Section 280-RICR-20-20-15.6 - Employee Tax Credit ExamplesA. Example 1 - Calendar year Employer1. the incentive shall be applied only once for any given employee2. Employee John Doe is hired on January 1, 1998 and the employer is a calendar year end taxpayer. Since the 365 day requirement is satisfied in 1 year, the stated total wages on the 1998 W-2 for the employee may then be used for the calculation of the modification or deduction. John Doe 1998 W-2 Total Wages for his Employer | $12,000 |
Incentive rate (40%) | X .40 |
Total | $4,800 |
3. Maximum incentive of $2,400 for John Doe may be utilized a modification or adjustment on year end 12/31/98 tax return of his employer.B. Example 2 - Calendar Year Employer:1. Employee Jane Doe is hired on April 28, 1998 and the employer is a calendar year end taxpayer. Jane Doe 1998 W-2 Total Wages from this Employer $ 7,400.00 Jane Doe 1999 W-2 Total Wages from this Employer 12,600.00. Since the 365 day requirement is satisfied in 2 different years, the measure calculation is: 04/28/98 through 12/31/98 = | 247 days |
01/01/98 through 04/28/99 = | 118 days |
Total | 365 days |
1998 Wages Total = | $ 7,400.00 |
1999 Wages 118/365 x $12,600 = | 4,073.42 |
Total Eligible Wages | $11,073.42 |
Incentive Rate (40%) | X .40 |
Total | $ 4,589.37 |
2. Maximum incentive of $2,400 for Jane Doe may be utilized as a modification or adjustment on year end 12/31/99 tax return of her employer.C. Example 3 - Fiscal Year Employer:1. Under the same facts, except the taxpayer is a fiscal year end June 30th filer, the incentive is calculated as follows:a. For John Doe, the calculation and incentive amount would remain the same; however, the taxpayer would not be able to modify or adjust until the June 30, 1999 filing since the 365 days of employment would not be reached until the middle of the employer's fiscal year.b. For Jane Doe, since the 365 day criteria will be met within the June 30, 1999 fiscal year and before Jane's W-2 is prepared for 1999, the calculation will use Jane's 1998 W-2 wages and her actual wages for the first 118 days of 1999.D. Example 4 - Fiscal year Employer:1. Employee Jane Smith is hired on July 30, 1998 and the employer is a June 30 fiscal year end. Jane Smith 1998 W-2 wages from this Employer | $4,580.00 |
Jane Smith 1999 W-2 wages from this Employer | 7,050.00 |
Measure Calculation | |
07/30/98 through 12/31/98 = | 154 days |
01/1/99 through 07/30/99 = | 211 days |
Total | 365 days |
1998 Wages from this Employer | $4,580.00 |
1999 Wages 211/365 x $7050.00 = | 4,075.48 |
Total Eligible Wages | $8,555.48 |
Incentive Rate (40%) | X .40 |
Total | $3,462.19 |
2. Maximum incentive of $2,400.00 for Jane Smith may be utilized as a modification or adjustment on the year end June 30, 2000 tax return since the 365 day criteria is not met until that fiscal year of the return filer.280 R.I. Code R. § 280-RICR-20-20-15.6