Seed Capital Investment Tax Credit Worksheet

2011

SEED CAPITAL INVESTMENT TAX CREDIT

WORKSHEET INSTRUCTIONS

This credit, administered by the Finance Authority of Maine (“FAME”), is intended for investments in new or recent business ventures,

directly and through private venture capital funds. FAME issues a certiﬁ cate to investors for up to 40% of the cash equity they provide

to eligible Maine businesses. Investments may be used for ﬁ xed assets, research or working capital. Investments made in eligible

businesses located in high-unemployment areas, as determined by FAME, are eligible for a tax credit for up to 60% of investment. 25%

of the authorized credit may be used in each of four tax years beginning with the tax year during which the investment was made. The

credit is limited to 50% of the tax liability of the taxpayer in any one year. Unused credit may be carried forward for up to 15 years. A copy

of the credit certiﬁ cate must be attached to your tax return. If you have any questions regarding investments that qualify for the credit,

call FAME at 1-800-228-3734. If a credit certiﬁ cate is revoked by FAME, a portion of the credit relating to the revoked certiﬁ cate may be

subject to recapture. The recapture amount is equal to the amount of the credit revoked by FAME minus the amount of the credit not yet

taken by the taxpayer. The recapture amount is included as an additional tax on the Maine return. For details, see 10 MRSA § 1100-T and

36 MRSA § 5216-B and FAME rules, Chapter 307. For more information, you may visit the FAME web site at

What investments qualify for the Seed Capital Investment Tax Credit? An aggregate investment up to $5,000,000 per business is eligible.

The investment must be at risk for ﬁ ve years. Investors must own less than 50% of the business and immediate relatives of principal

owners of a business being invested in are not eligible for a credit. An eligible investment is an investment in a business that:

Is located in Maine;

Has gross sales of $3,000,000 or less per year;

Is the full-time, professional activity of at least one of the principal owners; and

Is a manufacturer, or a product or service provider with sales derived predominantly from outside the state or to out-of-state

residents, or is engaged in developing or applying advanced technologies, or must bring signiﬁ cant permanent capital into

Maine.

In the case of pass-through entities (partnerships, LLCs, S corporations, trusts, etc.), the partners, members, shareholders, beneﬁ ciaries

or other owners are allowed a credit in proportion to their respective interests in these entities.

SPECIFIC LINE INSTRUCTIONS

Please enter the taxpayer name and employer identiﬁ cation number (“EIN”) or social security number (“SSN”).

Line 1. Investment credit certiﬁ cate amounts for investments made January 1, 2008 through December 31, 2008. Enter 25% of credit

certiﬁ cate amounts relating to investments made January 1, 2008 through December 31, 2008.

Line 2. Investment credit certiﬁ cate amounts for investments made January 1, 2009 through December 31, 2009. Enter 25% of credit

certiﬁ cate amounts relating to investments made January 1, 2009 through December 31, 2009.

Line 3. Investment credit certiﬁ cate amounts for investments made January 1, 2010 through December 31, 2010. Enter 25% of credit

certiﬁ cate amounts relating to investments made January 1, 2010 through December 31, 2010.

Line 4. Investment credit certiﬁ cate amounts for investments made January 1, 2011 through December 31, 2011. Enter 25% of credit

certiﬁ cate amounts relating to investments made January 1, 2011 through December 31, 2011.

Line 6. Carryover. The amount of credit allowed in any one year is limited to 50% of the tax liability of the taxpayer before credits. The

carryover is the portion of the available credit not taken in previous years as a result of this limitation. The carryover period` is

limited to 15 years. Enter any credits claimed but unused from the past 15 years on this line.

Line 8. Income tax before credits. Enter the amount from Form 1120ME, line 7a or Form 1040ME, Schedule A, line 20. Multiply by 50%.

The amount of the total credit cannot exceed 50% of the tax liability.

Line 9. Credit amount. This is the allowable credit amount for 2011.

Line 10. Carryover to next year. Enter the amount on line 7 not used on Form 1120ME, Schedule C or Form 1040ME, Schedule A. That

portion of the unused credit not exceeding the 15-year carryover period may be claimed on your income tax return next year.

Line 11. Credit amounts available in future years. This is a breakdown of the allowable gross credit amounts that may be claimed in

future years relating to credit certiﬁ cates issued to you by FAME in 2011.

Line 12. Recapture. Enter on line 12a the amount of the original credit certiﬁ cate revoked by FAME. Enter on line 12b the amount of the

original credit certiﬁ cate amount not yet claimed as a credit. Subtract line 12b from line 12a and enter the difference on line 12c.

If the amount is positive, this is the recapture amount. Enter on Form 1120ME, line 7b or Form 1040ME, Schedule A, line 3c. If

the amount is negative, this is the amount of credit still available to claim.

Rev. 8/12

Seed Capital Investment Tax Credit Worksheet - 2011 Page 2

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