Form Ct-46-I - Instructions For Form Ct-46 - Claim For Investment Tax Credit

Page 4 CT-46-I (1998)

Column G - Unless you have a short tax year, divide the

investment tax credit was claimed and on the level of

amount in Column F by four. If you have a short tax year (a

employment (see Rate Schedule 2 , Form CT-46).

tax year of less than 12 months,) divide the amount in

New York C Corporations — The employment incentive

Column F by the number of dates shown in Columns B

credit may not reduce the tax liability to an amount less

through E that occur during the short tax year.

than the higher of the tax on minimum taxable income or

the ﬁxed dollar minimum tax.

Column H - Divide the average number of employees

covered by this claim by the average number of employees

The credit may be carried forward for up to 15 tax years or

in the base year (Column G), and carry the result to two

until completely used. A New York C corporation can not

decimal places. If the percentage in Column H is at least

claim a refund of the employment incentive credit.

101% (1.01), complete Schedule C. If the percentage in

New York S Corporations — The shareholders of a New

Column H is less than 101%, STOP. You do not qualify for

York S corporation can claim an employment incentive

the employment incentive tax credit for this year.

credit. The employment incentive credit will apply to any

investment tax credit computed on property placed in

Schedule C — Employment Incentive Credit Computation

service on or after January 1, 1997, whether or not

deductible in the year placed in service.

General

The amount of employment incentive credit is a percentage

Any excess employment incentive credit that cannot be

of the original investment credit base on which the

used to reduce a shareholder’s current year’s tax liability

investment tax credit was allowed for each of the two years

can be carried forward for up to ten tax years. However, a

immediately following the year the investment tax credit was

shareholder that qualiﬁes as an owner of a new business

allowed. The percentage used to compute the employment

may elect to have the excess employment incentive credit

incentive credit will vary depending on the year the

refunded.

Schedules B and C - Examples

Example 1

A calendar-year corporation acquired qualiﬁed property in 1996 at a cost of $500,000. The corporation computed an investment tax credit

for 1996 in the amount of $25,000 ($500,000

5% ITC rate). The corporation’s average number of New York employees was 200 for 1995

(employment base year), 204 for 1997 (1st succeeding year), and 199 for 1998 (2nd succeeding year). In 1997 and 1998, the corporation

computes its employee incentive credit on Schedules B and C as shown below:

Schedule B

A. Use in conjunction with Schedule C, line 26,

Year

March 31

June 30

September 30

December 31

Total

Average

Percent

ﬁrst succeeding year

B+C+D+E

Number of New York State employees

1995

200

800

200

in employment base year

Number of New York State employees

1997

204

816

204

102%

in period covered by this claim

B. Use in conjunction with Schedule C, line 27,

Year

March 31

June 30

September 30

December 31

Total

Average

Percent

second succeeding year

B+C+D+E

Number of New York State employees

1995

200

800

200

in employment base year

Number of New York State employees

1998

200

198

796

199

99.5%

in period covered by this claim

Schedule C

Tax Year in which

Amount of Investment Credit Base upon which

Employment Incentive Credit

Investment Tax Credit

Original Investment Tax Credit was Allowed

(multiply column B by the appropriate

was Allowed

(excluding R & D property at optional rate)

rate from Rate Schedule 2)

First succeeding year

1996

$500,000

$10,000 ($500,000

2%)

Second succeeding year

************

************ In 1998, the corporation did not qualify for the employment incentive credit since the average number of employees was less than 101% of the

number employed in 1995.

In 1997, if the average number of employees had been 206 instead of 204, the percentage of employees in the current year, as compared

to the base year, would have been 103% instead of 102%, and the corporation would have been entitled to compute its employment

incentive credit at the rate of 2.5% (see Rate Schedule 2 on Form CT-46).

Form Ct-46-I - Instructions For Form Ct-46 - Claim For Investment Tax Credit - 1998 Page 4

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