Instructions for Form M-990t - Unrelated Business Income Tax Return 2017

ADVERTISEMENT
2017 Form M-990T Instructions
Major 2017 Tax Law Changes
porate taxpayers. However, it may not reduce the tax to less than the
minimum excise. The credit is a one-year credit that must be claimed
Filing Due Dates
in the year that the donation is made and is not refundable. Any credit
amounts that exceed the tax due may be carried forward for five years.
Massachusetts law was changed to conform the due dates for Mass-
See TIR 16-15.
achusetts C corporation tax returns to federal filing due dates, begin-
ning with tax returns due on or after January 1, 2018. G.L. c. 62C, §§
Economic Development Incentive
11 and 12 have been amended to require C corporations to file their
Program Tax Credit
tax returns on or before the 15th day of the fourth month following the
close of each taxable year (April 15th in the case of corporations filing
For economic development projects certified after January 1, 2017,
on a calendar year basis). This change affects all returns due on or
the credit is no longer tied to the cost of property that would qualify for
after January 1, 2018, irrespective of a corporation’s fiscal year end.
the investment tax credit allowed under G.L. c. 63, § 31A. Instead, the
The law did not change the filing due date for S corporation tax re-
amount of credit allowed in each case is determined by the Economic
turns, hich remains the 15th day of the third month following the close
Assistance Coordinating Council (EACC) based on numerous factors
of each taxable year. See TIR 17-5.
set forth in G.L. c. 23A § 3D. In addition to determining the amount of
credit, the EACC will designate whether the credit is refundable. Re-
Extension Due Dates for Tax Returns Due
capture is required only if the EACC revokes the certification of a pro-
on or After January 1, 2018
ject and is no longer subject to the recapture provision of G.L.c. 63, §
31A(e). The amount of credit subject to recapture will be proportionate
C corporations are allowed an automatic extension to file their tax re-
to the business’ compliance with the job creation requirements applic-
turns if they satisfy the payment requirements stated in TIR 15-15. For
able to a certified project. If a certified project is sold or otherwise dis-
corporations participating in a combined report pursuant to G.L. c.
posed of, the credit allowed may be transferred to the purchaser of
63, § 32B, tax returns filed on extension are due seven months from
the certified project only if approved by the EACC. See TIR 16-15.
the filing due date (November 15 in the case of corporations filing on a
calendar year basis). For corporations filing returns reporting unrelated
Certified Housing Development Tax Credit
business income tax under G.L. c. 63, tax returns filed on extension
are due eight months from the filing due date (December 15 in the
The amount of credit available and the types of costs eligible for the
case of corporations filing on a calendar basis). For all other C corpo-
credit have changed. The credit is available for 25% of “qualified pro-
rations, tax returns filed on extension are due six months from the due
ject expenditures.” Formerly, the credit was available for 10% of
date (October 15 in the case of corporations filing on a calendar year
“qualified substantial rehabilitation expenditures.” Additionally, the
basis). See TIR 17-5.
carry forward period for which the credit can be used has increased
from five to 10 years. See TIR 16-15.
Extension Due Dates for Tax Returns Due
Community Investment Tax Credit
on or Before December 31, 2017
A community partner may now claim a subsequent community invest-
The due dates for Massachusetts partnership and C corporation tax
ment tax credit if the Department of Housing and Community Develop-
returns for tax years beginning after December 31, 2015 that are due
ment determines that the community partner has made satisfactory
on or before December 31, 2017 do not conform to the federal due
progress towards utilizing any prior allocation it has received. For fur-
dates for such returns. The Department of Revenue (DOR) announced
ther information, see TIR 16-15.
late-file penalty relief with respect to such returns. See TIR 17-5.
Historic Rehabilitation Tax Credit
Veteran’s Hire Tax Credit
The Massachusetts Historical Commission may, subject to certain cri-
A new credit is available to businesses that hire veterans who live and
teria, transfer the historic rehabilitation tax credit to corporate excise
work in Massachusetts. The credit is equal to $2,000 for each qualified
taxpayers that acquire a qualified historic structure. For multi-phased
veteran hired. The business must employ fewer than 100 employees;
projects, the Massachusetts Historical Commission may transfer his-
be certified by the Commissioner of Veteran’s Services; and qualify for
toric rehabilitation tax credit awards for any phase that meets the cri-
and claim the federal Work Opportunity Credit allowed under I.R.C. §
teria. For further information, see TIR 16-15.
