63-3029F. CLAIM OF RIGHT INCOME REPAYMENT ADJUSTMENTS. (1) Subject to the provisions of this section, a credit against the taxes otherwise due shall be allowed to a taxpayer for a claim of right income repayment adjustment.

(2) The credit under this section shall be allowed only if the taxpayer’s federal tax liability is determined under section 1341(a) of the Internal Revenue Code.

(3) The amount of the credit shall equal the difference between:

(a) The taxpayer’s actual Idaho state income tax liability for the tax year for which the claim of right was included in gross income for federal tax purposes; and

(b) The taxpayer’s Idaho state income tax liability for that tax year, had the claim of right income not been included in gross income for federal tax purposes.

(4) A credit under this section shall be allowed only for the tax year for which the taxpayer’s federal tax liability is determined under section 1341 of the Internal Revenue Code for federal tax purposes.

(5) If the amount allowable as a credit under this section, when added to the sum of other amounts allowable as a payment of tax and other refundable credit amounts, exceeds the taxes imposed (reduced by any nonrefundable credits allowed for the tax year), then the excess shall be treated as an overpayment of tax and shall be refunded or applied in the same manner as other tax overpayments.

(6) As used in this section, "claim of right income" means:

(a) An item included in federal gross income for a prior tax year because it appeared that the taxpayer had an unrestricted right to the item; and

(b) An item for which the taxpayer’s federal tax liability is adjusted under section 1341 of the Internal Revenue Code because the taxpayer did not have an unrestricted right to the item of gross income.

History:

[63-3029F, added 2015, ch. 21, sec. 2, p. 27.]