Oklahoma Investment/Jobs Credit (you will also need Form 511CR)

Investment/Jobs Credit (you will also need Form 511CR)
2023 Form 506 Investment New Jobs Credit
State of Oklahoma

FORM

Investment/New Jobs Credit

Provide with Oklahoma income tax return - Form 511, 511NR, 512, 512-S, 513, 513NR, or 514.
Please read the information on pages 2 and 3 carefully.
Name as Shown on Return

Social Security Number

Name of Business

506

2
0
2
3

Federal Employer Identification Number

Mfg. Sales/Exemption Permit (MSEP) (required for a manufacturing facility)

Provide the exact location of the manufacturing facility or web search portal establishment for which the credit is being claimed.
Also provide a full explanation of the type of manufacturing or activity in which you are engaged.

______________________________________________________________________________________________
______________________________________________________________________________________________
New Jobs Credit

Employee must be paid at least $7,000 in wages or salary subject to Oklahoma income tax withholding
in the year credit is claimed. Any new employees hired in subsequent years must be entered on a new Form 506.
Monthly average of qualified full-time employees
engaged in manufacturing for 4th quarter

Number of full-time employees
engaged in manufacturing
during base year

Taxable Year

Net increase
(decrease)

Total credit
for additional
employees

2022
Column 1 - Column 2
(see instructions)
(2)			
(3)			
(4)

(1)
2023
2024
2025
2026
2027

Notice: Credit may be claimed for either new jobs or investment, but not both. Complete both calculations.

Investment Credit

Investment in Oklahoma Qualified Depreciable Property placed into service in 2023. This investment must be at least $50,000.
AMOUNT INVESTED

REDUCTIONS (Sales, Transfers, Disposals)

RATE (1% OR 2%)

CREDIT ALLOWED (See instructions)

(5)

(6)

(7)

(8)
%
%
%
%
%

2023
2024
2025
2026
2027

Allowable Credit

Credits not used may be carried over, in order, to each of the fifteen years following the initial five-year period.
TAX YEAR
AVAILABLE

CREDIT FROM
COLUMN 4 OR 8

AMOUNT OF CREDIT USED
PRIOR YEARS

AMOUNT UTILIZED
CURRENT YEAR

CARRYOVER

(9)

(10)

(11)

(12)

(13)

2023
2024
2025
2026
2027
Total of Credit
Generated and Utilized $

$

$

$

The credit shall be allowed in each of the four subsequent tax years only if the level of new employees is maintained or qualified property is not sold, disposed of,
or transferred. New jobs credit cannot be claimed as a result of investment in equipment on which investment credit was claimed in previous years. This form must
be used for each of the four remaining years in which the credit is claimed.

Enterprise Zone

The credit is doubled (per 62 OS Sec. 690.4) if the facility is located in an enterprise zone. If you have questions about which areas in Oklahoma qualify as
Enterprise Zones, see the current listing at https://www.okcommerce.gov/doing-business/data-reports/maps-geographic-data/. For additional information, contact
Lesli Crofford with the Oklahoma Department of Commerce by email at [email protected] or by phone at 405.815.5120.

Check if located in an enterprise zone and provide County where facility is located: ________________________________________________
	

2020 Census Tract Number: ___________________________________________________________________________________________

2023 Form 506 - Page 2

Investment/New Jobs Credit Instructions
68 OS Sec. 2357.4 and Rule 710:50-15-74

General
Taxpayers who may claim the credit are individuals (including the pass-through credit from Partnerships and Sub-Chapter
S Corporations), Partnerships, Fiduciaries, Corporations and Sub-Chapter S Corporations. When this credit is claimed as
a pass-through from a partnership or Sub-Chapter S Corporation, the Form 506 must have the name of the Partnership
or Sub-Chapter S Corporation entered in the space provided at the top of the form. The pass-through entity shall provide
to each partner, shareholder or member, documentation showing their share of the credit. Such documentation must be
provided with the partner’s, shareholder’s or member’s income tax return when their share of the credit is being claimed.

New Jobs Credit
	

a)	 For Column 1 and Column 2, “full-time-employee” refers to job positions that pay at least $7,000 and in which
someone is employed during the final quarter regardless of whether the person occupying the job position has
actually earned $7,000.

	b)	
No employee may be included in Column 3, for which a credit is being claimed on any other Form 506.
	

c)	 No employee may be included in Column 3, if the increase in employees is the result of an investment in qualified
depreciable property for which an income tax credit has been claimed and allowed on any other Form 506.

	

d)	 No employee may be included in Columns 1 or 2, who is not actually engaged in manufacturing, including
support of the manufacturing of a product, or in a web search portal establishment. Employees engaged in
administrative, legal, accounting, clerical, sales, delivery, housekeeping and yard upkeep are not generally
considered support personnel and may not be included.

	

e)	 In the first year a credit is claimed based on jobs, a new employee may be included in Column 1 if the
employee’s wages are less than the $7,000 only if the following conditions are met:

		

1)	 The employee was hired in any of the last three quarters of the tax year, and

		

2)	 Has wages or salary that will result in annual paid wages in excess of $7,000, and

		

3)	 The taxpayer submits an affidavit stating that the employee’s position will be retained the following tax year
and result in the payment of wages in excess of $7,000.

	

f)	 A company that engages in manufacturing or processing may still qualify for the Oklahoma New Jobs Credit even
though they lease their employees through an employee leasing company. See Rule 710:50-15-74 for additional
guidance if the employees included in Columns 1 or 2 are leased through an employee leasing company.	

