete Parts

2, include only the carryforwards for those nonresident partners on whose

3 and 4 by including only the amount allocated to the fiduciary.

behalf the partnership pays tax in both the prior year and the current year.

NC-478B - Investing in Machinery and Equipment

Trusts and estates complete Parts 1 and 3 as one taxpayer, add Part 1,

Lines 4 and 8, then allocate the total among the fiduciary and the beneficiaries.

The credit for investing in machinery and equipment is taken in seven

Complete Part 2 by including only the amount allocated to the fiduciary.

equal installments beginning in the tax year following the year the

machinery and equipment is placed in service.

NC-478E - Investing in Central Office or Aircraft

Facility Property

Individuals, S corporations claiming this credit against franchise tax, and C

corporations complete NC-478B and enter the amount from Part 3, Line 7 on

The credit for investing in central office or aircraft facility property is

Form NC-478, Line 2. If machinery and equipment was placed in service over a

taken in seven equal installments beginning in the tax year following the

Instructions For Form Nc-478 Series - Summary Of Tax Credit Limited To 50% Of Tax - North Carolina Department Of Revenue Page 2

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