565: 2025 Form 565 Credits for Employers in the Aerospace Sector (2025)
Oklahoma · Oklahoma Tax Commission · Used for tax years 2025
Oklahoma Form 565 calculates credits for qualified aerospace-sector employers for tuition reimbursed and compensation paid to qualified employees. It totals the credits to carry to Form 511-CR.
Who files this form
The 2025 Oklahoma Form 565 is for qualified employers claiming credits for tuition reimbursed or compensation paid to qualified employees in the aerospace sector.
A qualified employer is a business or public entity whose principal business activity involves the aerospace sector. The form defines this sector to include Oklahoma organizations involved in aerospace or defense manufacturing, maintenance, repair, parts, services, research, or education and training.
A qualified employee must be employed in Oklahoma by, or contract with, a qualified employer and meet the form’s education or professional engineering license requirements. The tuition and compensation credits have separate eligibility rules and limits.
What you'll need
Have the following information ready to complete the form:
- The qualified employer’s name as shown on the return, federal employer identification number, and business type.
- Each qualified employee’s name, Social Security number, and date employment began in Oklahoma.
- For the tuition credit: the employee’s graduation date and the amount of tuition reimbursed during the tax year.
- For the compensation credit: the institution where the employee earned their engineering degree and the Oklahoma compensation paid during the tax year. The form calls for contract labor reported on Form 1099 and/or wages reported in Box 16 of Form W-2.
- A separate schedule showing the same information as Columns A through F if more employee lines are needed.
The total credit is carried to Form 511-CR. Credits that are transferred or allocated must also be reported on Oklahoma Tax Commission Form 569.
Common mistakes
- Including excluded tuition costs. Books, fees, and room and board do not count as tuition.
- Exceeding the tuition limit. Part 1, Column E cannot exceed the average annual amount paid for enrollment and instruction in a qualified program at an Oklahoma public institution. The credit is 50% of that amount.
- Claiming tuition credits outside the allowed period. The engineering degree must have been awarded within one year of employment in Oklahoma. No tuition credit may be claimed after the fourth year of employment.
- Exceeding compensation credit limits. The credit is limited to $12,500 annually per qualified employee, and no credit may be claimed after the fifth year of employment.
- Including excluded compensation. Employer-provided retirement, medical or health-care benefits, and reimbursements for travel, meals, lodging, or other expenses do not count as compensation.
- Omitting Form 569 for transferred or allocated credits. The form warns that failure to file Form 569 will result in denial of the affected credits.
Questions people ask
How much is the tuition reimbursement credit?
The credit is 50% of eligible tuition reimbursed during the first four years of employment. It cannot exceed 50% of the average annual amount paid for enrollment and instruction in a qualified program at an Oklahoma public institution. The employee must have been awarded their engineering degree within one year of employment in Oklahoma.
Does the employee’s college location affect the compensation credit?
Yes. The credit is 10% of eligible compensation if the employee graduated from an Oklahoma institution, or 5% if the institution is outside Oklahoma. The annual maximum is $12,500 per qualified employee, and the credit applies to the first five years of employment.
Can an employee qualify with a Professional Engineer license?
Yes. The qualified employee definition includes individuals who hold a Professional Engineer license from the Oklahoma State Board of Licensure for Professional Engineers and Land Surveyors under 59 OS Sec. 475.15. It also includes individuals who earned an undergraduate or graduate degree from a qualified program at an institution.
Where does the total credit go?
Enter the tuition credit from Part 1, line 6 on Part 3, line 1, and the compensation credit from Part 2, line 6 on Part 3, line 2. Add those amounts on Part 3, line 3 and carry the total to Form 511-CR.