us-ct/statute/supplements/2024/chapter-229/block-1 — Note: This 2024 Supplement is intended to be used in conjunction with the General Statutes of Connecticut, revised to January 1, 2023.

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(ii)Notwithstanding the provisions of subparagraph (A)(i)…#

(ii) Notwithstanding the provisions of subparagraph (A)(i) of this subdivision, for each taxpayer whose Connecticut adjusted gross income exceeds fifty-six thousand five hundred dollars, the amount of the taxpayer's Connecticut taxable income to which the three-per-cent tax rate applies shall be reduced by one thousand dollars for each five thousand dollars, or fraction thereof, by which the taxpayer's Connecticut adjusted gross income exceeds said amount. Any such amount of Connecticut taxable income to which, as provided in the preceding sentence, the three-per-cent tax rate does not apply shall be an amount to which the five-per-cent tax rate shall apply.

(iii) Each taxpayer whose Connecticut adjusted gross income exceeds two hundred thousand dollars shall pay, in addition to the tax computed under the provisions of subparagraphs (A)(i) and (A)(ii) of this subdivision, an amount equal to seventy-five dollars for each five thousand dollars, or fraction thereof, by which the taxpayer's Connecticut adjusted gross income exceeds two hundred thousand dollars, up to a maximum payment of two thousand two hundred fifty dollars.

(B) (i) For any person who files a return under the federal income tax for such taxable year as a head of household, as defined in Section 2(b) of the Internal Revenue Code:

Connecticut Taxable Income Rate of Tax Not over $16,000 3.0% Over $16,000 but not $480.00, plus 5.0% of the over $80,000 excess over $16,000 Over $80,000 but not $3,680, plus 5.5% of the over $160,000 excess over $80,000 Over $160,000 but not $8,080, plus 6.0% of the over $320,000 excess over $160,000 Over $320,000 but not $17,680, plus 6.5% of the over $400,000 excess over $320,000 Over $400,000 $22,880, plus 6.70% of the excess over $400,000

(ii) Notwithstanding the provisions of subparagraph (B)(i) of this subdivision, for each taxpayer whose Connecticut adjusted gross income exceeds seventy-eight thousand five hundred dollars, the amount of the taxpayer's Connecticut taxable income to which the three-per-cent tax rate applies shall be reduced by one thousand six hundred dollars for each four thousand dollars, or fraction thereof, by which the taxpayer's Connecticut adjusted gross income exceeds said amount. Any such amount of Connecticut taxable income to which, as provided in the preceding sentence, the three-per-cent tax rate does not apply shall be an amount to which the five-per-cent tax rate shall apply.

(iii) Each taxpayer whose Connecticut adjusted gross income exceeds three hundred twenty thousand dollars shall pay, in addition to the tax computed under the provisions of subparagraphs (B)(i) and (B)(ii) of this subdivision, an amount equal to one hundred twenty dollars for each eight thousand dollars, or fraction thereof, by which the taxpayer's Connecticut adjusted gross income exceeds three hundred twenty thousand dollars, up to a maximum payment of three thousand six hundred dollars.

(C) (i) For any husband and wife who file a return under the federal income tax for such taxable year as married individuals filing jointly or any person who files a return under the federal income tax for such taxable year as a surviving spouse, as defined in Section 2(a) of the Internal Revenue Code:

Connecticut Taxable Income Rate of Tax Not over $20,000 3.0% Over $20,000 but not $600.00, plus 5.0% of the over $100,000 excess over $20,000 Over $100,000 but not $4,600, plus 5.5% of the over $200,000 excess over $100,000 Over $200,000 but not $10,100, plus 6.0% of the over $400,000 excess over $200,000 Over $400,000 but not $22,100, plus 6.5% of the over $500,000 excess over $400,000 Over $500,000 $28,600, plus 6.70% of the excess over $500,000

(ii) Notwithstanding the provisions of subparagraph (C)(i) of this subdivision, for each taxpayer whose Connecticut adjusted gross income exceeds one hundred thousand five hundred dollars, the amount of the taxpayer's Connecticut taxable income to which the three-per-cent tax rate applies shall be reduced by two thousand dollars for each five thousand dollars, or fraction thereof, by which the taxpayer's Connecticut adjusted gross income exceeds said amount. Any such amount of Connecticut taxable income to which, as provided in the preceding sentence, the three-per-cent tax rate does not apply shall be an amount to which the five-per-cent tax rate shall apply.

(iii) Each taxpayer whose Connecticut adjusted gross income exceeds four hundred thousand dollars shall pay, in addition to the tax computed under the provisions of subparagraphs (C)(i) and (C)(ii) of this subdivision, an amount equal to one hundred fifty dollars for each ten thousand dollars, or fraction thereof, by which the taxpayer's Connecticut adjusted gross income exceeds four hundred thousand dollars, up to a maximum payment of four thousand five hundred dollars.

(D) (i) For any person who files a return under the federal income tax for such taxable year as a married individual filing separately:

Connecticut Taxable Income Rate of Tax Not over $10,000 3.0% Over $10,000 but not $300.00, plus 5.0% of the over $50,000 excess over $10,000 Over $50,000 but not $2,300, plus 5.5% of the over $100,000 excess over $50,000 Over $100,000 but not $5,050, plus 6.0% of the over $200,000 excess over $100,000 Over $200,000 but not $11,050, plus 6.5% of the over $250,000 excess over $200,000 Over $250,000 $14,300, plus 6.70% of the excess over $250,000

(ii) Notwithstanding the provisions of subparagraph (D)(i) of this subdivision, for each taxpayer whose Connecticut adjusted gross income exceeds fifty thousand two hundred fifty dollars, the amount of the taxpayer's Connecticut taxable income to which the three-per-cent tax rate applies shall be reduced by one thousand dollars for each two thousand five hundred dollars, or fraction thereof, by which the taxpayer's Connecticut adjusted gross income exceeds said amount. Any such amount of Connecticut taxable income to which, as provided in the preceding sentence, the three-per-cent tax rate does not apply shall be an amount to which the five-per-cent tax rate shall apply.

(iii) Each taxpayer whose Connecticut adjusted gross income exceeds two hundred thousand dollars shall pay, in addition to the tax computed under the provisions of subparagraphs (D)(i) and (D)(ii) of this subdivision, an amount equal to seventy-five dollars for each five thousand dollars, or fraction thereof, by which the taxpayer's Connecticut adjusted gross income exceeds two hundred thousand dollars, up to a maximum payment of two thousand two hundred fifty dollars.

(E) For trusts or estates, the rate of tax shall be 6.70% of the Connecticut taxable income.

(9) For taxable years commencing on or after January 1, 2015, but prior to January 1, 2024, in accordance with the following schedule:

(A) (i) For any person who files a return under the federal income tax for such taxable year as an unmarried individual:

(iii) Each taxpayer whose Connecticut adjusted gross income exceeds two hundred thousand dollars shall pay, in addition to the tax computed under the provisions of subparagraphs (A)(i) and (A)(ii) of this subdivision, an amount equal to ninety dollars for each five thousand dollars, or fraction thereof, by which the taxpayer's Connecticut adjusted gross income exceeds two hundred thousand dollars, up to a maximum payment of two thousand seven hundred dollars.

(iv) Each taxpayer whose Connecticut adjusted gross income exceeds five hundred thousand dollars shall pay, in addition to the tax computed under the provisions of subparagraphs (A)(i), (A)(ii) and (A)(iii) of this subdivision, an amount equal to fifty dollars for each five thousand dollars, or fraction thereof, by which the taxpayer's Connecticut adjusted gross income exceeds five hundred thousand dollars, up to a maximum payment of four hundred fifty dollars.

(B) (i) For any person who files a return under the federal income tax for such taxable year as a head of household, as defined in Section 2(b) of the Internal Revenue Code:

(iii) Each taxpayer whose Connecticut adjusted gross income exceeds three hundred twenty thousand dollars shall pay, in addition to the tax computed under the provisions of subparagraphs (B)(i) and (B)(ii) of this subdivision, an amount equal to one hundred forty dollars for each eight thousand dollars, or fraction thereof, by which the taxpayer's Connecticut adjusted gross income exceeds three hundred twenty thousand dollars, up to a maximum payment of four thousand two hundred dollars.

(iv) Each taxpayer whose Connecticut adjusted gross income exceeds eight hundred thousand dollars shall pay, in addition to the tax computed under the provisions of subparagraphs (B)(i), (B)(ii) and (B)(iii) of this subdivision, an amount equal to eighty dollars for each eight thousand dollars, or fraction thereof, by which the taxpayer's Connecticut adjusted gross income exceeds eight hundred thousand dollars, up to a maximum payment of seven hundred twenty dollars.

(iii) Each taxpayer whose Connecticut adjusted gross income exceeds four hundred thousand dollars shall pay, in addition to the tax computed under the provisions of subparagraphs (C)(i) and (C)(ii) of this subdivision, an amount equal to one hundred eighty dollars for each ten thousand dollars, or fraction thereof, by which the taxpayer's Connecticut adjusted gross income exceeds four hundred thousand dollars, up to a maximum payment of five thousand four hundred dollars.

(iv) Each taxpayer whose Connecticut adjusted gross income exceeds one million dollars shall pay, in addition to the tax computed under the provisions of subparagraphs (C)(i), (C)(ii) and (C)(iii) of this subdivision, an amount equal to one hundred dollars for each ten thousand dollars, or fraction thereof, by which the taxpayer's Connecticut adjusted gross income exceeds one million dollars, up to a maximum payment of nine hundred dollars.

(D) (i) For any person who files a return under the federal income tax for such taxable year as a married individual filing separately:

(iii) Each taxpayer whose Connecticut adjusted gross income exceeds two hundred thousand dollars shall pay, in addition to the tax computed under the provisions of subparagraphs (D)(i) and (D)(ii) of this subdivision, an amount equal to ninety dollars for each five thousand dollars, or fraction thereof, by which the taxpayer's Connecticut adjusted gross income exceeds two hundred thousand dollars, up to a maximum payment of two thousand seven hundred dollars.

(iv) Each taxpayer whose Connecticut adjusted gross income exceeds five hundred thousand dollars shall pay, in addition to the tax computed under the provisions of subparagraphs (D)(i), (D)(ii) and (D)(iii) of this subdivision, an amount equal to fifty dollars for each five thousand dollars, or fraction thereof, by which the taxpayer's Connecticut adjusted gross income exceeds five hundred thousand dollars, up to a maximum payment of four hundred fifty dollars.

(E) For trusts or estates, the rate of tax shall be 6.99% of the Connecticut taxable income.

(10) For taxable years commencing on or after January 1, 2024, in accordance with the following schedule:

(A) (i) For any person who files a return under the federal income tax for such taxable year as an unmarried individual:

Connecticut Taxable Income Rate of Tax Not over $10,000 2.0% Over $10,000 but not $200.00, plus 4.5% of the over $50,000 excess over $10,000 Over $50,000 but not $2,000, plus 5.5% of the over $100,000 excess over $50,000 Over $100,000 but not $4,750, plus 6.0% of the over $200,000 excess over $100,000 Over $200,000 but not $10,750, plus 6.5% of the over $250,000 excess over $200,000 Over $250,000 but not $14,000, plus 6.9% of the over $500,000 excess over $250,000 Over $500,000 $31,250, plus 6.99% of the excess over $500,000

(ii) Notwithstanding the provisions of subparagraph (A)(i) of this subdivision, for each taxpayer whose Connecticut adjusted gross income exceeds fifty-six thousand five hundred dollars, the amount of the taxpayer's Connecticut taxable income to which the two-per-cent tax rate applies shall be reduced by one thousand dollars for each five thousand dollars, or fraction thereof, by which the taxpayer's Connecticut adjusted gross income exceeds said amount. Any such amount of Connecticut taxable income to which, as provided in the preceding sentence, the two-per-cent tax rate does not apply shall be an amount to which the four-and-one-half-per-cent tax rate shall apply.

(iii) Each taxpayer whose Connecticut adjusted gross income exceeds one hundred five thousand dollars shall pay, in addition to the tax computed under the provisions of subparagraphs (A)(i) and (A)(ii) of this subdivision, an amount equal to twenty-five dollars for each five thousand dollars, or fraction thereof, by which the taxpayer's Connecticut adjusted gross income exceeds one hundred five thousand dollars, up to a maximum payment of two hundred fifty dollars.

(iv) Each taxpayer whose Connecticut adjusted gross income exceeds two hundred thousand dollars shall pay, in addition to the tax computed under the provisions of subparagraphs (A)(i), (A)(ii) and (A)(iii) of this subdivision, an amount equal to ninety dollars for each five thousand dollars, or fraction thereof, by which the taxpayer's Connecticut adjusted gross income exceeds two hundred thousand dollars, up to a maximum payment of two thousand seven hundred dollars.

(v) Each taxpayer whose Connecticut adjusted gross income exceeds five hundred thousand dollars shall pay, in addition to the tax computed under the provisions of subparagraphs (A)(i), (A)(ii), (A)(iii) and (A)(iv) of this subdivision, an amount equal to fifty dollars for each five thousand dollars, or fraction thereof, by which the taxpayer's Connecticut adjusted gross income exceeds five hundred thousand dollars, up to a maximum payment of four hundred fifty dollars.

(B) (i) For any person who files a return under the federal income tax for such taxable year as a head of household, as defined in Section 2(b) of the Internal Revenue Code:

Connecticut Taxable Income Rate of Tax Not over $16,000 2.0% Over $16,000 but not $320.00, plus 4.5% of the over $80,000 excess over $16,000 Over $80,000 but not $3,200, plus 5.5% of the over $160,000 excess over $80,000 Over $160,000 but not $7,600, plus 6.0% of the over $320,000 excess over $160,000 Over $320,000 but not $17,200, plus 6.5% of the over $400,000 excess over $320,000 Over $400,000 but not $22,400, plus 6.9% of the over $800,000 excess over $400,000 Over $800,000 $50,000, plus 6.99% of the excess over $800,000

(ii) Notwithstanding the provisions of subparagraph (B)(i) of this subdivision, for each taxpayer whose Connecticut adjusted gross income exceeds seventy-eight thousand five hundred dollars, the amount of the taxpayer's Connecticut taxable income to which the two-per-cent tax rate applies shall be reduced by one thousand six hundred dollars for each four thousand dollars, or fraction thereof, by which the taxpayer's Connecticut adjusted gross income exceeds said amount. Any such amount of Connecticut taxable income to which, as provided in the preceding sentence, the two-per-cent tax rate does not apply shall be an amount to which the four-and-one-half-per-cent tax rate shall apply.

(iii) Each taxpayer whose Connecticut adjusted gross income exceeds one hundred sixty-eight thousand dollars shall pay, in addition to the tax computed under the provisions of subparagraphs (B)(i) and (B)(ii) of this subdivision, an amount equal to forty dollars for each eight thousand dollars, or fraction thereof, by which the taxpayer's Connecticut adjusted gross income exceeds one hundred sixty-eight thousand dollars, up to a maximum payment of four hundred dollars.

(iv) Each taxpayer whose Connecticut adjusted gross income exceeds three hundred twenty thousand dollars shall pay, in addition to the tax computed under the provisions of subparagraphs (B)(i), (B)(ii) and (B)(iii) of this subdivision, an amount equal to one hundred forty dollars for each eight thousand dollars, or fraction thereof, by which the taxpayer's Connecticut adjusted gross income exceeds three hundred twenty thousand dollars, up to a maximum payment of four thousand two hundred dollars.

(v) Each taxpayer whose Connecticut adjusted gross income exceeds eight hundred thousand dollars shall pay, in addition to the tax computed under the provisions of subparagraphs (B)(i), (B)(ii), (B)(iii) and (B)(iv) of this subdivision, an amount equal to eighty dollars for each eight thousand dollars, or fraction thereof, by which the taxpayer's Connecticut adjusted gross income exceeds eight hundred thousand dollars, up to a maximum payment of seven hundred twenty dollars.

