Instructions for Idaho Form 49
GENERAL INSTRUCTIONS
Form 49 is used to calculate the investment tax credit (ITC) earned or allowed. Each member of a unitary group of corporations that earns or is allowed the credit must complete a separate Form 49.
Property Used Both In and Outside Idaho
If property is used both in and outside Idaho, compute the qualified investment for all such property using one of the following methods:
1. Percentage-of-Use Method - Multiply the investment in each asset by a fraction where Idaho use is the numerator and total use is the denominator. Usage can be measured by machine hours, mileage, or any other method that accurately reflects the usage.
2. Property Factor Numerator Method - Use the amount correctly included in the Idaho property numerator for each asset.
The amount computed in method #2 will generally be the same as that computed in method #1 unless your business uses the Multistate Tax Commission special industry regulations to compute its factors.
Carryover Periods
Compute the ITC carryover on Form 49C.
● For property acquired after 1989 but prior to tax years beginning in 2000, the credit carryover is limited to seven tax years unless the credit has not been carried over seven tax years before 2000. If the credit has been carried forward less than seven tax years, and is eligible for carryover to tax years beginning on or after 2000, the carryover period is limited to 14 tax years.
● For credit earned in tax years beginning on or after January 1, 2000, the credit carryover is limited to 14 tax years.
For purposes of the carryover period, a short tax year counts as one tax year
Election to Claim Two-Year Property Tax Exemption and Forgo Investment Tax Credit
If you placed personal property in service that qualifies for the ITC, you may elect to exempt this property from your property tax. You aren't eligible for the election if your rate of charge or rate of return is regulated or limited by federal or state law. The exemption from the property tax is for two years. After the two years, you must pay any applicable property tax. You can't claim the ITC for any property that you elect to exempt from property tax.
The election is available if you had negative Idaho taxable income in the second preceding tax year from the tax year in which the property was placed in service. Negative Idaho taxable income must have been computed without regard to any carryover or carryback of net operating losses.
The election must be made on Form 49E and filed with the operator's statement or personal property declaration. A copy of the election form must be included with the original income tax return(s) for the tax year(s) in which the property was placed in service.
Biofuel Infrastructure Investment Tax Credit
If you placed biofuel infrastructure in service during the tax year and are claiming the biofuel infrastructure investment tax credit, you can't claim the ITC on the same property.
Recapture
You must compute recapture if you sell or otherwise dispose of the property or it ceases to qualify for the ITC before it has been in service for five full years. File Form 49ER if you claimed the property tax exemption. File Form 49R if you claimed the ITC.
SPECIFIC INSTRUCTIONS
PART I - CREDIT AVAILABLE SUBJECT TO LIMITATION
Corporations claiming ITC must provide a calculation of the credit earned and used by each member of the combined group. The schedule must clearly identify shared credit and the computation of any credit carryovers.
PART II - LIMITATION
The ITC is limited to 50% of your Idaho income tax after deducting:
● Credit for taxes paid to other states
● Credit for contributions to Idaho educational entities