A tax credit is allowed for small businesses that make contributions to the State Unemployment Insurance Fund during the tax year with respect to wages paid for employment in this State. The credit is 25% of the amount of qualified contributions to the State Unemployment Insurance Fund. A small business is defined as a business whose cumulative gross receipts from the business activity for the tax year do not exceed one million dollars ($1,000,000). The credit may be claimed only against corporate or individual income taxes.

If the credit exceeds the amount of tax for the taxable year reduced by the sum of all credits allowable, the excess is refundable. In computing the amount of tax against which multiple credits are allowed, nonrefundable credits are subtracted before refundable credits.

The credit applies to taxable years 2010 and 2011. The credit expires for taxable years beginning on or after January 1, 2012.

The tax credit should be computed on Part 6 of Form D-400TC.

Last modified on: 01/12/11 01:35:25 PM.