Under the regulation a taxpayer with liabilities under G.L. c. 62 for both the previous taxable year and the current taxable year may claim an excess revenue credit. 830 CMR 62F.6.1(3). The taxpayer claims this credit on the current taxable year return based on the liability for the previous taxable year. Id. Trusts and not-for-profits clubs and organizations, as well as individuals, may be eligible for this credit. See 830 CMR 62F.6.1(3)(b). To be entitled to the credit, however, the taxpayer must file a return for the previous taxable year by the end of current calendar year. Because of the way the regulation defines "current calendar year," "current taxable year" and "previous taxable year" (830 CMR 62F.6.1(2)), this last rule poses a problem for fiscal-year taxpayers that filed returns for their 1986-87 tax year after January 1, 1988 (i.e., taxpayers with a fiscal year ending after August 31, 1987). If these definitions are read and applied literally, such taxpayers would be ineligible for the excess revenue credit.
To avoid this problem, a fiscal-year taxpayer should calculate its excess revenue credit using the liability, before credits, shown on the Massachusetts tax return due in calendar year 1987 (the "current calendar year" under 830 CMR 62F.6.1(2)). The fiscal-year taxpayer may then claim this excess revenue credit on its return for the current taxable year which it filed or will file in 1988.
Some fiscal-year taxpayers will be eligible to amend returns filed earlier this year. Those filing amended returns as a result of the rules stated in this TIR should note at the top: "Excess Revenue Credit: TIR 88-6."
The Excess Revenue Credit Regulation, 830 CMR 62F.6.1, will be amended as necessary to include the rules set out in this TIR.
Stephen W. Kidder
Commissioner of Revenue
May 5, 1988
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