PDF document

- 1 -

Form 85
2022
Small Employer New Jobs Tax Credit
Names as shown on return Social Security number or EIN

Qualifying for the Credit
You can claim the small employer new jobs tax credit if you’ve certified on Form 89SE that you’ll meet all the following tax
incentive criteria at the project site during the project period:
• Capital investment in new plant and building facilities of at least $500,000
• Increased employment by at least 10 new employees, each earning at least $19.23 per hour and receiving health
benefits
• For new employment increases above the 10 new employees, the average wages of the additional new employees
are at least $15.50 per hour worked. See instructions for who’s included in this calculation.
If you haven’t filed Form 89SE with the Tax Commission or have been notified that you don’t qualify for the small employer
incentives, you don’t qualify for this credit.
Credit Available Subject to Limitation
1. The average number of qualifying employees during the tax year ............................................ 1
2. The average number of qualifying employees during the three
preceding tax years ................................................................................. 2
3. The average number of qualifying employees during the
preceding tax year ................................................................................... 3
4. Subtract the greater of line 2 or 3 from line 1 and enter the difference. This is
the number of qualifying new employees. The amount must equal or exceed one ................... 4
5. Number of qualifying new employees listed on line 4 whose annual
salary during the tax year the credit was earned was:
a. greater than $24.04 per hour worked but equal to or less than an
average rate of $28.85 per hour worked ............................................ 5a
b. greater than an average rate of $28.85 per hour worked but equal
to or less than an average rate of $36.06 per hour worked ............... 5b
c. greater than an average rate of $36.06 per hour worked but equal
to or less than an average rate of $43.27 per hour worked ............... 5c

d. greater than an average rate of $43.27 per hour worked .................. 5d
$1,500 Credit
6. Multiply the number on line 5a by $1,500 ................................................................................... 6
$2,000 Credit
7. Multiply the number on line 5b by $2,000 ................................................................................... 7
$2,500 Credit
8. Multiply the number on line 5c by $2,500 ................................................................................... 8
$3,000 Credit
9. Multiply the number on line 5d by $3,000 ................................................................................... 9
10. Add lines 6 through 9. This is your total small employer new jobs tax credit
earned this tax year .................................................................................................................... 10
11. Pass-through share of credit from an S corporation, partnership, trust, or estate ...................... 11
12. Credit received through unitary sharing. Include a schedule ............................................................. 12
13. Carryover of small employer new jobs tax credit from prior years .............................................. 13
14. Carryover eliminated due to recapture in 2022. Enter the amount from
Form 85R, line 11. Include Form 85R ......................................................................................... 14
15. Credit distributed to shareholders, partners, or beneficiaries ..................................................... 15
16. Credit shared with unitary affiliates ............................................................................................. 16
17. Total credit available subject to limitations. Add lines 10 through 13,
then subtract lines 14 through 16 ............................................................................................... 17
EFO00017 03-31-2022 Page 1 of 2

- 2 -

Form 85 2022 (continued)

18. Enter the Idaho income tax from your tax return ........................................................................ 18
19. Credit for income tax paid to other states ................................................ 19
20. Credit for contributions to Idaho educational entities .............................. 20
21. Investment tax credit from Form 49, Part II, line 8 .................................. 21
22. Credit for contributions to Idaho youth and rehabilitation facilities .......... 22
23. Credit for production equipment using post-consumer waste ................. 23
24. Promoter-sponsored event credit ............................................................ 24
25. Credit for Idaho research activities from Form 67, line 29 ....................... 25
26. Broadband equipment investment credit from Form 68, line 18 .............. 26
27. Reserved .................................................................................................27
28. Small employer investment tax credit from Form 83, line 28 .................. 28
29. Small employer real property improvement tax credit from
Form 84, line 26 ...................................................................................... 29
30. Add lines 19 through 29 .............................................................................................................. 30
31. Tax available after other credits. Subtract line 30 from line 18 ........................................................... 31
32. Multiply line 18 by 62.5% ............................................................................................................ 32
33. Total credit allowed on current year tax return. Enter the smaller amount from
lines 17, 31 or 32 here and on Form 44, Part I, line 8 ................................................................ 33
Credit Carryover
34. Total credit available subject to limitations. Enter the amount from line 17 ................................ 34
35. Credit allowed. Enter the amount from line 33 ........................................................................... 35
36. Credit carryover to future years. Subtract line 35 from line 34. Enter the amount
here and on Form 44, Part I, line 8 ............................................................................................. 36