Connecticut Taxable Income Rate of Tax Not over $20,000 2.0% Over $20,000 but not $400.00, plus 4.5% of the over $100,000 excess over $20,000 Over $100,000 but not $4,000, plus 5.5% of the over $200,000 excess over $100,000 Over $200,000 but not $9,500, plus 6.0% of the over $400,000 excess over $200,000 Over $400,000 but not $21,500, plus 6.5% of the over $500,000 excess over $400,000 Over $500,000 but not $28,000, plus 6.9% of the over $1,000,000 excess over $500,000 Over $100,000 $62,500, plus 6.99% of the excess over $1000,000

(ii) Notwithstanding the provisions of subparagraph (C)(i) of this subdivision, for each taxpayer whose Connecticut adjusted gross income exceeds one hundred thousand five hundred dollars, the amount of the taxpayer's Connecticut taxable income to which the two-per-cent tax rate applies shall be reduced by two thousand dollars for each five thousand dollars, or fraction thereof, by which the taxpayer's Connecticut adjusted gross income exceeds said amount. Any such amount of Connecticut taxable income to which, as provided in the preceding sentence, the two-per-cent tax rate does not apply shall be an amount to which the four-and-one-half-per-cent tax rate shall apply.

(iii) Each taxpayer whose Connecticut adjusted gross income exceeds two hundred ten thousand dollars shall pay, in addition to the tax computed under the provisions of subparagraphs (C)(i) and (C)(ii) of this subdivision, an amount equal to fifty dollars for each ten thousand dollars, or fraction thereof, by which the taxpayer's Connecticut adjusted gross income exceeds two hundred ten thousand dollars, up to a maximum payment of five hundred dollars.

(iv) Each taxpayer whose Connecticut adjusted gross income exceeds four hundred thousand dollars shall pay, in addition to the tax computed under the provisions of subparagraphs (C)(i), (C)(ii) and (C)(iii) of this subdivision, an amount equal to one hundred eighty dollars for each ten thousand dollars, or fraction thereof, by which the taxpayer's Connecticut adjusted gross income exceeds four hundred thousand dollars, up to a maximum payment of five thousand four hundred dollars.

(v) Each taxpayer whose Connecticut adjusted gross income exceeds one million dollars shall pay, in addition to the tax computed under the provisions of subparagraphs (C)(i), (C)(ii), (C)(iii) and (C)(iv) of this subdivision, an amount equal to one hundred dollars for each ten thousand dollars, or fraction thereof, by which the taxpayer's Connecticut adjusted gross income exceeds one million dollars, up to a maximum payment of nine hundred dollars.

(D) (i) For any person who files a return under the federal income tax for such taxable year as a married individual filing separately:

(ii) Notwithstanding the provisions of subparagraph (D)(i) of this subdivision, for each taxpayer whose Connecticut adjusted gross income exceeds fifty thousand two hundred fifty dollars, the amount of the taxpayer's Connecticut taxable income to which the two-per-cent tax rate applies shall be reduced by one thousand dollars for each two thousand five hundred dollars, or fraction thereof, by which the taxpayer's Connecticut adjusted gross income exceeds said amount. Any such amount of Connecticut taxable income to which, as provided in the preceding sentence, the two-per-cent tax rate does not apply shall be an amount to which the four-and-one-half-per-cent tax rate shall apply.

(iii) Each taxpayer whose Connecticut adjusted gross income exceeds one hundred five thousand dollars shall pay, in addition to the tax computed under the provisions of subparagraphs (D)(i) and (D)(ii) of this subdivision, an amount equal to twenty-five dollars for each five thousand dollars, or fraction thereof, by which the taxpayer's Connecticut adjusted gross income exceeds one hundred five thousand dollars, up to a maximum payment of two hundred fifty dollars.

(iv) Each taxpayer whose Connecticut adjusted gross income exceeds two hundred thousand dollars shall pay, in addition to the tax computed under the provisions of subparagraphs (D)(i), (D)(ii) and (D)(iii) of this subdivision, an amount equal to ninety dollars for each five thousand dollars, or fraction thereof, by which the taxpayer's Connecticut adjusted gross income exceeds two hundred thousand dollars, up to a maximum payment of two thousand seven hundred dollars.

(v) Each taxpayer whose Connecticut adjusted gross income exceeds five hundred thousand dollars shall pay, in addition to the tax computed under the provisions of subparagraphs (D)(i), (D)(ii), (D)(iii) and (D)(iv) of this subdivision, an amount equal to fifty dollars for each five thousand dollars, or fraction thereof, by which the taxpayer's Connecticut adjusted gross income exceeds five hundred thousand dollars, up to a maximum payment of four hundred fifty dollars.

(E) For trusts or estates, the rate of tax shall be 6.99% of the Connecticut taxable income.

(11) The provisions of this subsection shall apply to resident trusts and estates and, wherever reference is made in this subsection to residents of this state, such reference shall be construed to include resident trusts and estates, provided any reference to a resident's Connecticut adjusted gross income derived from sources without this state or to a resident's Connecticut adjusted gross income shall be construed, in the case of a resident trust or estate, to mean the resident trust or estate's Connecticut taxable income derived from sources without this state and the resident trust or estate's Connecticut taxable income, respectively.

(b) There is hereby imposed on the Connecticut taxable income derived from or connected with sources within this state of each nonresident a tax which shall be the product of an amount equal to the tax computed as if such nonresident were a resident, multiplied by a fraction, the numerator of which is the nonresident's Connecticut adjusted gross income derived from or connected with sources within this state and the denominator of which is the nonresident's Connecticut adjusted gross income, provided, if the nonresident's Connecticut adjusted gross income is less than such nonresident's Connecticut adjusted gross income derived from or connected with sources within this state, (1) such nonresident's Connecticut adjusted gross income derived from or connected with sources within this state, reduced by the amount of the exemption provided in section 12-702, shall be such nonresident's Connecticut taxable income derived from or connected with sources within this state and shall be multiplied by the tax rate specified in subsection (a) of this section for the purposes of determining the tax pursuant to this section and (2) such nonresident's Connecticut adjusted gross income derived from or connected with sources within this state shall be such nonresident's Connecticut adjusted gross income for the purposes of determining the credit pursuant to section 12-703. The provisions of this subsection shall also apply to nonresident trusts and estates and, wherever reference is made in this subsection to nonresidents of this state, such reference shall be construed to include nonresident trusts and estates, provided any reference to a nonresident's Connecticut adjusted gross income derived from sources within this state or to a nonresident's Connecticut adjusted gross income shall be construed, in the case of a nonresident trust or estate, to mean the nonresident trust or estate's Connecticut taxable income derived from sources within this state and the nonresident trust or estate's Connecticut taxable income, respectively.

(c) (1) There is hereby imposed on the Connecticut taxable income derived from or connected with sources within this state of each part-year resident a tax which shall be a product equal to the tax computed as if such part-year resident were a resident, multiplied by a fraction, the numerator of which is the part-year resident's Connecticut adjusted gross income derived from or connected with sources within this state, as described in subsection (a) of section 12-717, and the denominator of which is the part-year resident's Connecticut adjusted gross income, as described in subdivision (2) of this subsection, provided, if the part-year resident's Connecticut adjusted gross income is less than such part-year resident's Connecticut adjusted gross income derived from or connected with sources within this state, (A) such part-year resident's Connecticut adjusted gross income derived from or connected with sources within this state, reduced by the amount of the exemption provided in section 12-702, shall be such part-year resident's Connecticut taxable income derived from or connected with sources within this state and shall be multiplied by the tax rate specified in subsection (a) of this section for the purposes of determining the tax pursuant to this section and (B) such part-year resident's Connecticut adjusted gross income derived from or connected with sources within this state shall be such part-year resident's adjusted gross income for the purposes of determining the credit pursuant to section 12-703. The provisions of this subsection shall apply to part-year resident trusts and, wherever reference is made in this subsection to part-year residents, such reference shall be construed to include part-year resident trusts, provided any reference to a part-year resident's Connecticut adjusted gross income derived from sources within this state or a part-year resident's Connecticut adjusted gross income shall be construed, in the case of a part-year resident trust, to mean the part-year resident trust's Connecticut taxable income derived from sources within this state and the part-year resident trust's Connecticut taxable income, respectively.

(2) For purposes of subdivision (1) of this subsection and subsection (a) of this section, the Connecticut adjusted gross income of a part-year resident (A) changing such resident's status from resident to nonresident shall be increased or decreased, as the case may be, by the items accrued under subdivision (1) of subsection (c) of section 12-717, to the extent not otherwise includable in Connecticut adjusted gross income for the taxable year, and (B) changing such resident's status from nonresident to resident shall be increased or decreased, as the case may be, by the items accrued under subdivision (2) of subsection (c) of section 12-717, to the extent included in Connecticut adjusted gross income for the taxable year.

(d) The provisions of this chapter shall be applicable with respect to any person, trust or estate. Whenever, in this chapter, “any person” appears without “trust or estate”, the reference to any person shall be deemed to include any trust and any estate unless, in the context of the particular provision, the reference to any person could not be applicable in the case of a trust or in the case of an estate.

(June Sp. Sess. P.A. 91-3, S. 51, 168; May Sp. Sess. P.A. 92-5, S. 1, 37; P.A. 93-74, S. 63, 67; 93-332, S. 6, 42; P.A. 95-160, S. 30, 69; P.A. 96-139, S. 8, 12, 13; P.A. 97-309, S. 8, 23; 97-322, S. 5, 7, 9; P.A. 03-2, S. 22; June Sp. Sess. P.A. 09-3, S. 119; P.A. 11-6, S. 107; P.A. 15-244, S. 66; P.A. 16-146, S. 10; P.A. 18-26, S. 25, 26; P.A. 23-204, S. 376.)

History: June Sp. Sess. P.A. 91-3, S. 51, effective August 22, 1991, and applicable to taxable years of taxpayers commencing on or after January 1, 1991; May Sp. Sess. P.A. 92-5 made various technical and minor changes, effective June 19, 1992, and applicable to taxable years of taxpayers commencing on or after January 1, 1992; P.A. 93-74 amended Subsec. (c) to add provisions re applicability of tax for part-year residents as Subdiv. (2), designating previously existing provisions as Subdiv. (1) and prior Subdivs. as Subparas. (A) and (B), effective May 19, 1993, and applicable to taxable years commencing on and after January 1, 1993; P.A. 93-332 amended Subsec. (c)(2) making technical changes, effective June 25, 1993, and applicable to taxable years on or after January 1, 1993; P.A. 95-160 amended Subsecs. (a) to (c) to decrease tax rate to 3% from 4.5% in accordance with the schedules in Subsec. (a)(2) and (3), effective June 1, 1995, and applicable to income years commencing on or after January 1, 1996; P.A. 96-139 amended Subsec. (a) to add references to filing return status under the federal income tax as defined in the Internal Revenue Code, and amended Subsec. (a)(3)(C) to change the rate of tax for persons filing joint returns on taxable income over $9,000 from $180.00 to $270.00, plus 4.5% of the excess over $9,000, effective May 29, 1996, and changed effective date of P.A. 95-160 but without affecting this section; P.A. 97-309 added Subsec. (a)(4) to increase amount of taxable income taxed at 3% for the taxable year commencing January 1, 1998, and Subsec. (a)(5) to increase amount of taxable income taxed at 3% for taxable years commencing on or after January 1, 1999, effective the later of July 1, 1997, or the first day of the calendar month immediately following the last action necessary to make effective a final budget for the biennium ending June 30, 1999, provided for purposes of this section any legislative action to continue the appropriations for the fiscal year ending June 30, 1997, with adjustments shall not constitute a final budget for the biennium ending June 30, 1999, and shall be applicable to income years commencing on or after January 1, 1998; P.A. 97-322 amended Subsec. (a)(3) and (5) to increase amount of taxable income subject to 3% rate, effective July 1, 1997 and revised effective date of P.A. 97-309 but without affecting this section; P.A. 03-2 amended Subsec. (a)(5) and added new Subdiv. (6) to increase the top rate to 5% and redesignated existing Subdiv. (6) as Subdiv. (7), effective February 28, 2003, and applicable to taxable years commencing on or after January 1, 2003; June Sp. Sess. P.A. 09-3 amended Subsec. (a) to add “but prior to January 1, 2009,” in Subdiv. (6), to add Subdiv. (7) re new rate schedule and to redesignate existing Subdiv. (7) as Subdiv. (8), effective September 9, 2009, and applicable to taxable years commencing on or after January 1, 2009; P.A. 11-6 amended Subsec. (a) to add Subdiv. (8) re tax rates for taxable years commencing on or after January 1, 2011, re phasing out the 3% tax rate for certain taxpayers and re benefit recapture for certain taxpayers, and redesignated existing Subdiv. (8) as Subdiv. (9), effective May 4, 2011, and applicable to taxable years commencing on or after January 1, 2011; P.A. 15-244 amended Subsec. (a) to add “but prior to January 1, 2015” in Subdiv. (8), add new Subdiv. (9) re tax rates for taxable years commencing on or after January 1, 2015, and re phasing out 3% tax rate for certain taxpayers, benefit recapture for certain taxpayers and rate for trusts or estates, and redesignate existing Subdiv. (9) as Subdiv. (10), effective June 30, 2015, and applicable to taxable years commencing on or after January 1, 2015; P.A. 16-146 amended Subsec. (a)(9)(B)(i) by replacing “$50,400” with “$50,480” in provision re tax rate for person filing as head of household for taxable years commencing on or after January 1, 2015, effective June 9, 2016; P.A. 18-26 made technical changes in Subsecs. (a)(9)(C)(i) and (c)(2); P.A. 23-204 amended Subsec. (a) to add “but prior to January 1, 2024,” in Subdiv. (9), add new Subdiv. (10) re tax rates for taxable years commencing on or after January 1, 2024, and redesignate existing Subdiv. (10) as Subdiv. (11), effective June 12, 2023, and applicable to taxable years commencing on or after January 1, 2024.

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Sec. 12-701. Definitions. Regulations. (a) For purposes of this chapter:

(1) “Resident of this state” means any natural person (A) who is domiciled in this state, unless (i) the person maintains no permanent place of abode in this state, maintains a permanent place of abode elsewhere and spends in the aggregate not more than thirty days of the taxable year in this state, or (ii) within any period of five hundred forty-eight consecutive days the person is present in a foreign country or countries for at least four hundred fifty days, and during such period of five hundred forty-eight consecutive days the person is not present in this state for more than ninety days and does not maintain a permanent place of abode in this state at which such person's spouse, unless such spouse is legally separated, or minor children are present for more than ninety days, and during the nonresident portion of the taxable year with or within which such period of five hundred forty-eight consecutive days begins and the nonresident portion of the taxable year with or within which such period ends, such person is present in this state for a number of days which does not exceed an amount which bears the same ratio to ninety as the number of days contained in such portion of the taxable year bears to five hundred forty-eight, or (B) who is not domiciled in this state but maintains a permanent place of abode in this state and is in this state for an aggregate of more than one hundred eighty-three days of the taxable year, unless such person, not being domiciled in this state, is in active service in the armed forces of the United States.

(2) “Nonresident of this state” means any natural person who is not a resident of this state for any portion of the taxable year.

(3) “Part-year resident of this state” means any natural person who is not either a resident of this state for the entire taxable year or a nonresident of this state for the entire taxable year.

