W. Va. Code R. § 110-13Q-4

Current through Register Vol. XLI, No. 50, December 13, 2024

Section 110-13Q-4 - Application of the Credits

4.1. This credit may be applied only after all other allowable credits are applied and may in no case reduce the tax owed to below zero.

4.2. This credit shall be applied against an eligible taxpayer's Business Franchise Tax liability before any remaining credit may be applied against that taxpayer's Corporation Net Income Tax liability. The credit may only be applied to a Personal Income tax liability if the credit holder is either a sole proprietor or a pass-through entity.

4.2.a. In no event may any remaining credit be applied against both Personal Income Tax liability and Corporation Net Income Tax liability, unless:

4.2.a.1. The taxpayer is a pass-through entity treated as a partnership for federal income tax purposes. In that case, the amount of credit remaining, if any, after application against the business franchise tax shall flow through to the partners in the same proportion as distributive share flows through to them and the credit shall apply to the liabilities of the partners for West Virginia income taxes.

4.2.b. In no event may the credit applied exceed the eligible taxpayer's liability for business franchise tax and corporation net income tax for the taxable year, or if the eligible taxpayer is a pass-through entity, the taxpayer's liability for business franchise tax and the liabilities of the partners for West Virginia income taxes, for the taxable year.

4.3. Any amount of credit allowed which remains after being applied against eligible taxes for the tax year may be carried forward for a maximum of 9 years following the taxable year in which the credit first accrued to the taxpayer or until no credit remains, whichever comes first.

4.4. If a taxpayer does not claim the credit in the first tax year when it is available to be used, it is forfeited and may not be used in any other tax year. However, the unclaimed credit is not forfeited if it is subsequently claimed for that first year on a timely filed amended return.

4.5. The credit may be claimed only by one taxpayer for a given period of time, and may not be assigned to any other taxpayer. However, when the credit is available to be taken against the personal income tax, the credit may be claimed on the joint income tax return if either or both of them is an eligible taxpayer.

4.6. A credit is not allowed under this rule for consideration received by the developer from a person related to the developer, as defined in subsection (b), Section 267 of the Internal Revenue Code of 1986, as amended for patents developed for direct use in a manufacturing process or product.

W. Va. Code R. § 110-13Q-4