Idaho Idaho Incentive Investment Tax Credit

Idaho Incentive Investment Tax Credit
Form 49, Investment Tax Credit and Instructions 2020
Form 49
Investment Tax Credit

2020

Names as shown on return

Social Security number or EIN

Part I — Credit Available Subject to Limitation
1. a.
b.

c.


Amount of qualified investments acquired during the tax year. Include a detailed list .................... 1a
Amount of investments you claimed the property tax exemption on.
Include applicable Form 49Es ........................................................................................................... 1b
Subtract line 1b from line 1a. This is the amount of qualified investments you can earn the
investment tax credit (ITC) on ........................................................................................................... 1c

2. Credit earned. Multiply line 1c by 3% .....................................................................................................
3. Pass-through share of credit from an S corporation, partnership, trust, or estate:
a. Pass-through Entity Name

2

b. Pass-through Entity EIN c. Pass-through Share of ITC

Total column c ............................ 3
4. Credit received through unitary sharing. Include a schedule .................................................................. 4
5. Carryover of ITC from prior years. Include Form 49C or other schedule ................................................ 5
6. Credit distributed to shareholders, partners, or beneficiaries .................................................................. 6
7. Credit shared with unitary affiliates ......................................................................................................... 7
8. Total credit available. Add lines 2 through 5, then subtract lines 6 and 7 ............................................... 8

Part II — Limitation
1. Enter the Idaho income tax from your return .......................................................................................... 1
2. Credit for income tax paid to other states ............................................................................................... 2
3. Idaho income tax after credit for income tax paid to other states. Subtract line 2 from line 1 ................

3

4. Credit for contributions to Idaho educational entities .............................................................................. 4
5. Tax available after credits. Subtract line 4 from line 3 ..................................... 5
6. 50% of tax after credit for income tax paid to other states. Multiply line 3 by 50% 6
7. Investment tax credit available. Enter the amount from Part I, line 8 .............. 7
8. Investment tax credit allowed. Enter the smallest amount from lines 5, 6, or 7 here
and on Form 44, Part I, line 1 ................................................................................................................. 8

Qualifying Depreciable Property

Nonqualifying Property

Idaho generally follows the definition of qualified property
found in the Internal Revenue Code (IRC) sections 46
and 48 as in effect before 1986. The property must have
a useful life of three years or more and be property that
you’re allowed to depreciate or amortize. Qualifying property
includes the following property used in a trade or business:
•	 Tangible personal property – machinery and equipment
•	 Other tangible property
ƒ	 Property used as an integral part of manufacturing,
production, extraction or
ƒ	 Furnishing transportation, communications, or utility
services or
ƒ	 Research facilities and bulk storage facilities used
in connection with those businesses
•	 Elevators and escalators
•	 Single-purpose agricultural or horticultural structures
•	 Qualified timber property
•	 Petroleum storage facilities
•	 Qualified broadband equipment as approved by the
Idaho Public Utilities Commission

Property that doesn’t qualify includes:
•	 Buildings and their structural components
•	 Property used in lodging facilities that rent 50% or more
of their lodging units for periods of 30 days or longer,
such as apartment houses or rental homes
•	 The cost of property expensed under IRC section 179
•	 Property subject to 60-month amortization
•	 Used property not acquired by purchase
•	 The portion of property used for personal use
•	 Used property in excess of $150,000 (total of all
properties)
•	 Horses
•	 Property not used in Idaho
•	 Vehicles under 8,000 pounds gross vehicle weight
(GVW)
•	 Property previously used by the same taxpayer or an
affiliate of the taxpayer

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Form 49 — Instructions
Investment Tax Credit
General Instructions
Use Form 49 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. Use can be measured by machine
hours, mileage, or any other method that
accurately reflects the use.
2.	 Property Factor Numerator Method – Use the
amount correctly included in the Idaho property
numerator for each asset.
The amount computed in method #2 generally will
be the same as that computed in method #1 unless
your business uses the Multistate Tax Commission’s
special-industry regulations to compute its factors.
Carryover Periods
Compute the ITC carryover on Form 49C.
•	 For property acquired after 1989 but before tax
years beginning in 2000, the credit carryover
is limited to seven tax years unless the credit
hasn’t 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 Instead of ITC
If you placed personal property in service that
qualifies for the ITC, you may elect to exempt this
property from your property tax. If federal or state
law regulates or limits your rate of charge or rate
of return, you aren’t eligible for the election. The
exemption from the property tax is for two years.
After the two years, you must pay any applicable
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2020
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 when the property was placed in service.
Negative Idaho taxable income must have been
computed without any carryover or carryback of net
operating losses.
Make the election on Form 49E and file with the
operator’s statement or personal property declaration.
Include a copy of the election form with the original
income tax returns for the tax years when the property
was placed in service.
Recapture
Compute recapture if you sell or otherwise dispose of
the property, or it no longer qualifies for the ITC before
it’s been in service for five full years. File Form 49R if
you claimed the ITC. File Form 49ER if you claimed
the property tax exemption.

Specific Instructions
Instructions are for lines not fully explained on the form.
Part I — Credit Available Subject to Limitation
Line 1a. Include a list of all property you acquired and
placed in service during the tax year that qualifies for
the ITC. The list should identify:
•	 Each item of property and its location
•	 Your basis in the item
•	 Whether the item is new or used and
•	 The date placed in service
The basis of qualified property is the Idaho adjusted
basis computed without bonus depreciation. Don’t
include any property you’re expensing under IRC
section 179.
Line 1b. Enter the amount of qualified investments
you claimed the property tax exemption on. This
exemption is allowed instead of earning the ITC.
Include applicable Form 49Es.
Line 3. Include a list of all ITC that’s being passed
through by S corporations, partnerships, trusts or
estates that you have an interest in. This amount is
reported on Form ID K-1, Part VII, line 42. Identify
each entity by name, EIN and the amount of ITC
that’s being passed through.
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Form 49 — Instructions

Line 4. If you’re a member of a unitary group, enter
the amount of credit you received from another
member of the unitary group.
Line 5. Enter the ITC carryover from prior years.
Compute the amount on Form 49C or on a
separate schedule. Include a copy of Form 49C or
the schedule. See General Instructions for the
carryover period allowed.
Line 6. If you’re an S corporation, partnership, trust
or estate, enter the amount of credit that passed
through to shareholders, partners or beneficiaries.
Line 7. If you’re a member of a unitary group, enter
the amount of credit you earned that you elect to
share with other members of your unitary group.
Before you can share your credit, you must use
the credit up to the allowable limitation of your tax
liability.
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.

2020

(continued)

Part II — Limitation
The ITC is limited to the smallest of the following:
•	 50% of your Idaho income tax after credit for
taxes paid to other states
•	 Tax available after credit for taxes paid to other
states and credit for contributions to Idaho
educational entities
•	 ITC available
Line 1. Enter the amount of your Idaho income tax.
This is the computed tax before adding the permanent
building fund tax or any other taxes, or subtracting any
credits.
Line 2. Enter the credit for income tax paid to other
states from Form 39R or Form 39NR. This credit is
available only to individuals, trusts and estates.
Line 8. Enter the smallest amount from lines 5, 6, or 7.
Carry this amount to Form 44, Part I, line 1, and enter
it in the Credit Allowed column.

Contact us:

In the Boise area: (208) 334-7660 | Toll free: (800) 972-7660
Hearing impaired (TDD) (800) 377-3529
tax.idaho.gov/contact
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