(4) “Resident trust or estate” means (A) the estate of a decedent who at the time of his death was a resident of this state, (B) the estate of a person who, at the time of commencement of a case under Title 11 of the United States Code, was a resident of this state, (C) a trust, or a portion of a trust, consisting of property transferred by will of a decedent who at the time of his death was a resident of this state, and (D) a trust, or a portion of a trust, consisting of the property of (i) a person who was a resident of this state at the time the property was transferred to the trust if the trust was then irrevocable, (ii) a person who, if the trust was revocable at the time the property was transferred to the trust, and has not subsequently become irrevocable, was a resident of this state at the time the property was transferred to the trust or (iii) a person who, if the trust was revocable when the property was transferred to the trust but the trust has subsequently become irrevocable, was a resident of this state at the time the trust became irrevocable. For purposes of this chapter, if any trust or portion of a trust, other than a trust created by the will of a decedent, has one or more nonresident noncontingent beneficiaries, the Connecticut taxable income of the trust, as defined in subdivision (9) of this subsection, shall be modified as follows: The Connecticut taxable income of the trust shall be the sum of all such income derived from or connected with sources within this state and that portion of such income derived from or connected with all other sources which is derived by applying to all such income derived from or connected with all other sources a fraction the numerator of which is the number of resident noncontingent beneficiaries and the denominator of which is the total number of noncontingent beneficiaries. For purposes of section 12-700a, if any trust or portion of a trust, other than a trust created by the will of a decedent, has one or more nonresident noncontingent beneficiaries, its adjusted federal alternative minimum taxable income, as defined in section 12-700a shall be modified as follows: The adjusted federal alternative minimum taxable income of the trust shall be the sum of all such income derived from or connected with sources within this state and that portion of such income derived from or connected with all other sources which is derived by applying to all such income derived from or connected with all other sources a fraction, the numerator of which is the number of resident noncontingent beneficiaries and the denominator of which is the total number of noncontingent beneficiaries. As used in this subdivision, “noncontingent beneficiary” means a beneficiary whose interest is not subject to a condition precedent.

(5) “Nonresident trust or estate” means any trust or estate other than a resident trust or estate or a part-year resident trust.

(6) “Part-year resident trust” means any trust which is not either a resident trust or a nonresident trust for the entire taxable year.

(7) “Taxable year” means taxable year as determined in accordance with section 12-708.

(8) “Connecticut taxable income of a resident” means the Connecticut adjusted gross income of a natural person with respect to any taxable year reduced by the amount of the exemption provided in section 12-702.

(9) “Connecticut taxable income of a resident trust or estate” means the taxable income of the fiduciary of such trust or estate as determined for purposes of the federal income tax, to which (A) there shall be added or subtracted, as the case may be, the share of the trust or estate, as determined under section 12-716, in the Connecticut fiduciary adjustment, and (B) with respect to any trust, there shall be added the amount of any includable gain, reduced by any deductions properly allocable thereto, upon which a tax is imposed for the taxable year pursuant to Section 644 of the Internal Revenue Code.

(10) “Connecticut fiduciary adjustment” means the net positive or negative total of the following items relating to income, gain, loss or deduction of a trust or estate:

(A) There shall be added together:

(i) Any interest income from obligations issued by or on behalf of any state, political subdivision thereof, or public instrumentality, state or local authority, district or similar public entity, exclusive of such income from obligations issued by or on behalf of the state of Connecticut, any political subdivision thereof, or public instrumentality, state or local authority, district or similar public entity created under the laws of the state of Connecticut and exclusive of any such income with respect to which taxation by any state is prohibited by federal law;

(ii) Any exempt-interest dividends, as defined in Section 852(b)(5) of the Internal Revenue Code, exclusive of such exempt-interest dividends derived from obligations issued by or on behalf of the state of Connecticut, any political subdivision thereof, or public instrumentality, state or local authority, district or similar public entity created under the laws of the state of Connecticut and exclusive of such exempt-interest dividends derived from obligations, the income with respect to which taxation by any state is prohibited by federal law;

(iii) Any interest or dividend income on obligations or securities of any authority, commission or instrumentality of the United States that federal law exempts from federal income tax but does not exempt from state income taxes;

(iv) To the extent properly includable in determining the net gain or loss from the sale or other disposition of capital assets for federal income tax purposes, any loss from the sale or exchange of obligations issued by or on behalf of the state of Connecticut, any political subdivision thereof, or public instrumentality, state or local authority, district or similar public entity created under the laws of the state of Connecticut, in the income year such loss was recognized;

(v) To the extent deductible in determining federal taxable income prior to deductions relating to distributions to beneficiaries, any income taxes imposed by this state;

(vi)To the extent deductible in determining federal taxable…#

(vi) To the extent deductible in determining federal taxable income prior to deductions relating to distributions to beneficiaries, any interest on indebtedness incurred or continued to purchase or carry obligations or securities the interest on which is exempt from tax under this chapter;

(vii) Expenses paid or incurred during the taxable year for the production or collection of income which is exempt from tax under this chapter, or the management, conservation or maintenance of property held for the production of such income, and the amortizable bond premium for the taxable year on any bond the interest on which is exempt from taxation under this chapter, to the extent that such expenses and premiums are deductible in determining federal taxable income prior to deductions relating to distributions to beneficiaries;

(viii) To the extent deductible in determining federal taxable income prior to deductions relating to distributions to beneficiaries, the deduction allowable as qualified domestic production activities income, pursuant to Section 199 of the Internal Revenue Code; and

(ix) To the extent not includable in federal taxable income prior to deductions relating to distributions to beneficiaries, the total amount of a lump sum distribution for the taxable year.

(B) There shall be subtracted from the sum of such items:

(i) To the extent properly includable in gross income for federal income tax purposes, any income with respect to which taxation by any state is prohibited by federal law;

(ii) To the extent allowable under section 12-718, exempt dividends paid by a regulated investment company;

(iii) With respect to any trust or estate that is a shareholder of an S corporation which is carrying on, or that has the right to carry on, business in this state, as said term is used in section 12-214, the amount of such shareholder's pro rata share of such corporation's nonseparately computed items, as defined in Section 1366 of the Internal Revenue Code, that is subject to tax under chapter 208, in accordance with subsection (c) of section 12-217 multiplied by such corporation's apportionment fraction, if any, as determined in accordance with section 12-218;

(iv) To the extent properly includable in gross income for federal income tax purposes, any interest income from obligations issued by or on behalf of the state of Connecticut, any political subdivision thereof, or public instrumentality, state or local authority, district or similar public entity created under the laws of the state of Connecticut;

(v) To the extent properly includable in determining the net gain or loss from the sale or other disposition of capital assets for federal income tax purposes, any gain from the sale or exchange of obligations issued by or on behalf of the state of Connecticut, any political subdivision thereof, or public instrumentality, state or local authority, district or similar public entity created under the laws of the state of Connecticut, in the income year such gain was recognized;

(vi) Any interest on indebtedness incurred or continued to purchase or carry obligations or securities the interest on which is subject to tax under this chapter, but exempt from federal income tax, to the extent that such interest on indebtedness is not deductible in determining federal taxable income prior to deductions relating to distributions to beneficiaries;

(vii) Ordinary and necessary expenses paid or incurred during the taxable year for the production or collection of income that is subject to taxation under this chapter, but exempt from federal income tax, or the management, conservation or maintenance of property held for the production of such income, and the amortizable bond premium for the taxable year on any bond the interest on which is subject to tax under this chapter, but exempt from federal income tax, to the extent that such expenses and premiums are not deductible in determining federal taxable income prior to deductions relating to distributions to beneficiaries; and

(viii) The amount of any refund or credit for overpayment of income taxes imposed by this state, to the extent properly includable in gross income for federal income tax purposes for the taxable year and to the extent deductible in determining federal taxable income prior to deductions relating to distributions to beneficiaries for the preceding taxable year.

(11) “Estimated tax” means the amount which the individual estimates to be his income tax under this chapter for the taxable year less the amount which such individual estimates to be the sum of any credits allowable for tax withheld.

(12) “Required annual payment” means the lesser of (A) ninety per cent of the tax shown on the return for the taxable year, or, if no return is filed, ninety per cent of the tax for such year, or (B) if the preceding taxable year was a taxable year of twelve months and the individual filed a return for the preceding taxable year, one hundred per cent of the tax shown on the return of the individual for such preceding taxable year.

(13) “Regulated investment company” means a regulated investment company as defined in Section 851 of the Internal Revenue Code.

(14) “Exempt dividends” means any dividend or part thereof, other than a capital gain dividend, paid by a regulated investment company and designated by it as an exempt dividend, in accordance with section 12-718, in a written notice mailed to its shareholders not later than sixty days after the close of its taxable year.

(15) “Taxpayer” means any person, trust or estate subject to the tax imposed under this chapter.

(16) “Internal Revenue Code” means the Internal Revenue Code of 1986, or any subsequent corresponding internal revenue code of the United States, as from time to time amended.

(17) “S corporation” means any corporation which is an S corporation for federal income tax purposes.

(18) “Person” means a person as defined in section 12-1, but shall not include any corporation or association which is taxable as a corporation for the purposes of chapter 208, provided, for purposes of sections 12-735, 12-736 and 12-737, the term “person” shall include an individual, corporation or partnership and any officer or employee of any corporation, including a dissolved corporation, and a member or employee of any partnership who, as such officer, employee or member, is under a duty to perform the act in respect of which the violation occurs.

(19) “Adjusted gross income” means the adjusted gross income of a natural person with respect to any taxable year, as determined for federal income tax purposes and as properly reported on such person's federal income tax return.

(20) “Connecticut adjusted gross income” means adjusted gross income, with the following modifications:

(A) There shall be added thereto:

(i) To the extent not properly includable in gross income for federal income tax purposes, any interest income from obligations issued by or on behalf of any state, political subdivision thereof, or public instrumentality, state or local authority, district or similar public entity, exclusive of such income from obligations issued by or on behalf of the state of Connecticut, any political subdivision thereof, or public instrumentality, state or local authority, district or similar public entity created under the laws of the state of Connecticut and exclusive of any such income with respect to which taxation by any state is prohibited by federal law;

(iii) Any interest or dividend income on obligations or securities of any authority, commission or instrumentality of the United States which federal law exempts from federal income tax but does not exempt from state income taxes;

(iv) To the extent included in gross income for federal income tax purposes for the taxable year, the total taxable amount of a lump sum distribution for the taxable year deductible from such gross income in calculating federal adjusted gross income;

(v) To the extent properly includable in determining the net gain or loss from the sale or other disposition of capital assets for federal income tax purposes, any loss from the sale or exchange of obligations issued by or on behalf of the state of Connecticut, any political subdivision thereof, or public instrumentality, state or local authority, district or similar public entity created under the laws of the state of Connecticut, in the income year such loss was recognized;

(vi) To the extent deductible in determining federal adjusted gross income, any income taxes imposed by this state;

(vii) To the extent deductible in determining federal adjusted gross income, any interest on indebtedness incurred or continued to purchase or carry obligations or securities the interest on which is exempt from tax under this chapter;

(viii) Expenses paid or incurred during the taxable year for the production or collection of income which is exempt from taxation under this chapter or the management, conservation or maintenance of property held for the production of such income, and the amortizable bond premium for the taxable year on any bond the interest on which is exempt from tax under this chapter to the extent that such expenses and premiums are deductible in determining federal adjusted gross income;

(ix) For property placed in service after September 27, 2017, any additional allowance for depreciation under subsection (k) of Section 168 of the Internal Revenue Code, to the extent deductible in determining federal adjusted gross income;

(x) To the extent deductible in determining federal adjusted gross income, the deduction allowable as qualified domestic production activities income, pursuant to Section 199 of the Internal Revenue Code;

(xi)To the extent not properly includable in gross income…#

(xi) To the extent not properly includable in gross income for federal income tax purposes for the taxable year, any income from the discharge of indebtedness, in taxable years ending after December 31, 2008, in connection with any reacquisition, after December 31, 2008, and before January 1, 2011, of an applicable debt instrument or instruments, as those terms are defined in Section 108 of the Internal Revenue Code, as amended by Section 1231 of the American Recovery and Reinvestment Act of 2009, the inclusion of which income in federal gross income for the taxable year is deferred, as provided by said Section 1231;

(xii) To the extent not properly includable in gross income for federal income tax purposes, an amount equal to (I) any distribution from a manufacturing reinvestment account not used in accordance with subdivision (3) of subsection (c) of section 32-9zz to the extent that a contribution to such account was subtracted from federal adjusted gross income pursuant to clause (xix) of subparagraph (B) of this subdivision in computing Connecticut adjusted gross income for the current or a preceding taxable year, and (II) any return of money from a manufacturing reinvestment account pursuant to subsection (d) of section 32-9zz to the extent that a contribution to such account was subtracted from federal adjusted gross income pursuant to clause (xix) of subparagraph (B) of this subdivision in computing Connecticut adjusted gross income for the current or a preceding taxable year;

(xiii) To the extent not properly includable in gross income for federal income tax purposes, an amount equal to any compensation required to be recognized under Section 457A of the Internal Revenue Code that is attributable to services performed within this state; and

(xiv) For taxable years commencing on or after January 1, 2018, eighty per cent of any deduction claimed for federal purposes under Section 179 of the Internal Revenue Code.

(B) There shall be subtracted therefrom:

(i) To the extent properly includable in gross income for federal income tax purposes, any income with respect to which taxation by any state is prohibited by federal law;

(ii) To the extent allowable under section 12-718, exempt dividends paid by a regulated investment company;

(iii) To the extent properly includable in gross income for federal income tax purposes, the amount of any refund or credit for overpayment of income taxes imposed by this state, or any other state of the United States or a political subdivision thereof, or the District of Columbia;

(iv) To the extent properly includable in gross income for federal income tax purposes and not otherwise subtracted from federal adjusted gross income pursuant to clause (x) of this subparagraph in computing Connecticut adjusted gross income, any tier 1 railroad retirement benefits;

(v) To the extent any additional allowance for depreciation under Section 168(k) of the Internal Revenue Code for property placed in service after September 27, 2017, was added to federal adjusted gross income pursuant to subparagraph (A)(ix) of this subdivision in computing Connecticut adjusted gross income, twenty-five per cent of such additional allowance for depreciation in each of the four succeeding taxable years;

(vi) To the extent properly includable in gross income for federal income tax purposes, any interest income from obligations issued by or on behalf of the state of Connecticut, any political subdivision thereof, or public instrumentality, state or local authority, district or similar public entity created under the laws of the state of Connecticut;

(vii) To the extent properly includable in determining the net gain or loss from the sale or other disposition of capital assets for federal income tax purposes, any gain from the sale or exchange of obligations issued by or on behalf of the state of Connecticut, any political subdivision thereof, or public instrumentality, state or local authority, district or similar public entity created under the laws of the state of Connecticut, in the income year such gain was recognized;

(viii) Any interest on indebtedness incurred or continued to purchase or carry obligations or securities the interest on which is subject to tax under this chapter but exempt from federal income tax, to the extent that such interest on indebtedness is not deductible in determining federal adjusted gross income and is attributable to a trade or business carried on by such individual;

(ix) Ordinary and necessary expenses paid or incurred during the taxable year for the production or collection of income which is subject to taxation under this chapter but exempt from federal income tax, or the management, conservation or maintenance of property held for the production of such income, and the amortizable bond premium for the taxable year on any bond the interest on which is subject to tax under this chapter but exempt from federal income tax, to the extent that such expenses and premiums are not deductible in determining federal adjusted gross income and are attributable to a trade or business carried on by such individual;

(x) (I) For taxable years commencing prior to January 1, 2019, for a person who files a return under the federal income tax as an unmarried individual whose federal adjusted gross income for such taxable year is less than fifty thousand dollars, or as a married individual filing separately whose federal adjusted gross income for such taxable year is less than fifty thousand dollars, or for a husband and wife who file a return under the federal income tax as married individuals filing jointly whose federal adjusted gross income for such taxable year is less than sixty thousand dollars or a person who files a return under the federal income tax as a head of household whose federal adjusted gross income for such taxable year is less than sixty thousand dollars, an amount equal to the Social Security benefits includable for federal income tax purposes;

(II) For taxable years commencing prior to January 1, 2019, for a person who files a return under the federal income tax as an unmarried individual whose federal adjusted gross income for such taxable year is fifty thousand dollars or more, or as a married individual filing separately whose federal adjusted gross income for such taxable year is fifty thousand dollars or more, or for a husband and wife who file a return under the federal income tax as married individuals filing jointly whose federal adjusted gross income from such taxable year is sixty thousand dollars or more or for a person who files a return under the federal income tax as a head of household whose federal adjusted gross income for such taxable year is sixty thousand dollars or more, an amount equal to the difference between the amount of Social Security benefits includable for federal income tax purposes and the lesser of twenty-five per cent of the Social Security benefits received during the taxable year, or twenty-five per cent of the excess described in Section 86(b)(1) of the Internal Revenue Code;