51. A business may be eligible for a second credit for the next taxable
year if the veteran continues to work for the business. The credit can-
General Instructions
not be transferred or refunded. The credit is not subject to the 50%
limitation but may not reduce the tax to less than the minimum excise.
Who Must File an Unrelated Business Income
Any amount of credit that exceeds the tax due in the current taxable
Tax Return?
year may be carried forward to any of the three subsequent taxable
Exempt corporations that have gross income from an unrelated trade
years. The credit is available for qualified veterans hired after July 1,
or business and are required to file IRS Form 990-T, Exempt Organiza-
2017. See TIR 17-10.
tion Business Income Tax Return, will be required to file a new Mass -
Low-Income Housing Donation Tax Credit
achusetts form specifically designed for exempt corporations, modeled
on Form 990-T.
A new credit is available to businesses if they donate real or personal
property to certain nonprofit entities for use in purchasing, construct-
For additional information, see Regulation 830 CMR 63.38T.1, Taxation
ing or rehabilitating a Qualified Massachusetts Project. The credit is
of Unrelated Business Income of Exempt Organizations and TIR 06-7.
generally limited to 50% of the amount of the donation, but it may be
increased to 65% by the Department of Housing and Community De-
velopment. The credit is not subject to the 50% limitation rule for cor-
2017 Form M-990T Instructions
Major 2017 Tax Law Changes
porate taxpayers. However, it may not reduce the tax to less than the
minimum excise. The credit is a one-year credit that must be claimed
Filing Due Dates
in the year that the donation is made and is not refundable. Any credit
amounts that exceed the tax due may be carried forward for five years.
Massachusetts law was changed to conform the due dates for Mass-
See TIR 16-15.
achusetts C corporation tax returns to federal filing due dates, begin-
ning with tax returns due on or after January 1, 2018. G.L. c. 62C, §§
Economic Development Incentive
11 and 12 have been amended to require C corporations to file their
Program Tax Credit
tax returns on or before the 15th day of the fourth month following the
close of each taxable year (April 15th in the case of corporations filing
For economic development projects certified after January 1, 2017,
on a calendar year basis). This change affects all returns due on or
the credit is no longer tied to the cost of property that would qualify for
after January 1, 2018, irrespective of a corporation’s fiscal year end.
the investment tax credit allowed under G.L. c. 63, § 31A. Instead, the
The law did not change the filing due date for S corporation tax re-
amount of credit allowed in each case is determined by the Economic
turns, hich remains the 15th day of the third month following the close
Assistance Coordinating Council (EACC) based on numerous factors
of each taxable year. See TIR 17-5.
set forth in G.L. c. 23A § 3D. In addition to determining the amount of
credit, the EACC will designate whether the credit is refundable. Re-
Extension Due Dates for Tax Returns Due
capture is required only if the EACC revokes the certification of a pro-
on or After January 1, 2018
ject and is no longer subject to the recapture provision of G.L.c. 63, §
31A(e). The amount of credit subject to recapture will be proportionate
C corporations are allowed an automatic extension to file their tax re-
to the business’ compliance with the job creation requirements applic-
turns if they satisfy the payment requirements stated in TIR 15-15. For
able to a certified project. If a certified project is sold or otherwise dis-
corporations participating in a combined report pursuant to G.L. c.
posed of, the credit allowed may be transferred to the purchaser of
63, § 32B, tax returns filed on extension are due seven months from
the certified project only if approved by the EACC. See TIR 16-15.
the filing due date (November 15 in the case of corporations filing on a
calendar year basis). For corporations filing returns reporting unrelated
Certified Housing Development Tax Credit
business income tax under G.L. c. 63, tax returns filed on extension
are due eight months from the filing due date (December 15 in the
The amount of credit available and the types of costs eligible for the
case of corporations filing on a calendar basis). For all other C corpo-
credit have changed. The credit is available for 25% of “qualified pro-
rations, tax returns filed on extension are due six months from the due
ject expenditures.” Formerly, the credit was available for 10% of
date (October 15 in the case of corporations filing on a calendar year
“qualified substantial rehabilitation expenditures.” Additionally, the
basis). See TIR 17-5.
carry forward period for which the credit can be used has increased
from five to 10 years. See TIR 16-15.
