Oklahoma Investment/Jobs Credit (you will also need Form 511CR)
Extracted from PDF file 2019-oklahoma-form-506.pdf, last modified December 2007
Investment/Jobs Credit (you will also need Form 511CR)State of Oklahoma Investment/New Jobs Credit FORM 506 Provide with Oklahoma income tax return - Form 511, 511NR, 512, 512-S, 513, 513NR, or 514. Please read the information on pages 2 and 3 carefully. Social Security Number Name as Shown on Return 2 0 1 9 Federal Employer Identification Number Mfg. Sales/Exemption Permit (MSEP) (required for a manufacturing facility) Name of Business Furnish the exact location of the manufacturing facility or web search portal establishment for which the credit is being claimed. Also provide a full explanation of the type of manufacturing or activity in which you are engaged. ______________________________________________________________________________________________ ______________________________________________________________________________________________ New Jobs Credit Employee must be paid at least $7,000 in wages or salary subject to Oklahoma income tax withholding in the year credit is claimed. Any new employees hired in subsequent years must be entered on a new Form 506. Monthly average of qualified full-time employees engaged in manufacturing for 4th quarter Number of full-time employees engaged in manufacturing during base year Taxable Year Total credit for additional employees 2018 Column 1 - Column 2 (see instructions) (2) (3) (4) (1) 2019 2020 2021 2022 2023 Net increase (decrease) Notice: Credit may be claimed for either new jobs or investment, but not both. Complete both calculations. Investment Credit Investment in Oklahoma Qualified Depreciable Property placed into service in 2019. This investment must be at least $50,000. AMOUNT INVESTED RATE (1% OR 2%) (5) (6) 2019 2020 2021 2022 2023 CREDIT ALLOWED (SEE INSTRUCTIONS) (7) % % % % % Allowable Credit Credits not used may be carried over, in order, to each of the fifteen years following the initial five-year period. TAX YEAR AVAILABLE CREDIT FROM COLUMN 4 OR 7 AMOUNT OF CREDIT USED PRIOR YEARS AMOUNT UTILIZED CURRENT YEAR CARRYOVER (8) (9) (10) (11) (12) 2019 2020 2021 2022 2023 Total of Credit Generated and Utilized $ $ $ $ The credit shall be allowed in each of the four subsequent tax years only if the level of new employees is maintained or qualified property is not sold, disposed of, or transferred. New jobs credit cannot be claimed as a result of investment in equipment on which investment credit was claimed in previous years. This form must be used for each of the four remaining years in which the credit is claimed. Enterprise Zone The credit is doubled (per 62 Oklahoma Statutes (OS) Sec. 690.4) if the facility is located in an enterprise zone. If you have questions about which areas in Oklahoma qualify as Enterprise Zones, see the current listing at https://www.okcommerce.gov/doing-business/data-reports/maps-geographic-data/. For additional information, contact Lesli Crofford with the Oklahoma Department of Commerce by email at [email protected] or by phone at (405) 815-5120. Check if located in an enterprise zone and provide County where facility is located: ________________________________________________ 2010 Census Tract Number: ___________________________________________________________________________________________ 2019 Form 506 - Page 2 Investment/New Jobs Credit Instructions 68 Oklahoma Statutes (OS) Sec. 2357.4 and Rule 710:50-15-74 General Taxpayers who may claim the credit are individuals (including the pass-through credit from Partnerships and Sub-Chapter S Corporations), Partnerships, Fiduciaries, Corporations and Sub-Chapter S Corporations. When this credit is claimed as a pass-through from a partnership or Sub-Chapter S Corporation, the Form 506 must have the name of the Partnership or Sub-Chapter S Corporation entered in the space provided at the top of the form. The pass-through entity shall provide to each partner, shareholder or member, documentation showing their share of the credit. Such documentation must be provided with the partner’s, shareholder’s or member’s income tax return when their share of the credit is being claimed. New Jobs Credit a) For Column 1 and Column 2, “full-time-employee” refers to job positions that pay at least $7,000 and in which someone is employed during the final quarter regardless of whether the person occupying the job position has actually earned $7,000. b) No employee may be included in Column 3, for which a credit is being claimed on any other Form 506. c) No employee may be included in Column 3, if the increase in employees is the result of an investment in qualified depreciable property for which an income tax credit has been claimed and allowed on any other Form 506. d) No employee may be included in Columns 1 or 2, who is not actually engaged in manufacturing, including support of the manufacturing of a product, or in a web search portal establishment. Employees engaged in