(III) For the taxable year commencing January 1, 2019, and each taxable year thereafter, for a person who files a return under the federal income tax as an unmarried individual whose federal adjusted gross income for such taxable year is less than seventy-five thousand dollars, or as a married individual filing separately whose federal adjusted gross income for such taxable year is less than seventy-five thousand dollars, or for a husband and wife who file a return under the federal income tax as married individuals filing jointly whose federal adjusted gross income for such taxable year is less than one hundred thousand dollars or a person who files a return under the federal income tax as a head of household whose federal adjusted gross income for such taxable year is less than one hundred thousand dollars, an amount equal to the Social Security benefits includable for federal income tax purposes; and

(IV) For the taxable year commencing January 1, 2019, and each taxable year thereafter, for a person who files a return under the federal income tax as an unmarried individual whose federal adjusted gross income for such taxable year is seventy-five thousand dollars or more, or as a married individual filing separately whose federal adjusted gross income for such taxable year is seventy-five thousand dollars or more, or for a husband and wife who file a return under the federal income tax as married individuals filing jointly whose federal adjusted gross income from such taxable year is one hundred thousand dollars or more or for a person who files a return under the federal income tax as a head of household whose federal adjusted gross income for such taxable year is one hundred thousand dollars or more, an amount equal to the difference between the amount of Social Security benefits includable for federal income tax purposes and the lesser of twenty-five per cent of the Social Security benefits received during the taxable year, or twenty-five per cent of the excess described in Section 86(b)(1) of the Internal Revenue Code;

(xi) To the extent properly includable in gross income for federal income tax purposes, any amount rebated to a taxpayer pursuant to section 12-746;

(xii) To the extent properly includable in the gross income for federal income tax purposes of a designated beneficiary, any distribution to such beneficiary from any qualified state tuition program, as defined in Section 529(b) of the Internal Revenue Code, established and maintained by this state or any official, agency or instrumentality of the state;

(xiii) To the extent allowable under section 12-701a, contributions to accounts established pursuant to any qualified state tuition program, as defined in Section 529(b) of the Internal Revenue Code, established and maintained by this state or any official, agency or instrumentality of the state;

(xiv) To the extent properly includable in gross income for federal income tax purposes, the amount of any Holocaust victims' settlement payment received in the taxable year by a Holocaust victim;

(xv) To the extent properly includable in the gross income for federal income tax purposes of a designated beneficiary, as defined in section 3-123aa, interest, dividends or capital gains earned on contributions to accounts established for the designated beneficiary pursuant to the Connecticut Homecare Option Program for the Elderly established by sections 3-123aa to 3-123ff, inclusive;

(xvi) To the extent properly includable in gross income for federal income tax purposes, any income received from the United States government as retirement pay for a retired member of (I) the Armed Forces of the United States, as defined in Section 101 of Title 10 of the United States Code, or (II) the National Guard, as defined in Section 101 of Title 10 of the United States Code;

(xvii) To the extent properly includable in gross income for federal income tax purposes for the taxable year, any income from the discharge of indebtedness in connection with any reacquisition, after December 31, 2008, and before January 1, 2011, of an applicable debt instrument or instruments, as those terms are defined in Section 108 of the Internal Revenue Code, as amended by Section 1231 of the American Recovery and Reinvestment Act of 2009, to the extent any such income was added to federal adjusted gross income pursuant to subparagraph (A)(xi) of this subdivision in computing Connecticut adjusted gross income for a preceding taxable year;

(xviii) To the extent not deductible in determining federal adjusted gross income, the amount of any contribution to a manufacturing reinvestment account established pursuant to section 32-9zz in the taxable year that such contribution is made;

(xix) To the extent properly includable in gross income for federal income tax purposes, (I) for the taxable year commencing January 1, 2015, ten per cent of the income received from the state teachers' retirement system, (II) for the taxable years commencing January 1, 2016, to January 1, 2020, inclusive, twenty-five per cent of the income received from the state teachers' retirement system, and (III) for the taxable year commencing January 1, 2021, and each taxable year thereafter, fifty per cent of the income received from the state teachers' retirement system or, for a taxpayer whose federal adjusted gross income does not exceed the applicable threshold under clause (xx) of this subparagraph, the percentage pursuant to said clause of the income received from the state teachers' retirement system, whichever deduction is greater;

(xx) To the extent properly includable in gross income for federal income tax purposes, except for retirement benefits under clause (iv) of this subparagraph and retirement pay under clause (xvi) of this subparagraph, for a person who files a return under the federal income tax as an unmarried individual whose federal adjusted gross income for such taxable year is less than seventy-five thousand dollars, or as a married individual filing separately whose federal adjusted gross income for such taxable year is less than seventy-five thousand dollars, or as a head of household whose federal adjusted gross income for such taxable year is less than seventy-five thousand dollars, or for a husband and wife who file a return under the federal income tax as married individuals filing jointly whose federal adjusted gross income for such taxable year is less than one hundred thousand dollars, (I) for the taxable year commencing January 1, 2019, fourteen per cent of any pension or annuity income, (II) for the taxable year commencing January 1, 2020, twenty-eight per cent of any pension or annuity income, (III) for the taxable year commencing January 1, 2021, forty-two per cent of any pension or annuity income, and (IV) for the taxable years commencing January 1, 2022, and January 1, 2023, one hundred per cent of any pension or annuity income;

(xxi) To the extent properly includable in gross income for federal income tax purposes, except for retirement benefits under clause (iv) of this subparagraph and retirement pay under clause (xvi) of this subparagraph, any pension or annuity income for the taxable year commencing on or after January 1, 2024, and each taxable year thereafter, in accordance with the following schedule, for a person who files a return under the federal income tax as an unmarried individual whose federal adjusted gross income for such taxable year is less than one hundred thousand dollars, or as a married individual filing separately whose federal adjusted gross income for such taxable year is less than one hundred thousand dollars, or as a head of household whose federal adjusted gross income for such taxable year is less than one hundred thousand dollars:

Federal Adjusted Gross Income Deduction Less than $75,000 100.0% $75,000 but not over $77,499 85.0% $77,500 but not over $79,999 70.0% $80,000 but not over $82,499 55.0% $82,500 but not over $84,999 40.0% $85,000 but not over $87,499 25.0% $87,500 but not over $89,999 10.0% $90,000 but not over $94,999 5.0% $95,000 but not over $99,999 2.5% $100,000 and over 0.0%

(xxii) To the extent properly includable in gross income for federal income tax purposes, except for retirement benefits under clause (iv) of this subparagraph and retirement pay under clause (xvi) of this subparagraph, any pension or annuity income for the taxable year commencing on or after January 1, 2024, and each taxable year thereafter, in accordance with the following schedule for married individuals who file a return under the federal income tax as married individuals filing jointly whose federal adjusted gross income for such taxable year is less than one hundred fifty thousand dollars:

Federal Adjusted Gross Income Deduction Less than $100,000 100.0% $100,000 but not over $104,999 85.0% $105,000 but not over $109,999 70.0% $110,000 but not over $114,999 55.0% $115,000 but not over $119,999 40.0% $120,000 but not over $124,999 25.0% $125,000 but not over $129,999 10.0% $130,000 but not over $139,999 5.0% $140,000 but not over $149,999 2.5% $150,000 and over 0.0%

(xxiii) The amount of lost wages and medical, travel and housing expenses, not to exceed ten thousand dollars in the aggregate, incurred by a taxpayer during the taxable year in connection with the donation to another person of an organ for organ transplantation occurring on or after January 1, 2017;

(xxiv) To the extent properly includable in gross income for federal income tax purposes, the amount of any financial assistance received from the Crumbling Foundations Assistance Fund or paid to or on behalf of the owner of a residential building pursuant to sections 8-442 and 8-443;

(xxv) To the extent properly includable in gross income for federal income tax purposes, the amount calculated pursuant to subsection (b) of section 12-704g for income received by a general partner of a venture capital fund, as defined in 17 CFR 275.203(l)-1, as amended from time to time;

(xxvi) To the extent any portion of a deduction under Section 179 of the Internal Revenue Code was added to federal adjusted gross income pursuant to subparagraph (A)(xiv) of this subdivision in computing Connecticut adjusted gross income, twenty-five per cent of such disallowed portion of the deduction in each of the four succeeding taxable years;

(xxvii) To the extent properly includable in gross income for federal income tax purposes, for a person who files a return under the federal income tax as an unmarried individual whose federal adjusted gross income for such taxable year is less than seventy-five thousand dollars, or as a married individual filing separately whose federal adjusted gross income for such taxable year is less than seventy-five thousand dollars, or as a head of household whose federal adjusted gross income for such taxable year is less than seventy-five thousand dollars, or for a husband and wife who file a return under the federal income tax as married individuals filing jointly whose federal adjusted gross income for such taxable year is less than one hundred thousand dollars, for the taxable year commencing January 1, 2023, twenty-five per cent of any distribution from an individual retirement account other than a Roth individual retirement account;

(xxviii) To the extent properly includable in gross income for federal income tax purposes, for a person who files a return under the federal income tax as an unmarried individual whose federal adjusted gross income for such taxable year is less than one hundred thousand dollars, or as a married individual filing separately whose federal adjusted gross income for such taxable year is less than one hundred thousand dollars, or as a head of household whose federal adjusted gross income for such taxable year is less than one hundred thousand dollars, (I) for the taxable year commencing January 1, 2024, fifty per cent of any distribution from an individual retirement account other than a Roth individual retirement account, (II) for the taxable year commencing January 1, 2025, seventy-five per cent of any distribution from an individual retirement account other than a Roth individual retirement account, and (III) for the taxable year commencing January 1, 2026, and each taxable year thereafter, any distribution from an individual retirement account other than a Roth individual retirement account. The subtraction under this clause shall be made in accordance with the following schedule:

(xxix) To the extent properly includable in gross income for federal income tax purposes, for married individuals who file a return under the federal income tax as married individuals filing jointly whose federal adjusted gross income for such taxable year is less than one hundred fifty thousand dollars, (I) for the taxable year commencing January 1, 2024, fifty per cent of any distribution from an individual retirement account other than a Roth individual retirement account, (II) for the taxable year commencing January 1, 2025, seventy-five per cent of any distribution from an individual retirement account other than a Roth individual retirement account, and (III) for the taxable year commencing January 1, 2026, and each taxable year thereafter, any distribution from an individual retirement account other than a Roth individual retirement account. The subtraction under this clause shall be made in accordance with the following schedule:

(xxx) To the extent properly includable in gross income for federal income tax purposes, for the taxable year commencing January 1, 2022, the amount or amounts paid or otherwise credited to any eligible resident of this state under (I) the 2020 Earned Income Tax Credit enhancement program from funding allocated to the state through the Coronavirus Relief Fund established under the Coronavirus Aid, Relief, and Economic Security Act, P.L. 116-136, and (II) the 2021 Earned Income Tax Credit enhancement program from funding allocated to the state pursuant to Section 9901 of Subtitle M of Title IX of the American Rescue Plan Act of 2021, P.L. 117-2;

(xxxi) For the taxable year commencing January 1, 2023, and each taxable year thereafter, for a taxpayer licensed under the provisions of chapter 420f or 420h, the amount of ordinary and necessary expenses that would be eligible to be claimed as a deduction for federal income tax purposes under Section 162(a) of the Internal Revenue Code but that are disallowed under Section 280E of the Internal Revenue Code because marijuana is a controlled substance under the federal Controlled Substance Act;

(xxxii) To the extent properly includable in gross income for federal income tax purposes, for the taxable year commencing on or after January 1, 2025, and each taxable year thereafter, any common stock received by the taxpayer during the taxable year under a share plan, as defined in section 12-217ss;

(xxxiii) To the extent properly includable in gross income for federal income tax purposes, the amount of any student loan reimbursement payment received by a taxpayer pursuant to section 10a-19m; and

(xxxiv) Contributions to an ABLE account established pursuant to sections 3-39k to 3-39q, inclusive, not to exceed five thousand dollars for each individual taxpayer or ten thousand dollars for taxpayers filing a joint return.

(C) With respect to a person who is the beneficiary of a trust or estate, there shall be added or subtracted, as the case may be, from adjusted gross income such person's share, as determined under section 12-714, in the Connecticut fiduciary adjustment.

(21) “Commissioner” means the Commissioner of Revenue Services or his authorized agent.

(22) “Department” means the Department of Revenue Services.

(23) “Federal tentative minimum tax” means tentative minimum tax, as determined pursuant to Section 55 of the Internal Revenue Code, reduced by the alternative minimum tax foreign tax credit.

(24) “Adjusted federal tentative minimum tax” of an individual means such individual's federal tentative minimum tax or, in the case of an individual whose Connecticut adjusted gross income includes modifications described in subparagraph (A)(i), (A)(ii), (A)(v), (A)(vi), (A)(vii) or (A)(viii) of subdivision (20) of this subsection or subparagraph (B)(i), (B)(ii), (B)(v), (B)(vi), (B)(vii), (B)(viii), (B)(ix), (B)(x), (B)(xiii) or (B)(xv) of subdivision (20) of this subsection, the amount that would have been the federal tentative minimum tax if such tax were calculated by including, to the extent not includable in federal alternative minimum taxable income, the modifications described in subparagraph (A)(i), (A)(ii), (A)(v), (A)(vi), (A)(vii) or (A)(viii) of subdivision (20) of this subsection, by excluding, to the extent includable in federal alternative minimum taxable income, the modifications described in subparagraph (B)(i), (B)(ii), (B)(v), (B)(vi), (B)(vii), (B)(viii), (B)(ix), (B)(x), (B)(xiii) or (B)(xv) of subdivision (20) of this subsection, and by excluding, to the extent includable in federal alternative minimum taxable income, the amount of any interest income or exempt-interest dividends, as defined in Section 852(b)(5) of the Internal Revenue Code, from obligations that are issued by or on behalf of the state of Connecticut, any political subdivision thereof, or public instrumentality, state or local authority, district, or similar public entity that is created under the laws of the state of Connecticut, or from obligations that are issued by or on behalf of any territory or possession of the United States, any political subdivision of such territory or possession, or public instrumentality, authority, district or similar public entity of such territory or possession, the income with respect to which taxation by any state is prohibited by federal law. If such individual is a beneficiary of a trust or estate, then, in calculating his or her federal tentative minimum tax, his or her federal alternative taxable income shall be increased or decreased, as the case may be, by the net amount of such individual's proportionate share of the Connecticut fiduciary adjustment relating to modifications that are described in, to the extent not includable in federal alternative minimum taxable income, subparagraph (A)(i), (A)(ii), (A)(v), (A)(vi), (A)(vii) or (A)(viii) of subdivision (20) of this subsection or, to the extent includable in federal alternative minimum taxable income, subparagraph (B)(i), (B)(ii), (B)(v), (B)(vi), (B)(vii), (B)(viii), (B)(ix), (B)(x), (B)(xiii) or (B)(xv) of subdivision (20) of this subsection.

(25) “Net Connecticut minimum tax” means the amount by which the Connecticut minimum tax exceeds the income tax imposed under section 12-700.

(26) (A) “Connecticut minimum tax” of an individual means the lesser of (i) nineteen per cent of the adjusted federal tentative minimum tax, as defined in subdivision (24) of this subsection, or (ii) five and one-half per cent of the adjusted federal alternative minimum taxable income, as defined in subdivision (30) of this subsection. (B) “Connecticut minimum tax” of a trust or estate means the lesser of (i) nineteen per cent of the adjusted federal tentative minimum tax, as defined in subdivision (28) of this subsection, or (ii) five and one-half per cent of the adjusted federal alternative minimum taxable income, as defined in subdivision (31) of this subsection.