Extension Due Dates for Tax Returns Due
Community Investment Tax Credit
on or Before December 31, 2017
A community partner may now claim a subsequent community invest-
The due dates for Massachusetts partnership and C corporation tax
ment tax credit if the Department of Housing and Community Develop-
returns for tax years beginning after December 31, 2015 that are due
ment determines that the community partner has made satisfactory
on or before December 31, 2017 do not conform to the federal due
progress towards utilizing any prior allocation it has received. For fur-
dates for such returns. The Department of Revenue (DOR) announced
ther information, see TIR 16-15.
late-file penalty relief with respect to such returns. See TIR 17-5.
Historic Rehabilitation Tax Credit
Veteran’s Hire Tax Credit
The Massachusetts Historical Commission may, subject to certain cri-
A new credit is available to businesses that hire veterans who live and
teria, transfer the historic rehabilitation tax credit to corporate excise
work in Massachusetts. The credit is equal to $2,000 for each qualified
taxpayers that acquire a qualified historic structure. For multi-phased
veteran hired. The business must employ fewer than 100 employees;
projects, the Massachusetts Historical Commission may transfer his-
be certified by the Commissioner of Veteran’s Services; and qualify for
toric rehabilitation tax credit awards for any phase that meets the cri-
and claim the federal Work Opportunity Credit allowed under I.R.C. §
teria. For further information, see TIR 16-15.
51. A business may be eligible for a second credit for the next taxable
year if the veteran continues to work for the business. The credit can-
General Instructions
not be transferred or refunded. The credit is not subject to the 50%
limitation but may not reduce the tax to less than the minimum excise.
Who Must File an Unrelated Business Income
Any amount of credit that exceeds the tax due in the current taxable
Tax Return?
year may be carried forward to any of the three subsequent taxable
Exempt corporations that have gross income from an unrelated trade
years. The credit is available for qualified veterans hired after July 1,
or business and are required to file IRS Form 990-T, Exempt Organiza-
2017. See TIR 17-10.
tion Business Income Tax Return, will be required to file a new Mass -
Low-Income Housing Donation Tax Credit
achusetts form specifically designed for exempt corporations, modeled
on Form 990-T.
A new credit is available to businesses if they donate real or personal
property to certain nonprofit entities for use in purchasing, construct-
For additional information, see Regulation 830 CMR 63.38T.1, Taxation
ing or rehabilitating a Qualified Massachusetts Project. The credit is
of Unrelated Business Income of Exempt Organizations and TIR 06-7.
generally limited to 50% of the amount of the donation, but it may be
increased to 65% by the Department of Housing and Community De-
velopment. The credit is not subject to the 50% limitation rule for cor-
When Must Form M-990T Be Filed?
Note: New corporations in their first full taxable year with less than
10 employees have different estimated payment percentages — 30%,
Form M-990T must be filed on or before the 15th day of the fourth
25%, 25% and 20% respectively.
month after the close of the corporation’s taxable year. A late return
incurs a penalty of 1% per month (or fraction thereof), up to a maxi-
Exempt companies that underpay, or fail to pay, their estimated taxes
mum of 25% of the tax due. The penalty for late payment of the tax is
may incur an additional penalty on the amount of the underpayment
1% per month (or fraction thereof) of the balance due, up to a maxi-
for the period of the underpayment. Form M-2220, Underpayment of
mum of 25%.
Massachusetts Estimated Tax by Corporations, is used to compute
the additional charge.
Filing Amended Returns and Applications for
Any corporation having $1 million or more of federal taxable income
Abatement for Business Taxes
in any of its three preceding taxable years (as defined in fl 6655 (g) of
DOR’s computerized tax system, MassTaxConnect, makes filing re-
the IRC) may only use its prior year’s tax liability to calculate its first
turns, submitting payments, and managing taxpayer accounts sim-
quarterly estimated tax payment. Any reduction in the first installment
pler, quicker, and more efficient than ever before. MassTaxConnect
payment that results from using this method must be added to the
automates the amended return process, and in most cases separate
second installment payment.
from the abatement application process. For further information, see
TIR 15-13.
Are Combined Returns Allowed?
No. Exempt corporations are not allowed to participate in the filing of
New Electronic Filing and Payment
combined returns.
