Montana Recycling Credit/Deduction

Recycling Credit/Deduction
Form RCYL (Obsolete)
CLEAR FORM

2019 Recycle Credit/Deduction

MONTANA
RCYL
Rev 08 19

15-32-603 and 15-32-610, MCA

Name (as it appears on your Montana tax return)
Social Security Number

OR

Federal Employer
Identification Number

Part I. Partners in a Partnership or Shareholders of an S Corporation
Enter your portion of the recycle credit here. See instructions.

$_______________________

Business Name of Partnership or S Corporation
Federal Employer
_____________________________________________________ Identification Number
Part II. Qualifications
1. Was the qualifying machinery/equipment purchased on or after the first day of the current taxable year
and before the last date of the current taxable year?................................................................................  Yes	  No
2. Was the machinery/equipment located and operating in Montana on the last day of the taxable year
for which the credit is claimed?..................................................................................................................  Yes	  No
If you answered No to questions 1 or 2, stop here. You do not qualify.
3. Is the machinery/equipment used in Montana to produce energy from reclaimed material?.....................  Yes	  No
If you answered Yes to question 3, stop here. You do not qualify.
4. Answer all of the following questions (a,b, and c). If you answer No to all of them, you do not qualify.
a. Is the machinery/equipment used in Montana primarily for collections or processing reclaimed material?......  Yes	  No
b. Is the machinery/equipment used in Montana primarily for the manufacturing of finished products
from reclaimed materials?...................................................................................................................... Yes	  No
c. Is the machinery/equipment used to treat soils contaminated by hazardous wastes?...........................  Yes	  No
If you do not qualify for the credit, go to Part V.
Part III. For equipment used in Montana
1. Please explain in detail the equipment purchased and how it is used and include a copy of any pamphlets or
other related supporting information__________________________________________________________________
_______________________________________________________________________________________________
2. Date of purchase_____________________________ (A copy of sales receipt is required.)
3. Cost of equipment (the total cost of equipment in Part III and Part IV may not exceed $1,000,000)......... $____________
4. Computation of credit (multiply the cost of the equipment by the following percentages):
Multiply the first $250,000 by 25% (0.25).................................................................... 	 ____________
Multiply the next $250,000 by 15% (0.15)................................................................... 	 ____________
Multiply the next $500,000 by 5% (0.05)..................................................................... 	 ____________
Total Credit..................... $____________

SSN

OR

FEIN

Part IV. For qualifying specialized mobile equipment used in and out of Montana
1.	 Please explain in detail the equipment purchased and how it is used. Include a copy of any pamphlets or
other related supporting information__________________________________________________________________
	

_______________________________________________________________________________________________

2.	 Date of purchase_____________________________ (A copy of sales receipt is required.)
3.	 Cost of equipment (the total cost of equipment in Part III and Part IV may not exceed $1,000,000)......... $____________
4.	 Number of days used in Montana.............................. 	 _____________
5.	 Total days used for the year...................................... 	 _____________
6.	 Divide amount on line 4 by amount on line 5............. 	 _____________
7.	 Computation of credit:
	
Multiply the ratio on line 6 by 25% (0.25); then multiply the first $250,000 of line 3.... 	 ____________
	

Multiply the ratio on line 6 by 15% (0.15); then multiply the next $250,000 of line 3.... 	 ____________

	

Multiply the ratio on line 6 by 5% (0.05); then multiply the next $500,000 of line 3..... 	 ____________

	

Total Credit..................... $____________

8.	 Add total credit from Part III to total credit from Part IV. This is your total credit available.
Enter the amount from this line on your tax return. The amount of credit may not exceed your tax liability...... $____________
Where to Report Your Credit
	
► Individuals: Form 2, Page 9, Nonrefundable Credits Schedule
	
► C corporations: Form CIT, Schedule C
	
► S corporations: Form PTE, Schedule II
	
► Partnerships: Form PTE, Schedule II
Part V. Deduction for purchase of recycled material
1.	 Type of recycled material purchased________________________________________________________________
2.	 Cost of recycled material...........................................................................................................................$____________
3.	 Multiply the amount on line 2 by 10% (0.10). This is the amount of your additional deduction.
Enter the amount from this line on your tax return..................................................................................... $____________
Where to Report Your Deduction
	
► Individuals: Form 2, Page 5, Montana Subtractions Schedule
	
► C corporations: Form CIT, page 3, line 3c
	
► S corporations: Form PTE, page 1, line 16a, and Montana Adjustment Worksheet
	
► Partnerships: Form PTE, page 1, line 16a, and Montana Adjustments Worksheet

If you file your Montana tax return electronically, you do not need to mail this form to us unless we ask you for a copy. When you file electronically, you
represent that you have retained the required documents in your tax records and will provide them upon the department’s request.

