Sec. 5-3.5. Examples

Example 1:

A calendar year taxpayer acquired property which qualified for the investment tax credit on June 2, 1981 for $100,000 with a useful life of 10 years. The taxpayer's average number of employees within New York State are as follows:

1980	1982	1983	1984
200	205	201	202

The taxpayer would be allowed credits against the tax due based on such property as follows:

1981	—	Investment tax credit (5% × $100,000)	$5,000
1982	—	Employment incentive tax credit (50% × $5,000)	$2,500
1983	—	No credit	- 0 -
1984	—	Employment incentive tax credit (50% × $5,000)	$2,500

Example 2:

Assume the same facts as in Example 1 except that the property was disposed of or ceased to be in qualified use, as described in section 5-2.8 of this Part, on December 30, 1981. The taxpayer would be allowed credits against the tax due based on such property as follows:

1981	—	Investment tax credit (5% × $100,000 × 7/120)	$291.67
1982	—	Employment incentive tax credit (50% × $291.67)	145.84
1983	—	No credit	- 0 -
1984	—	Employment incentive tax credit (50% × $291.67)	145.84

Example 3:

Assume the same facts as in Example 1 except that the property was disposed of or ceased to be in qualified use, as described in section 5-2.8 of this Subpart, on May 31, 1986. The taxpayer would be allowed credits against the tax the same as in Example 1, but it would have to compute the total amount of credits to be added back as follows:

Investment tax credit (60/120 × $5,000)	$2,500
Employment incentive tax credit
(50% × $2,500 × 2 years)	2,500
Total amount to be added to the tax otherwise due for taxable year 1986	$5,000

Example 4:

X Corporation was incorporated in New York State on March 15, 1981, and elected to file its return on a calendar-year basis. On July 1, 1981, it acquired $100,000 worth of property which qualified for the investment tax credit. The taxpayer had an allowable investment tax credit of $5,000 for the calendar year 1981 and had an average of 100 employees within New York State during 1981. During 1982, the average number of employees within New York State was 104. The taxpayer is entitled to an employment incentive tax credit of $2,500 for the calendar year 1982.

Example 5:

Y Corporation, incorporated in California on June 1, 1970, files its Federal income tax return on a calendar-year basis and first became subject to tax in New York State on August 1, 1981. The taxpayer has an allowable investment tax credit of $10,000 for the calendar year 1981 and had an average of 200 employees within New York State during 1981. During 1982, the average number of employees within New York State was 203. The taxpayer is entitled to an employment incentive tax credit of $5,000 for the calendar year 1982.