Requirements
Effective January 1, 2016, businesses with combined annual liability
What if the Taxpayer Is a Fiscal or Short Year
for wage withholding, sales and use tax, and other transactional taxes
Filer?
at or exceeding $5,000 will be required to file and pay their taxes elec-
File the 2017 return for calendar year 2017 and fiscal years that
tronically. In addition, certain businesses and organizations, including
began in 2017 and ended in 2018. For a fiscal year return, fill in the
financial institutions, urban redevelopment excise filers and 501(c)
tax year space at the top of page 1. Short year filers should file using
corporations, reporting annual gross income of $100,000 or more on
the tax form for the calendar year within which the short year falls. If
their corporate excise returns, will also be required to file electroni-
the short year spans more than one calendar year, the filer should file
cally. For further information, see TIRs 15-9 and 16-9.
use the tax form for the calendar year in which the short year began.
If the current form is not available at the time the short year filer must
Can a Corporation Get an Extension of Time
file, the filer should follow the rules explained in TIR 11-12.
to File?
In 2015, DOR adopted an automated proc ess for extensions of time to
Can the Taxpayer Claim Credits on Form
file tax returns for corporate excise taxpayers, beginning with all re-
M-990-T?
turns due on or after November 30, 2015, as part of the new MassTax-
Yes. However, any credit being claimed must be determined with re-
Connect system. Consistent with current rules, taxpayers meeting
spect to the unrelated business activity being reported on this return.
certain payment requirements will be given an automatic seven-month
The taxpayer cannot generate or claim any credits with respect to any
extension in the case of corporate excise taxpayers filing combined re-
exempt activity which has not been reported on this return.
ports and a six-month extension for other corporate excise taxpayers.
Taxpayers filing unrelated business income tax returns will be given
Are There Special Tax Credits Available In
an eight-month extension. For further information, see TIR 15-15.
Massachusetts?
Note: An extension of time to file is not valid if the corporation fails
Yes. Massachusetts offers several special credits to corporations.
to pay at least 50% of the total tax liability or the minimum tax of
Under M.G.L. Ch. 63, § 32C, a corporation’s credits may not offset
$456, which ever is greater, through estimated payments or with
more than 50% of its excise. Any credits not utilized as a result of this
Form 355-7004.
pro vision may be carried over for an unlimited number of years. This
Any tax not paid on or before the due date — without regard to the
provision does not apply to the Research Credit, the Harbor Mainte-
extension — shall be subject to an interest charge.
nance Tax Credit, Low-Income Housing Credit, Historic Rehabilitation
Credit, the Film Incentive Credit, Medical Device Credit, Veteran's Hire
What Is a Valid Return?
Tax Credit or the Low-Income Housing Donation Credit.
A valid return is a return upon which all required amounts have been
Credits must be entered on the Credit Manager Schedule (CMS).
entered in all appropriate lines on all forms. Data sheets, account forms
See page 9 for more information about using the CMS.
or other schedules may be enclosed to explain amounts entered on
the forms. However, referencing items to enclosures in lieu of properly
Credit Manager Schedule
entering all amounts onto the return is not sufficient.
Note: The taxpayer must complete and enclose a Credit Manager
Schedule with its return in order to report all credits generated, taken
When Must a Corporation Pay Estimated
or carried over from prior years.
Taxes?
The Credit Manager Schedule (CMS), which eliminates Schedule CR
Any exempt corporation which reasonably estimates its excise tax to
(Other Corporate Credits), reports in Section 1 the taxpayer’s credits
be more than $1,000 must pay estimated taxes. Payments must be
available (including credits carried over from prior years) and the
made in quarterly installments of 40%, 25%, 25% and 10% of the esti -
credits taken. Credits are shown in a table format and may be listed
mated annual tax liability.
in any order. Taxpayers with more than one credit available may
choose how much of each credit to take in the current year. A tax-
payer participating in a combined report and allowing other members
2
of the combined group to use its credits (as allowed in 830 CMR
ber and the associated credits separately. For credits not tracked by
63.32B.2(9)) also reports the amount of each credit shared on this
certificate number, enter credits separately by type and the year to
schedule.
which they relate. List only those credits and certificate numbers or
tax years for which a reduction in the credit is being calculated.
