New Jobs Creation Tax Credit
A tax credit is available for the creation of 50 new jobs. The credit is available to any taxpayer that is subject to the insurance premiums tax under Chapter 207; the corporation business tax under Chapter 208; or the utilities company tax under Chapter 212 of the Connecticut General Statutes provided that the entity was not conducting business in Connecticut prior to its relocation to Connecticut.
The credit allowed is an amount up to 25% of the income tax deducted and withheld from the wages of new employees and paid over to the state according to Chapter 229 of the Connecticut general statutes. For each new employee, credits may be granted for five successive years.
How to Compute the Credit
The credit is administered by the Commissioner of DECD. To be entitled to claim the credit an application for an eligibility certificate must be submitted to DECD. The total amount of credits granted to all taxpayers will not exceed $10 million in any one fiscal year.
Effective for income years beginning on or after January 1, 2006.
A new job is defined as a job which did not exist prior to the application and which is filled by a new employee hired by the taxpayer to fill a full-time job.
Relocation to Connecticut means the taxpayer creating the new job must not have been conducting business in Connecticut prior to the taxpayer's application to Department of Economic and Community Development (DECD) for an eligibility certificate.
New employee means a person hired by the taxpayer to fill a new full-time job. A new employee does not include a person who was employed in Connecticut by a related person with respect to the taxpayer within the prior 12 months.
Claiming the Credit
Complete Form CT-1120 NJC, New Jobs Creation Credit, and attach it to Form CT-1120K, Business Tax Credit Summary.
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.
No carryforward or carryback is allowed. The credit is claimed in the income year in which it is earned and any credit not used in a tax year expires.
Full-time job means a job in which the employee is hired to work at least 35 hours per week and does not include a temporary or seasonal job.
Informational Publication 2006(15), Guide to Connecticut Business Tax Credits Issued: 04/24/07