Oklahoma Form 564 is the state tax form you use to claim the $5,000 Credit for Employees in the Aerospace Sector. You attach it to your Oklahoma individual income tax return (Form 511) and report the credit on Form 511-CR. The form itself is short: three parts covering your employer, your engineering credential, and the credit amount.
Who Can Claim the Credit
You qualify as a “qualified employee” if you work for (or contract with) a qualified aerospace employer in Oklahoma and you hold either an eligible engineering degree or an Oklahoma Professional Engineer license.
On the degree path, your undergraduate or graduate engineering program must have been accredited by the Engineering Accreditation Commission of ABET on the date you graduated. If either the undergraduate or graduate program in your engineering discipline at your school held ABET accreditation when you graduated, both programs in that discipline count.
On the license path, an active PE license issued by the Oklahoma State Board of Licensure for Professional Engineers and Land Surveyors qualifies you without the ABET degree.
One eligibility trap: you cannot have been employed in Oklahoma’s aerospace sector immediately before starting with your qualifying employer. There is an exception for people who worked in aerospace in a non-engineering capacity, then earned a qualifying degree. Staffing company employees assigned to aerospace work also qualify.
Your employer must be a business or public entity whose principal activity is in the aerospace sector, which the statute defines to include manufacturing of aerospace or defense hardware and software, maintenance and repair, parts supply, aerospace services and support, research and development, and aerospace education and training.
Completing the Three Parts of Form 564
Before you start, pull together your W-2 or 1099, a copy of your diploma or transcript (or your PE license number), and any Form 564 you filed in a prior year that generated a carryover.
Part 1: Employer Information
Enter your qualified employer’s name and federal Employer Identification Number. The EIN is on your W-2, or on the Form 1099 from your client if you’re an independent contractor. Then enter the dates of your Oklahoma employment with that employer during the tax year.
Part 2: Education and Licensing
Enter the name and location of the institution where you earned your engineering degree, your graduation date, the name of the engineering program, and whether the degree was undergraduate or graduate. First-time claimants must attach proof of the degree. A copy of the diploma or transcript is enough.
If you qualify through a PE license rather than a degree, enter your Oklahoma PE license number and leave the degree fields blank.
Part 3: Credit Calculation
Three lines:
- Line 1: Enter $5,000 if you meet the qualified employee definition for the year.
- Line 2: Enter any unused credit carried forward from prior years, noting the original tax year each carryover was established.
- Line 3: Add Lines 1 and 2. This is your available credit for the year. Transfer the total to Form 511-CR.
Filing Form 564 With Your Oklahoma Return
Form 564 is not filed on its own. Attach it to your Oklahoma Form 511 as supporting documentation for the credit you claim on Form 511-CR, the Other Credits Form.
On Form 511-CR, the aerospace employee credit goes on Line 16. Enter any prior-year carryover in Column A, the current year’s $5,000 in Column B, and the total in Column C. The combined credit from Form 511-CR then flows to Line 17 of your Form 511.
Hold on to your degree documentation, PE license records, and employer verification. The Oklahoma Tax Commission can request proof of eligibility during processing or on a later audit. If this is your first year claiming the credit and you forget to attach degree proof, expect the credit to be denied.
If the Credit Is Bigger Than Your Tax Bill
The credit is nonrefundable. It can zero out your Oklahoma income tax, but it will not generate a refund on its own.
Anything you can’t use carries forward for up to five years from the date the credit was originally established. File a new Form 564 each carryover year, entering the unused amount on Line 2 along with the original tax year. Credits are applied in chronological order, oldest first, then the current year’s credit. Any amount still unused after five years from its establishment date expires.
You can claim the credit for up to five years during your lifetime, and those years do not have to be consecutive.
Changing Aerospace Employers
A 2024 legislative change (HB 4072) confirmed that moving between qualified aerospace employers does not disqualify you. If you established the credit at one aerospace company and take a job at another, you keep claiming it on Form 564 as long as you have not already used your five lifetime years. Update Part 1 to reflect the new employer’s name, EIN, and your employment dates with them.
When the Program Ends
The aerospace employee credit is scheduled to sunset for tax years ending on or after January 1, 2031. If you’re starting in the Oklahoma aerospace workforce now, factor the sunset into your planning so you can use as many of your five lifetime credit years as possible before the program closes.