Some credits are identified on the Credit Manager Schedule by a cer-
tificate number. The certificate number for the credit is assigned by
For more information and examples, see the Credit Recapture
the issuing agency (which may be DOR) and must always be reported
Schedule instructions.
to claim the credit. A taxpayer with multiple certificates for the same
Investment Tax Credit
type of credit will enter each separately, with the available (unused)
Manufacturing corporations and corporations engaged primarily in re-
balance associated with that certificate in column (e) and the amount
search and development, agriculture or commercial fishing are al -
of the credit used in the current year in column (f). Taxpayer’s claiming
lowed a credit of 3% of the cost of depreciable real and tangible
the EDIP Credit for a Certified Jobs Creation Project must enter a cer-
property. Such property must have a useful life of four years or more.
tificate number, but are only required to complete the header section
The property must be used and located in Massachusetts on the last
of Schedule EDIP.
day of the taxable year. A corporation cannot take the credit on prop-
Some credits are identified by the tax period end date which refers to
erty which it leases to another. A corporation can take the credit on
the period in which the credit originated. This may be the current tax-
property which it leases from another (for property leased and placed
able year or a prior year if the credit is being carried forward from a
in service on or after July 1, 1994). Generally, eligible corporate
prior year. If the period of origin is the current year, a schedule detail-
lessees making qual ifying leasehold improvements may claim the
ing the calculation of the amount of credit must be enclosed with the
credit.
return. If the period of origin is a prior year, only the amount carried
Note: Motor vehicles and trailers acquired on or after January 1,
over to and available in the current year is shown in column (e) and
1988 and subject to the motor vehicle excise do not qualify for the In-
no calculation schedule is required.
vestment Tax Credit.
If, by operation of M.G.L. c. 63, § 32C or another provision of law, a
A corporation may carry over to the next suc ceed ing three years any
credit normally identified by period of origin is eligible for indefinite
unused portion of its Investment Tax Credit (ITC). To claim the ITC,
carryover, the credit should be reported as “non-expiring”; the tax-
Schedule H must be completed where the credit is calculated. The
payer is not required to identify the period of origin on the Credit
amount of the credit is then entered on the Credit Manager Schedule.
Manager Schedule. (Non-expiring credits were formerly referred to
as “unlimited.”)
Vanpool Credit
The abbreviation in the enumeration column is used to identify the
Business corporations are allowed a credit of 30% of the cost in-
credit type on the Credit Manager Schedule.
curred during the taxable year for the purchase or lease of company
Section 2 of the Credit Manager Schedule reports any refundable
shuttle vans used in the Commonwealth as part of an em ployer-
credits claimed in the current year.
sponsored ridesharing program. The shuttle vans must be used for
transporting employees and students from their homes, or public
Certain credits are refundable only if specifically authorized (or, in the
transportation facilities, to their places of employment or study.
case of the Film Credit, if the original recipient has not transferred the
credit to another). Other conditions may apply depending on the
To claim the Vanpool Credit, Schedule VP must be completed. The
terms applicable to the specific credit. Credits are identified sepa-
amount of the credit is then entered on the Credit Manager Schedule.
rately. The amount in column (f) is the amount of the refund re-
Research Credit
quested, which may be 100% or 90% of the amount reported in
column (e).
What Is the Research Credit?
The Research Credit is a tax credit available to corporations who
For more information and examples, see the Credit Manager Sched-
incur certain expenses for research conducted in Massachusetts. The
ule instructions.
credit closely parallels the federal research credit available under § 41
Credit Recapture Schedule
of the Internal Revenue Code (IRC § 41).
Certain Massachusetts tax credits are subject to recapture as speci-
Effective for tax years beginning on or after January 1, 2015, St.
fied in the statute authorizing the credit (e.g. the investment tax credit
2014, c. 287 changed the method for calculating the amount of credit
is subject to recapture under M.G.L. c 63, s 31A(e) if an asset for
allowable with respect to the taxpayer’s qualified research expenses.
which the credit was taken is disposed of before the end of its useful
For further information, see TIR 14-13 and TIR 14-16 and Proposed
life). Recapture may also be triggered if the corporation no longer
Regulation 830 CMR 63.38M.2.
qualifies for the credit (as when a manufacturing corporation ceases
A credit is allowed for corporations which made basic research pay-
to qualify as such or a corporation’s status as a Life Sciences Com-
ments and/or incurred qualified research expenses conducted in
pany is terminated as discussed in TIR 13-6.)
Mass achusetts during the taxable year. A corporation taking the re-
If a recapture calculation is required, the amount of the credit allowed
search credit is limited in the amount that can be taken against the ex-
is redetermined and the reduction in the amount of credit allowable is
cise in any year. The credit cannot reduce the tax to less than $456.
recaptured to the extent the credit was taken or used in a prior year.
