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Recapture Provision

A taxpayer must recapture a percentage of the credit allowed for the entire period of eligibility if an investment is made in an insurance company or in a company that provides services to an insurance business if:

  • The number of new employees on account of which a taxpayer claimed the credit decreases to less than 25% of its total work force for more than 60 days during any of the taxable years for which the credit is claimed;

  • Those employees are not replaced by other employees who have not been shifted from an existing location of the subject insurance business in Connecticut; and

  • The insurance business in which the investment was made has relocated to a location outside Connecticut.

The recapture will not apply and the tax credits may continue to be claimed if, for the entire period that the credit is applicable, the decrease in the percentage of total work force employed in Connecticut on a regular, full-time, and permanent basis does not result in an actual decrease in the number of persons employed by the subject insurance business in Connecticut.

The taxpayer must recapture a percentage of the credit that is related to an investment in a company that meets the requirements provided above as follows:

Where to Get Additional Information

Direct inquiries to:

Department of Economic and Community Development Attn: Michael Lettieri 505 Hudson Street 2nd Floor Hartford CT 06106-7107

860-270-8127 www.ct.gov/ecd

REFERENCES: Conn. Gen. Stat. §38a-88a

Year

Percentage

Year 4

90%

Year 5

65%

Year 6

50%

Year 7

30%

Year 8

20%

Years 9 and 10

10%

The Commissioner of Revenue Services may recapture the credit first from any taxpayer who claimed the credit, then from any taxpayer who assigned the credit, and finally from any fund through which the investment that generated the credit was made.

44

Informational Publication 2006(15), Guide to Connecticut Business Tax Credits Issued: 04/24/07

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