Source: http://www.ct.gov/drs/cwp/view.asp?a=3807&q=529682
Timestamp: 2018-06-21 18:02:33
Document Index: 629201476

Matched Legal Cases: ['§12', '§10', '§12', '§12', '§12', '§12', '§12', '§12', '§12', '§12', '§12', '§12', '§12', '§12', '§12', '§12', '§12', '§10', '§10', '§10', '§8', '§12', '§38', '§38', '§12', '§12', '§12', '§12', '§12', '§12', '§12', '§12', '§12', '§12', '§12', '§12', '§12', '§12', '§32', '§38', '§12']

DRS: Corporate Credit Overview 01MAR2012
This overview of Connecticut’s available business tax credits includes a reference chart that lists each available tax credit, statutory authority for the tax credit, what taxes the tax credit may be applied against, and other informational notes.
Tax credits are “tax expenditures” paid for by foregoing revenues that would otherwise be paid to the state. Tax credits are also a matter of “legislative grace” and, therefore, narrowly construed. Careful attention must be paid to determine:
The authorizing state statutes usually specify what entities may earn tax credits. Under the majority of tax credit statutes, only the entity that earned the credit may claim the credit. See Bell Atlantic Nynex Mobile v. Commissioner of Revenue Services, 273 Conn. 240 (2005). However, there are tax credits that may be claimed by an entity other than the entity that earned the credit. See Flow-Through of Tax Credits below.
Please review the language of the specific tax credit to determine what entities may claim the credit.
Tax credits under Conn. Gen. Stat. Chapter 208 follow much of the Internal Revenue Code and federal income tax principles, including the conduit treatment of partnerships. See Bell Atlantic Nynex Mobile v. Commissioner of Revenue Services, 273 Conn. 240, 248. However, other chapters of the Connecticut General Statutes do not and conduit treatment is not applicable to such chapters.
Tax credits that may be assigned are specifically identified in the reference chart that follows. Unless otherwise specifically provided statutorily, tax credits may only be assigned once. Even if a tax credit may be assigned, assignment may only be made before the tax credit has been claimed (reported) on a tax return. If a tax credit is assigned, the assignee must claim the tax credit in the year in which the business that earned the tax credit would have been eligible to claim the tax credit. If a tax credit that allows carryforward is assigned, the assignee is entitled to the same carryforward provisions. DRS will rely solely on documentation provided by the Department of Economic and Community Development or the Department of Energy and Environmental Protection with respect to proof of assignment.
For most tax credits, there is a specific form that must be completed to claim the tax credit. Failure to provide all documentation required for the specific tax credit form may result in a denial of the tax credit. In addition to completing the applicable tax credit forms, you must report any such tax credit on Form CT -1120K, Business Tax Credit Summary. Important note: Do not use Form CT-1120K in connection with a tax credit to be applied against the tax as imposed by Chapter 207 or 229 of the Connecticut General Statutes. Please refer to the appropriate tax instruction booklet for information on how to claim these credits.
The Financial Institutions tax credit must be claimed before any other credit allowed against the tax imposed under Chapter 208 of the Connecticut General Statutes. In addition, taxpayers may apply the Electronic Data Processing Equipment Property tax credit only after all other allowable tax credits have been applied. If a taxpayer uses the Electronic Data Processing Equipment Property tax credit, the taxpayer must first use the tax credit against the tax imposed under Chapter 208, and then against the taxes imposed under Chapters 207, 208a, 209, 210, 211, or 212.
Tax Credits Against Chapter 208
In general, the amount of tax credits otherwise allowable against the taxes imposed under Chapter 208 for any income year may not exceed 70% of the amount of tax due prior to the application of tax credits. However, for income years beginning on or after January 1, 2011, and prior to January 1, 2013, the amount of the tax credit limitation may exceed 70% if a taxpayer has an average monthly net employment gain. To calculate the amount by which the tax credit limitation may exceed 70%, a taxpayer must calculate its average monthly net employee gain for the income year and multiply that amount by $6,000. In no event may the amount of tax credit or credits otherwise allowable against the tax for such income year exceed 100% of the tax due or be used against the minimum tax of $250.
