Current through Register Vol. XLI, No. 50, December 13, 2024
Section 117-4-4 - Tax Credits4.1. Maximum Authorized Credits.4.1.1. Generally. -- Each Investor in a Center shall be allowed a tax credit equal to one hundred percent of the Investor's investment in a Center.4.1.2. Maximum Per Center. -- The total amount of tax credits authorized for a single Center may not exceed One Million Dollars ($1,000,000) during any single State fiscal year.4.2. Total Credits. -- The total credits which may be authorized by the Authority in each fiscal year is set forth in the Act.4.3. Certificate of Tax Credit. -- The Authority shall issue to each Investor the Authority's Certificate approving the amount of tax credits allocated to the Investor. The Authority's Certificate shall list the name of the Investor and the amount of credit allotted to the Investor. An Investor shall submit a true copy of the Certificate with the Investor's tax return requesting a tax credit. If the Investor entitled to a tax credit is a Partnership, an S corporation, a limited liability company or any other pass-through entity, the partners, shareholders, members or owners shall apportion the tax credit among themselves pursuant to the provisions of subdivision 4.4.f of this Rule.4.4. Application of Tax Credits. 4.4.a. General Rule. -- The amount of tax credit allowed for the taxable year is the portion of the tax credit authorized that does not exceed the tax liability limitation provided in this subsection.4.4.b. Tax Credit Available. -- The credit available for the taxable year is the sum of: 1. Unused tax credit carried forward from prior taxable years (carryforwards); and2. The amount of tax credits allocated to the Investor by the Authority pursuant to the Act and this Rule (tax credits earned).4.4.c. Tax Liability Limitation. -- Tax credit available for a taxable year beginning after June 30, 2001, shall be applied against the same taxes as set forth in W. Va. Code § 11-13C-5(c) through (i), and in that order.4.4.d. Excess Tax Credit. -- The excess of the tax credit available over the applicable tax liability limitation for the year is an unused credit which the Investor may carry forward as provided for under subsection 4.5 of this Rule.4.4.e. Order of Application. -- If the tax credit available for a taxable year is not allowed in full because of the tax liability limitation, carryforwards are applied against the tax liability limitation first. To the extent the tax liability limitation exceeds carryforwards, tax credit earned for the taxable year is then applied.4.4.f. Apportionment. 1. The partners, shareholders, members or owners shall by election and pursuant to this subdivision divide the tax credits authorized by the Authority for investments by a Partnership, an S corporation, a limited liability company or other entity which is treated as a pass-through entity under federal and state income tax laws.2. Any Center formed as a non-profit, non-stock corporation which has been allocated tax credits shall apportion the tax credits to contributors to the Center as agreed to by the contributors to the Center.3. The partners, S corporation shareholders, limited liability company members or other pass-through entity owners shall apportion the tax credit authorized in any manner they select, provided that each partner, shareholder, member or owner consents in writing to an apportionment plan. The written consent to an apportionment plan shall be signed by each partner, shareholder, member or owner, or their duly authorized agents. The written consent shall set forth the name, address, employer identification number or social security number and taxable year for which the credit will be claimed for each partner, shareholder, member or owner and the amount of tax credit apportioned to each of them under the plan. The consent of more than one partner, shareholder, member or owner may be incorporated in a single statement. Each partner, shareholder, member or owner shall file the statement with the application required pursuant to Section 3 of this Rule. The statement is irrevocable and not subject to change after filing of the application unless the tax credit authorized by the Authority is less than the tax credit applied for, in which case the Authority may request the apportionment plan to be amended. Each partner, shareholder, member or owner consenting to an apportionment plan shall keep as part of his or her records a copy of the statement containing all of the required consents.4. An apportionment plan adopted and consented to by all partners, S corporation shareholders, limited liability company members or other pass-through entity owners is valid only for the tax credits authorized by the Authority pursuant to the application with respect to which the plan is filed. A separate consent to an apportionment plan shall be filed with respect to each application filed pursuant to Section 3 of this Rule.4.4.g. Limitation. -- Tax credits authorized by the Authority may not be used against any liability the taxpayer may have for interest, penalties, or additions to tax.4.5. Carryforward of Unused Tax Credit. 