Form RCYL Instructions
Definitions
Collect refers to the collection and delivery of reclaimed materials
to a recycling or reclaimable materials processing facility.
Machinery or equipment refers to property used in the collection
or processing of reclaimable material or in the manufacturing of a
product from reclaimed material. This property has a depreciable
life of more than one year.
Reclaimable material refers to material that still has useful
physical or chemical properties after serving its original purpose
and that a consumer, processor or manufacturer would normally
treat as solid waste and dispose of.
Recycled material refers to a substance that is produced from
reclaimed material. The person who generated the reclaimed
material that was collected, processed or used to manufacture a
product may not claim the tax credit.

How do I claim my credit when I am a partner or
shareholder in a partnership or an S corporation that
invested in the depreciable property used for recycling?
Your partnership or S corporation will report the credit on its
informational tax return and provide you with your portion of the
credit on Montana Schedule K-1.
If you are a partner, your portion of the credit is based on the
same proportion you use to report your income or loss from the
partnership for Montana tax purposes unless the partners have
an agreement providing for a different allocation. If you are a
shareholder, your portion of the credit is based on the pro rata
share of the corporation’s cost of investing in the equipment.
For example, if your business is an S corporation with four
shareholders with equal ownership interest, each shareholder
would be entitled to 25% of the total credit.
Only a taxpayer that owns an interest either directly or through a
pass-through entity, such as a partnership or S corporation, and is
operating the equipment as the primary user on the last business
day of the year, may claim the credit.

Part I. Partners in a Partnership or Shareholders of an
S Corporation
If you complete Part I, do not complete Parts II, III or IV unless
you have additional credit amounts that you did not receive as
a distribution from a partnership or S corporation. If you are
a partner or shareholder in more than one partnership or S
corporation, you will need to complete a separate Form RCYL for
each entity you are receiving a credit from.

Parts II, III and IV. Qualifications and Credit Computation
This credit is available to qualifying C corporations, S corporations,
partnerships and individuals.

What costs do I use to calculate my recycling credit?
Use the costs of the investment that you have made in the
qualifying equipment that you used to calculate your depreciation
deduction for federal income tax purposes.
The tax credit is available only for machinery and equipment that
is depreciable (defined in IRS Code Section 167). The machinery
and equipment must be used in Montana, primarily for collecting
or processing reclaimable material for manufacturing finished
products from reclaimed material or for treating soils contaminated
by hazardous wastes.

The basis for the credit is generally the cost of the property before
any reduction you might have received from the seller by trading
in old equipment. If, however, you received a previous credit
on the equipment you traded in, the basis for the credit would
be the cost of the property after factoring in the reduction you
received on the trade-in. The basis includes the purchase price,
transportation cost (if paid by the purchaser) and the installation
cost before depreciation or other reductions. This credit does not
increase or decrease the basis for tax purposes.
Recycling machinery and equipment must be located and
operating in Montana on the last day of the taxable year for
which the credit is claimed. The machinery must be used to
collect, process, separate, modify or treat solid waste so that it
can be converted into a product that can be used in place of a
raw material or be used to treat soils contaminated by hazardous
wastes. This does not include transportation equipment unless it
is specialized to the point that it can only be used to collect and
process reclaimable material.

If the credit exceeds my tax liability, can I carry any
excess credit to another tax year?
No. The credit is limited to the amount of the taxpayer’s individual
or corporate income tax liability. Any excess credit is not refundable
and cannot be carried back or forward to other tax years.

Are there other limitations concerning the recycle
credit?
The Department of Revenue may disallow a credit resulting from
a sale or lease when the overriding purpose of the transaction is
not to collect or process reclaimable material or manufacture a
product from reclaimed material.
The credit may not be claimed for an investment in property used
to produce energy from reclaimed material.

What information do I have to include with my tax
return when I claim this credit?
Individuals and C corporations filing paper returns must include
a completed Form RCYL. S corporations and partnerships filing
paper information returns must include, in addition to a completed
Form RCYL, a separate statement identifying each owner and
their portion of the credit.
In addition, if you are claiming a credit in Part III or Part IV, you will
also need to provide a copy of the sales receipt, any pamphlets
on the equipment purchased, and any other information regarding
what the equipment is and how it is used in collecting, processing
or manufacturing reclaimed material.

Part V. Recycling Deduction Instructions
You may deduct an additional amount equal to 10% of your
expenditures for the purchase of recycled material that you could
otherwise deduct as a business-related expense in Montana. The
products have to contain recycled material at a level consistent
with industry standards or with standards established by the federal
Environmental Protection Agency (if those standards exist).
Include a statement from the manufacturer or supplier stating
the amount of recycled material contained in the material or
product purchased.
Administrative Rules of Montana: 42.4.2601 through 42.4.2605
Questions? Please call us at (406) 444-6900, or
Montana Relay at 711 for hearing impaired..