36 §5217-D. Credit for educational opportunity - Maine Statutes

Title 36: TAXATION

Part 8: INCOME TAXES

Chapter 822: TAX CREDITS

§5217-D. Credit for educational opportunity

1. Definitions. As used in this section, unless the context otherwise indicates, the following terms have the following meanings.

A. "Benchmark loan payment" has the same meaning as in Title 20-A, section 12541, subsection 2. [2007, c. 469, Pt. B, §1 (NEW).]

B. "Employer" has the same meaning as the term "employing unit," as defined in Title 26, section 1043, subsection 10. [2007, c. 469, Pt. B, §1 (NEW).]

C. "Full time" employment means employment with a normal workweek of 32 hours or more. [2007, c. 469, Pt. B, §1 (NEW).]

D. “Part time” employment means employment with a normal workweek of between 16 and 32 hours. [2007, c. 469, Pt. B, §1 (NEW).]

E. "Qualified employee" means an employee who is eligible for the credit provided in this section and who is employed at least part time. [2007, c. 469, Pt. B, §1 (NEW).]

F. [2009, c. 553, Pt. B, §2 (RP); 2009, c. 553, Pt. B, §5 (AFF).]

G. "Opportunity program participant" means an individual who obtains the specified degree and complies with the requirements under Title 20‐A, section 12542. [2009, c. 553, Pt. B, §3 (AMD); 2009, c. 553, Pt. B, §5 (AFF).]

H. "Resident individual" has the same meaning as in section 5102, subsection 5. [2007, c. 469, Pt. B, §1 (NEW).]

I. "Seasonal employment" has the same meaning as in Title 26, section 1251 and in regulations promulgated thereunder. [2007, c. 469, Pt. B, §1 (NEW).]

J. "Term of employment" includes all months when the individual is actually employed. It includes time periods when an individual is on leave or vacation. It extends to the full year for individuals working for employers who customarily operate only during a regularly recurring period of 9 months or more in a calendar year. For individuals working for employers who customarily operate only during regularly recurring periods of less than 9 months in a calendar year, including seasonal employment, the term of employment extends only to time periods when the individual is actually working. [2007, c. 469, Pt. B, §1 (NEW).]

[ 2009, c. 553, Pt. B, §§2, 3 (AMD); 2009, c. 553, Pt. B, §5 (AFF) .]

2. Credit allowed. A taxpayer constituting an opportunity program participant or an employer of a qualified employee is allowed a credit against the tax imposed by this Part for each taxable year under the terms established in this section. The credit is created to implement the Job Creation Through Educational Opportunity Program established under Title 20-A, chapter 428-C.

The credit may not reduce the tax otherwise due under this Part to less than zero. A taxpayer entitled to the credit for any taxable year may carry over and apply to the tax liability for any one or more of the next succeeding 10 years the portion, as reduced from year to year, of any unused credits. More than one taxpayer may claim a credit based on loan payments actually made to a relevant lender or lenders to benefit a single opportunity program participant, but no 2 taxpayers may claim the credit based on the same payment.

[ 2007, c. 469, Pt. B, §1 (NEW) .]

3. Calculation of the credit. The credit in this section is determined on the basis of the amount under paragraph A or paragraph B, whichever is less, multiplied by the proration factor. For purposes of this subsection, the proration factor is the amount derived by dividing the total number of academic credit hours earned for a bachelor's or associate degree after December 31, 2007 by the total number of academic credit hours earned for the bachelor's or associate degree.

A. If the benchmark loan payment is less than the actual monthly amount, then the credit claimed may not exceed the product of the benchmark loan payment and the number of months during the taxable year in which the taxpayer made loan payments. [2009, c. 553, Pt. B, §4 (AMD); 2009, c. 553, Pt. B, §5 (AFF).]

B. If the opportunity program participant's actual monthly loan payment amount is less than the benchmark loan payment, the credit must be based on the actual loan payments made during the taxable year. [2009, c. 553, Pt. B, §4 (AMD); 2009, c. 553, Pt. B, §5 (AFF).]

C. [2009, c. 553, Pt. B, §4 (RP); 2009, c. 553, Pt. B, §5 (AFF).]

[ 2009, c. 553, Pt. B, §4 (AMD); 2009, c. 553, Pt. B, §5 (AFF) .]

4. Conditions for an opportunity program participant claiming the credit. An opportunity program participant may claim the credit only if the participant is a resident individual. The participant may claim the credit based only on regular payments made during months in which the individual was working for an employer located in this State. A married couple filing jointly under Title 36, section 5221 may claim the credit only to the extent that the spouse on whose behalf the credit is claimed meets these requirements.

[ 2007, c. 469, Pt. B, §1 (NEW) .]

5. Conditions for an employer claiming the credit. A taxpayer constituting an employer may claim the credit under this section under the following circumstances. The employer may undertake to make partial or full loan payments directly to the relevant lender or lenders on behalf of a qualified employee, having taken reasonable steps to ascertain that the employee is in fact a qualified employee, and may claim a credit based on amounts that came due and were paid by the employer during the term of employment. To receive the credit, the employer must retain for 5 years any proof of eligibility that the employee or independent contractor provides.

The employer may claim a credit for the amount that the qualified employee could have claimed during any months when the qualified employee was employed, had the qualified employee made the partial or full loan payments instead, under conditions where the qualified employee had sufficient income to claim the full credit for the taxable year. If the qualified employee is employed only on a part-time basis, the employer may claim a credit only up to half of the total that the qualified employee could have claimed had the qualified employee made all payments and earned sufficient income to claim the full credit for the taxable year, but the amount the employer claims must still be based on amounts actually paid.

[ 2009, c. 434, §78 (AMD) .]

SECTION HISTORY

2007, c. 469, Pt. B, §1 (NEW). 2009, c. 434, §78 (AMD). 2009, c. 553, Pt. B, §§2-4 (AMD). 2009, c. 553, Pt. B, §5 (AFF).