If you conducted business or earned income in Connecticut, you may be subject to Connecticut state taxes. If this applies to you, please find below the details regarding key tax deadlines and extension information for 2024.
In Connecticut, you may:
File your taxes online for free via myConnecCT
When filing by mail, ensure that your documents are postmarked by the due date.
Federal filing is not required.
Amendments are allowed up to 3-years from the original date of filing.
Cannot apply for tax credit exchange on amended returns.
Overview, Eligibility, and Limitations
Overview, Eligibility, and Limitations
Research and Experimental Expenditures Tax Credit
A corporation can receive a tax credit for research and development expenses that are deductible under IRC § 174, as well as for basic research payments that are deductible under IRC § 41.
A qualified small business that is unable to utilize the credit in a given year due to having no tax liability can either carry the credit forward to future years or apply to the Commissioner to exchange the credit for a refund worth 65% of its value.
Eligible Entities
C-Corporations only.
S-Corporations, Partnerships, and Sole-Proprietors are not eligible.
Two credits are available for Connecticut. You may claim both.
Incremental R&D Credit – Research and Experimental Expenditure (RC)
Non-incremental R&D Credit – Research and Development Expenditure (RDC)
Incremental R&D Credit
Incremental R&D Credit
The tax credit is 20% of the excess in qualified research and experimental expenses for the current claim year compared to the prior year.
Additionally, the credit may be partially refundable for taxpayers with gross income not exceeding $70 million and no tax liability.
Carryforward and Carryback Limitations
Carryforward and Carryback Limitations
The tax credit shall be carried forward for 15 successive income years until the tax credit is fully taken.
Credits cannot be carried back to prior tax years.
Refundable?
Refundable?
Yes – A qualified small business that cannot utilize the tax credit in a year due to having no tax liability may exchange the credit for a refund equal to 65% of its value or choose to carry the credit forward to future years.
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.
A qualified small business may receive no more than $1,500,000 of tax credit refund for any one income year.
A qualified small business that files a Form CT-1120 is permitted to exchange this tax credit if:
The company’s apportioned amount of net income is zero or negative, regardless of the amount of its capital base tax.
The company’s capital base tax is equal to $250.
A qualified small business that files as part of a combined group on a Form CT-1120CU is permitted to exchange this tax credit if the group pays tax on the capital base and:
The qualified small business’s apportioned amount of the combined group’s net income is zero or negative, regardless of its portion of the capital base tax.
The qualified small business’s portion of the capital base tax is equal to $250.
To exchange tax credits, complete the following:
Form CT-1120XCH – Application for Exchange of Research and Development
Submit at the same time as the tax return for the income year on or before the original due date.
Or, if applicable, the extended due date of the return.
Non-Incremental R&D Credit
Non-Incremental R&D Credit
Qualified small businesses are entitled to a tentative tax credit equal to 6% of its research and development expenses.
All other companies: Calculate the tax credit as provided below based on the amount of qualified research and development expenditures in Connecticut, as follows:
If it results in a greater tentative tax credit, companies headquartered in an Enterprise Zone, with revenues in excess of $3 billion, employing more than 2,500 employees, shall multiply their research and development expenses by 3.5% instead of using the tax credit percentage listed above.
Connecticut Wage Base Reduction
Connecticut Wage Base Reduction
(Only if the business incurred more than $200 million in R&D expenses)
Taxpayers that pay or incur more than $200 million in research and development expenses in an income year must reduce their Research and Development tax credit if workforce reductions exceed certain percentages.
To determine the extent of workforce reductions, the current wage base is compared to a historic wage base determined from the third full income year immediately preceding the current income year.
The wage base is calculated from the total wages with exclusions for the ten most highly paid executives of the taxpayer.
The Research and Development tax credit must be reduced by the following percentages based on the extent of the workforce reduction from the historic wage base.
Carryforward and Carryback Limitations
Carryforward and Carryback Limitations
Tax credits that are allowed but that exceed the limitation amounts may be carried forward to each successive income year until such credits are fully taken. All allowable tax credits from prior years must be carried forward and applied before the current year tax credit may be taken.
In general, the amount of tax credits allowable against the corporation business tax shall not exceed 50.01% of the amount of tax due.
However, Research and Development Expenses Tax Credits may be used up to 60% of the tax due in income year 2022, and up to 70% of the tax due in income year 2023 and thereafter.
