Section 35.01.01.785 - CREDITS: PASS-THROUGH ENTITIESSection 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.a. Partnerships. A credit passes through to a partner based on that partner's distributive share of partnership profits.b. S Corporations. A credit passes through to a shareholder based on that shareholder's pro rata share of income or loss.c. Estates and Trusts. A credit passes through to a beneficiary in the same ratio that income is allocable to that beneficiary.d. Idaho credits may not pass through to partners or owners based on special allocations.02.Limitations.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.03.Carryovers. Carryovers of credit are allowed to the partner, shareholder, or beneficiary to the extent provided by statute or rule.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.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.06.Pass-Through Entities That Pay Tax.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 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.b. The partner, shareholder or beneficiary is responsible for the recapture or recomputation of credits passed through to the partner, shareholder, or beneficiary.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.07.Examples. Available at Income Tax Rules Examples.Idaho Admin. Code r. 35.01.01.785