(27) “Adjusted net Connecticut minimum tax” means (A) if the Connecticut minimum tax is calculated under subparagraph (A)(i) or (B)(i), as the case may be, of subdivision (26) of this subsection, the excess, if any, of (i) the net Connecticut minimum tax, less the credit allowed under subsection (e) of section 12-700a, over (ii) the amount that would have been the net Connecticut minimum tax provided the adjustments and items of preference specified in Section 53(d) of the Internal Revenue Code had been used in determining the net Connecticut minimum tax, less the credit that would have been allowed under subsection (e) of section 12-700a for a similar tax determined by using only the adjustments and items of preference specified in Section 53(d) of the Internal Revenue Code, or (B) if the Connecticut minimum tax is calculated under subparagraph (A)(ii) or (B)(ii), as the case may be, of subdivision (26) of this subsection, then the product of the excess that is described in subparagraph (A) of this subdivision and that is determined without regard to said subparagraph (A)(ii) or (B)(ii), as the case may be, of subdivision (26) of this subsection, multiplied by a fraction, the numerator of which is the net Connecticut minimum tax, as if the Connecticut minimum tax were calculated under said subparagraph (A)(ii) or (B)(ii), as the case may be, of subdivision (26) of this subsection and the denominator of which is the net Connecticut minimum tax, as if the Connecticut minimum tax were calculated under said subparagraph (A)(i) or (B)(i), as the case may be, of subdivision (26) of this subsection.

(28) “Adjusted federal tentative minimum tax” of a trust or estate means its federal tentative minimum tax or, in the case of a trust or estate whose Connecticut taxable income includes modifications described in subparagraph (A)(i), (A)(ii), (A)(iv), (A)(v), (A)(vi) or (A)(vii) of subdivision (10) of this subsection or subparagraph (B)(i), (B)(ii), (B)(iii), (B)(iv), (B)(v), (B)(vi) or (B)(vii) of subdivision (10) of this subsection, the amount that would have been the federal tentative minimum tax if such tax were calculated by including, to the extent not includable in federal alternative minimum taxable income, the modifications described in subparagraph (A)(i), (A)(ii), (A)(iv), (A)(v), (A)(vi) or (A)(vii) of subdivision (10) of this subsection, by excluding, to the extent includable in federal alternative minimum taxable income, the modifications described in subparagraph (B)(i), (B)(ii), (B)(iii), (B)(iv), (B)(v), (B)(vi) or (B)(vii) of subdivision (10) of this subsection, and by excluding, to the extent includable in federal alternative minimum taxable income, the amount of any interest income or exempt-interest dividends, as defined in Section 852(b)(5) of the Internal Revenue Code, from obligations that are issued by or on behalf of the state of Connecticut, any political subdivision thereof, or public instrumentality, state or local authority, district, or similar public entity that is created under the laws of the state of Connecticut, or from obligations that are issued by or on behalf of any territory or possession of the United States, any political subdivision of such territory or possession, or public instrumentality, authority, district or similar public entity of such territory or possession, the income with respect to which taxation by any state is prohibited by federal law. If such trust or estate is itself a beneficiary of a trust or estate, then, for purposes of calculating its adjusted federal alternative minimum tax, its federal alternative minimum taxable income shall also be increased or decreased, as the case may be, by the net amount of such trust or estate's proportionate share of the Connecticut fiduciary adjustment relating to modifications that are described, to the extent not includable in federal alternative minimum taxable income, in subparagraph (A)(i), (A)(ii), (A)(iv), (A)(v), (A)(vi) or (A)(vii) of subdivision (10) of this subsection or, to the extent includable in federal alternative minimum taxable income, subparagraph (B)(i), (B)(ii), (B)(iii), (B)(iv), (B)(v), (B)(vi) or (B)(vii) of subdivision (10) of this subsection.

(29) “Federal alternative minimum taxable income” means alternative minimum taxable income, as defined in Section 55(b)(2) of the Internal Revenue Code.

(30) “Adjusted federal alternative minimum taxable income” of an individual means his or her federal alternative minimum taxable income or, in the case of an individual whose Connecticut adjusted gross income includes modifications described in subparagraph (A)(i), (A)(ii), (A)(v), (A)(vi), (A)(vii) or (A)(viii) of subdivision (20) of this subsection or subparagraph (B)(i), (B)(ii), (B)(v), (B)(vi), (B)(vii), (B)(viii), (B)(ix), (B)(x), (B)(xiii) or (B)(xv) of subdivision (20) of this subsection, the amount that would have been the federal alternative minimum taxable income if such amount were calculated by including, to the extent not includable in federal alternative minimum taxable income, the modifications described in subparagraph (A)(i), (A)(ii), (A)(v), (A)(vi), (A)(vii) or (A)(viii) of subdivision (20) of this subsection, by excluding, to the extent includable in federal alternative minimum taxable income, the modifications described in subparagraph (B)(i), (B)(ii), (B)(v), (B)(vi), (B)(vii), (B)(viii), (B)(ix), (B)(x), (B)(xiii) or (B)(xv) of subdivision (20) of this subsection, and by excluding, to the extent includable in federal alternative minimum taxable income, the amount of any interest income or exempt-interest dividends, as defined in Section 852(b)(5) of the Internal Revenue Code, from obligations that are issued by or on behalf of the state of Connecticut, any political subdivision thereof, or public instrumentality, state or local authority, district, or similar public entity that is created under the laws of the state of Connecticut, or from obligations that are issued by or on behalf of any territory or possession of the United States, any political subdivision of such territory or possession, or public instrumentality, authority, district or similar public entity of such territory or possession, the income with respect to which taxation by any state is prohibited by federal law. If such individual is a beneficiary of a trust or estate, then, for purposes of calculating his or her adjusted federal alternative minimum taxable income, his or her federal alternative minimum taxable income shall also be increased or decreased, as the case may be, by the net amount of such individual's proportionate share of the Connecticut fiduciary adjustment relating to modifications to the extent not includable in federal alternative minimum taxable income, that are described in subparagraph (A)(i), (A)(ii), (A)(v), (A)(vi), (A)(vii) or (A)(viii) of subdivision (20) of this subsection or, to the extent includable in federal alternative minimum taxable income, subparagraph (B)(i), (B)(ii), (B)(v), (B)(vi), (B)(vii), (B)(viii), (B)(ix), (B)(x), (B)(xiii) or (B)(xv) of subdivision (20) of this subsection.

(31) “Adjusted federal alternative minimum taxable income” of a trust or estate means its federal alternative minimum taxable income or, in the case of a trust or estate whose Connecticut taxable income includes modifications described in subparagraph (A)(i), (A)(ii), (A)(iv), (A)(v), (A)(vi) or (A)(vii) of subdivision (10) of this subsection or subparagraph (B)(i), (B)(ii), (B)(iii), (B)(iv), (B)(v), (B)(vi) or (B)(vii) of subdivision (10) of this subsection, the amount that would have been the federal alternative minimum taxable income if such amount were calculated by including, to the extent not includable in federal alternative minimum taxable income, the modifications described in subparagraph (A)(i), (A)(ii), (A)(iv), (A)(v), (A)(vi) or (A)(vii) of subdivision (10) of this subsection, by excluding, to the extent includable in federal alternative minimum taxable income, the modifications described in subparagraph (B)(i), (B)(ii), (B)(iii), (B)(iv), (B)(v), (B)(vi) or (B)(vii) of subdivision (10) of this subsection, and by excluding, to the extent includable in federal alternative minimum taxable income, the amount of any interest income or exempt-interest dividends, as defined in Section 852(b)(5) of the Internal Revenue Code, from obligations that are issued by or on behalf of the state of Connecticut, any political subdivision thereof, or public instrumentality, state or local authority, district, or similar public entity that is created under the laws of the state of Connecticut, or from obligations that are issued by or on behalf of any territory or possession of the United States, any political subdivision of such territory or possession, or public instrumentality, authority, district or similar public entity of such territory or possession, the income with respect to which taxation by any state is prohibited by federal law. If such trust or estate is itself a beneficiary of a trust or estate, then, for purposes of calculating its adjusted federal alternative minimum taxable income, its federal alternative minimum taxable income shall also be increased or decreased, as the case may be, by the net amount of such trust or estate's proportionate share of the Connecticut fiduciary adjustment relating to modifications that are described, to the extent not includable in federal alternative minimum taxable income, in subparagraph (A)(i), (A)(ii), (A)(iv), (A)(v), (A)(vi) or (A)(vii) of subdivision (10) of this subsection or, to the extent includable in federal alternative minimum taxable income, subparagraph (B)(i), (B)(ii), (B)(iii), (B)(iv), (B)(v), (B)(vi) or (B)(vii) of subdivision (10) of this subsection.

(32) “Pay” means the payment by an individual of the tax imposed on his Connecticut adjusted gross income or the payment by a fiduciary of a trust or estate of the tax imposed on its Connecticut taxable income, and includes the payment over by an employer or other person of the tax that such employer or other person is required to collect, deduct or withhold and to truthfully account for.

(33) “Partnership” means a partnership as defined in Section 7701(a)(2) of the Internal Revenue Code and the regulations adopted thereunder, as from time to time amended, and any reference in this chapter or in regulations adopted under this chapter to a partnership shall include a limited liability company that is treated as a partnership for federal income tax purposes.

(34) “Partner” means a partner as defined in Section 7701(a)(2) of the Internal Revenue Code and the regulations adopted thereunder, as from time to time amended, and any reference in this chapter or in regulations adopted under this chapter to a partner shall include a member of a limited liability company that is treated as a partnership for federal income tax purposes.

(35) “Holocaust victim settlement payment” means a payment received: (A) As a result of a settlement of the action entitled In re Holocaust Victims' Asset Litigation, C.A. No. 96-4849, in the United States District Court for the Eastern District of New York; (B) under the German act regulating unresolved property claims, also known as Gesetz zur Regelung offener Vermogensfragen, or any other foreign law providing payments for Holocaust claims; or (C) as a result of the settlement of any other Holocaust claim, including insurance claims, claims relating to looted art, claims relating to looted financial assets, or claims relating to slave labor wages. “Holocaust victim settlement payment” includes any interest on any such payment accumulated or accrued through the date of payment. “Holocaust victim settlement payment” does not include any amount received from any asset acquired with any asset recovered, returned, or otherwise given as compensation to a Holocaust victim as a Holocaust victim settlement payment or with the proceeds from the sale of any asset recovered, returned, or otherwise given as compensation to a Holocaust victim as a Holocaust victim settlement payment.

(36) “Holocaust victim” means an individual who died or lost property as a result of discriminatory laws, policies or actions targeted against discrete groups of individuals based on race, religion, ethnicity, sexual orientation or national origin, whether or not the individual was actually a member of any of those groups, or because the individual assisted or allegedly assisted any of those groups, between January 1, 1929, and December 31, 1945, in the country of Nazi Germany, areas occupied by Nazi Germany, those European countries allied with Nazi Germany, areas occupied by those European countries allied with Nazi Germany or any other neutral European country or area in Europe under the influence or threat of invasion by Nazi Germany or by any European country allied with or occupied by Nazi Germany. “Holocaust victim” includes the spouse or descendant of a Holocaust victim.

(37) “Organ” means human bone marrow or all or part of a human liver, pancreas, kidney, intestine or lung.

(b) Any term used in this chapter has the same meaning as when used in a comparable context in the laws of the United States relating to income taxes unless a different meaning is clearly required. Any reference in this chapter to the laws of the United States means the provisions of the Internal Revenue Code and any other provisions of the laws of the United States relating to income tax as the same may be or become effective, at any time or from time to time, for the taxable year. Terms preceded by the word “federal” refer to the corresponding terms defined in the laws of the United States.

(c) The commissioner shall, by regulation, define the term “derived from or connected with sources within this state” as used in this chapter.

(June Sp. Sess. P.A. 91-3, S. 52, 168; May Sp. Sess. P.A. 92-5, S. 2, 37; May Sp. Sess. P.A. 92-17, S. 11, 43, 59; P.A. 93-74, S. 38, 39, 57, 58, 67; 93-332, S. 27, 42; May Sp. Sess. P.A. 94-4, S. 26, 71–74, 85; P.A. 95-5, S. 1–3, 6; 95-160, S. 64, 69; P.A. 96-139, S. 9–11, 13; 96-175, S. 2, 3, 5; 96-180, S. 29–31, 166; 96-221, S. 22, 25; P.A. 97-286, S. 2, 3, 8; 97-309, S. 9, 23; 97-322, S. 7, 9; P.A. 98-110, S. 4, 27; 98-252, S. 58, 80; 98-255, S. 3, 24; P.A. 99-173, S. 1, 65; P.A. 00-82, S. 1–4, 6; 00-174, S. 38, 39, 83; 00-192, S. 6, 102; June Sp. Sess. P.A. 01-6, S. 35, 36, 85; May 9 Sp. Sess. P.A. 02-1, S. 77; P.A. 03-225, S. 13; June 30 Sp. Sess. P.A. 03-6, S. 72; P.A. 05-251, S. 71–73; P.A. 06-186, S. 76, 77; P.A. 07-130, S. 7, 8; P.A. 08-140, S. 1; June Sp. Sess. P.A. 09-3, S. 120, 121; June 19 Sp. Sess. P.A. 09-2, S. 5; June 12 Sp. Sess. P.A. 12-1, S. 196; P.A. 14-47, S. 50; 14-69, S. 3; 14-122, S. 99, 100; 14-155, S. 16; P.A. 15-179, S. 3; 15-244, S. 65; P.A. 17-147, S. 2; June Sp. Sess. P.A. 17-2, S. 342, 641, 642; June Sp. Sess. P.A. 17-4, S. 18; P.A. 18-26, S. 27; 18-49, S. 11; 18-147, S. 2; P.A. 19-117, S. 332; June Sp. Sess. P.A. 21-2, S. 433; P.A. 22-110, S. 32, 33; 22-118, S. 410; P.A. 23-117, S. 8; 23-137, S. 57; 23-204, S. 175, 377, 391.)