	 Column 1: 	Enter the average number of qualified full-time employees engaged in manufacturing, including support, or in
a web search portal establishment, employed in the State of Oklahoma during the 4th quarter and during the
taxable year who received at least $7,000 in wages or salary subject to Oklahoma income tax withholding. The
4th quarter is generally defined as the last quarter of your taxable year.
	 Column 2: 	Enter the average number of qualified full-time employees engaged in manufacturing, including support, or in
a web search portal establishment, employed in the State of Oklahoma during the 4th quarter and during the
base year who received at least $7,000 in wages or salary subject to Oklahoma income tax withholding. The
base year is the preceding taxable year before the increase in employees.
	 Column 3:	 Net increase or decrease in employees. Subtract Column 2 from Column 1. The credit, once established, is
also allowed in each of the four subsequent years if the level of new employees is maintained. For subsequent
tax years, Column 3 is limited to the number of new employees in Column 3 of the initial tax year. Provide
a schedule showing the computation of the employee count for all columns. Include name, social
security number, brief job description, annual wages for each employee and the date the new job was
created.
	 Column 4:	 The credit is $500* per new employee engaged in manufacturing, including support personnel, or in a web
search portal establishment. Multiply the amount of Column 3 by $500. This is the amount of the allowable
credit if you qualify for the New Jobs Credit.
	 *NOTE: 	

If the box on page 1 is checked, indicating the facility is located in an enterprise zone, the credit is $1,000 per
new employee.

2023 Form 506 - Page 3

Investment/New Jobs Credit Instructions
68 OS Sec. 2357.4 and Rule 710:50-15-74

Investment Credit
	 Column 5:	 Enter the amount invested in qualified depreciable property placed in service, in the State of Oklahoma,
during the taxable year. The investment must be at least $50,000 in qualified depreciable property used in
manufacturing or in a web search portal establishment in this state. The credit shall not be allowed if such
investment is the direct cause of a decrease in the number of employees. Qualified property shall be limited
to machinery, fixtures, equipment, buildings or substantial improvements thereto, placed in service in this state
during the taxable year. The investment in Oklahoma Qualified Property must be reduced when the property
is sold, disposed of or transferred. Provide a detailed schedule showing the description of the qualified
property, the amount invested (cost), and the date the assets were placed in service.
	 Column 6:	 Enter the amount by which the investment in Oklahoma Qualified Property was reduced for sales, transfers
and/or disposals.
	 Column 7:	 Enter 1% unless the box on page 1 is checked indicating the facility is located in an enterprise zone. If the box
is checked, enter 2%.
	 Column 8:	 The credit is 1% (2% if located in an enterprise zone) of the cost of the qualified depreciable property. Subtract
Column 6 from Column 5 and multiply the difference by Column 7. This is the amount of the allowable credit if
you qualify for the Investment Credit.

Allowable Credit - Carryover **
	 Column 10:	 The credit is allowed for the greater of New Jobs Credit or Investment Credit, but not both. Enter the greater
amount from Column 4 or Column 8. Once the type of allowable credit is determined in the first year, that
type of credit will be used in all remaining tax years on that particular Form 506.
	 Column 11:	 Enter the amount of credit used in a prior year
	 Column 12:	 Enter the amount of credit used this tax year.
	 Column 13:	 Enter the amount of credit not used this tax year. Any credit claimed and not used in any taxable year may
be carried over, in order, to each of the four years following the year of qualification and to the extent not
used in those years, in order, to each of the fifteen years following the initial five-year period. To the extent
not used, any credit from qualified depreciable property may be utilized in subsequent tax years after the
initial 20-year period. Provide schedule showing all carryover credits by tax year claimed and used.
** If a C corporation that otherwise qualified for the credits under subsection A of 68 OS Sec. 2357.4 subsequently changes
its operating status to that of a pass-through entity that is being treated as the same entity for federal tax purposes, the credits
will continue to be available as if the pass-through entity had originally qualified for the credits subject to the limitations of
such Section. The pass-through entity shall provide, to each member, documentation showing their share of the credit. Such
documentation must be provided with the member’s income tax return when their share of the credit is being claimed.

Notices:
• If the business entity manufactures any product described in Division D of Part I of the Standard Industrial Classification
Manual, latest revision, they may be entitled to double their Investment/New Jobs Credit. To qualify for the double credit,
the total cost of qualified depreciable property used in the manufacture of such product must be at least $40 million and
be placed in service in this state within three years from the date of the initial qualifying expenditure. The credit for each
new employee in Column 4 will be $1,000, and the rate for qualified depreciable property in column 6 will be 2%. Enter the
amount of doubled credit in Column 4 and/or Column 7 and note the reason for the double credit.
• If you receive an incentive payment under one of the Quality Jobs incentives (such as 68 OS Sec. 3601, 3801, 3901 or
3911) or under one of the Quality Investment incentives (such as 68 OS Sec. 4101 or 4201), you may not be eligible for
this credit.
• Credit may not be claimed during the period of time that any withholding taxes are being paid to the Community Economic Development Pooled Finance Revolving Fund or in any manner used for the payment of principal, interest or other
costs associated with any obligation issued by the Oklahoma Development Finance Authority in accordance with the
“Oklahoma Community Economic Development Pooled Finance Act”. (62 OS Sec. 891.12)
• Credit may not be claimed for jobs created or capital investments made as a direct result of bond proceeds that are provided in accordance with the “Oklahoma Quality Jobs Incentive Leverage Act” pursuant to a second irrevocable election.
(68 OS Sec. 3651)
• Credit may not be claimed for investment or job creation in electric power generation by means of wind as described by the
North American Industry Classification System, No. 221119.
• Tax credits transferred or allocated must be reported on Oklahoma Tax Commission (OTC) Form 569. Failure to file
Form 569 will result in the affected credits being denied by the OTC pursuant to 68 OS Sec. 2357.1A-2.