585: 2024 Form 585 Credits for Employers in the Vehicle Manufacturing Industry (2024)
Oklahoma · Oklahoma Tax Commission · Used for tax years 2024
Oklahoma Form 585 calculates credits for qualified employers in the vehicle manufacturing industry for tuition reimbursed and compensation paid to qualified employees. It totals the credits to carry to Form 511-CR.
Who files this form
Form 585 is for qualified employers claiming credits for tuition reimbursed or compensation paid to qualified employees.
A qualified employer is a business or public entity whose principal business activity involves vehicle manufacturing. The definition covers qualifying vehicle manufacturing operations first placed in operation in Oklahoma after November 1, 2018, and automotive parts manufacturing operations first placed in operation after November 1, 2019.
A qualified employee must:
- Be employed in Oklahoma by, or contract in Oklahoma with, a qualified employer on or after January 1, 2018, regardless of the hire date.
- Have an undergraduate or graduate degree from a qualified program.
- Meet the rule against employment in Oklahoma vehicle manufacturing immediately before the current employment or contract.
The form provides exceptions to that last rule for people who worked in vehicle manufacturing, but not as full-time engineers, before earning the qualifying degree, and for qualifying graduates employed by professional staffing companies and assigned to Oklahoma vehicle manufacturing work. See the definitions on page 3 for the full eligibility rules.
What you'll need
Have the following information ready to complete Form 585:
- The 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 graduation date, tuition reimbursed during the tax year, and the applicable average annual enrollment and instruction amount at an Oklahoma public institution.
- For the compensation credit: the institution that awarded the engineering degree and compensation paid during the tax year. Contract labor must have a Form 1099 issued, and wages must be subject to Oklahoma withholding.
If more employee lines are needed, provide a separate schedule with the same information as Columns A through F. Credits transferred or allocated must also be reported on OTC Form 569.
Common mistakes
- Including excluded tuition costs. Books, fees, and room and board do not count as tuition.
- Exceeding tuition credit limits. Do not enter more in Part 1, Column E, than the average annual enrollment and instruction amount for a qualified program at an Oklahoma public institution. No tuition credit may be claimed after the fourth year of employment.
- Exceeding compensation credit limits. The credit is limited to $12,500 per qualified employee annually. No compensation 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.
- Missing 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. The employee must have received the engineering degree within one year of employment in Oklahoma. The credit cannot exceed 50% of the average annual enrollment and instruction amount for a qualified program at an Oklahoma public institution.
How much is the compensation credit?
For the first five years of employment, 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 limit is $12,500 per qualified employee.
What is a qualified program?
It is a program accredited by the Engineering Accreditation Commission of the Accreditation Board for Engineering and Technology (ABET) that awards an undergraduate or graduate degree.
Where do I put the total credit?
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.
Does an overall credit cap apply for 2024?
The form states that no more than $3 million of credit may offset tax in a taxable year. It also states that the full amount of the statutory credit is available for tax year 2024.