History: June Sp. Sess. P.A. 91-3, S. 52, effective August 22, 1991, and applicable to taxable years of taxpayers occurring on or after January 1, 1991; May Sp. Sess. P.A. 92-5 made various technical and minor changes, effective June 19, 1992, and applicable to taxable years of taxpayers commencing on or after January 1, 1992; May Sp. Sess. P.A. 92-17 amended Subsec. (a)(4) to delete standards for nontaxation of a resident trust and to create a formula for modification of the Connecticut taxable income of a trust based on the residence of the beneficiaries, effective June 19, 1992, and applicable to taxable years of taxpayers commencing on or after January 1, 1993, and added Subsec. (c), concerning a definition of the term “derived from or connected with sources within this state”, effective June 19, 1992, and applicable to taxable years of taxpayers commencing on or after January 1, 1992; P.A. 93-74 amended Subsec. (a)(12), deleting existing definition of “assumed tax” and replacing it with definition of “required annual payment”, amended Subsec. (a)(18), defining “person” by changing statutory citation from Sec. 1-1 to Sec. 12-1, made technical change in Subsec. (a)(20) and added Subdivs. (23) to (27), inclusive, to Subsec. (a) defining “federal tentative minimum tax”, “adjusted federal tentative minimum tax”, “net Connecticut minimum tax”, “Connecticut minimum tax” and “adjusted net Connecticut minimum tax”, effective May 19, 1993, and applicable to taxable years on and after January 1, 1993; P.A. 93-332 amended Subsec. (a)(4) to modify definition of “resident trust or estate” to include trust or estate which has one or more nonresident beneficiaries, effective June 25, 1993, and applicable to taxable years commencing on or after January 1, 1993; May Sp. Sess. P.A. 94-4 in Subsec. (a)(4) made changes in definition of “resident trust or estate” relative to the calculation of the alternative minimum tax, effective June 9, 1994, and applicable to taxable years commencing on or after January 1, 1993, in Subsec. (a)(20) eliminated the modification for moving expenses and added a new Subpara. (x) re eliminating the federal increase in social security taxes, effective June 9, 1994, and applicable to taxable years commencing on or after January 1, 1994, in Subsec. (a)(24) modified definition to exclude the amount of certain interest income or exempt-interest dividends, effective June 9, 1994, and applicable to taxable years commencing on or after January 1, 1993, in Subsec. (a)(26) and (27) modified definitions of “Connecticut minimum tax” and “adjusted net Connecticut minimum tax” to provide that the Connecticut minimum tax is the lesser of 19% of the adjusted federal tentative minimum tax or 5% of the adjusted federal alternative minimum taxable income, effective June 9, 1994, and applicable to taxable years commencing on or after January 1, 1993, and added Subdivs. (28) to (31), inclusive, defining “adjusted federal tentative minimum tax”, “federal alternative minimum taxable income”, “adjusted federal alternative minimum taxable income of an individual” and “adjusted federal alternative minimum taxable income of a trust or an estate”, respectively, effective June 9, 1994, and applicable to taxable years commencing on or after January 1, 1993; P.A. 95-5 amended Subsec. (a)(18) to include reference to Secs. 12-735 and 12-737, amended Subsec. (a)(26) and (27) to add a definition of “Connecticut minimum tax” of a trust or estate and to provide that adjusted net Connecticut minimum tax is less the credit under Sec. 12-700a(e) and made technical changes, and added new Subdiv. (32) defining “pay” effective April 13, 1995, and applicable to taxable years commencing on or after January 1, 1995; P.A. 95-160 revised effective date of May Sp. Sess. P.A. 94-4 but without affecting this section; P.A. 96-139 amended Subsec. (a)(10), (28) and (31) to make technical relettering and renumbering corrections, effective May 29, 1996; P.A. 96-175 amended Subsec. (a)(10) and (20) to add reference to Sec. 12-217(c), effective May 31, 1996, and applicable to income years commencing on or after January 1, 1997; P.A. 96-180 amended Subsec. (a)(10), (28) and (31) to make technical relettering and renumbering changes in Subpara. and clause designations, effective June 3, 1996; P.A. 96-221 added Subsec. (a)(10)(B)(viii) re amount of any refund or credit for overpayment of tax, effective June 4, 1996, and applicable to income years commencing on or after January 1, 1992 (Revisor's note: The Revisors editorially corrected clerical errors in Subdivs. (28), (30) and (31) by changing references to “… such territory of possession, …” to “… such territory or possession, …” for consistency with the other references in the section); P.A. 97-286 amended Subsec. (a)(27) to make technical changes to definition and to add new Subdivs. (33) and (34) defining “partnership” and “partner”, effective June 26, 1997, and applicable to taxable years commencing on or after January 1, 1997; P.A. 97-309 amended Subsec. (a)(20)(B)(x) to increase the amount of Social Security income that is exempt, effective July 1, 1997, and applicable to income years commencing on or after January 1, 1998; P.A. 97-322 changed effective date of P.A. 97-309 but without affecting this section; P.A. 98-110 added Subsec. (a)(20)(B)(xi) excluding amount of rebate, effective May 19, 1998, and applicable to taxable years commencing on or after January 1, 1998; P.A. 98-252 and P.A. 98-255 both added Subsec. (a)(20)(B)(xii) re distributions from qualified state tuition programs, effective July 1, 1998; P.A. 99-173 amended Subsec. (a)(20) to exempt the remaining 25% of taxable Social Security income for joint filers and heads of household with an adjusted gross income under $60,000 and single filers with an adjusted gross income under $50,000, effective June 23, 1999, and applicable to taxable years commencing on or after January 1, 1999; P.A. 00-82 amended Subsec. (a)(20) to exclude Holocaust victim's settlement payments from Connecticut adjusted gross income, amended Subsec. (a)(24) and (30) to make said Subdivs. consistent with substantive changes in said act and to make technical changes for purposes of gender neutrality and added Subsec. (a)(35) and (36) defining “Holocaust victim settlement payment” and “Holocaust victim”, respectively, effective May 26, 2000, and applicable to taxable years commencing on or after January 1, 2000; P.A. 00-174 amended Subsec. (a)(1) to modify the domicile provisions in the definition of “resident of this state” and amended Subsec. (a)(20) to eliminate a subtraction modification for tax refunds or credits from any province of Canada, to modify provisions in the Social Security benefit adjustment and to make technical changes, effective May 26, 2000, and applicable to taxable years commencing on or after January 1, 2000; P.A. 00-192 amended Subsec. (a)(20)(B) to delete reference to any province of Canada and to add provisions re interest earned on funds deposited in individual development accounts, effective January 1, 2001, and applicable to taxable years commencing on or after that date; June Sp. Sess. P.A. 01-6, S. 35 amended Subsec. (a)(19) to provide that “adjusted gross income” shall be the income that is properly reported on the taxpayer's federal return, effective July 1, 2001, and applicable to all open tax periods (Revisor's note: June Sp. Sess. P.A. 01-6, S. 36, provided as follows: “Sec. 36. The intent of the amendment made by section 35 of this act to subdivision (19) of subsection (a) of section 12-701 of the general statutes is to clarify that a natural person's adjusted gross income is not further modified in determining such person's Connecticut adjusted gross income for purposes of chapter 229 of the general statutes, except as expressly provided in subdivision (20) of subsection (a) of said section 12-701.”); May 9 Sp. Sess. P.A. 02-1 amended Subsec. (a)(20)(A) to require an addition to income for any allowance for depreciation under the federal Job Creation and Worker Assistance Act of 2002, effective July 1, 2002, and applicable to taxable years commencing on or after January 1, 2002; P.A. 03-225 amended Subsec. (a)(20)(B)(iv) and (v) to provide for a corresponding subtraction modification for the bonus depreciation “decoupling” adopted the previous year and to eliminate an overlap between Social Security and railroad retirement benefits, effective July 9, 2003, and applicable to taxable years commencing on or after January 1, 2003; June 30 Sp. Sess. P.A. 03-6 amended Subsec. (a)(26) to increase applicable percentage of alternative minimum taxable income from 5% to 5.5% and to make a technical change, effective August 20, 2003 and applicable to taxable years commencing on and after January 1, 2003; P.A. 05-251 added Subsec. (a)(20)(B)(xv) excluding 50% of military retirement pay, and amended Subsecs. (a)(24) and (a)(30) to add reference to Subsec. (a)(20)(B)(xv) re military retirement pay, effective June 30, 2005, and applicable for taxable years commencing on or after January 1, 2008; P.A. 06-186 added Subsec. (a)(20)(B)(xiii) re contributions to qualified state tuition programs, and redesignating existing clauses (xiii) to (xv) as clauses (xiv) to (xvi), effective July 1, 2006, and applicable to taxable years commencing on or after January 1, 2006; P.A. 07-130 amended Subsec. (a)(20)(B) by adding new clause (xvi) re contributions to accounts established for designated beneficiary pursuant to Connecticut Homecare Option Program for the Elderly, effective October 1, 2007, and applicable to taxable years commencing on or after January 1, 2007, and by redesignating existing clause (xvi) as clause (xvii), effective October 1, 2007, and applicable to taxable years commencing on or after January 1, 2008; P.A. 08-140 amended Subsec. (a)(20)(B)(xvi) by adding as allowable deduction dividends or capital gains earned on contributions to accounts established under Connecticut Homecare Option Program for the Elderly, effective July 1, 2008, and applicable to taxable years commencing on or after January 1, 2008; June Sp. Sess. P.A. 09-3 amended Subsec. (a) by adding Subdivs. (10)(A)(viii) and (20)(A)(x) re deduction for qualified domestic production activities income, effective September 9, 2009, and applicable to taxable years commencing on or after January 1, 2009; June 19 Sp. Sess. P.A. 09-2 amended Subsec. (a)(20) by adding Subpara. (A)(x), codified by the Revisors as Subpara. (A)(xi), and Subpara. (B)(xviii) re treatment of income from discharge of indebtedness, effective June 22, 2009, and applicable to taxable years ending after December 31, 2008; June 12 Sp. Sess. P.A. 12-1 amended Subsec. (a)(20) by adding clauses (xii) and (xiii) re distribution from a manufacturing reinvestment account in Subpara. (A) and adding clause (xix) re contribution to a manufacturing reinvestment account in Subpara. (B), effective June 15, 2012, and applicable to taxable years commencing on or after January 1, 2011; P.A. 14-47 amended Subsec. (a)(20)(B) by adding clause (xx) re deduction for income from state teachers' retirement system, effective July 1, 2015, and applicable to taxable years commencing on or after January 1, 2015; P.A. 14-69 amended Subsec. (a)(20)(A) by deleting former clause (xii) re manufacturing reinvestment account distribution and redesignating existing clause (xiii) as clause (xii), effective July 1, 2014, and applicable to taxable years commencing on or after January 1, 2014; P.A. 14-122 made technical changes in Subsecs. (a)(9) and (b); P.A. 14-155 amended Subsec. (a)(10)(A) by adding clause (ix) re lump sum distribution, effective June 11, 2014, and applicable to taxable years commencing on or after January 1, 2014; P.A. 15-179 made a technical change in Subsec. (a)(20)(B)(xviii), effective July 1, 2015; P.A. 15-244 amended Subsec. (a)(20)(B)(xvii) to increase deduction for Armed Forces and National Guard retirement income from 50 per cent of such income to any such income, effective July 1, 2015, and applicable to taxable years commencing on or after January 1, 2015; P.A. 17-147 amended Subsec. (a)(20)(A) by adding clause (xiii) re compensation required to be recognized under Sec. 457A of the Internal Revenue Code, effective July 1, 2017, and applicable to taxable years commencing on or after January 1, 2017; June Sp. Sess. P.A. 17-2 amended Subsec. (a)(20) by adding Subpara. (B)(xxi), codified by the Revisors as Subpara. (B)(xxiii), re amount of financial assistance received from Crumbling Foundations Assistance Fund or paid to or on behalf of owner pursuant to Secs. 8-442 and 8-443, effective October 31, 2017, and applicable to taxable years commencing on and after January 1, 2017, and amended Subsec. (a)(20)(B) by adding subclauses (III) and (IV) re deduction of Social Security benefits for taxable years commencing January 1, 2018, in clause (x), replacing “January 1, 2017” with “January 1, 2019” re implementation of 50 per cent deduction of teachers' retirement income, adding provision re percentage, if applicable, pursuant to clause (xxi) and adding subclause designators in clause (xx), adding clause (xxi) re deduction of pension or annuity income, adding clause (xxii) re deduction of lost wages and medical, travel and housing expenses incurred in connection with certain organ donations, and making technical and conforming changes, effective October 31, 2017, and applicable to taxable years commencing on or after January 1, 2017, and further amended Subsec. (a) by adding Subdiv. (37) re definition of “organ”, effective October 31, 2017, and applicable to taxable years commencing on or after January 1, 2017; June Sp. Sess. P.A. 17-4 amended Subsec. (a)(20)(B)(x) by replacing “2018” with “2019”, effective November 21, 2017; P.A. 18-26 amended Subsec. (a)(20) to make technical changes and add “and each taxable year thereafter,” in Subpara. (B)(xxi)(VII); P.A. 18-49 amended Subsec. (a)(20) by replacing “September 10, 2001, but prior to September 11, 2004, in taxable years ending after September 10, 2001” with “September 27, 2017” and deleting reference to Sec. 101 of the Job Creation and Worker Assistance Act of 2002 in Subpara. (A)(ix), adding Subpara. (A)(xiv) re 80 per cent addback of deduction claimed for federal purposes under Sec. 179 of Internal Revenue Code, deleting reference to Sec. 101 of Job Creation and Worker Assistance Act of 2002, replacing “December 31, 2001, but prior to September 10, 2004” with “September 27, 2017” and deleting reference to taxable year ending after December 31, 2001, in Subpara. (B)(v), adding Subpara. (B)(xxiv), codified by the Revisors as Subpara. (B)(xxv), re deduction of disallowed portion pursuant to Subpara. (A)(xiv), and making technical changes, effective May 31, 2018, and applicable to taxable years commencing on or after January 1, 2017; P.A. 18-147 amended Subsec. (a)(20)(B) by adding clause (xxiv) re deduction for venture capital income calculated pursuant to Sec. 12-704g, effective July 1, 2018, and applicable to taxable years commencing on or after January 1, 2018; P.A. 19-117 amended Subsec. (a)(20)(B)(xx) by replacing “January 1, 2017, and January 1, 2018” with “to January 1, 2020, inclusive” in subclause (II) re income received from state teachers' retirement system, and replacing “2019” with “2021” in subclause (III), and made a technical change in Subsec. (a)(20)(B)(xxiii), effective June 26, 2019, and applicable to taxable years commencing on or after January 1, 2019; June Sp. Sess. P.A. 21-2 amended Subsec. (a)(20)(B) by deleting “the percentage, if applicable, pursuant to” in clause (xx) and adding provision re taxpayer whose federal adjusted gross income does not exceed applicable threshold under clause (xxi), and adding clause (xxvi) re deductions for the taxable years commencing on and after January 1, 2023, for distribution from individual retirement account other than Roth individual retirement account, effective June 23, 2021; P.A. 22-110 amended Subsec. (a) by making technical changes in Subdivs. (10), (24), (26), (28), (30) and (31); P.A. 22-118 amended Subsec. (a)(20) by making 100 per cent of pension or annuity income deductible for the taxable year commencing January 1, 2022, and each taxable year thereafter for taxpayers with federal adjusted gross income below certain thresholds in Subpara. (B)(xxi)(IV), and adding Subpara. (B)(xxvii) re amount or amounts paid or otherwise credited under the 2020 and 2021 federal Earned Income Tax Credit enhancement programs, effective May 7, 2022; P.A. 23-117 amended Subsec. (a)(20)(B) by deleting former clause (xv) and making conforming changes, effective June 27, 2023; P.A. 23-137 amended Subsec. (a)(20)(B) by making technical changes in clauses (xxvi) and (xxvii) and adding clause (xxviii), codified by the Revisors as clause (xxxiv), re deduction for contributions to ABLE account, effective January 1, 2024, and applicable to taxable years commencing on or after January 1, 2024; P.A. 23-204 amended Subsec. (a)(20)(B) by replacing “taxable year commencing January 1, 2022, and each taxable year thereafter” with “taxable years commencing January 1, 2022, and January 1, 2023” in clause (xxi)(IV), adding new clauses (xxii) and (xxiii), codified by the Revisors as clauses (xxi) and (xxii), re deductions for pension or annuity income for taxable years commencing on or after January 1, 2024, redesignating existing clauses (xxii) to (xxv) as clauses (xxiv) to (xxvii), redesignating existing clause (xxvi) as clause (xxviii) and amending same to delete subclauses (II) and (III) and subclause (I) designator, adding clauses (xxix) and (xxx), codified by the Revisors as clauses (xxviii) and (xxix), re deductions for distributions from an individual retirement account other than a Roth individual retirement account for taxable years commencing on or after January 1, 2024, redesignating existing clause (xxvii) as clause (xxxi), and adding clause (xxxii), codified by the Revisors as clause (xxxi), re deduction for ordinary and necessary expenses for taxpayer licensed under Ch. 420f or 420h for the taxable year commencing January 1, 2023, and each taxable year thereafter, effective June 12, 2023, and further amended Subsec. (a)(20)(B) by adding clause (xxviii), codified by the Revisors as clause (xxxii), re deduction for common stock received under a share plan for taxable years commencing on or after January 1, 2025, effective January 1, 2024, and further amended Subsec. (a)(20)(B) by adding clause (xxviii), codified by the Revisors as clause (xxxiii), re student loan reimbursement payment and making technical changes in clauses (xxvi) and (xxvii), effective January 1, 2024, and applicable to taxable years commencing on or after January 1, 2024.

