Schedule RZ: Schedule RZ - Renaissance Zone Income Exemption and Tax Credits (2024) (2024)
North Dakota · ND Tax Commissioner · Used for tax years 2024
North Dakota Schedule RZ calculates Renaissance Zone business or investment income exemptions and tax credits for 2024. It reports zone project details and amounts for business purchases or expansions, single-family residences, and historic property preservation or renovation.
Who files this form
Use Schedule RZ to report the following Renaissance Zone income exemptions and tax credits with your 2024 North Dakota return:
- Business or investment income exemption.
- Business purchase or expansion tax credit.
- Single-family residence tax credit.
- Historic property preservation or renovation tax credit.
- Renaissance fund organization (RFO) investment tax credit.
- Nonparticipating property owner tax credit.
The schedule attaches to Form ND-1, 38, 40, 58, or 60. It also includes lines for exemptions and certain credits received through a passthrough entity on a North Dakota Schedule K-1.
What you'll need
Gather the records and attachments that apply to your claim:
- Final zone project approval letter: Attach a copy where requested. Use it for the project number, qualifying transaction, exemption or credit start date, and approved utility-change costs, as applicable.
- North Dakota Schedule K-1: Use it for passthrough exemption or credit amounts. Parts 4, 5, and 6 specifically require a copy for passthrough credits.
- RFO investment reporting form: For Part 5, attach the Renaissance Fund Organization Investment Reporting Form received from the RFO.
- 2023 Schedule RZ: Use the specified prior-year lines for carryforwards in Parts 4, 5, and 6.
- Supporting statements: Attach a statement identifying other assets reported on Part 1, line 9e. Parts 4, 5, and 6 also request statements for the 2024 credit and carryforward to 2025.
Depending on the part completed, you will also need business income and property values, rent amounts, building square footage, transaction or completion dates, historic preservation or renovation costs, and RFO investment amounts.
How to file
Complete the applicable parts and use Part 7 to summarize your exemption and credits. Attach all five pages of Schedule RZ to your North Dakota income tax return. The form does not provide a mailing address or e-filing directions.
Transfer the exemption from Part 7, line 1c to:
- Form ND-1: Schedule ND-1SA, line 4.
- Form 38: Tax Computation Schedule, line 4d.
- Form 40: line 10, or Schedule CR, Part I, line 10.
- Form 58: Schedule K, line 4.
- Form 60: Schedule K, line 2.
Transfer the total credit from Part 7, line 7 to:
- Form ND-1: Schedule ND-1TC, line 2.
- Form 38: Schedule 38-TC, line 1.
- Form 40: Schedule TC, line 8, or Schedule CR, Part III, line 8.
- Form 58: Schedule K, line 7.
- Form 60: Schedule K, line 4.
Common mistakes
- Leaving out pages: The form repeatedly says to attach all five pages to the return.
- Including unrelated business figures: Part 1, lines 8 through 17, must include only the numbers for the business that owns or leases the zone project property.
- Missing the investment-use shortcut: If the property is used solely for investment purposes, skip Part 1, lines 8 through 15, and go to line 16.
- Overlooking the property-location rule: If less than 100% of the taxpayer's North Dakota business real property is at the zone project location, complete lines 9a through 9h. Otherwise, enter 1.000000 on line 9h and go to line 10.
- Skipping referenced instructions: The form specifically directs filers to read instructions before completing the expansion-limitation and eligibility-month calculations. Those instructions are not included in the supplied text.
Questions people ask
What if I have more than one zone project?
Complete a separate Schedule RZ for Parts 1 through 6 for each project. Add the amounts from the separate schedules and enter the totals on the appropriate lines of Part 7 on only one Schedule RZ.
What if my only Part 1 exemption comes from a North Dakota Schedule K-1?
Skip Part 1, lines 1 through 17, and enter the exemption amount on line 18.
What is the maximum annual income exemption shown on the form?
Part 7 lists a maximum exemption of $500,000 per year. Line 1c uses the smaller of the tentative exemption on line 1a or that maximum.
Can I change the election to claim the business purchase or expansion credit instead of the business income exemption?
Part 2 describes this election as irrevocable. Fill in the circle on line 1 only if you are eligible for the credit and are electing to claim it instead of the business income exemption.