Connecticut

State Credit Name: Research and Experimental Expenditures Tax Credit

Expiration Date: Indefinite

Who Can Apply? Corporations and flow-through entities

Credit Carry Forward: Unlimited carry forward for the Non-Incremental credit. 15 year carry forward for the Incremental Credit. There is a mandatory carry forward of  of 2/3 of the credit received in the tax year. No carry back.

About the Credit: The Incremental Method: 20% of the amount spent by the corporation directly on Connecticut research and experimentation expenditures that exceed expenses in the previous years.

Non-Incremental Method: Businesses with a gross income of less than $100 million from the previous year can take 6% of QRE’s. Large companies are eligible for a graduated percentage. If a company is in an enterprise zone, they can choose to use 3.5%.

Notes: Taxpayers can elect both the Incremental and the Non-Incremental methods in a tax year. Taxpayers with a gross revenue of less than $70 million may elect to receive a refund of 65% of unused credits. The credit used in one year is limited to 1/3 of the current year credit received.

Click here to find out if you qualify for the federal research tax credit.

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