Idaho Idaho Small Employer Investment Tax Credit

Idaho Small Employer Investment Tax Credit
Form 83, Small Employer Investment Tax Credit and Instructions 2023
Form 83
Small Employer Investment Tax Credit
Names as shown on return

2023

Social Security number or EIN

Qualifying for the Credit
You can claim the small employer investment 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. Complete Form 49 for any investments that qualify for the regular
investment tax credit.
Credit Available Subject to Limitation
1. Amount of qualified investments acquired during the tax year.
Include a complete list of qualified investments ......................................................................... 1
2. Amount of investments you claimed the property tax exemption for. Include Form 49E ...........
2
3. Subtract line 2 from line 1. This is the amount of qualified investments
you may earn the small employer investment tax credit on .......................................................
3
4. Credit earned. Multiply line 3 by 3.75% .....................................................................................
4
5. Pass-through share of credit from an S corporation, partnership, trust, or estate .....................
5
6. Credit received through unitary sharing. Include a schedule .....................................................
6
7. Carryover of small employer investment tax credit from prior years ..........................................
7
8. Carryover eliminated due to recapture in 2023. Enter the amount from Form 83R,
line 13. Include Form 83R ..........................................................................................................
8
9. Credit distributed to shareholders, partners, or beneficiaries ....................................................
9
10. Credit shared with unitary affiliates ............................................................................................ 10
11. Total credit available subject to limitations. Add lines 4 through 7, then
subtract lines 8 through 10 ......................................................................................................... 11
12.
13.
14.
15.
16.
17.
18.
19.
20.
21.
22.
23.
24.
25.

Enter the Idaho income tax from your tax return ........................................................................
Credit for income tax paid to other states ................................................ 13
Credit for contributions to Idaho educational entities ............................... 14
Investment tax credit. Include Form 49 ................................................... 15
Credit for contributions to Idaho youth and rehabilitation facilities .......... 16
Credit for production equipment using post-consumer waste ................. 17
Promoter-sponsored event credit ............................................................ 18
Credit for Idaho research activities from Form 67, line 29 ....................... 19
Broadband equipment investment credit from Form 68, line 18 .............. 20
Reserved ................................................................................................. 21
Add lines 13 through 21 ..............................................................................................................
Tax available after other credits. Subtract line 22 from line 12 ................ 23
62.5% of tax. Multiply line 12 by 62.5% ................................................... 24
Credit allowable subject to limitation of tax. Enter the smaller of:
a. the amount from line 11, or
b. $750,000 ............................................................................................ 25
26. Total credit allowed on current year tax return. Enter the smaller amount
from lines 23, 24, or 25 here and on Form 44, Part I, line 6 .......................................................
Credit Carryover
27. Total credit available subject to limitations. Enter the amount from line 11 ................................
28. Credit allowed. Enter the amount from line 26....................................................................................
29. Credit carryover to future years. Subtract line 28 from line 27. Enter the amount here
and on Form 44, Part I, line 6 .....................................................................................................
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22

26
27
28
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Form 83 — Instructions
Small Employer Investment Tax Credit
General Instructions
Use Form 83 to calculate the Idaho small employer
investment tax credit (SE-ITC) earned or allowed.
Each member of a unitary group of corporations
that earns or is allowed the credit must complete a
separate Form 83.
The SE-ITC is allowed for property that qualifies for
the 3% investment tax credit (ITC). If you’re claiming
the SE-ITC, you can’t claim the ITC on the same
property.
Qualifying Taxpayers
To qualify for the SE-ITC, you must certify by filing
Form 89SE that you’ll meet the tax incentive criteria
at the project site during the project period. If you
haven’t filed Form 89SE with the Tax Commission
or you’ve been notified that you don’t qualify for
the small employer incentives, you can’t claim this
credit. If you don’t qualify for the SE-ITC, you may
be eligible to claim the ITC. See Idaho Form 49.
Qualifying Property
If you’re a qualifying taxpayer, property that would
qualify for the ITC qualifies for the SE-ITC. The
property doesn’t have to be located at the project
site to qualify. However, it does have to be placed in
service during the project period.
Property that qualifies for the ITC generally follows
the definition of qualified property found in the
Internal Revenue Code (IRC), Sections 46 and 48
as in effect before 1986. The property must have a
useful life of three years or more and be property
you’re allowed to depreciate or amortize. Qualifying
property includes the following property used in a
trade or business:
•	 Tangible personal property – machinery and
equipment
•	 Other tangible property – property used as
an integral part of manufacturing, production,
extraction, or furnishing transportation,
communications, or utility services, or research
facilities and bulk storage facilities used in
connection with those businesses
•	 Elevators and escalators
•	 Single-purpose agricultural or horticultural
structures
•	 Qualified timber property
•	 Petroleum storage facilities
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•	 Qualified broadband equipment as approved by
the Idaho Public Utilities Commission
Nonqualifying Property
Property that doesn’t qualify includes:
•	 Buildings and their structural components (this
property may qualify for the small employer real
property improvement tax credit – see Idaho
Form 84)
•	 Property used in lodging facilities that rent 50% or
more of their lodging units for periods of 30 days
or longer, such as apartment houses or rental
homes. (This doesn’t apply to hotels and motels
that rent more than half their units for periods
of less than 30 days.) Nonqualifying property
includes property used in the living quarters,
lobby furniture, office equipment, and laundry
and swimming pool facilities, but excludes certain
coin-operated machines.
•	 The cost of property expensed under IRC
Section 179
•	 Used property not acquired by purchase
•	 Property that’s either nondepreciable or has a
useful life of less than three years
•	 The portion of property used for personal use
•	 Used property in excess of $150,000 (total of all
properties)
•	 Horses
Idaho Exceptions to IRC Sections 46 and 48
Idaho law specifically excludes the following property
from qualifying for the Idaho ITC:
•	 Property not used in Idaho
•	 Vehicles under 8,000 pounds gross vehicle
weight
Property Used Both In and Outside of Idaho
If property is used both in and outside Idaho, compute
the qualified investment for all property using one of
the following methods:
1.	 Percentage-of-Use Method – Multiply the
investment in each asset by a fraction where
Idaho use is the numerator and total use is the
denominator. Use can be measured by machine
hours, mileage, or any other method that
accurately reflects the use.
2.	 Property Factor Numerator Method – Use
the amount included in the Idaho property
numerator for each asset.
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Form 83 — Instructions

