Connecticut R&D Tax Credit Updated in State Budget Legislation
On June 23rd, Governor Lamont signed Connecticut’s state budget legislation into law. While the budget did not change anything for income or sales tax rates, it did include a change to the Connecticut State Research and Development Tax Credit.
There will be an increase in the R&D credit corporations may claim against their annual Connecticut tax liability over the next two years. This increase will bring the cap on this credit from 50.01% to 60% of their annual tax liability for the 2022 tax year and 70% for the 2023 tax year and onward.
However, the carryforward period for unused credits will be reduced. This period will now be capped to 15-year carryforward rather than the unlimited “period’ that was used before. This change will come into effect starting with R&D credits earned in the 2021 tax year.
Are you developing new software for an existing application? Did you know your development work could be eligible for the R&D Tax Credit and you can receive up to 14% back on your expenses? Even if your development isn’t successful your work may still qualify for R&D credits (i.e. you don’t need to have a patent to qualify). To find out more, please contact a Swanson Reed R&D Specialist today or check out our free online eligibility test.
Who We Are:
Swanson Reed is one of the U.S.’ largest Specialist R&D tax advisory firms. We manage all facets of the R&D tax credit program, from claim preparation and audit compliance to claim disputes.
Swanson Reed regularly hosts free webinars and provides free IRS CE and CPE credits for CPAs. For more information please visit us at www.swansonreed.com/webinars or contact your usual Swanson Reed representative.