Department of Taxation and Finance

Instructions for Form CT-601 Claim for EZ Wage Tax Credit Including the ZEA Wage Tax Credit

CT-601-I

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General information

The zone equivalent area (ZEA) and empire zone (EZ) wage tax credits have both expired:

• For tax years beginning after June 13, 2004, you may only claim a ZEA wage tax credit you carried forward from previous years.
• For tax years beginning on or after July 1, 2014, you may only claim an EZ wage tax credit you carried forward from previous years.
• If you were required to obtain an EZ retention certificate from Empire State Development, but were denied one, you are not eligible to claim any amount of the credit you carried forward.

Credit calculation

The credit is limited to 50% of the tax imposed under Article 9-A, before you add the metropolitan transportation business tax (MTA surcharge) or deduct any tax credits.

You cannot:

• use the credit to reduce the tax due to less than the fixed dollar minimum tax,
• apply the credit against the MTA surcharge, or
• request a refund for any unused portion of this credit; however, you may carry it forward to future tax years indefinitely.

Schedule A: Calculation of the credit carried forward and available for the current tax year

Line 1

Enter the wage tax credit you carried forward from your prior year Form CT-601.

Line 2

Enter the current year’s tax before the deduction of any tax credit or addition of the MTA surcharge.

Line 3

For taxpayers claiming a wage tax credit carried forward from more than one entity on a return, such as on a combined franchise tax return, the total amount of all the wage tax credits used in the current year cannot exceed 50% of the current year’s tax.

Schedule B: Calculation of credit used and carried over

Line 4

Enter the amount from line 2 plus any net recaptured tax credits.

Line 5

If you are claiming more than one tax credit for this year, enter the total amount of credits you claimed before applying this credit; otherwise enter 0. You must apply tax credits in a specific order.

For the correct order of credits, see Form CT-600-I, Instructions for Form CT-600, Ordering of Corporation Tax Credits.

Combined filers: Include the total amount of all tax credits you and other members of the combined group are claiming – including the claim for EZ wage tax credit – that you want to apply before you apply this credit.

Line 7

Enter your fixed dollar minimum tax from Form CT-3, General Business Corporation Franchise Tax Return, or the designated agent’s fixed dollar minimum tax from Form CT-3-A, General Business Corporation Combined Franchise Tax Return.

Line 10

Enter the lesser of line 1 or line 9. Transfer this amount to your franchise tax return.