ADA Tax Credit

[Duane Anderson]

Does a Home Owners Association which files an 1120H for fiscal year ending June 30, 2018 qualify for the income tax credit of up to $5,000 under IRS code section 44 and reported on tax form 8826. The HOA has gross receipts of less than $1 million and less than 30 employees.

I have input some info into my tax software and cannot get it to calculate the credit (tax refund) of 50% of eligible purchases up to a $5,000 maximum tax credit.

Thanks,,,Duane Anderson

[Rapid Robert]

Does a Home Owners Association which files an 1120H for fiscal year ending June 30, 2018 qualify for the income tax credit of up to $5,000 under IRS code section 44 and reported on tax form 8826.

Yes. Per §38,

"C) Eligible small business
For purposes of this subsection, the term "eligible small business" means, with respect to any taxable year-
(i) a corporation the stock of which is not publicly traded,
(ii) a partnership, or
(iii) a sole proprietorship,"

then §44 adds the dollar/no. of employees limits to the definition.

I have a simple test return in my software and whether I use Form 1120 or 1120H, the credit calculates on Form 8826, and is carried forward if not all used. Also does not seem to matter if calendar year or fiscal year. So I'd guess either your software does not support this form or you are not entering something correctly. All I had to do was enter some gross receipts and eligible access expenditures, nothing else.

[Rapid Robert]

Upon further thought, not sure why you put "tax refund" in parentheses.

"cannot get it to calculate the credit (tax refund) "

I don't think it's a refundable credit.

In my simple test for Form 1120H filing, it was a GBC (Form 3800) carryforward only. I have only worked on a few 1120H returns and that was half a dozen years ago, so I don't remember what the difference is between 1120H and 1120 filing for a HOA. What happens when you switch to regular Form 1120?

[Burke]

Does a Home Owners Association which files an 1120H for fiscal year ending June 30, 2018 qualify for the income tax credit of up to $5,000 under IRS code section 44 and reported on tax form 8826. The HOA has gross receipts of less than $1 million and less than 30 employees. I have input some info into my tax software and cannot get it to calculate the credit (tax refund) of 50% of eligible purchases up to a $5,000 maximum tax credit. Thanks,,,Duane Anderson

If you have Form 8826 in the return, it should carry forward to Form 3800 (general business credit) and then to tax return. Maybe you have to pull up both forms for it to calculate.