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Sec. 12-704d. Credits for angel investors. (a) As used in this section:

(1) “Angel investor” means an accredited investor, as defined by the Securities and Exchange Commission, or network of accredited investors who review new or proposed businesses for potential investment and who may seek active involvement, such as consulting and mentoring, in a qualified Connecticut business or a qualified cannabis business, but “angel investor” does not include (A) a person controlling fifty per cent or more of the Connecticut business or cannabis business invested in by the angel investor, (B) a venture capital company, or (C) any bank, bank and trust company, insurance company, trust company, national bank, savings association or building and loan association for activities that are a part of its normal course of business;

(2) “Cash investment” means the contribution of cash, at a risk of loss, to a qualified Connecticut business or a qualified cannabis business in exchange for qualified securities;

(3) “Connecticut business” means any business, other than a cannabis business, with its principal place of business in Connecticut;

(4) “Bioscience” means manufacturing pharmaceuticals, medicines, medical equipment or medical devices and analytical laboratory instruments, operating medical or diagnostic testing laboratories, or conducting pure research and development in life sciences;

(5) “Advanced materials” means developing, formulating or manufacturing advanced alloys, coatings, lubricants, refrigerants, surfactants, emulsifiers or substrates;

(6) “Photonics” means generation, emission, transmission, modulation, signal processing, switching, amplification, detection and sensing of light from ultraviolet to infrared and the manufacture, research or development of opto-electronic devices, including, but not limited to, lasers, masers, fiber optic devices, quantum devices, holographic devices and related technologies;

(7) “Information technology” means software publishing, motion picture and video production, teleproduction and postproduction services, telecommunications, data processing, hosting and related services, custom computer programming services, computer system design, computer facilities management services, other computer related services and computer training;

(8) “Clean technology” means the production, manufacture, design, research or development of clean energy, green buildings, smart grid, high-efficiency transportation vehicles and alternative fuels, environmental products, environmental remediation and pollution prevention;

(9) “Qualified securities” means any form of equity, including a general or limited partnership interest, common stock, preferred stock, with or without voting rights, without regard to seniority position that must be convertible into common stock;

(10) “Emerging technology business” means any business that is engaged in bioscience, advanced materials, photonics, information technology, clean technology or any other emerging technology as determined by the Commissioner of Economic and Community Development;

(11) “Cannabis business” means a cannabis establishment (A) for which a social equity applicant has been granted a provisional license or a license, (B) in which a social equity applicant or social equity applicants have an ownership interest of at least sixty-five per cent, and (C) such social equity applicant or social equity applicants have control of such establishment;

(12) “Social equity applicant” has the same meaning as provided in section 21a-420;

(13) “Cannabis” has the same meaning as provided in section 21a-420; and

(14) “Cannabis establishment” has the same meaning as provided in section 21a-420.

(b) There shall be allowed a credit against the tax imposed under this chapter, other than the liability imposed by section 12-707, for a cash investment by an angel investor of not less than twenty-five thousand dollars in the qualified securities of a Connecticut business or a cannabis business. The credit shall be in an amount equal to (1) twenty-five per cent of such investor's cash investment in a Connecticut business, or (2) forty per cent of such investor's cash investment in a cannabis business, provided the total tax credits allowed to any angel investor shall not exceed five hundred thousand dollars. The credit shall be claimed in the taxable year in which such cash investment is made by the angel investor. The credit may be sold, assigned or otherwise transferred, in whole or in part.

(1) A Connecticut business that (A) has been approved as a qualified Connecticut business pursuant to subsection (d) of this section; (B) had annual gross revenues of less than one million dollars in the most recent income year of such business; (C) has fewer than twenty-five employees, not less than seventy-five per cent of whom reside in this state; (D) has been operating in this state for less than seven consecutive years; (E) is primarily owned by the management of the business and their families; and (F) received less than two million dollars in cash investments eligible for the tax credits provided by this section; or

(2) A cannabis business that (A) has been approved as a qualified cannabis business pursuant to subsection (d) of this section; (B) had annual gross revenues of less than one million dollars in the most recent income year of such business; (C) has fewer than twenty-five employees, not less than seventy-five per cent of whom reside in this state; (D) is primarily owned by the management of the business and their families; and (E) received less than two million dollars in cash investments eligible for the tax credits provided by this section.

(d) (1) A Connecticut business or a cannabis business may apply to Connecticut Innovations, Incorporated, for approval as a Connecticut business or cannabis business, as applicable, qualified to receive cash investments eligible for a tax credit pursuant to this section. The application shall include (A) the name of the business and a copy of the organizational documents of such business, (B) a business plan, including a description of the business and the management, product, market and financial plan of the business, (C) a description of the business's innovative technology, product or service, (D) a statement of the potential economic impact of the business, including the number, location and types of jobs expected to be created, (E) a description of the qualified securities to be issued and the amount of cash investment sought by the business, (F) a statement of the amount, timing and projected use of the proceeds to be raised from the proposed sale of qualified securities, and (G) such other information as the chief executive officer of Connecticut Innovations, Incorporated, may require.

(2) Said chief executive officer shall, on a monthly basis, compile a list of approved applications, categorized by the cash investments being sought by the qualified Connecticut business or the qualified cannabis business and type of qualified securities offered.

(e) (1) Any angel investor that intends to make a cash investment in a business on such list may apply to Connecticut Innovations, Incorporated, to reserve a tax credit in the amount indicated by such investor. Connecticut Innovations, Incorporated, shall not reserve tax credits under this section for any investments made in a qualified Connecticut business on or after July 1, 2028, or for any investments made in a qualified cannabis business on or after July 1, 2023.

(2) The aggregate amount of all tax credits under this section that may be reserved by Connecticut Innovations, Incorporated, shall not exceed (A) for cash investments made in qualified Connecticut businesses, six million dollars annually for the fiscal years commencing July 1, 2010, to July 1, 2012, inclusive, and five million dollars for each fiscal year thereafter, and (B) for cash investments made in qualified cannabis businesses, fifteen million dollars annually for the fiscal years commencing July 1, 2021, and July 1, 2022.

(3) With respect to the tax credits available under this section for investments in qualified Connecticut businesses, Connecticut Innovations, Incorporated, shall not reserve more than seventy-five per cent of such tax credits for investments in emerging technology businesses, except if any such credits remain available for reservation after April first in any fiscal year, such remaining credits may be reserved for investments in such businesses and may be prioritized for veteran-owned, women-owned or minority-owned businesses and businesses owned by individuals with disabilities.

(4) The amount of the credit allowed to any investor pursuant to this section shall not exceed the amount of tax due from such investor under this chapter, other than section 12-707, with respect to such taxable year. Any tax credit that is claimed by the angel investor but not applied against the tax due under this chapter, other than the liability imposed under section 12-707, may be carried forward for the five immediately succeeding taxable years until the full credit has been applied.

(f) If the angel investor is an S corporation or an entity treated as a partnership for federal income tax purposes, the tax credit may be claimed by the shareholders or partners of the angel investor. If the angel investor is a single member limited liability company that is disregarded as an entity separate from its owner, the tax credit may be claimed by such limited liability company's owner, provided such owner is a person subject to the tax imposed under this chapter.

(g) A review of the cumulative effectiveness of the credit under this section shall be conducted by Connecticut Innovations, Incorporated, by July first annually. Such review shall include, but need not be limited to, the number and type of Connecticut businesses and cannabis businesses that received angel investments, the number of angel investors and the aggregate amount of cash investments, the current status of each Connecticut business and cannabis business that received angel investments, the number of employees employed in each year following the year in which such Connecticut business or cannabis business received the angel investment and the economic impact in the state of the Connecticut business or cannabis business that received the angel investment. Such review shall be submitted to the Office of Policy and Management and to the joint standing committee of the General Assembly having cognizance of matters relating to commerce, in accordance with the provisions of section 11-4a.

(P.A. 10-75, S. 15; P.A. 11-254, S. 1; Oct. Sp. Sess. P.A. 11-1, S. 29; P.A. 14-47, S. 51; 14-79, S. 2; May Sp. Sess. P.A. 16-3, S. 183; P.A. 17-110, S. 1; P.A. 19-117, S. 347; June Sp. Sess. P.A. 21-1, S. 133; P.A. 23-204, S. 355.)

History: P.A. 10-75 effective July 1, 2010, and applicable to taxable years commencing on or after January 1, 2010; P.A. 11-254 amended Subsec. (d)(1)(C) to delete “and proprietary” re description of business's technology, product of service, effective July 1, 2011, and applicable to taxable years commencing on or after January 1, 2011; Oct. Sp. Sess. P.A. 11-1 amended Subsec. (b) to lower minimum investment required from $100,000 to $25,000, effective October 27, 2011; P.A. 14-47 amended Subsec. (e)(1) to change “July 1, 2014” to “July 1, 2016”, amended Subsec. (g) to add provisions re review of cumulative effectiveness of credit and submission of same to Office of Policy and Management, and made technical changes, effective May 29, 2014, and applicable to taxable years commencing on or after January 1, 2014; P.A. 14-79 amended Subsec. (d) to change “executive director” to “chief executive officer”, effective June 3, 2014; May Sp. Sess. P.A. 16-3 amended Subsec. (b) to delete provision re credit not to be transferrable and to add provision re credit may be sold, assigned or otherwise transferred, and amended Subsec. (e)(1) to replace “July 1, 2016” with “July 1, 2019”, effective July 1, 2016, and applicable to taxable years commencing on or after January 1, 2016; P.A. 17-110 amended Subsec. (a)(3) by redefining “Connecticut business”, added Subsec. (a)(10) defining “emerging technology business”, amended Subsec. (e)(1) by adding provision re reservation of tax credits for investments in emerging technology businesses and made conforming changes, effective July 1, 2017; P.A. 19-117 amended Subsec. (b) to increase total tax credits allowed to any angel investor from $250,000 to $500,000, and amended Subsec. (e)(1) to increase aggregate amount of all tax credits under section from $3,000,000 to $5,000,000, add provision re prioritization for veteran-owned, women-owned or minority-owned businesses and businesses owned by individuals with disabilities, and replace “July 1, 2019” with “July 1, 2024”, effective July 1, 2019, and applicable to taxable and income years commencing on or after January 1, 2019; June Sp. Sess. P.A. 21-1 amended Subsec. (a) to add definitions of “cannabis business”, “social equity applicant”, “cannabis” and “cannabis establishment”, substantially revised Subsecs. (b) and (c) to add provisions re tax credits for cannabis businesses, substantially revised Subsec. (e) to add provision re aggregate amount of tax credits under section for cash investments made in cannabis businesses and replace “July 1, 2024” with “July 1, 2028”, and made technical and conforming changes, effective July 1, 2021; P.A. 23-204 amended Subsec. (e) to change moratorium date on tax credits under section from on or after July 1, 2028, to on or after July 1, 2028, for qualified Connecticut business and on or after July 1, 2023, for qualified cannabis business in Subdiv. (1), and make technical and conforming changes in Subdivs. (2) and (3), effective July 1, 2023.

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Sec. 12-704e. Earned income tax credit. (a) Any resident of this state, as defined in subdivision (1) of subsection (a) of section 12-701, who is subject to the tax imposed under this chapter for any taxable year shall be allowed a credit against the tax otherwise due under this chapter in an amount equal to the applicable percentage of the earned income credit claimed and allowed for the same taxable year under Section 32 of the Internal Revenue Code, as defined in subsection (a) of section 12-701. As used in this section, “applicable percentage” means (1) twenty-three per cent for taxable years commencing prior to January 1, 2021, (2) thirty and one-half per cent for taxable years commencing on or after January 1, 2021, and prior to January 1, 2023, and (3) forty per cent for taxable years commencing on or after January 1, 2023.

(b) If the amount of the credit allowed pursuant to this section exceeds the taxpayer's liability for the tax imposed under this chapter, the Commissioner of Revenue Services shall treat such excess as an overpayment and, except as provided under section 12-739 or 12-742, shall refund the amount of such excess, without interest, to the taxpayer.

(c) If a married individual who is otherwise eligible for the credit allowed hereunder has filed a joint federal income tax return for the taxable year, but is required to file a separate return under this chapter for such taxable year, the credit for which such individual is eligible under this section shall be an amount equal to the applicable percentage of the earned income credit claimed and allowed for such taxable year under Section 32 of the Internal Revenue Code multiplied by a fraction, the numerator of which is such individual's federal adjusted gross income, as reported on such individual's separate return under this chapter, and the denominator of which is the federal adjusted gross income, as reported on the joint federal income tax return.

(d) To the extent permitted under federal law, any state or federal earned income tax credit shall not be counted as income when received by an individual who is an applicant for, or recipient of, benefits or services under any state or federal program that provides such benefits or services based on need, nor shall any such earned income tax credit be counted as resources, for the purpose of determining the individual's or any other individual's eligibility for such benefits or services, or the amount of such benefits or services.

(P.A. 11-6, S. 110; June Sp. Sess. P.A. 11-1, S. 3, 4, 14; P.A. 13-184, S. 83; P.A. 15-244, S. 69; June Sp. Sess. P.A. 17-2, S. 645; June Sp. Sess. P.A. 21-2, S. 430; P.A. 23-204, S. 378.)

History: P.A. 11-6 effective May 4, 2011, and applicable to taxable years commencing on or after January 1, 2011; June Sp. Sess. P.A. 11-1, S. 3 and 4, amended Subsecs. (a) and (c) to change tax credit from 30% to 25%, effective July 1, 2011, and applicable to taxable years commencing on or after January 1, 2011; pursuant to June Sp. Sess. P.A. 11-1, S. 14, the changes made by June Sp. Sess. P.A. 11-1, S. 3 and 4, to Subsecs. (a) and (c) ceased to be effective on August 22, 2011, and the provisions of Subsecs. (a) and (c) in effect immediately prior to July 1, 2011, were reinstated; P.A. 13-184 amended Subsecs. (a) and (c) to delete “thirty per cent” and add reference to applicable percentage and added Subsec. (e) defining “applicable percentage”, effective June 18, 2013, and applicable to taxable years commencing on or after January 1, 2013; P.A. 15-244 amended Subsec. (e)(2) by redefining “applicable percentage” to apply 27.5 per cent rate to taxable years commencing on or after January 1, 2014, but prior to January 1, 2017, effective June 30, 2015, and applicable to taxable years commencing on or after January 1, 2015; June Sp. Sess. P.A. 17-2 amended Subsec. (e) by redefining “applicable percentage”, effective October 31, 2017, and applicable to taxable years commencing on or after January 1, 2017; June Sp. Sess. P.A. 21-2 redefined “applicable percentage” and made technical changes, effective June 23, 2021, and applicable to taxable years commencing on or after January 1, 2021; P.A. 23-204 amended Subsec. (a) by redefining “applicable percentage”, effective June 12, 2023.

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Sec. 12-704i. Credit for delivery of a fetus born dead for which a fetal death certificate has been filed. A taxpayer shall be allowed a credit against the tax imposed under this chapter, other than the liability imposed by section 12-707, in the amount of two thousand five hundred dollars for the delivery of a fetus born dead for which a fetal death certificate has been filed, provided such child would have been a dependent on such taxpayer's federal income tax return. The credit shall be allowed for the taxable year for which a fetal death occurred.

(P.A. 22-118, S. 412; P.A. 23-31, S. 10.)

History: P.A. 22-118 effective July 1, 2022, and applicable to taxable years commencing on or after January 1, 2022; P.A. 23-31 replaced “birth of a stillborn child” with “delivery of a fetus born dead for which a fetal death certificate has been filed” and “stillbirth certificate is issued by the State Vital Records Office of the Department of Public Health” with “fetal death occurred”, effective June 7, 2023, and applicable to taxable years commencing on or after January 1, 2022.

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Sec. 12-719. Filing of returns. Returns for partnerships, S corporations and pass-through entities. Returns for nonresident athletes of professional teams. (a) The income tax return required under this chapter shall be filed on or before the fifteenth day of the fourth month following the close of the taxpayer's taxable year. A person required to make and file a return shall, without assessment, notice or demand, pay any tax due thereon to the Commissioner of Revenue Services on or before the date fixed for filing such return, determined without regard to any extension of time for filing the return.

(b) (1) (A) The provisions of this subsection shall not apply to taxable years commencing on or after January 1, 2018, and prior to January 1, 2024.

(B) With respect to each of its nonresident partners, each partnership doing business in this state or having income derived from or connected with sources within this state shall, for each taxable year, make payment to the commissioner as provided in subdivision (2) of this subsection.

(C) For taxable years commencing on or after January 1, 2024, the payment due with respect to each nonresident partner under this subsection shall be reduced by such partner's direct and indirect credit properly reported by the partnership under subdivision (1) of subsection (f) of section 12-699. In no event shall the payment with respect to any nonresident partner be less than zero.

