Instructions For Form C-8000c, Credit For Small Businesses And Contribution Credits printable pdf download

Instructions for Form C-8000C,

Credit for Small Businesses and Contribution Credits

Purpose: To allow taxpayers to choose either the

If the tax year is less than 12 months, gross receipts,

standard or alternate small business credit and to

adjusted business income, partners’ and shareholders’

claim contribution credits.

or officers’ share of business income must be

annualized to determine eligibility and to compute the

The small business credit is reduced if an individual, a

small business credit. If annualized gross receipts

partner in a partnership or shareholder or officer of a

exceed $9 million but do not exceed $10 million,

corporation has allocated income after loss adjustment of

annualize figures to compute Part 3. Part-year partners

more than $95,000. This reduction is based on the

or shareholders must annualize their share of business

individual/partner/officer/shareholder with the largest

income to determine their eligibility. See Annualizing

allocated income.

on page 6.

Note: For the purpose of computing the small business

Loss Adjustment. If taxpayers are not eligible for the

credit, a member of an LLC is treated as a partner if the

full small business credit or the alternate tax

LLC is taxed as a partnership. A member of an

calculation due to an adjusted business income or

LLC with officer-like duties is treated as an officer

allocated income disqualifier, they may benefit from

if the LLC is taxed as a corporation.

Form 3307, SBT Loss Adjustment Worksheet for the

General Instructions - Eligibility

Small Business Credit, on page 27. If the adjusted

business income was less than zero in any of the five

Taxpayers are not eligible for either the standard

years immediately preceding the tax year for which a

small business credit or the alternate tax if any of the

taxpayer is claiming a credit and a small business

following conditions exist:

credit was received for that same year, then adjust for

•

Gross receipts exceed $10 million.

the loss. A loss adjustment will not affect a reduction

•

Adjusted business income after loss adjustment

to the small business credit based on gross receipts

exceeds:

that exceed $9 million. It will also not change the

amount of compensation on Form C-8000KC,

•

$475,000 for corporations, partnerships and

Column K for a C Corporation.

LLCs

Controlled groups or entities under common control,

•

$115,000 for individuals or fiduciaries.

as defined in the IRC, are not eligible for the standard

•

Any shareholder or officer has allocated income after

small business credit or alternate tax unless the

loss adjustment of over $115,000 or any partner

business activities of the entities are consolidated,

has distributive share of income after loss

whether or not a consolidated SBT return is filed. This

adjustment of over $115,000, as determined on

means the gross receipts, adjusted business income

Form C-8000KC or Form C-8000KP.

and tax base of all members of the group must be

combined to determine eligibility and to compute this

Corporations - Allocated income for regular

credit.

corporations is either:

In other words, if the combined gross receipts exceed

a. Shareholders’ or officers’ compensation and

$10 million, the combined adjusted business income

directors’ fees from Form C-8000KC, column K,

after loss adjustment exceeds $475,000, or any one

individual, partner, shareholder or officer has

b. Shareholders’ compensation, directors’ fees and

allocated income after loss adjustment of more than

share of business income, after loss adjustment, or

$115,000 from any one member of the group, the

loss from Form C-8000KC, column M.

group is not eligible for the credit.

If either a or b is greater than $115,000, the corporation

If the group is eligible and files a consolidated SBT

is not eligible for the small business credit. In addition,

return, compute either the standard small business credit

if either a or b is more than $95,000 but not more than

or alternate tax on a consolidated basis using

$115,000, the corporation must reduce the small

Form C-8000C.

business credit based on the individual/partner/officer/

If separate SBT returns are filed, determine the

shareholder with the largest allocated income.

combined credit and each member’s share of the

S Corporation - Allocated income for S Corporations

credit on Form C-8009, SBT Allocation of Statutory

is shareholders’ compensation, directors’ fees and

Exemption, Standard Small Business Credit and

share of business income, after loss adjustment, or

Alternate Tax for Members of Controlled Groups, on

loss from Form C-8000KC, column M.

page 59. Attach a copy of Form C-8009 to each

member’s SBT return.

Instructions For Form C-8000c, Credit For Small Businesses And Contribution Credits

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