Idaho State Tax Commission Forms & Instructions
Investment Tax Credit Instructions 2025
preamble
Names as shown on return Social Security number or EIN
Part I - Credit Available Subject to Limitation
Column A - New Column B - Used 1. a. Amount of qualified investments acquired during the tax year. Include a detailed list .............................................................................. 1a b. Amount of investments you claimed the property tax exemption on. Include applicable Form 49Es ................................................................... 1b c. Subtract line 1b from line 1a. This is the amount of qualified investments you can earn the investment tax credit (ITC) on .................... 1c 2. Pass-through share of qualified investments from an S corporation, partnership, trust, or estate: a. Pass-through Entity Name b. Pass-through Entity EIN c.
Part II - Limitation
1. Enter the Idaho income tax from your return .......................................................................................... 1 2. Credit for income tax paid to other states ............................................................................................... 2 3. Idaho income tax after credit for income tax paid to other states. Line 1 minus line 2 ........................... 3 4. Part-year resident Food Tax Credit ......................................................................................................... 4 5. Credit for contributions to Idaho educational entities .............................................................................. 5 6. Tax available after credits. Line 3 minus lines 4 and 5 .................................... 6 7. 50% of tax after credit for income tax paid to other states. Multiply line 3 by 50% 7 8. Investment tax credit available. Enter the amount from Part I, line 11 ............ 8 9. ABE Investment Tax Credit. Include Form 49ABE .......................................... 9 10. Investment tax credit allowed. Add the amount from line 9 to the smallest amount from line 6, 7, or 8. Enter here and on Form 44, Part 1, line 1 ............................................................................................... 10 Investment Tax Credit
Form 49 - Instructions
Investment Tax Credit • The portion of property used for personal use • Used property in excess of $150,000 (total of all properties) • Horses • Property not used in Idaho • Vehicles under 8,000 pounds gross vehicle weight (GVW) • Property previously used by the same taxpayer or an affiliate of the taxpayer Property Used Both In and Outside Idaho If property is used both in and outside Idaho, compute the qualified investment for all such 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 correctly included in the Idaho property numerator for each asset. The amount computed in method #2 generally will be the same as that computed in method #1 unless your business uses the Multistate Tax Commission's special-industry regulations to compute its factors. Carryover Periods Compute the ITC carryover on Form 49C. For credit earned in tax years beginning on or after January 1, 2000, the credit carryover is limited to 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. If federal or state law regulates or limits your rate of charge or rate of return, you aren't eligible for the election. 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 ITC for any property that you elect to exempt from property tax.
General Instructions
Use Form 49 to calculate the investment tax credit (ITC) earned or allowed. Each member of a unitary group of corporations that earns or is allowed the credit must complete a separate Form 49. Qualified Depreciable Property and Nonqualifying property Idaho 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 that 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 • Qualified broadband equipment as approved by the Idaho Public Utilities Commission Nonqualified Property Property that doesn't qualify includes: • Buildings and their structural components • 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 • The cost of property expensed under IRC section 179 • Used property not acquired by purchase
Form 49 - Instructions 2025 (continued) The election is available if you had negative Idaho taxable income in the second preceding tax year from 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 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 if it no longer qualifies for the ITC before it's been in service for five full years. File Form 49R if you claimed the ITC. File Form 49ER if you claimed the property tax exemption.
Specific Instructions Instructions are for lines not fully explained on the form.
