Form 85 - Idaho Small Employer New Jobs Tax Credit

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08-24-11

Instructions for Idaho Form 85

But equal to or

If the annual

GENERAL INSTRUCTIONS

salary is greater

less than an

Then the credit

average rate of ...

than …

earned is ...

Form 85 is used to calculate the Idaho small employer new jobs

tax credit (SE-NJTC) earned or allowed. Each member of a

$24.04 per hour

$28.85 per hour

$1,500

unitary group of corporations that earns or is allowed the credit

An average rate of

must complete a separate Form 85.

$36.06 per hour

$2,000

$28.85 per hour

An average rate of

If the project period began during this tax year and didn't cover a

period of at least nine months, you don't qualify for the SE-NJTC

$43.27 per hour

$2,500

$36.06 per hour

this year. If you are claiming the SE-NJTC, you can't also claim

An average rate of

the Hire One Act credit for the same employees.

$3,000

$43.27 per hour

QUALIFYING TAXPAYERS

To qualify for the SE-NJTC, you must certify by filing Form 89SE

CARRYOVER PERIODS

that you will meet the tax incentive criteria at the project site

The SE-NJTC earned but not used against tax may be carried

during the project period. If you haven't filed Form 89SE with the

forward for 10 tax years. For purposes of the carryover period, a

Tax Commission, or you have been notified that you don't qualify

short tax year counts as one tax year.

for the small employer incentives, you can't claim this credit. If

you don't qualify for the SE-NJTC, you may be eligible to claim

RECAPTURE

the Hire One Act credit. See Idaho Form 72.

You must compute recapture if you don't maintain the required

level of new employees for five full years from the date the

QUALIFYING NEW EMPLOYEES FOR THE SE-NJTC

project period ends.

To qualify for the credit, the new employee must:

Also, you must compute recapture if you claimed the SE-NJTC

•

Qualify as a new employee for purposes of the small employer

in an earlier year and fail to meet the tax incentive criteria you

tax incentive criteria discussed above,

certified to on Idaho Form 89SE.

•

Earn more than $24.04 per hour, and

•

Have worked a minimum of nine months during the tax year in

If you claimed the SE-NJTC and recapture is now required, file

which the credit is claimed.

Form 85R.

SPECIFIC INSTRUCTIONS

CALCULATING THE CREDIT

The Employer Quarterly Unemployment Insurance Tax Reports

and the Unemployment Insurance Wage Reports filed with the

Instructions are for lines not fully explained on the form.

Idaho Department of Labor are used to compute the number

of employees. However, only those employees who meet the

CREDIT AVAILABLE SUBJECT TO LIMITATION

definition of “new employee” can be included when computing

Line 1. Determine the average number of qualifying employees

the SE-NJTC. Don't include any employees who don't work

during the tax year by adding the number of qualifying

primarily in the project site. You must keep records to support

employees reported for each month on your Idaho Employer

the computations.

Quarterly Unemployment Insurance Tax Reports and dividing

that amount by the number of months of operation during the

The number of employees employed primarily at the project

tax year. Don't include any employees who weren't employed

site during a tax year is the average of the number of such

primarily at the project site.

employees reported to the Idaho Department of Labor during the

12 months of the tax year. If the project period began during the

Line 2. Determine the average number of qualifying employees

tax year, the number of employees for the year is the average

during the three preceding tax years by dividing the total of the

number actually employed during the months of the project

average number of qualifying employees reported on your Idaho

period. However, you can't earn the credit if the project period

Employer Quarterly Unemployment Insurance Tax Reports for

didn't cover at least nine months during the first tax year. These

each preceding year by three. If the project period existed less

employees may qualify for the credit the next year.

than three tax years, use the number of tax years in operation.

Line 3. Determine the average number of qualifying employees

The number of qualifying new employees is the increase in the

number of qualifying employees for the current tax year over the

during the preceding tax year by adding the number of qualifying

greater of the following:

employees reported for each month on your Idaho Employer

Quarterly Unemployment Insurance Tax Reports and dividing

•

The average number of qualifying employees for the three

that amount by the number of months of operation during the

preceding tax years, or

preceding tax year. Enter zero if the project period covered less

•

The average number of qualifying employees for the preceding

than nine months the preceding tax year.

tax year.

Line 4. No credit is allowed unless the number on this line

The number of qualifying new employees must be rounded down

equals or exceeds one. If it is more than one, the number is

to the nearest whole number.

rounded down to the nearest whole number.

CREDIT RATES

Line 5. To complete lines 5a through 5d, you must be able

Each qualifying new employee must be identified in order to

to identify each individual who is a qualifying new employee

determine the credit allowed, which is based on the annual

and the annual average salary earned during the tax year by

salary of the employee as shown in the following table.

that individual. Enter the number of qualifying new employees

according to their annual salary earned for the tax year. The

amounts listed on lines 5a through 5d can't exceed the number

on line 4.

Form 85 - Idaho Small Employer New Jobs Tax Credit - 2011 Page 3

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