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How to Apply

Complete Form CT-1120 MEC, Machinery and Equipment Credit.

Forms are available anytime from the DRS website at www.ct.gov/DRS or by calling the DRS Forms Unit at 1-800-382-9463 (Connecticut calls outside the Greater Hartford calling area only) and selecting Option 2 from a touch-tone phone, or 860-297-4753 (from anywhere).

TTY, TDD, and Text Telephone users only may transmit inquiries anytime by calling 860-297-4911.

Attachments Required

Schedules listing machinery and equipment expenditures and verification of the number of full-time employees must be attached to a completed Form CT-1120 MEC. The credit amount reported on Form CT-1120 MEC must be entered on Form CT-1120K, Business Tax Credit Summary. Form CT-1120 MEC and all schedules must be attached to Form CT-1120K.

Q & A on the Machinery and Equipment Expenditure Credit:

1. How is the final number of employees determined?

The final number of employees is determined by taking the average of the number of full-time, permanent employees in Connecticut that are reported on the corporation's Form CT-941, Connecticut Quarterly Reconciliation of Withholding, for the income year.

  • 2.

    Do motor vehicles, mobile transportation, or construction equipment (for interior or exterior use) expenses qualify? No. Conn. Gen. Stat. §12-217o requires that the machinery and equipment be installed in a facility in Connecticut.

  • 3.

    When an asset is traded in, what is the corporation's expenditure for the asset that is replaced?

The expenditure is the cash paid plus the consideration received for the asset traded.

  • 4.

    What amount is taken into account on machinery and equipment expenditures and dispositions – gross or net purchases? The credit is based on the amounts spent by the corporation on machinery and equipment without regard to dispositions, reductions for the original tax cost or adjusted tax basis of disposed assets, or consideration received for disposed assets.

  • 5.

    Do bundled, unbundled, custom, or canned software expenses qualify? Canned software qualifies if it is preloaded with the machinery on which it is used. However, custom software does not qualify.

Where to Get Additional Information

Direct inquiries to:

Department of Revenue Services Taxpayer Services Division 25 Sigourney Street Hartford CT 06106

1-800-382-9463 (Connecticut calls outside the Greater Hartford calling area only), or 860-297-5962 (from anywhere)

www.ct.gov/DRS

REFERENCES: Conn. Gen. Stat. §12-217o

46

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

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