77-6550.

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

(1) If the employer fails to retain the required level of employment and retain its headquarters in the state throughout the entirety of the earning period and the usage period, all or a portion of the wage retention credits shall be recaptured directly by the state from the employer 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 employer.

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

(a) If the employer has failed to retain the required level of employment:

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

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

(iii) For wage retention credits for future years, the credits shall be reduced by one-tenth for each year the required level of employment was not maintained in previous years; and

(b) If the employer has failed to retain its headquarters in the state:

(i) No wage retention credits shall be used, and if already used shall be recaptured, for the actual year or years in which the headquarters was not retained in the state;

(ii) For wage retention credits allowed in prior years, one-tenth of the credits shall be recaptured from the employer for each year of the usage period the headquarters was not maintained in the state; and

(iii) Wage retention credits will not be allowed for future years if the employer has not maintained its headquarters in the state.

(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 employer. 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 employer failed to maintain the required level of employment or failed to maintain its headquarters in the state.

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

(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 or failure to maintain the employer's headquarters in the state was caused by unavoidable circumstances such as an act of God or a national emergency.