N-756: Enterprise Zone Tax Credit (Revision 2022)

Who files this form

If you are claiming Hawaii’s enterprise zone tax credit, you must attach Form N-756 to your tax return.

Partners of partnerships, shareholders of S corporations, and beneficiaries of estates or trusts must also attach Form N-756A, Information Statement.

What you'll need

To claim the credit, attach all required documents to your tax return:

• Form N-756, Enterprise Zone Tax Credit.
• Form N-756A, Information Statement, if you are a partnership partner, S corporation shareholder, or estate or trust beneficiary.
• A copy of the certification issued by the Department of Business, Economic Development & Tourism.

To complete Form N-756, have your total tax liability, gross income from business within the zone, total gross income required to be reported to Hawaii, Hawaii unemployment insurance premiums paid, and payroll totals for employees within the zone and within Hawaii. You will also need your cycle year information.

How to file

Attach Form N-756 and the required supporting documents to Form N-11, N-15, N-20, N-30, N-35, N-40, or N-70NP, as applicable.

• If your 7- or 10-year cycle began at the start of your taxable year, complete Parts I, II, and IV.
• If your cycle began during your taxable year, complete Parts I, III, and IV.
• Enter the credit from Part IV, line 21, on the appropriate line of Schedule CR if your tax return requires Schedule CR.

The supplied form does not give a mailing address or e-filing instructions.

Common mistakes

• Do not leave out required attachments. The form says all applicable attachments must accompany your return to claim the credit.
• Do not use the wrong calculation part. Use Part II for a cycle that began at the start of your taxable year and Part III for one that began during the year.
• Do not use cycle years 8 through 10 unless you manufacture tangible personal property or produce or process agricultural products.
• In Part III, if the taxable year contains only your first or last cycle year, complete only lines 11a, 12a through 12e, and 14.
• If line 16 is larger than line 15, enter zero on both line 17 and line 21.
• Read the separate instructions before completing the form, as the form directs.

Questions people ask

What credit percentage applies to my cycle year?

The table lists 80% for year 1, 70% for year 2, 60% for year 3, 50% for year 4, 40% for year 5, 30% for year 6, and 20% for year 7. Years 8 through 10 also use 20%, but are allowed only for manufacturers of tangible personal property or producers or processors of agricultural products.

What if my cycle began during my taxable year?

Use Part III. It calculates the credit using the months attributable to each cycle year and the applicable credit percentages.

Is the maximum calculated credit always the amount I can claim?

No. Part IV limits the credit. Line 21 uses the smaller of line 19, your remaining tax liability eligible for offset, or line 20, the maximum credit calculated in Part II or III.

What if I am claiming other tax credits?

Line 16 directs you to complete the credit worksheet in the instructions and enter the total on that line.

Official sources

• https://files.hawaii.gov/tax/forms/current/n756_i.pdf