Carryover Periods
SE-ITC that was earned but not used against
tax may be carried forward for 14 tax years. For
purposes of the carryover period, a short tax year
counts as one tax year.
Election to Claim Two-year Property Tax
Exemption Instead of ITC
If you placed personal property in service that
qualifies for the ITC, you may elect to exempt this
property from your property tax. You aren’t eligible
for the election if your rate of charge or rate of
return is regulated or limited by federal or state
law. The exemption from the property tax is for
two years. After the two years, you must pay any
applicable property tax. You can’t claim the SE-ITC
for any property that you elect to exempt from
property tax.
The election is available if you had negative Idaho
taxable income in the second tax year before the
tax year when the property was placed in service.
Negative Idaho taxable income must have been
computed without any carryover or carryback of net
operating losses.
Make the election on Form 49E and file it with
the operator’s statement or personal property
declaration. Include a copy of the election form with
the original income tax returns for the tax years
when the property was placed in service.
Recapture
Compute recapture if you sell or otherwise dispose
of the property or it no longer qualifies for the
SE-ITC before it’s been in service for five full years.
Compute recapture if you claimed the SE-ITC in an
earlier year and didn’t meet the tax incentive criteria
you certified to on Idaho Form 89SE.
File Form 83R if you claimed the SE-ITC. File
Form 49R if you claimed the ITC or Form 49ER if
you claimed the property tax exemption.

Specific Instructions

2023

(continued)

Don’t include any property placed in service before
the date the project period began.
Line 2. Enter the amount of qualified investments for
which you claimed the property tax exemption. This
exemption is allowed instead of earning the SE-ITC.
Include applicable Forms 49E.
Line 5. Enter the amount of the SE-ITC that’s being
passed through by S corporations, partnerships,
trusts, or estates in which you have an interest. This
amount is reported on Form ID K-1, Part VII, line 42 or
Form ID K-1, Part XI, line 66 (Composite/ABE).
Line 6. If you’re a member of a unitary group, enter
the amount of credit you received from another
member of the unitary group.
Line 7. Enter the carryover computed on your 2022
Form 83, line 29.
Line 9. If you’re an S corporation, partnership, trust, or
estate, enter the amount of credit that passed through
to shareholders, partners, or beneficiaries.
Line 10. If you’re a member of a unitary group, enter
the amount of credit you earned that you elect to share
with other members of your unitary group. Before you
can share your credit, you must use the credit up to
the allowable limitation of your tax liability.
Corporations claiming the SE-ITC must provide a
calculation of the credit earned and used by each
member of the combined group. The schedule must
clearly identify the shared credit and the computation
of any credit carryovers.
Credit Limitations
The SE-ITC is limited to the smaller of $750,000,
62.5% of the tax liability, or the Idaho income tax
after allowing all other tax credits that can be claimed
before the SE-ITC.
The following credits must be applied to the tax before
the SE-ITC:
1.	 Credit for income tax paid to other states

Instructions are for lines not fully explained on the form.

2.	 Credit for contributions to Idaho educational
entities

Credit Available Subject to Limitation

3.	 Investment tax credit

Line 1. Include a list of all property you acquired
and placed in service during the tax year that
qualifies for the SE-ITC. List each item of property
and its location, your basis in the item, whether the
item is new or used, and the date placed in service.
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4.	 Credit for contributions to Idaho youth and
rehabilitation facilities
5.	 Credit for production equipment using
post-consumer waste

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Form 83 — Instructions

6.	 Promoter-sponsored event credit

2023

(continued)

If you’re an S corporation or partnership and you’ve
elected to be an ABE, this amount also needs to be
distributed to the shareholders or partners on their
Form ID K-1.

7.	 Credit for Idaho research activities
8.	 Broadband equipment investment credit
Line 12. Enter the amount of your Idaho income
tax. This is the computed tax before subtracting any
credits or adding the permanent building fund tax or
any other taxes.
Line 13. Enter the credit for income tax paid
to other states from Form 39R, Form 39NR, or
Form 66. This credit is available only to individuals,
trusts, or estates.

Credit Carryover
Line 29. The amount of credit available that exceeds
the total credit allowed on the current year tax return
can be carried forward up to 14 tax years. Enter this
amount on Form 44, Part I, line 6 in the Carryover
column.

Line 26. Enter the smallest amount from lines 23, 24,
or 25 on line 26. Enter this amount on Form 44, Part I,
line 6 in the Credit Allowed column.

Contact us:

In the Boise area: (208) 334-7660 | Toll free: (800) 972-7660
Hearing impaired (TDD) (800) 377-3529
tax.idaho.gov/contact
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