The amount of credit is equal to:
See DOR Directive 89-7. Taxpayers who have a recapture calculation
• 100% of the first $25,000 of excise; and
must complete this schedule whether or not a recapture tax is deter-
mined to be due.
• 75% of any amount of excise remaining after the first $25,000.
The Credit Recapture Schedule (CRS), which eliminates Schedule
The deduction allowed to a corporation for any research expenses
RF, lists each credit for which a recapture calculation must be made.
generating a Massachusetts Research Credit must be reduced by the
For credits tracked by certificate numbers, enter each certificate num-
3
amount of the credit generated. This amount is added back to income
Economic Opportunity Area/Economic
on Schedule E, line 13.
Development Incentive Program
For projects certified by the EACC before January 1, 2010, the Eco-
Any corporation which is a member of a combined group may share
excess research credits with other members of the combined group.
nomic Opportunity Area credit is a tax credit under G.L. c. 62, § 6(g)
Corporations which are members of a controlled group or which are
and G.L. c. 63, § 38N equal to 5% of the cost of qualifying property
under common control with any trade or business (whether or not in -
purchased for business use within a certified project within an Eco-
corporated) are treated as a single taxpayer for purposes of deter-
nomic Opportunity Area (EOA). To qualify for the EOA credit, the prop-
mining the allowable Research Credit.
erty must be used by the certified project exclusively in an EOA and
must meet the same tests imposed for the 3% ITC. A certified project
See Schedule RC instructions for further information. To claim the
is a project approved by the Economic Assistance Coordinating Coun-
Research Credit, Schedule RC must be completed and the amount
cil (EACC). If a corporation participates in a certified project and is
of the credit entered on the Credit Manager Schedule.
also eligible for the 3% ITC (see above), the corporation may claim
either the ITC or the EOA credit, but not both with respect to each
Harbor Maintenance Tax Credit
item of qualifying property.
Corporations are allowed a credit against the corporate excise for
certain harbor maintenance taxes paid to the U.S. Customs Service
The 5% EOA credit cannot offset more than 50% of the excise due
pursuant to IRC § 4461. A corporation is eligible for the credit if the
nor reduce the excise below the minimum tax. Any unused credit
tax paid is attributable to the shipment of break-bulk or contain erized
may be carried forward for 10 years.
cargo by sea- and ocean-going vessels through a Massachu setts
To claim the credit, Schedule EOAC must be completed and the
harbor facility.
amount of the credit entered on the Credit Manager Schedule.
The credit is not subject to the 50% limitation; however, it may not re-
Note: The EOA credit is not available to projects that were certified
duce the tax to less than the minimum excise of $456. A taxpayer
by the EACC on or after January 1, 2010 by the EACC. See TIRs 10-
may carryover any excess credit to any of the next succeeding five
1 and 16-15 for further information.
taxable years.
For projects certified by the EACC on or after January 1, 2010, the
See Schedule HM instructions for further information. To claim the
Economic Development Incentive Program (EDIP) credit is available
Harbor Maintenance Tax Credit, Schedule HM must be completed and
to certified projects as defined under G.L. c. 23A. The credit is author-
the amount of the credit entered on the Credit Manager Schedule.
ized under G.L. c. 62, § 6(g) and G.L. c. 63, § 38N and is equal to a
percentage of the cost of qualifying property purchased by a certified
Brownfields Tax Credit
project for business use within Massachusetts.
Taxpayers are allowed a credit for amounts expended to rehabilitate
To be eligible for the EDIP credit, the project must have been certified
contaminated property owned or leased for business purposes and
by the EACC on or after January 1, 2010. As part of the project certifi-
located within an economically distressed area.
cation, the EACC may (but is not required to) award a credit under
In 2013 legislation extended the Brownfields credit to nonprofit orga-
the program and, when the EACC awards the credit, the EACC will
nizations, extended the time frame for eligibility for the credit, and
determine the percentage of the cost of the property to be used to
permitted the credit to be transferred, sold, or assigned. Under prior
determine the credit. In addition the EACC may award an EDIP credit
law, net response and removal costs incurred by a taxpayer between
that is refundable. To qualify for the EDIP credit, the qualifying prop-
August 1, 1998 and August 5, 2005, were eligible for the credit pro-
erty must be used exclusively in the certified project in Massachu-
vided that the environmental response action before August 5, 2005.
