Form Ct-46-I - Instructions For Form Ct-46 - Claim For Investment Tax Credit - 1998 Page 5
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6CT-46-I (1998) Page 5
Example 2
A calendar-year corporation acquired qualified property in 1996 at a cost of $450,000,000, and an additional $300,000 of research and
development property upon which the corporation elected to compute the investment tax credit at the optional rate of 9%. The corporation
computed an investment tax credit for 1996 in the amount of $21,527,000 ($350,000,000
5% ITC rate
$100,000,000
4% ITC rate
$300,000
9% optional R & D rate). The corporation’s average number of New York employees was 200 for 1995 (employment base
year), 204 for 1997 (1st succeeding year), and 201 for 1998 (2nd succeeding year). In 1997 and 1998, the corporation computes its
employee incentive credit on Schedules B and C as shown below:
Schedule B
A
B
C
D
E
F
G
H
A. Use in conjunction with Schedule C, line 26,
Year
March 31
June 30
September 30
December 31
Total
Average
Percent
first succeeding year
B+C+D+E
22
Number of New York State employees
1995
200
200
200
200
800
200
in employment base year
23
Number of New York State employees
1997
200
200
206
206
812
204
102%
in period covered by this claim
B. Use in conjunction with Schedule C, line 27,
Year
March 31
June 30
September 30
December 31
Total
Average
Percent
second succeeding year
B+C+D+E
24
Number of New York State employees
1995
200
200
200
200
800
200
in employment base year
25
Number of New York State employees
1998
200
200
202
202
804
201
100.5%
in period covered by this claim
Schedule C
A.
B
C
Tax Year in which
Amount of Investment Credit Base upon which
Employment Incentive Credit
Investment Tax Credit
Original Investment Tax Credit was Allowed
(multiply column B by the appropriate
was Allowed
(excluding R & D property at optional rate)
rate from Rate Schedule 2)
26
First succeeding year
1996
$450,000,000
$9,000,000 ($450,000,000
2%)
27
Second succeeding year
************
************ In 1998, the corporation did not qualify for the employment incentive credit since the average number of employees was less than 101% of the
number employed in 1995.
In 1997, if the average number of employees had been 206 instead of 204, the percentage of employees in the current year, as compared
to the base year, would have been 103% instead of 102%, and the corporation would have been entitled to compute its employment
incentive credit at the rate of 2.5% (see Rate Schedule 2 on Form CT-46).
Schedule D — Recapture of Investment Tax Credit
(2) For three-year property depreciated under IRC section
(including Rehabilitation Expenditures for Retail
168, the formula for recapture of investment tax credit
is:
Enterprises and Historic Barns) and Additional
Investment Tax Credit
months of unused life x investment tax credit allowed
36 months
If property on which an investment tax credit, retail
(3) For property depreciated under IRC section 168, other
enterprise credit, or rehabilitation credit has been allowed is
than three-year property or buildings or structural
disposed of or ceases to be in qualified use prior to the end
components of buildings, the formula for recapture of
of its useful life, the difference between the original credit
investment tax credit is:
allowed and the credit allowed for actual use must be
months of unused life x investment tax credit allowed
added back to the tax otherwise due in the year of
60 months
disposition or disqualification. Section 210.12(g) provides
different formulas for computing the amount of recaptured
(4) For a building or structural component of a building
investment tax credit for property depreciated under IRC
placed in service after December 31, 1980, and
sections 167 and 168.
depreciated under IRC section 168, the formula for
recapture of investment tax credit is:
(1) For property depreciated solely under IRC section 167,
months of unused life x investment tax credit allowed
the formula for recapture of investment tax credit is:
number of months
months of unused life x investment tax credit allowed
allowed by IRC
months of useful life
and used by taxpayer
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