Part I - Credit Available Subject to Limitation
Line 1a. Include a list of all property you acquired and placed in service during the tax year that qualifies for the ITC. The list should identify: • 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 The basis of qualified property is the Idaho adjusted basis computed without bonus depreciation. Don't include any property you're expensing under IRC section 179. Column A Enter the amount of qualified new investments placed into service in the current year. Column B Enter the amount of qualified used investments placed into service in the current year. Line 1b. This exemption is allowed instead of earning the ITC. Include applicable Form 49Es. Column A Enter the amount of qualified new investments you claimed the property tax exemption on. Column B Enter the amount of qualified used investments you claimed the property tax exemption on. Line 2. Include a list of all ITC that's being passed through by S corporations, partnerships, trusts, or estates that you have an interest in. This amount is reported on Form ID K-1, Part X. Identify each entity by name, EIN, and the share of new and used qualified investments being passed through. Line 3. Used property is limited to $150,000. If the total qualified used investments is greater than $150,000, enter $150,000 in Column B. Line 4. If you're an S corporation, partnership, trust, or estate: Column A Enter the amount of qualified new investments that passed through to shareholders, partners, or beneficiaries reported on Form ID K-1, Part X, line 54. Column B Enter the amount of qualified used investments that passed through to shareholders, partners, or beneficiaries reported on Form ID K-1, Part X, line 55. Line 7a. Enter the amount of credit passed through from an ABE that is not being distributed to other taxpayers. • Individuals and C corporations ▪ Enter the amount of credit passed through from an ABE • Trusts and Estates ▪ Enter the amount of credit passed through from an ABE that is not being distributed to beneficiaries • S corporations or partnerships (Composite Return) ▪ Enter the amount of credit passed through from an ABE that is not being distributed Line 7b. Enter the amount of credit passed through from an ABE that is being distributed to other taxpayers. Enter this amount on Form ID K-1, Part XI, line 60. • Trusts and Estates ▪ Enter the amount of credit passed through from an ABE that is being distributed to beneficiaries
Form 49 - Instructions 2025 (continued) Contact us: In the Boise area: (208) 334-7660 | Toll free: (800) 972-7660 Hearing impaired (TDD) (800) 377-3529 • S corporations or partnerships (Composite Return) ▪ Enter the amount of credit passed through from an ABE that is being distributed to resident shareholders or partners • Non ABE and Non Composite S corporations or partnerships ▪ Enter the amount of credit passed through from an ABE that is being distributed to shareholders or partners Line 8a. Enter the ITC carryover from prior years not being distributed to other taxpayers. Compute the amount on Form 49C or on a separate schedule. Include a copy of Form 49C or the schedule. See General Instructions for the carryover period allowed. • Individuals, trusts, estates, or C corporations ▪ Enter the amount of the ITC carryover from prior years • S corporations or partnerships (Composite Return) ▪ Enter the amount of the ITC carryover from prior years Line 8b. Enter the ITC carryover from prior years being distributed to other taxpayers. Enter this amount on Form ID K-1, Part XI, line 60. • Non ABE and Non Composite S corporations or partnerships ▪ Enter the amount of the ITC carryover from prior ABE or composite years to be distributed to shareholders or partners Line 9. If you're a member of a unitary group, enter the amount of credit you received from another member of the unitary group. Include a schedule detailing the entity name, EIN, and amount of ITC received. Line 10. If you're a member of a unitary group, enter the amount of qualifying investments 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 ITC must provide a detailed schedule showing the name, EIN, and amount of ITC used by each member of the combined group. The schedule must clearly identify shared investments and the computation of any credit carryovers.
Part II - Limitation
The ITC is limited to the smallest of the following: • 50% of your Idaho income tax after credit for taxes paid to other states • Tax available after credit for taxes paid to other states and credit for contributions to Idaho educational entities • ITC available Line 1. Enter the amount of your Idaho income tax. This is the computed tax before adding the permanent building fund tax or any other taxes, or subtracting any credits. Line 2. Enter the credit for income tax paid to other states from Form 39R or Form 39NR. This credit is available only to individuals, trusts, and estates. Line 4. Enter the part-year resident Food Tax Credit from the appropriate Idaho income tax return. Line 5. Enter the credit for contributions to Idaho educational entities from the appropriate Idaho income tax return. Line 10. Enter the smallest amount from lines 6, 7, or 8 plus the amount from line 9. Carry this amount to Form 44, Part I, line 1, and enter it in the Credit Allowed column. 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 on Form 44, Part I, line 1 in the Carryover column.
Source: official text