setts and must meet the same tests imposed for the 3% ITC. If a
As a result of the recent legislation, the environmental response ac-
corporation participates in a certified project and is also eligible for
tion commencement cut-off date is changed from August 5, 2013 to
the 3% ITC or the EDIP credit, but not both with respect to each item
August 5, 2018, and the time for incurring eligible costs that qualify
of qualifying property.
for the credit is extended to January 1, 2019. See TIR 13-15 for more
Unless the EDIP credit awarded is refundable, the credit may not off-
information.
set more than 50% of the excise due nor reduce the excise below the
The Brownfields Credit may be transferred, sold or assigned to an-
minimum tax. Carryover of unused credit is available only to the ex-
other taxpayer with a liability under chapter 62 or chapter 63, or to a
tent authorized by the EACC.
nonprofit organization.
The EACC may also in consultation with the DOR limit (but not ex-
DOR will issue a certificate to the party receiving the Brownfields
pand) the credit to a specific dollar amount or time duration or in any
Credit reflecting the amount of the Brownfields Credit received. The
other manner deemed appropriate by the EACC. St. 2009, c.b166, §
party receiving the Brownfields Credit must enclose the certificate with
18. For example, the EACC may limit the credit available with respect
each tax return in which the credits are being applied. Certificate appli-
to a particular project to a specific dollar maximum, even if the actual
cation forms and additional information are available at mass.gov/dor.
dollar amount of the qualifying purchases would otherwise generate
The Brownfields Credit cannot offset more than 50% of the excise
a higher credit amount. Similarly, the EACC may limit the otherwise
due nor reduce the excise be low the minimum tax. Any unused credit
applicable credit carry forward period provided by G.L. c. 62, § 6(g)
may be carried forward for five years.
and G.L. c. 63, § 38N(d). See TIRs 10-15, 10-1 and 14-3 for more in-
formation.
If you qualify for this credit, you must have completed Schedule BCA,
Brownfields Credit Application, and received certificate number from
Taxpayers authorized by the EACC to claim the EDIP credit for pro-
DOR. Be sure to enter the DOR issued certificate number in the
jects certified on or after January 1, 2010 must complete Schedule
space provided on the Credit Manager Schedule.
EDIP and enter the amount of the credit on the Credit Manager
Schedule. See TIRs 10-01 and 16-15 for further information.
4
The EDIP credit provisions were significantly changed for projects cer-
Film Incentive Credit
tified on or after January 1, 2017. For Projects certified by the EACC
For taxable years beginning on or after January 1, 2006 and before
on or after January 1, 2017, the EDIP credit allow to a taxpayer is de-
January 1, 2023, Massachusetts allows two credits for motion picture
termined by the EACC based on numerous factors set for the in G.L.
production companies who meet certain qualification require ments.
c. 23A, § 3D. The EACC may award a refundable EDIP credit.
Production companies who incur at least $50,000 of production costs
in Massachusetts are eligible for income and corporate excise tax
Unless the EDIP credit awarded is refundable, the credit may not off-
credits equal to 25% of the total Massachusetts payroll for the pro-
set more than 50% of the excise due nor reduce the excise below the
duction, excluding salaries of $1 million and higher. In addition, pro-
minimum tax. Carryover of unused credit is available only to the ex-
duction companies whose Massachusetts production expenses
tent authorized by the EACC.
exceed 50% of the total production cost receive an income and cor-
Taxpayers authorized by the EACC to claim the EDIP credit for pro-
porate excise tax credit of 25% of the total Mass achusetts production
jects certified on or after January 1, 2017 must complete Schedule
expense. Sup porting documentation must be available to the De part -
EDIP and enter the amount of the credit on the Credit Manager
ment of Revenue upon request.
Schedule. See TIRs 10-01 and 16-15 for further information.
For further information on the Film Incentive Credit, see TIR 07-15.
Refundable Economic Development Incentive
To claim the Film Incentive Credit, enter the Certificate Number is-
Program Credit
sued by DOR and the amount of the credit on the Credit Manager
Schedule. Certificate application forms and additional information are
For projects certified after January 1, 2010, M.G.L. Ch. 62 § 6(g) and
available at mass.gov/dor.
