Instructions For Form Pa-20s/pa-65 - Schedule Oc - Other Credits - 2013

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2013
Pennsylvania Department of Revenue
Instructions for PA-20S/PA-65 Schedule OC
Other Credits
WHAT’S NEW
The portion of the tax credit that ex-
must submit with PA-20S/PA-65 Sched-
ceeds the tax liability of the awardee of
ule OC and the certificate or notification
The Organ & Bone Marrow Tax Credit has
the tax credit may be carried forward
that approved each tax credit claimed.
been removed from the Schedule OC.
unless the awardee elects to sell or as-
Following is some general information
sign the tax credit or pass it through to
GENERAL INFORMATION
regarding tax credits.
its owners.
PURPOSE OF SCHEDULE
● All of the restricted tax credits
Special rules apply for taxpayers that
A PA S corporation, partnership and
can be claimed against any class
sell/assign restricted tax credits as well
limited liability company filing as a
of income.
as the taxpayers who purchase them or
partnership or PA S corporation for fed-
to whom tax credits are assigned. The
● Restricted tax credits are nonre-
eral income tax purposes uses PA-
rules apply to all taxpayers, whether or
fundable. If applicable, other non-
20S/PA-65 Schedule OC to enter its
not they are incorporated. For specific
refundable credits must be applied
share for each tax credit received after
information regarding these rules, re-
to the account before restricted
applying the tax credit to the entity’s
view Corporation Tax Bulletin 2011-03
tax credits.
corporate liability, if any.
on the Department of Revenue’s web-
site,
● The request to pass through tax
A tax credit passed through from an-
credit to an entity owner is irrevo-
other entity can only be applied to tax
Tax credits are often sold through credit
cable, therefore the entity should
liability resulting from the RCT-101, PA
brokers; however, a credit broker is not
not pass through more than the
Corporate Tax Report. Do not report a
a requirement of sale. For additional in-
owner can use in any single year.
tax credit passed through from another
formation about using purchased or as-
entity on PA-20S/PA-65 Schedule OC.
signed tax credits, see the specific
● Tax credits passed through from
section for each tax credit.
REDUCTION IN EXPENSES
pass through entities to other pass
through entities or to estates or
Pennsylvania does not allow the deduc-
PERSONAL INCOME TAX
trusts may not be passed through
tion of certain expenses used to qualify
REPORTING REQUIREMENTS
to owners or beneficiaries.
for the Neighborhood Assistance Pro-
FOR SALE OF RESTRICTED
gram and the Educational Improvement
TAX CREDITS
SALEABLE OR ASSIGNABLE
tax credits. If the expenses were de-
TAX CREDITS
Seller of a Restricted Tax Credit
ducted in calculating federal-taxable in-
The saleable restricted tax credits in-
For Pennsylvania personal income tax
come, the amount should be reported
purposes, the sales of restricted tax
clude the following:
as a reduction in expenses on PA-
credits are taxable as gains on the sale,
20S/PA-65 Schedule M, Part B, Section
Credit
Sale
exchange or disposition of property to
E, Line f. Do not reduce Pennsylvania-
Program
Provision
the sellers or original awardees of the
taxable income by amounts paid to
Film Production Tax
restricted tax credits.
yes
qualify for the tax credit. For additional
Credit Program
information, see the specific section for
The taxpayer selling the restricted tax
Historic Preservation
these tax credits.
yes
credit reports the sale of the tax credit
Tax Credit
as a sale of intangible property for
Job Creation Tax
affiliate
TAX CREDITS CLAIMED
Pennsylvania personal income tax pur-
Credit Program
entity only
ON SCHEDULE OC
poses on PA-20S/PA-65 Schedule D.
Keystone Innovation
Tax credits are often awarded to PA S
yes
Zone
corporations or partnerships and passed
The taxpayer’s cost basis in the re-
Keystone Special
through to entity owners. However,
stricted tax credit sold is usually $0 as
Development
yes
sometimes they are awarded to individ-
the tax credit is awarded based upon in-
Zone Program
ual or fiduciary taxpayers. The PA S cor-
come or expenses already included in
Neighborhood
porations and partnerships report tax
the current or a prior year’s tax return(s)
yes
Assistance Program
credits on PA-20S/PA-65 Schedule OC.
whereas no adjustment or reduction in
Pennsylvania Research
The individuals and entity owners report
income or expenses is required to be
Manufacturing
yes
made to obtain such tax credit.
tax credits on PA-40 Schedule OC. Dif-
Tax Credit
ferent provisions apply to various situa-
Research and
A reduction in the sales price may be
yes
tions, so please review the specific
Development Program
reported if commissions are paid to an
information for each tax credit.
Resource Enhancement
agent or broker for the sale of such re-
yes
and Protection Program
stricted tax credits in the amount of
For each tax credit claimed, the entity
1

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