EFO00017 03-31-2022 Page 2 of 2

- 3 -

                      Form 85 — Instructions
                      Small Employer New Jobs Tax Credit                                             2022

General Instructions                                    •  The average number of qualifying employees for 
Use Form 85 to calculate the Idaho small employer       the preceding tax year
new jobs tax credit (SE-NJTC) earned or allowed.        The number of qualifying new employees must be 
Each member of a unitary group of corporations          rounded down to the nearest whole number.
that earns or is allowed the credit must complete a 
separate Form 85.                                       Credit Rates
If the project period began during this tax year and    To determine the credit allowed, each qualifying new 
didn’t cover a period of at least nine months, you      employee must be identified based on their annual 
don’t qualify for the SE-NJTC this year.                salary as shown in the following table.

Qualifying Taxpayers                                    Carryover Periods
To qualify for the SE-NJTC, you must certify by         The SE-NJTC earned but not used against tax may 
filing Form 89SE that you’ll meet the tax incentive     be carried forward for 10 tax years. For purposes of 
criteria at the project site during the project period. the carryover period, a short tax year counts as one 
If you haven’t filed Form 89SE with the Tax             tax year.
Commission or you’ve been notified that you don’t 
qualify for the small employer incentives, you can’t    If the annual      But equal to or   Then the credit 
                                                        salary is greater  less than an      earned is...
claim this credit.
                                                        than...            average rate of...
Qualifying New Employees for the SE-NJTC                $24.04 per hour    $28.85 per hour     $1,500
To qualify for the credit, the new employee must:       An average rate of 
                                                                           $36.06 per hour     $2,000
                                                        $28.85 per hour
• Qualify as a new employee for purposes of the 
                                                        An average rate of 
  small employer tax incentive criteria discussed                          $43.27 per hour     $2,500
                                                        $36.06 per hour
  above
                                                        An average rate of 
                                                                                               $3,000
•  Earn more than $24.04 per hour worked and            $43.27 per hour
•  Have worked a minimum of nine months during 
  the tax year in which the credit is claimed           Recapture
                                                        Compute recapture if you don’t maintain the required 
Calculating the Credit
                                                        level of qualified new employees for five full years from 
Use the Employer Quarterly Unemployment                 the date the project period ends.
Insurance Tax Reports and the Unemployment 
                                                        Also, compute recapture if you claimed the SE-NJTC 
Insurance Wage Reports filed with the Idaho 
                                                        in an earlier year and don’t meet the tax incentive 
Department of Labor to compute the number of 
                                                        criteria you certified to on Idaho Form 89SE.
employees. Only those employees who meet 
the definition of “new employee” can be included        If you claimed the SE-NJTC and recapture is now 
when computing the SE-NJTC. Don’t include any           required, file Form 85R.
employees who don’t work primarily at the project 
site. Keep records to support the computations.         Specific Instructions
The number of employees employed primarily at           Instructions are for lines not fully explained on the form.
the project site during a tax year is the average of 
the number of employees reported to the Idaho           Credit Available Subject to Limitation
Department of Labor during the 12 months of the         Line 1. Determine the average number of qualifying 
tax year. If the project period began during the        employees during the tax year by adding the number 
tax year, the number of employees for the year is       of qualifying employees reported for each month 
the average number actually employed during the         on your Idaho Employer Quarterly Unemployment 
months of the project period. You can’t earn the        Insurance Tax Reports and dividing that amount by 
credit if the project period didn’t cover at least nine the number of months of operation during the tax year. 
months during the first tax year. These employees       Don’t include any employees who weren’t employed 
may qualify for the credit the next year.               primarily at the project site.
The number of qualifying new employees is the           Line 2. Determine the average number of qualifying 
increase in the number of qualifying employees for      employees during the three preceding tax years by 
the current tax year over the greater of the following: dividing the total of the average number of qualifying 
•  The average number of qualifying employees           employees reported on your Idaho Employer 
  for the three preceding tax years or
EIN00017 03-31-2022                                                                                  Page 1 of 2