M.G.L. Ch. 63 § 38N authorize the EACC to award refundable EDIP
credits. Taxpayers authorized by the EACC to claim a refundable EDIP
Medical Device Credit
credit for projects certified on or after January 1, 2010 must complete
The Medical Device Credit is equal to 100% of the user fees actually
Form EDIP, Refundable Economic Development Incentive Program
paid to the United States Food and Drug Administration (USFDA) by
Schedule and enter the amount of the credit on the Credit Manager
a medical de vice company during the taxable year for which the tax
Schedule. See TIRs 10-01 and 16-15 for further information.
is due for pre-market submissions (e.g., applications, supplements, or
Low-Income Housing Credit
510(k) submissions) to market new technologies or upgrades, changes,
or enhancements to existing technologies, developed or manufactured
This credit is administered through the Massachu setts Department of
in Massachusetts.
Housing and Community Development (DHCD). The Low-Income
Housing Credit is available to taxpayers that claim a U.S. credit for
For further information on the Medical Device Credit, see TIR 06-22.
the construction or development of low-income housing. The state
To claim the Medical Device Credit, enter the Certificate Number is-
credit is taken over five years. The amount of credit a taxpayer may
sued by DOR and the amount of the credit on the Credit Manager
claim for a qualified Massachusetts project is allocated by the DHCD
Schedule. Certificate application forms and additional information are
and is based on a total pool of money awarded to the Common-
available at mass.gov/dor.
wealth. In order to claim the credit, a copy of the eligibility statement
Life Science Company Investment Tax Credit
issued by DHCD must be available upon request.
For taxable years beginning on or after January 1, 2009, a new Invest-
The LIHC is not subject to the 50% limitation rule for corporate tax-
ment Tax Credit (ITC) may be available to corporate excise taxpayers.
payers. If the taxpayer disposes of the property generating the LIHC,
a portion of the credit may be subject to recapture.
This credit, which is available to certified life sciences companies only
to the extent authorized pur suant to the Life Sciences Tax Incentive
For further information regarding this credit, contact the Department
Program, is equal to 10% of the cost of qualifying property acquired,
of Housing and Community Development, Division of Private Hous-
constructed or erected during the taxable year and used exclusively
ing, at (617) 727-7824.
in the Commonwealth.
To claim the Low-Income Housing Credit, supporting documentation
The refundable ITC can apply to purchases made on or after January
must be enclosed with the return and the amount of the credit entered
1, 2009 even if a construction project started before that date. The
on the Credit Manager Schedule.
scope of qualifying property for purposes of the new credit is the same
Historic Rehabilitation Credit
as that provided by the existing ITC under M.G.L. Ch. 63, § 31A.
Effective for years beginning on or after January 1, 2005 and ending
Life sciences companies or persons also qualifying for the Economic
on or before December 31, 2022, taxpayers may be eligible for the
Opportunity Area Credit (EOAC) for the same property may only take
Historic Rehabilitation Credit (HRC). To claim this credit, a historic re-
such EOAC to the extent of an additional 2% of the cost of the quali-
habilitation project must be complete and have been certified by the
fying property. Corporations taking these credits are not allowed to
Massachusetts Historical Commission. Unused portions of the credit
take the ITC under M.G.L. Ch. 63, § 31A or the Low-Income Housing
may be carried forward for a maximum of five years. This credit may
Credit under M.G.L. Ch. 63, § 31H for the same qualifying property.
be transferred or sold to another taxpayer.
If a life sciences ITC exceeds the tax otherwise due under the corpo-
The HRC is not subject to the 50% limitation rule for corporate tax-
rate excise, as applicable, 90% of the balance of such credit may, at
payers. If the taxpayer disposes of the property generating the HRC,
the option of the taxpayer and to the extent authorized pursuant to
a portion of the credit may be subject to recapture.
the Life Sciences Tax Incentive Program, be refundable to the tax-
payer for the tax year in which the qualified property giving rise to
For further information, see Regulation 830 CMR 63.38R.1, Mass-
such credit is placed in service. If such refund is elected by the tax-
achusetts Historic Rehabilitation Tax Credit and TIR 10-11.
payer, then the carryover provisions for this credit that would other-
To claim the Historic Rehabilitation Credit, suppor ting documentation
wise apply shall not be available.
must be enclosed with the return and the amount of the credit entered
on the Credit Manager Schedule.
5

Download Instructions for Form M-990t - Unrelated Business Income Tax Return 2017

448 times
Rate
4.7(4.7 / 5) 27 votes
ADVERTISEMENT
Page of 9