Tax Credits

The tax credit process is designed to capture the detail composition of the tax credits, including the year generated and the corresponding year of expiration. The process is not integrated with the current provision or temporary difference rollforward. The tax year generated is maintained in the rows including the current year and 10 previous years, and one category for credit originated 10+ years ago.

The form provides a rollforward of the tax credit balances by year as follows:

• Original Credit (calculated from prior period)—Amount of the original credit, plus

• Created (manual input)—Amount of the current year tax credit to be deferred, plus

• Expiration (manual input)—Amount of the current year tax credit expiring, equals (subtotal)

• Available (calculated)—Amount of tax credit available to offset taxable income in the current period, plus

• CY Utilization (manual input)—Amount of tax credit utilized in the current period that will be transferred to the current provision, plus

• Return to Accrual adj (manual input)—Amount of tax credit adjusted in the current period due to Return to Accrual adjustments as a result of the filing of tax returns. (Note: Amount goes to the temporary difference rollforward to be written off in RTA Deferred only), plus

• Other Adjustments (manual input)—Amount of tax credit adjusted in the current period due to other adjustments, equals

• Carryforward (calculated)—Amount of tax credit carried forward.

The Tax Credit Form contains data used to consolidate the financial statement footnote disclosure for amount and expiration of tax credits when applicable. The Tax Credits - By Year of Expiration Report can be used to see entity and consolidated level tax credits by year of expiration. This information can be used to construct the footnote disclosure regarding credit expirations and amounts if required.