Tax Credits Against Chapter 207
For calendar year 2010, the amount of tax credits otherwise allowable against the taxes imposed under Chapter 207 may not exceed 70% of the amount of tax due prior to the application of tax credits. The same rule applies for all tax credits. For the 2011 and 2012 calendar years only, the amount of tax credits allowed against the taxes imposed under Chapter 207 is reduced. For those two calendar years, the amount of tax credits allowed against the taxes imposed under Chapter 207 may not exceed 70% for Insurance einvestment Fund tax credits, 55% for Digital Animation, Film Production and Film Production Infrastructure tax credits, and 30% for all other credits. The ordering rule for the application of the tax credits is adjusted in light of the new credit limitations.
In addition, for the 2011 and 2012 calendar years the amount of tax credits otherwise allowable may exceed the tax credit limitations set forth above. To calculate the amount by which the tax credit cap may be exceeded, a taxpayer must calculate its average monthly net employee gain for the income year and multiply that amount by $6,000. In no event may the amount of tax credit or credits otherwise allowable against the tax for such income year exceed 100% of the tax due.
None of the business tax credits are refundable. However, under certain circumstances two of the research and development tax credits may be exchanged with the state for 65% of their value. See the summaries for the Research and Development (Nonincremental) Expenses tax credit and the Research and Experimental (Incremental) Expenditures tax credit.
Connecticut Business Tax Credit Chart
Credit May be Applied Against Tax Imposed Under Conn. Gen. Stat.
§12-217g
§10-228b
Chs 207, 208, 209, 210, 211, 212
Credit will not be available for income years beginning on or after January 1, 2014
§12-217ll
Chs 207, 208
§12-217bb
§12-217hh
§§12-202, 12-210, or
Chs 208, 212
Credit may not be applied against tax imposed under §12-202a
Donation of Land Tax Credits
§§12-217dd,
12-217ff
§12-217
Equipment Property Tax Credit
§12-217t
Chs 207, 208, 208a, 209, 210, 211, 212
§12-217v
§12-217kk
§12-217jj
Assignable with certain limits
§12-217u
Credit will not be available for income years beginning on or after January 1, 2014.
§12-217w
§12-217mm
Assignable. Credit will be available for tax years beginning on or after January 1, 2012.
§12-217y
§10-416b
Assignable. Formerly referred to as the Historic Investment Tax Credit
Historic Homes Rehabilitative
§10-416
§10-416a
§8-395
§12-217x
§38a-88a
§38a-743 or Chs 207,208, 229
Assignable. Credit is only available if new investment criteria are met.
§12-217pp
Chs 207, 208, 209, 212, 229
Credit is limited to employees hired between January 1, 2012 and December 31, 2013.
Credit may not be applied against tax imposed under §12-707.
New Insurance Reinvestment Fund Tax Credit
Assignable only to an affiliate
§12-217o
§§12-631 through 12-638
Credit can be earned by an entity subject to tax imposed under Ch.213a but cannot be applied against tax imposed under Ch.213a.
§12-217ii
§§12-202,12-210, or Chs 208, 212
Credit may not be applied against tax imposed under §12-202a.
DECD will not issue eligibility certificates after December 31, 2011.
§12-217nn
Chs 207, 208, 229
Credit not available for income years beginning on or after January 1, 2013. May not be applied against tax imposed under §12-707.
Research and Experimental (Nonincremental) Expenses Tax Credit
§12-217n
§12-217l
§12-217j
§12-217e
§12-217cc
§32-9t
§38a-743 or Chs 207, 208, 208a, 209, 210, 211, 211a, 211b, 212, 212a
§12-217oo
Credit cannot be earned for employees hired during income years beginning on or after January 1, 2012.