For income years that begin prior to January 1, 2021, tax credits that are allowed but that exceed the limitation amounts may be carried forward to each successive income year until such credits are fully taken.
Unused R&D Tax Credits that are earned during income years that begin on or after January 1, 2021, may be carried forward for up to 15 years. All allowable tax credits from prior years must be carried forward and applied before the current year tax credit may be taken.
Credits cannot be carried back to prior tax years.
Refundable?
Refundable?
Yes – A qualified small business whose gross income does not exceed $70 million and who cannot take the credit as a result of having no tax liability may elect to carry 100% of the credit forward or may be eligible to exchange the credit for a credit refund equal to 65% of its value, subject to certain limitations.
See Conn. Gen. Stat. § 12-217ee. See Form CT-1120 XCH, Application for Exchange of Research and Development or Research and Experimental Expenditures Tax Credits by a Qualified Small Business, for eligibility.
Only tax credits earned in the current year and entitled to be claimed in the current year may be exchanged.
A qualified small business may receive no more than $1,500,000 of tax credit refund for any one income year.
A qualified small business that files a Form CT-1120 is permitted to exchange this tax credit if:
The company’s apportioned amount of net income is zero or negative, regardless of the amount of its capital base tax.
The company’s capital base tax is equal to $250.
To exchange tax credits, complete the following:
Form CT-1120XCH – Application for Exchange of Research and Development
Submit at the same time as the tax return for the income year on or before the original due date.
Or, if applicable, the extended due date of the return.
C-Corporation
You must file in Connecticut by April 15, 2025.
Applicable R&D Forms
Form CT-1120-RC – Research and Experimental Expenditure Tax Credit
Form CT-1120-RDC – Research and Development Expenditure Tax Credit
(Two credits available: RC and RDC. You may take both.)
File the above form with the following tax forms:
Form CT-1120 – Connecticut Corporation Business Tax Return
Extension to File Taxes in Connecticut for 2024
Taxes owed in Connecticut for the tax year 2024 must be paid by April 15, 2025.
No separate extension filing is required in Connecticut.
Connecticut automatically grants an extension for C-Corporation tax returns.
C-Corporation: the extension deadline is October 15, 2025.
Note that this extension pertains to the filing deadline, not the payment deadline.
Payment of taxes owed is still required by April 15, 2025.
S-Corporation / Partnership
S-Corporation / Partnership
You must file in Connecticut by March 15, 2025.
Applicable R&D Forms
Not eligible
These are the tax forms when filing as an S-Corp or Partnership
Form CT-1120SI – Composite Income Tax Return for S Corporations and Partnerships
Form CT-1065 – Partnership Return of Income
Extension to File Taxes in Connecticut for 2024
Taxes owed in Connecticut for the tax year 2024 must be paid by March 15, 2025.
No separate extension filing is required in Connecticut.
Connecticut automatically grants a 6-month extension for both S-Corporation tax Partnership tax returns.
S-Corporation: the extension deadline is September 15, 2025.
Partnership: the extension deadline is September 15, 2025.
Note that this extension pertains to the filing deadline, not the payment deadline.
Payment of taxes owed is still due by March 15, 2025.
Sole-Proprietorship
Sole-Proprietorship
You must file in Connecticut by April 15, 2025.
Applicable R&D Forms
Not eligible
These are the tax forms when filing as a sole proprietor
Form 1040 – Connecticut Resident Income Tax Return
Form CT-1040NR/PY – Nonresident/Part-Year Resident Tax Return
Extension to File Taxes in Connecticut for 2024
Taxes owed in Connecticut for the tax year 2024 must be paid by April 15, 2025.
No separate extension filing is required in Connecticut.
Connecticut automatically grants a 6-month extension for individual tax returns.
Sole-Proprietorship: the extension deadline is October 15, 2025.
Note that this extension pertains to the filing deadline, not the payment deadline.
Payment of taxes owed is still due by April 15, 2025.
Note: Connecticut conforms to IRC §174, not IRC §41.
Please consult with your tax professional to ensure proper filing.
References
We strive to ensure the accuracy of the information on this page, but it is not intended as tax or legal advice. Please use your own professional judgment and consult with a tax professional. Any advice you provide in connection with tax return preparation must comply in full with the requirements of IRS Circular 230.