4.5.a. General Rule. -- The holder of a tax credit may carry forward an unused tax credit as defined in subdivision 4.5.b of this Rule to succeeding taxable years but not beyond fifteen (15) years. Carryforwards of unused tax credits shall be taken into account in determining the amount of tax credit available and the tax credit allowed for the taxable years to which they may be carried forward.4.5.b. Unused Credit. -- If carryforwards and tax credits earned exceed the tax liability limitation, the excess attributable to tax credits earned is an unused tax credit. The taxable year in which an unused tax credit arises is referred to as the "unused credit year".4.5.c. Limitation on Carryforwards. -- Tax credit carryforwards to a taxable year may not exceed the applicable tax liability limitation for that year. Tax credit carryforwards from an unused tax credit year are applied before tax credit carryforwards from a later unused tax credit year.4.5.d. Joint Return by Husband and Wife. -- This Subdivision 4.5.d. prescribes additional rules for computing the tax credit carryforwards of a husband and wife making a joint return for one or more of the taxable years involved in the computation of the tax credits earned.1. From Separate to Joint Return. -- If a husband and wife, making a joint return for any taxable year, did not make a joint return for any of the taxable years involved in the computation of the tax credit earned, the separate tax credits apportioned in accordance with subdivision 4.4.f of this Rule shall together be considered a joint tax credit carryforward to the taxable year.2. Continuous Use of Joint Return. B If a husband and wife making a joint return for a taxable year made a joint return for each of the taxable years involved in the computation of the tax credit earned or the tax credit carryforward to the taxable years, the joint tax credit or tax credit carryforward to the taxable year is computed in the same manner as the tax credit carryforward of an individual as provided in subdivisions 4.5.a through 4.5.c of this Rule.3. From Joint to Separate Return. -- If a husband and wife making separate returns for a taxable year made a joint return for any, or all, of the taxable years involved in the computation of the tax credit earned or tax credit carryforward to the taxable year, the separate tax credit carryforward of each spouse to the taxable year is computed in accordance with subdivisions 4.5.a through 4.5.c of this Rule but with the following modification: the tax credit of each spouse for a taxable year for which a joint return was made shall be considered to be that portion of the joint tax credit apportioned to the spouse in accordance with subdivision 4.4.f of this Rule.4. Recurrent Use of Joint Return. -- If a husband and wife making a joint return for any taxable year made a joint return for one or more, but not all, of the taxable years involved in the computation of a tax credit carryforward to the taxable years, the taxable year is computed in the manner set forth in paragraph 4.5.d.3 of this Rule. The tax credit carryforward is considered a joint tax credit carryforward to the taxable year.5. Joint Tax Credit Carryforwards. -- The joint tax credit carryforwards to any taxable year for which a joint return is made are all the tax credit carryforwards of both spouses to the taxable year.6. Divorce and Remarriage. -- It is the intent of this Rule to allow the carryforward of joint tax credits to joint returns and of separate tax credits to joint returns so long as the two individuals remain married in both the taxable year in which the tax credit is earned and the taxable year to which the tax credit is to be carried forward. Divorce and remarriage in joint return cases present special problems. A joint tax credit of one couple cannot be carried forward to another taxable year and applied to the tax liability of a different couple. In applying the rules for joint returns of husband and wife and separate returns of husband and wife and in cases involving divorce and remarriage, the principles established under the Internal Revenue Code and Treasury Regulations, and interpretations thereof, for net operating loss carryovers and investment tax credit carryforwards may be used by the West Virginia Department of Tax and Revenue as a guide.4.5.e. Tax Credits Not Assignable. -- No portion of the tax credit earned by any Investor is subject in any manner to alienation, sale, transfer or assignment, except that tax credits authorized by the Authority for investments by a partnership, an S corporation or a limited liability company may be apportioned pursuant to subdivision 4.4.f of this Rule.