administrative, legal, accounting, clerical, sales, delivery, housekeeping and yard upkeep are not generally considered support personnel and may not be included. e) In the first year a credit is claimed based on jobs, a new employee may be included in Column 1 if the employee’s wages are less than the $7,000 only if the following conditions are met: 1) the employee was hired in any of the last three quarters of the tax year, and 2) has wages or salary which will result in annual paid wages in excess of $7,000, and 3) the taxpayer submits an affidavit stating that the employee’s position will be retained the following tax year and result in the payment of wages in excess of $7,000. f) A company that engages in manufacturing or processing may still qualify for the Oklahoma New Jobs Credit even though they lease their employees through an employee leasing company. See Rule 710:50-15-74 for additional guidance if the employees included in Columns 1 or 2 are leased through an employee leasing company. Column 1: Enter the average number of qualified full-time employees engaged in manufacturing, including support, or in a web search portal establishment, employed in the State of Oklahoma during the 4th quarter and during the taxable year who received at least $7,000 in wages or salary subject to Oklahoma income tax withholding. The 4th quarter is generally defined as the last quarter of your taxable year. Column 2: Enter the average number of qualified full-time employees engaged in manufacturing, including support, or in a web search portal establishment, employed in the State of Oklahoma during the 4th quarter and during the base year who received at least $7,000 in wages or salary subject to Oklahoma income tax withholding. The base year is the preceding taxable year before the increase in employees. Column 3: Net increase or decrease in employees. Subtract Column 2 from Column 1. The credit, once established, is also allowed in each of the four subsequent years if the level of new employees is maintained. For subsequent tax years, Column 3 is limited to the number of new employees in Column 3 of the initial tax year. Provide a schedule showing the computation of the employee count for all columns. Include name, social security number, brief job description, annual wages for each employee and the date the new job was created. Column 4: The credit is $500* per new employee engaged in manufacturing, including support personnel, or in a web search portal establishment. Multiply the amount of Column 3 by $500. This is the amount of the allowable credit if you qualify for the New Jobs Credit. *NOTE: If the box on page 1 is checked, indicating the facility is located in an enterprise zone, the credit is $1,000 per new employee. 2019 Form 506 - Page 3 Investment/New Jobs Credit Instructions 68 OS Sec. 2357.4 and Rule 710:50-15-74 Investment Credit Column 5: Enter the amount invested in qualified depreciable property placed in service, in the State of Oklahoma, during the taxable year. The investment must be at least $50,000 in qualified depreciable property used in manufacturing or in a web search portal establishment in this state. The credit shall not be allowed if such investment is the direct cause of a decrease in the number of employees. Qualified property shall be limited to machinery, fixtures, equipment, buildings or substantial improvements thereto, placed in service in this state during the taxable year. The investment in Oklahoma Qualified Property must be reduced when the property is sold, disposed of or transferred. Provide a detailed schedule showing the description of the qualified property, the amount invested (cost), and the date the assets were placed in service. Column 6: Enter 1% unless the box on page 1 is checked indicating the facility is located in an enterprise zone. If the box is checked, enter 2%. Column 7: The credit is 1% (2% if located in an enterprise zone) of the cost of the qualified depreciable property. Multiply the amount of Column 5 by Column 6. This is the amount of the allowable credit if you qualify for the Investment Credit. Allowable Credit - Carryover ** Column 9: The credit is allowed for the greater of New Jobs Credit or Investment Credit, but not both. Enter the greater amount from Column 4 or Column 7. Once the type of allowable credit is determined in the first year, that type of credit will be used in all remaining tax years on that particular Form 506. Column 10: Enter the amount of credit used in a prior year Column 11: Enter the amount of credit used this tax year. Column 12: Enter the amount of credit not used this tax year. Any credit claimed and not used in any taxable year may be carried over, in order, to each of the four years following the year of qualification and to the extent not used in those years, in order, to each of the fifteen years following the initial five-year period. To the extent not used, any credit from qualified depreciable property may be utilized in subsequent tax years after the initial 20-year period. Provide schedule showing all