IDAPA 35.01.01.785 — CREDITS: PASS-THROUGH ENTITIES (RULE 785)

Section 63-3029(a), Idaho Code
01.
In General. A credit earned by a partnership, S corporation, estate, or trust generally is claimed on
the income tax returns of the partners, shareholders, or beneficiaries of the entity.
(4-6-23)
a.
Partnerships. A credit passes through to a partner based on that partner's distributive share of
partnership profits.
(4-6-23)
b.
S Corporations. A credit passes through to a shareholder based on that shareholder's pro rata share
of income or loss.
(4-6-23)
c.
Estates and Trusts. A credit passes through to a beneficiary in the same ratio that income is
allocable to that beneficiary.
(4-6-23)
d.
Idaho credits may not pass through to partners or owners based on special allocations.
(4-6-23)
02.
Limitations.
(4-6-23)
a.
In General. Credits claimed on a partner's, shareholder's, or beneficiary's tax return may not
exceed the limitations imposed by statute or rule.
(4-6-23)
03.
Carryovers. Carryovers of credit are allowed to the partner, shareholder, or beneficiary to the
extent provided by statute or rule.
(4-6-23)
04.
Different Taxable Year Ends. If a pass-through entity has a taxable year end different from that of
a partner, shareholder, or beneficiary, the credit is available in the same taxable year that income or loss from that
entity is reported.
(4-6-23)
05.
Information Provided by a Pass-Through Entity. The pass-through entity is to prepare and
distribute to each partner, shareholder, or beneficiary a schedule detailing the proportionate share of each credit
earned and any recapture that is required. Copies of these schedules are to be attached to the pass-through entity's
Idaho income tax return or information return for the taxable year that the credit is earned and to each return on which
the credit is claimed.
(4-6-23)
06.
Pass-Through Entities That Pay Tax.
(4-6-23)
a.
A pass-through entity may apply and may recapture credits that generally pass through to the
partner, shareholder, or beneficiary for whom the pass-through entity is paying the tax. For example, Idaho
IDAHO ADMINISTRATIVE CODE
IDAPA 35.01.01
Idaho State Tax Commission
Income Tax Administrative Rules
Section 790
Page 109
investment tax credit earned that would have passed through to the owner or beneficiary could be claimed by the
pass-through entity subject to the applicable limitations. Limitations based on the tax liability apply to each owner's
or beneficiary's tax liability being paid by the pass-through entity.
(4-6-23)
b.
The partner, shareholder or beneficiary is responsible for the recapture or recomputation of credits
passed through to the partner, shareholder, or beneficiary.
(4-6-23)
c.
Carryovers that exist after a pass-through entity offsets the tax with credit available to that partner,
shareholder or beneficiary, remain a carryover of the partner, shareholder or beneficiary.
(4-6-23)
07.
Examples. Available at Income Tax Rules Examples.
(4-6-23)