- 4 -

Form 85 — Instructions 2022 (continued)

Quarterly Unemployment Insurance Tax Reports for Corporations claiming the SE-NJTC must provide
each preceding year by three. If the project period a calculation of the credit earned and used by each
existed less than three tax years, use the number of member of the combined group. The schedule must
tax years in operation. clearly identify shared credit and the computation of
any credit carryovers.
Line 3. Determine the average number of qualifying
employees during the preceding tax year by adding
Credit Limitations
the number of qualifying employees reported for
each month on your Idaho Employer Quarterly The SE-NJTC is limited to the smaller of 62.5% of
Unemployment Insurance Tax Reports and dividing the tax liability or the Idaho income tax after allowing
that amount by the number of months of operation all other tax credits that may be claimed before the
during the preceding tax year. Enter zero if the SE-NJTC.
project period covered less than nine months the The following credits must be applied to the tax before
preceding tax year. the SE-NJTC:
Line 4. No credit is allowed unless the number on 1. Credit for income tax paid to other states
this line equals or exceeds one. If it’s more than 2. Credit for contributions to Idaho educational
one, the number is rounded down to the nearest entities
whole number. 3. Investment tax credit
Line 5. To compute lines 5a through 5d, identify 4. Credit for contributions to Idaho youth and
each individual who’s a qualifying new employee rehabilitation facilities
and the annual average salary that the individual 5. Credit for production equipment using
earned during the tax year. Enter the number of post-consumer waste
qualifying new employees according to their annual 6. Promoter-sponsored event credit
salary earned for the tax year. The amounts listed 7. Credit for Idaho research activities
on lines 5a through 5d can’t exceed the number on
8. Broadband equipment investment credit
line 4.
9. Small employer investment tax credit
Line 11. Enter the amount of the SE-NJTC 10. Small employer real property improvement tax
that’s being passed through by S corporations, credit
partnerships, trusts, or estates in which you have
an interest. Report this amount on Form ID K-1, Line 18. Enter the amount of your Idaho income tax.
Part VII, line 49. This is the computed tax before adding the permanent
building fund tax or any other taxes or subtracting any
Line 12. If you’re a member of a unitary group, credits.
enter the amount of credit you received from
another member of the unitary group. Line 19. Enter the credit for income tax paid to other
states from Forms 39R, 39NR, or 66. This credit is
Line 13. Enter the carryover from your 2021 available only to individuals, trusts or estates.
Form 85, line 36.
Line 33. Enter the smallest amount from lines 17, 31,
Line 15. If you’re an S corporation, partnership, or 32 on line 33. Enter this amount on Form 44, Part I,
trust, or estate, enter the amount of credit that line 8 in the Credit Allowed column.
passed through to shareholders, partners, or
beneficiaries. Credit Carryover
Line 16. If you’re a member of a unitary group, Line 36. The amount of credit available that exceeds
enter the amount of credit you earned that you elect the total credit allowed on the current year tax return
to share with other members of your unitary group. may be carried forward up to 10 tax years. Enter this
Before you can share your credit, you must use amount on Form 44, Part I, line 8 in the Carryover
the credit up to the allowable limitation of the tax column.
liability.

Contact us:
In the Boise area: (208) 334-7660 |Toll free: (800) 972-7660
Hearing impaired (TDD) (800) 377-3529
tax.idaho.gov/contact
EIN00017 03-31-2022 Page 2 of 2

PDF file checksum: 455127522

(Plugin #1/9.12/13.0)