carryover credits by tax year claimed and used. ** If a C corporation that otherwise qualified for the credits under subsection A of 68 OS Sec. 2357.4 subsequently changes its operating status to that of a pass-through entity which is being treated as the same entity for federal tax purposes, the credits will continue to be available as if the pass-through entity had originally qualified for the credits subject to the limitations of such Section. The pass-through entity shall provide, to each member, documentation showing their share of the credit. Such documentation must be provided with the member’s income tax return when their share of the credit is being claimed. Notices: • If the business entity manufactures any product described in Division D of Part I of the Standard Industrial Classification Manual, latest revision, they may be entitled to double their Investment/New Jobs Credit. To qualify for the double credit the total cost of qualified depreciable property used in the manufacture of such product must be at least $40 million dollars and be placed in service in this state within three years from the date of the initial qualifying expenditure. The credit for each new employee in Column 4 will be $1,000 and the rate for qualified depreciable property in column 6 will be 2%. Enter the amount of doubled credit in Column 4 and/or Column 7 and note the reason for the double credit. • If you receive an incentive payment under one of the Quality Jobs incentives (such as 68 OS Sec. 3601, 3801, 3901 or 3911) or under one of the Quality Investment incentives (such as 68 OS Sec. 4101 or 4201) you may not be eligible for this credit. • Credit may not be claimed during the period of time that any withholding taxes are being paid to the Community Economic Development Pooled Finance Revolving Fund or in any manner used for the payment of principal, interest or other costs associated with any obligation issued by the Oklahoma Development Finance Authority in accordance with the “Oklahoma Community Economic Development Pooled Finance Act”. (62 OS Sec. 891.12) • Credit may not be claimed for jobs created or capital investments made as a direct result of bond proceeds which are provided in accordance with the “Oklahoma Quality Jobs Incentive Leverage Act” pursuant to a second irrevocable election. (68 OS Sec. 3651) • Credit may not be claimed for investment or job creation in electric power generation by means of wind as described by the North American Classification System, No. 221119. • Tax credits transferred or allocated must be reported on Oklahoma Tax Commission (OTC) Form 569. Failure to file Form 569 will result in the affected credits being denied by the OTC pursuant to 68 OS Sec. 2357.1A-2.
More about the Oklahoma Form 506 Individual Income Tax Tax Credit TY 2019
We last updated the Investment/Jobs Credit (you will also need Form 511CR) in February 2020, so this is the latest version of Form 506, fully updated for tax year 2019. You can download or print current or past-year PDFs of Form 506 directly from TaxFormFinder. You can print other Oklahoma tax forms here.
Other Oklahoma Individual Income Tax Forms:
|Form Code||Form Name|
|Form 511||Individual Resident Income Tax Return|
|Form 511NR||Individual Nonresident/Part-Year Income Tax Return|
|511-Pckt||Individual Resident Income Tax Return Packet (instructions, forms and tables)|
|Form 511-V||Oklahoma Individual Income Tax Payment Voucher|
|Form 505||Injured Spouse Claim and Allocation (not to be filed with the return)|
Oklahoma usually releases forms for the current tax year between January and April. We last updated Oklahoma Form 506 from the Tax Commission in February 2020.
Form 506 is an Oklahoma Individual Income Tax form. States often have dozens of even hundreds of various tax credits, which, unlike deductions, provide a dollar-for-dollar reduction of tax liability. Some common tax credits apply to many taxpayers, while others only apply to extremely specific situations. In most cases, you will have to provide evidence to show that you are eligible for the tax credit, and calculate the amount of the credit to which you are entitled.
About the Individual Income Tax
The IRS and most states collect a personal income tax, which is paid throughout the year via tax withholding or estimated income tax payments.
Most taxpayers are required to file a yearly income tax return in April to both the Internal Revenue Service and their state's revenue department, which will result in either a tax refund of excess withheld income or a tax payment if the withholding does not cover the taxpayer's entire liability. Every taxpayer's situation is different - please consult a CPA or licensed tax preparer to ensure that you are filing the correct tax forms!
Historical Past-Year Versions of Oklahoma Form 506
We have a total of eight past-year versions of Form 506 in the TaxFormFinder archives, including for the previous tax year. Download past year versions of this tax form as PDFs here:
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