77-6518.

Wage retention credit; recapture or disallowance; interest; penalties.

(1) If the taxpayer fails to retain the required level of employment through the entire performance period, all or a portion of the wage retention credits shall be recaptured directly by the state from the taxpayer or shall be disallowed. In no event shall any wage retention credits be required to be paid back directly or indirectly by the employees. All such credits must be repaid by the taxpayer.

(2) The recapture or disallowance shall be as follows:

(a) No wage retention credits shall be allowed, and if already allowed shall be recaptured, for the actual year or years in which the required level of employment was not maintained;

(b) For wage retention credits allowed in prior years, one-tenth of the credits shall be recaptured from the taxpayer for each year the required level of employment was not maintained; and

(c) For wage retention credits for future years, one-tenth of the credits shall be disallowed for each year the required level of employment was not maintained in previous years.

(3) Any amounts required to be recaptured shall be deemed to be an underpayment of tax, immediately due and payable, and shall constitute a lien on the assets of the taxpayer. When wage retention credits were received in more than one year, the credits received in the most recent year shall be recovered first and then the credits received in earlier years shall be recovered up to the extent of the required recapture.

(4) Interest shall accrue from the due date for the return for the year in which the taxpayer failed to maintain the required level of employment.

(5) Penalties shall not accrue until ninety days after the requirement for recapture or disallowance becomes known or should have become known to the taxpayer.

(6) The recapture or disallowance required by this section may be waived by the Tax Commissioner if he or she finds the failure to maintain the required level of employment was caused by unavoidable circumstances such as an act of God or a national emergency.