State R&D Tax Credits


Credit Name: CT-1120RC Research and Experimental Expenditures Tax Credit

Expiration Date: Unknown

Does it apply to C corps and pass-through entities?: Yes

Credit Carry forward: No Carry Back. Unlimited Carry Forward for the non-incremental credit. 15 year carryforward for the Incremental Credit

Description: Incremental method: 20% of the amount spent by the corporation directly on Connecticut research and experimentation expenditures that exceed expenses in the previous year.

Non-incremental method: Qualified small business (gross income less than $100M from previous year) can take 6% of QREs. Large companies are eligible for a graduated percentage. If Company is in an enterprise zone, may elect to use 3.5%.

Other Notes: Taxpayers with gross revenu of less than $70M may elect to receive a refund of 65% of unused credits instead of carrying the credit forward.

Taxpayers may elect BOTH the Incremental and Non-Incremental methods in a tax year.

Credit allowed in a year is limited to 1/3 of current year credit (mandatory carryforward of at minimum 2/3 of credit generated in the tax year). Other restriction apply to credits per year.

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