Connecticut Administrative Code › Title 12 - Taxation › 740(a) - INCOME TAX › Part VI - Credit for income taxes paid to another jurisdiction › Section 12-704(a)-3 - Limitations where credit is claimed for income taxes paid both to a qualifying jurisdiction and also to one or more of its political subdivisions

Current through July 10, 2024
(a) When a state of the United States imposes
				an income tax on income derived from sources within such state and one or more
				of its political subdivisions imposes income tax on the same income (or a
				portion thereof), the amount of the credit against Connecticut income tax for
				income taxes paid to that state and its political subdivision(s) is subject to
				the limitations provided in subsections (b), (c), (d) and (e) of this section
				and in §
									12-704(c)-1
				of this Part. When a state does not impose an income tax on income derived from
				sources within such state but two or more of its political subdivisions impose
				an income tax on income derived from sources within those respective political
				subdivisions, the amount of the credit against Connecticut income tax on income
				taxes paid to those political subdivisions is subject to the limitations
				provided in §
									12-704(a)-2
				of this Part (and not to the limitations provided in this section).
(b) Except as further limited by subdivision
				(3) of subsection (c) of this section, the credit for income tax paid to
				another state and its political subdivision(s) cannot exceed the total of the
				income taxes paid to those qualifying jurisdictions.
(c)
(1) The
				credit for income tax paid to another state and its political subdivision(s)
				cannot exceed the proportion of the Connecticut tax liability that is described
				in this subsection.
(2) Where the
				amount of income subject to tax in another state is equal to (and not more or
				less than) the amount of income subject to tax in a political subdivision of
				such state, that common amount of income is to be included only once in the
				numerator, and the credit for income tax paid to a state and its political
				subdivision cannot exceed the proportion of the Connecticut tax liability that
				the common amount (the numerator) bears to the taxpayer's Connecticut adjusted
				gross income (the denominator).
(3)
				Where the amount of income subject to tax in another state is not equal to (but
				is more or less than) the amount of income subject to tax in a political
				subdivision of such state, the credit for income tax paid to a state and its
				political subdivision cannot exceed the aggregate limitation described in
				subparagraphs (A) and (B) of this subdivision.
(A) With respect to the common amount subject
				to tax in both the other state and a political subdivision of such state (the
				common amount), the credit for income tax paid on the common amount cannot
				exceed the proportion of the Connecticut tax liability that such common amount
				(the numerator) bears to the taxpayer's Connecticut adjusted gross income (the
				denominator). For purposes of the limitation provided in subsection (b) of this
				section, the income tax considered to have been paid to the qualifying
				jurisdiction in which the larger amount of income is subject to tax (the larger
				income jurisdiction) on the common amount is that percentage of the income tax
				actually paid to the larger income jurisdiction that the common amount bears to
				the amount of income subject to tax in the larger income
				jurisdiction.
(B) With respect to
				the amount in excess of such common amount (the excess amount), the credit for
				income tax paid on the excess amount cannot exceed the proportion of the
				Connecticut tax liability that such excess amount (the numerator) bears to the
				taxpayer's Connecticut adjusted gross income (the denominator). (For purposes
				of the limitation provided in subsection (b) of this section, the income tax
				considered to have been paid to the larger income jurisdiction on the excess
				amount is that percentage of the income tax actually paid to the larger income
				jurisdiction that the excess amount bears to the amount of income subject to
				tax in the larger income jurisdiction.)