ETC-A: Employer Tax Credit Application for Employing Convicted Felons (2024)
Nebraska · Nebraska DOR · Used for tax years 2024
Nebraska Form ETC-A is an application for certification of a nonrefundable employer income tax credit for employing people convicted of felonies. It reports eligible employees, conviction and employment details, qualifying wages paid, and the credit requested.
Who files this form
Employers seeking approval for the Nebraska nonrefundable employer tax credit for employing convicted felons must file Form ETC-A. The employer must have employed someone convicted of a felony in Nebraska or another state.
The credit may be claimed on corporate, individual, or fiduciary income tax returns. An S corporation, partnership, or LLC filing as an S corporation or partnership cannot claim it unless the pass-through entity has elected to be subject to Nebraska income tax.
What you'll need
Have the following information ready to complete the application:
- Employer name, mailing address, Nebraska ID number or SSN, FEIN, and type of Nebraska return claiming the credit.
- Beginning and ending dates of the taxable year when the eligible wages were paid, and the number of eligible employees.
- Each eligible employee’s name, SSN, hire date, felony conviction date, city, state, and county of conviction, and whether the offense was state or federal.
- Dates wages were paid and qualifying wages paid to each eligible employee.
- Authorized signer’s name, title, signature, date, and contact information, plus contact person information.
If the signer is authorized through a power of attorney, that power of attorney must be on file with the Nebraska Department of Revenue (DOR).
How to file
- Complete Part B before Part A. List each eligible employee and their qualifying wages. Qualifying wages are limited to $200,000 per employee and must have been paid within the first 12 months of employment.
- Transfer the total qualifying wages from Part B to Part A, line 3. Multiply line 3 by 10% to calculate the requested credit on line 4.
- Have the application signed by the owner, corporate officer, fiduciary, or another person authorized by a power of attorney on file with DOR.
- Submit the application as the employer or the employer’s authorized representative. File a separate application for each taxable year and retain a copy for your records.
The form directs applicants to submit through DOR’s secure file sharing system using the link on the form. The instructions printed with the form also give this mailing address:
Nebraska Department of Revenue
PO Box 94818
Lincoln, NE 68509-4818
Common mistakes
- Completing Part A first. Complete Part B before entering information in Part A.
- Including cents. Enter whole dollars only and do not change the pre-printed zeros in the cents column. Round amounts below 50 cents down and amounts from 50 to 99 cents up.
- Including wages outside the qualifying period. Only wages paid within the first 12 months of employment qualify. Qualifying wages are limited to $200,000 per employee.
- Not separating periods after a rehire. Use two lines in Part B if an employee was terminated and rehired before completing the first 12 months of employment. The combined wage periods cannot exceed 12 months.
- Submitting an incomplete application. DOR adjusts the application date to the date it receives all required information.
- Providing an email address when you do not want email contact. Entering an email address acknowledges the confidentiality risks of email contact. Write “Opt Out” on the email address line if you do not want to be contacted by email.
Questions people ask
How much is the credit?
The credit is 10% of qualifying wages paid during the taxable year within the employee’s first 12 months of employment. It cannot exceed $20,000 for one eligible employee.
Is the credit refundable?
No. The form describes it as a nonrefundable income tax credit.
How does DOR decide which applications receive credits?
DOR processes applications in the order received and approves credits until the $5 million calendar-year limit is reached. If multiple complete applications arrive on the day available funds are exceeded, the remaining funds are prorated among qualified applications filed that day.
How will I know the approved amount?
After reviewing the application and certifying the approved credits, DOR will notify the employer of the certified amount.
Where do I claim an approved credit?
Claim it on the appropriate line of the corporate, individual, or fiduciary income tax return. Partnerships and S corporations that elect to be subject to Nebraska income tax may also claim it. The credit can be distributed to beneficiaries.