03.04.13.05

.05 Claiming the Credit.

A. A business entity that is an individual or a corporation allowed the credit shall claim the credit against the State income tax by completing Form 500CR and attaching it to the applicable income tax return of the individual or corporation.

B. A business entity that is a pass-through entity allowed the credit shall complete Form 500CR and attach it to the Form 510 of the pass-through entity.

C. A business entity that is an organization that is exempt from taxation under §501(c)(3) or (4) of the Internal Revenue Code shall:

(1) Claim the credit against income tax due on unrelated business taxable income by completing Form 500CR and attaching it to its applicable income tax return; or

(2) Claim the credit against the withholding tax by:

(a) Estimating the amount of the tax credit for a qualifying ex-felon employee for the taxable year;

(b) Dividing that amount evenly over the number of periods for filing employer withholding returns;

(c) Reducing each payment amount reported to the Comptroller on the withholding tax return by the credit for that period; and

(d) Attaching a completed Form 500CR to the end-of-year reconciliation return Form MW508, reconciling the withholding tax paid and credit claimed to the total withholding tax liability reported for that year.