If eligible for credit, can an employer apply it to previous or future years tax liability?
For non tax-exempt organizations, the credit for a year offsets only an employer’s actual income tax liability (or alternative minimum tax liability) for the year; however, as a general business credit, an unused credit amount can generally be carried back one year and carried forward 20 years. An unused credit amount cannot be carried back to a year before the effective date of the credit, so any unused credit amount for 2010 can only be carried forward.
Related Questions
- If a new employee has reached the limit for social security taxes with a previous employer in the same year, does the new employer need to take out the tax for both the company and employee?
- My historic rehabilitation credit is greater than my tax liability. Can I carry forward any of the unused amount to the next year?
- How will Credit of such TDS be available against the tax liability?
