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Attachments Required

The following information should be attached to Form CT-1120RC:

  • A full and complete description of the nature of the research projects conducted by the company during the income year, and the location(s) where the research is conducted;

  • A full and complete description of the methods used to obtain the amount spent directly on research and experimental expenditures conducted in Connecticut, in accordance with Conn. Gen. Stat. §12-217j;

  • A detailed description of each source of information used to compute the credit, including the methods and calculations of expense allocation, if any; and

  • The job title and detailed description of each employee whose wages are included in the research expenditures.

Exchange of Tax Credit for Refund

A qualified small business that cannot take this tax credit in a taxable year in which it could otherwise be taken, as a result of having no tax liability, may exchange such credit with the State of Connecticut for a credit refund equal to 65% of the value of the credit or may elect to carry such credit forward as indicated above.

For the purpose of exchanging tax credits, qualified small business means a company that has gross income for the previous income year that does not exceed $70 million and has not met the gross income test through transactions with a related person, as defined in Conn. Gen. Stat. §12-217w.

A qualified small business that reports no net income (prior to the application of net operating losses) or pays either the minimum tax of $250 or the capital base tax under Conn. Gen. Stat. §12-219 is permitted to exchange research and development tax credits.

A qualified small business that wishes to exchange tax credits must complete Form CT-1120 XCH, Application for Exchange of Research and Development or Research and Experimental Expenditures Tax Credits by a Qualified Small Business, and submit it with the final tax return for the income year. See Conn. Gen. Stat. §12-217ee.

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. §§12-217j and 12-217ee; 26 U.S.C. §174

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

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