Form Fr-399 - Qualified High Technology Companies Tax Package Page 11
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32INSTRUCTIONS FOR FORM D-20CR
Part B - Tax credit for the costs of retraining qualified
Who may use Form D-20CR?
disadvantaged employees during the first eighteen
A business which is a corporation, including a Limited
months of employment
Liability Company (LLC) which has elected to be treated as
A QHTC may claim a credit on its Form D-20 for expenditures
a corporation for Federal tax purposes and is certified as a
paid or incurred during the taxable year for retraining qualified
QHTC may file a Form D-20CR to claim the applicable credits
disadvantaged employee(s). This credit may be carried forward
listed on Form D-20CR.
for 10 years.
Should the certification of Gross Revenue be submitted
Part C - Tax credit for 50% of the wages paid to qualified
with the Form D-20CR?
disadvantaged employees during the first twenty-four
Yes, it must be submitted in the first year that the business
months of employment
is a QHTC for six or more months and in all subsequent
A QHTC is allowed a credit against its DC corporate franchise tax
years.
equal to 50% of the wages paid to each qualified disadvantaged
What is a QHTC?
employee during the first 24 calendar months of employment.
A QHTC is an individual or entity organized for profit that:
The credit claimed is limited to $15,000 a year for each qualified
•
Maintains an office, headquarters, or base of operations
disadvantaged employee. It may be carried forward for 10 years.
in DC;
•
Part D - Tax credit for relocation costs
Has 2 or more employees, employed in DC;
•
A QHTC is allowed a credit (subject to a dollar limitation) against
Derives at least 51% of its gross revenue from one or
its DC corporate franchise tax for each dollar reimbursed to or
more of the permitted activities listed in publication
paid on behalf of each qualified employee for relocation costs. The
FR-399 and in DC Code sec. 47-1817.01(5)(A)(iii);
credit may not exceed:
•
Does not receive 51% or more of its gross revenue from
•
$5,000 for each employee who relocates his or her employment
operating a retail store or electronic equipment facility
to DC from outside DC but does not relocate his or her principal
in DC; and
residence to DC. The total annual credit for a QHTC may not
•
Is appropriately registered as a business in DC, and is
exceed $250,000; and
current in all DC Government filing requirements and
•
$7,500 for each employee who relocates his or her employment
payment obligations.
to DC from outside DC and also relocates his or her principal
Which forms are required to claim QHTC credits?
residence to DC. The total annual credit for a QHTC may not
exceed $1,000,000. For purposes of this credit, the principal
A company must file a DC corporate franchise tax return
residence is determined as of the last day of the first six months
(D-20) to claim the credits entered on the Form D-20CR. The
of employment in DC by a QHTC. This credit may be carried
Certification for Qualified High Technology Company, Form
forward for 10 years.
QHTC-CERT, must also be filed. (This is required even if the
company has been previously certified as a QHTC.)
Part E - Tax credit for wages paid to qualified employees
during the first twenty-four months of employment
PART A - Reduction in the tax rate for a QHTC
A QHTC is allowed a credit against the DC corporate franchise
This benefit reduces the corporate franchise tax rate for a
tax equal to 10% of the wages paid during the first 24 calendar
QHTC from 9.975% to 6%.
months to a qualified employee. The qualified employee must be
hired after December 31, 2000 and employed in DC by the QHTC
A QHTC located in a high technology development zone is
in the “permitted activities.” This credit may be carried forward
not subject to the DC corporate franchise tax imposed on
for 10 years.
taxable income for a period of five years after the date the
QHTC commences business in that zone. However, in order
Part F - Summary of tax benefits for a corporate QHTC
to preserve the QHTC tax credit carryover, a QHTC in a
This is a summary of tax reductions and credits claimed in Parts
high technology development zone must file a DC corporate
A through E. Be careful to copy the correct lines when completing
franchise tax return for each year in which the QHTC is not
Part F. Enter the amount from line 10 of Part F on Schedule UB,
subject to the DC corporate franchise tax.
line 2.
Note: The transfer of ownership of a QHTC does not affect
Part G - Election to receive a refund for QHTC retraining
eligibility under this part.
costs
Claiming a Tax Credit Carryover
Complete this section to receive a refund equal to 50% of the costs
to retrain qualified disadvantaged employees. Enter this amount
When claiming a tax credit carryover on your return please
on Schedule UB, Line 3.
attach a copy of your form D-20CR for the year(s) from which
the carryover originated.
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