(2) (A) Any payment under this subdivision shall be in an amount equal to the highest marginal tax rate in effect under section 12-700 for the taxable year multiplied by the subject partner's distributive share of (i) such partnership's separately and nonseparately computed items, as described in Section 702(a) of the Internal Revenue Code, to the extent derived from or connected with sources within this state, as determined under this chapter, and (ii) any modification described in section 12-701 which relates to an item of such partnership's income, gain, loss or deduction, to the extent derived from or connected with sources within this state, as determined under this chapter. Any amount paid by a partnership to this state with respect to any taxable year pursuant to this subdivision shall be considered to be a payment by the partner on account of the income tax imposed on the partner for such taxable year pursuant to this chapter. A partnership shall not be liable to, and shall be entitled to recover a payment made pursuant to this subdivision from, the partner on whose behalf the payment was made. Any payment for a taxable year shall be made on or before the date the annual return for such taxable year is required to be filed pursuant to section 12-726. The partnership shall furnish, on a form prescribed by the commissioner, to each partner on whose behalf payment was made under this subdivision no later than the fifteenth day of the third month following the close of the partnership's taxable year a record of the amount of the tax paid on behalf of such partner by the partnership with respect to the taxable year.

(B) (i) If income from one or more pass-through entities, as defined in subparagraph (D) of this subdivision, is the only source of income derived from or connected with Connecticut sources of a partner, or the partner and his or her spouse if a joint federal income tax return is or shall be made, the filing by the partnership of an annual return pursuant to section 12-726 and the payment by the partnership on behalf of the partner of the tax prescribed under subparagraph (A) of this subdivision shall satisfy the filing and payment requirements otherwise separately imposed on the partner by this chapter. The commissioner may make any deficiency assessment against, at the commissioner's sole discretion, either the partnership or the partner, provided any such assessment against the partner shall be limited to the partner's share thereof. Except as otherwise provided in section 12-733, any such assessment shall be made not later than three years after the partnership's annual return pursuant to section 12-726 is filed. The commissioner may refund or credit any overpayment to either the partnership or the partner, in the commissioner's sole discretion. Except as otherwise provided in section 12-732, any such overpayment shall be refunded or credited not later than three years from the due date of the partnership's annual return pursuant to section 12-726 or, if the time for filing such return was extended, not later than three years from the date on which such return is filed or the extended due date of such return, whichever is earlier.

(ii) If income from one or more pass-through entities, as defined in subparagraph (D) of this subdivision, is not the only source of income derived from or connected with Connecticut sources of a partner, or the partner and his or her spouse if a joint federal income tax return is or shall be made, nothing in this subdivision shall be construed as excusing the partner from the obligation to file his or her own separate tax return under this chapter. In such event, the partner shall receive credit for the income tax paid under this subdivision by the partnership on his or her behalf. The commissioner may make any deficiency assessment that is related to the partner's share of partnership items against either, in the commissioner's sole discretion, the partnership or the partner. If the commissioner chooses to make any deficiency assessment against the partnership, then, except as otherwise provided in section 12-733, any such assessment shall be made not later than three years after the partnership's annual return pursuant to section 12-726 is filed. The commissioner may refund or credit any overpayment that is related to the partner's share of partnership items to either, in the commissioner's sole discretion, the partnership or the partner. If the commissioner chooses to refund or credit any overpayment to the partnership, then, except as otherwise provided in section 12-732, any such overpayment shall be refunded or credited not later than three years from the due date of the partnership's annual return pursuant to section 12-726 or, if the time for filing such return was extended, not later than three years from the date on which such return is filed or the extended due date of such return, whichever is earlier.

(C) Notwithstanding any provision of subparagraph (A) of this subdivision, a partnership shall not be required to make a payment on account of the income tax imposed on a partner for a taxable year pursuant to this chapter if (i) the partner's distributive share of partnership income, to the extent derived from or connected with sources within this state, as reflected on the partnership's annual return for the taxable year under section 12-726, is less than one thousand dollars; (ii) the department has determined by regulation, ruling or instruction that the partner's income is not subject to the provisions of this subdivision; or (iii) the partnership is a publicly traded partnership, as defined in Section 7704(b) of the Internal Revenue Code, that is treated as a partnership for federal income tax purposes and that has agreed to file the annual return pursuant to section 12-726, and to report therewith the name, address, Social Security number or federal employer identification number, and other information required by the department concerning each unitholder whose distributive share of partnership income, to the extent derived from or connected with sources within this state, as reflected on such annual return, is more than five hundred dollars.

(D) If a member of a pass-through entity, referred to in this subparagraph as an “upper-tier pass-through entity”, is itself a pass-through entity, the member, referred to in this subparagraph as a “lower-tier pass-through entity”, shall be subject to the same requirements to make payment, on behalf of its members, of the income tax imposed on those members pursuant to this chapter that apply to the upper-tier pass-through entity under this subdivision. The department shall apply the income tax paid by the upper-tier pass-through entity, on behalf of the lower-tier pass-through entity, to the income tax required to paid by the lower-tier pass-through entity, on behalf of its members. For purposes of this subdivision, “pass-through entity” means an S corporation, general partnership, limited partnership, limited liability partnership or limited liability company that is treated as a partnership for federal income tax purposes; and “member” means a shareholder of an S corporation, a partner in a general partnership, a limited partnership, or a limited liability partnership and a member of a limited liability company that is treated as a partnership for federal income tax purposes.

(E) For purposes of section 12-740, a nonresident individual who is a member of a pass-through entity, as defined in subparagraph (D) of this subdivision, shall not be required to file an income tax return under this chapter for a taxable year if, for such taxable year, the only source of income derived from or connected with Connecticut sources of such member, or the member and his or her spouse if a joint federal income tax return is or shall be made, is from one or more pass-through entities, and the sum of such income derived from or connected with Connecticut sources from such one or more pass-through entities is less than one thousand dollars.

(c) (1) (A) The provisions of this subsection shall not apply to taxable years commencing on or after January 1, 2018, and prior to January 1, 2024.

(B) With respect to each of its nonresident shareholders, each S corporation doing business in this state or having income derived from or connected with sources within this state shall, for each taxable year, make payment to the commissioner as provided in subdivision (2) of this subsection.

(C) For taxable years commencing on or after January 1, 2024, the payment due with respect to each nonresident shareholder under this subsection shall be reduced by such shareholder's direct and indirect credit properly reported by the S corporation under subdivision (1) of subsection (f) of section 12-699. In no event shall the payment with respect to any nonresident shareholder be less than zero.

(2) (A) Any payment under this subdivision shall be in an amount equal to the highest marginal tax rate in effect under section 12-700 for the taxable year multiplied by the subject shareholder's pro rata share of (i) such S corporation's separately and nonseparately computed items, as described in Section 1366 of the Internal Revenue Code, to the extent derived from or connected with sources within this state, as determined under this chapter, and (ii) any modification described in section 12-701 which relates to an item of such S corporation's income, gain, loss or deduction, to the extent derived from or connected with sources within this state, as determined under this chapter. Any amount paid by an S corporation to this state with respect to any taxable year pursuant to this subdivision shall be considered to be a payment by the shareholder on account of the income tax imposed on the shareholder for such taxable year pursuant to this chapter. An S corporation shall not be liable to, and shall be entitled to recover a payment made pursuant to this subdivision from, the shareholder on whose behalf the payment was made. Any payment for a taxable year shall be made at or before the date the annual return for such taxable year is required to be filed pursuant to section 12-726. The S corporation shall furnish, on a form prescribed by the department, to each shareholder on whose behalf payment was made under this subdivision no later than the fifteenth day of the third month following the close of the S corporation's taxable year a record of the amount of the tax paid on behalf of such shareholder by the S corporation with respect to the taxable year.

(B) (i) If income from one or more pass-through entities, as defined in subparagraph (D) of this subdivision, is the only source of income derived from or connected with Connecticut sources of a shareholder, or the shareholder and his or her spouse if a joint federal income tax return is or shall be made, the filing by the S corporation of an annual return pursuant to section 12-726 and the payment by the S corporation on behalf of the shareholder of the tax prescribed under subparagraph (A) of this subdivision shall satisfy the filing and payment requirements otherwise separately imposed on the shareholder by this chapter. The commissioner may make any deficiency assessment against, at the commissioner's sole discretion, either the S corporation or the shareholder, provided any such assessment against the shareholder shall be limited to the shareholder's share thereof. Except as otherwise provided in section 12-733, any such assessment shall be made not later than three years after the S corporation's annual return pursuant to section 12-726 is filed. The commissioner may refund or credit any overpayment to either the S corporation or the shareholder, in the commissioner's sole discretion. Except as otherwise provided in section 12-732, any such overpayment shall be refunded or credited not later than three years from the due date of the S corporation's annual return pursuant to section 12-726 or, if the time for filing such return was extended, not later than three years from the date on which such return is filed or the extended due date of such return, whichever is earlier.

(ii) If income from one or more pass-through entities, as defined in subparagraph (D) of subdivision (2) of subsection (b) of this section, is not the only source of income derived from or connected with Connecticut sources of a shareholder, or the shareholder and his or her spouse if a joint federal income tax return is or shall be made, nothing in this subdivision shall be construed as excusing the shareholder from the obligation to file his or her own separate tax return under this chapter. In such event, the shareholder shall receive credit for the income tax paid under this subdivision by the S corporation on his or her behalf. The commissioner may make any deficiency assessment that is related to the shareholder's share of S corporation items against either, in the commissioner's sole discretion, the S corporation or the shareholder. If the commissioner chooses to make any deficiency assessment against the S corporation, then, except as otherwise provided in section 12-733, any such assessment shall be made not later than three years after the S corporation's annual return pursuant to section 12-726 is filed. The commissioner may refund or credit any overpayment that is related to the shareholder's share of S corporation items to either, in the commissioner's sole discretion, the S corporation or the shareholder. If the commissioner chooses to refund or credit any overpayment to the S corporation, then, except as otherwise provided in section 12-732, any such overpayment shall be refunded or credited not later than three years from the due date of the S corporation's annual return pursuant to section 12-726 or, if the time for filing such return was extended, not later than three years from the date on which such return is filed or the extended due date of such return, whichever is earlier.

(C) Notwithstanding the provisions of subparagraph (A) of this subdivision, an S corporation shall not be required to make a payment on account of the income tax imposed on a shareholder for a taxable year pursuant to this chapter if (i) the shareholder's distributive share of S corporation income, to the extent derived from or connected with sources within this state, as reflected on the S corporation's annual return for the taxable year under section 12-726, is less than one thousand dollars; or (ii) the department has determined by regulation, ruling or instruction that the shareholder's income is not subject to the provisions of this subdivision.

(D) For purposes of this subdivision, the provisions of subparagraphs (D) and (E) of subdivision (2) of subsection (b) of this section apply.

(d) (1) In lieu of filing a return pursuant to this section, the commissioner may, if he determines that the enforcement of this chapter would not be adversely affected and pursuant to requirements and conditions set forth in forms and instructions, provide for the filing of a composite return for every qualifying nonresident member of a professional athletic team by such team, if such team is doing business in this state or the members of such team have compensation which is received for services rendered as members of such team and which is derived from or connected with sources within this state.

(2) If a professional athletic team is required to file a composite return pursuant to this subsection, the commissioner may, if he determines that the enforcement of this chapter would not be adversely affected, require such team, in lieu of deducting and withholding Connecticut income tax as may otherwise be required under section 12-705, to make payment to the commissioner of tax, estimated tax, additions to tax, interest and penalties otherwise required to be paid to the commissioner by such qualifying nonresident members.

(3) The commissioner may, if he determines that the enforcement of this chapter would not be adversely affected, require a professional athletic team, in lieu of deducting and withholding Connecticut income tax as may otherwise be required under section 12-705, to make payment to the commissioner of tax, estimated tax, additions to tax, interest and penalties otherwise required to be paid to the commissioner by every (A) resident member, but only with respect to compensation which is received for services rendered as a member of a professional athletic team and (B) nonresident member who is not a qualifying nonresident member, but only with respect to compensation which is received for services rendered as a member of a professional athletic team and which is derived from or connected with sources within this state.

(4) Any amount paid by a professional athletic team to this state with respect to any taxable period pursuant to this subsection shall be considered to be a payment by the member on account of the income tax imposed on the member for such taxable period pursuant to this chapter. The team shall be entitled to recover a payment made pursuant to this subsection from the member on whose behalf the payment was made.

(5) For purposes of this subsection, “qualifying nonresident member” means a member of a professional athletic team who is a nonresident individual for the entire taxable year, who does not maintain a permanent place of abode in Connecticut at any time during the taxable year, who does not have income derived from or connected with sources within this state other than compensation which is received for services rendered as a member of a professional athletic team and which is derived from or connected with sources within this state.

(June Sp. Sess. P.A. 91-3, S. 70, 168; May Sp. Sess. P.A. 92-5, S. 14, 37; P.A. 95-263, S. 1, 4; P.A. 96-175, S. 4, 5; P.A. 98-262, S. 11, 22; P.A. 04-216, S. 54; P.A. 06-159, S. 5; P.A. 17-147, S. 37; P.A. 18-49, S. 3, 4; P.A. 23-204, S. 362.)

History: June Sp. Sess. P.A. 91-3, S. 70, effective August 22, 1991, and applicable to taxable years of taxpayers commencing on or after January 1, 1991; May Sp. Sess. P.A. 92-5 made various technical and minor changes, effective June 19, 1992, and applicable to taxable years of taxpayers commencing on or after January 1, 1992; P.A. 95-263 added Subsec. (d) to permit filing a composite return for qualifying nonresident members of professional athletic teams, effective July 6, 1995, and applicable to taxable years commencing on or after January 1, 1996; P.A. 96-175 amended Subsec. (c)(3) to add the amount of the shareholder's pro rata share of the corporations' nonseparately computed items, reduced by the amount subject to tax under chapter 208 to the calculation of payment, effective May 31, 1996, and applicable to income years commencing on or after January 1, 1997; P.A. 98-262 amended Subsec. (c)(3) to clarify language relating to how a nonresident shareholder must calculate tax for nonseparately stated income derived from or connected with sources within this state, effective June 8, 1998, and applicable to taxable years commencing on or after January 1, 1998; P.A. 04-216 deleted former Subsec. (b) and added new Subsec. (b) re group returns of partnerships with nonresident partners and amended Subsec. (c) to add provisions re group returns of S corporations with nonresident shareholders and make conforming changes, effective May 6, 2004, and applicable to taxable years commencing on or after January 1, 2004, and to estimated composite income tax payments required to be made on or after May 6, 2004; P.A. 06-159 amended Subsecs. (b) and (c) to eliminate group tax returns for partnerships, S corporations and pass-through entities, to require such businesses to pay the taxes nonresident partners owe on income from such businesses and to make conforming changes, effective June 6, 2006, and applicable to taxable years commencing on or after January 1, 2006; P.A. 17-147 amended Subsec. (a) to delete provision re commissioner to prescribe by regulation place for filing return, declaration, statement or other document and for payment of any tax, effective July 7, 2017; P.A. 18-49 amended Subsecs. (b)(1) and (c)(1) to provide that the provisions of Subsecs. (b) and (c) shall not apply to taxable years commencing on or after January 1, 2018, effective May 31, 2018; P.A. 23-204 amended Subsecs. (b) and (c) to add “, and prior to January 1, 2024” in Subdiv. (1)(A), add Subdiv. (1)(C) re reduction of payment due for certain persons' direct and indirect credit properly reported for taxable years commencing on or after January 1, 2024, and change “fourth month following” to “third month following” in Subdiv. (2)(A), effective January 1, 2024, and applicable to taxable years commencing on or after January 1, 2024.

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Sec. 12-733. Limits on time for making of deficiency assessments. (a) Except as otherwise provided in this chapter, a notice of proposed deficiency assessment shall be mailed to the taxpayer within three years after the return is filed. No deficiency shall be assessed or collected with respect to the year for which the return is filed unless the notice is mailed within the three-year period or the period otherwise fixed. Where, within the sixty-day period ending on the day on which the time prescribed by this chapter for mailing a notice of proposed deficiency assessment for any taxable year would otherwise expire, the commissioner receives a written document signed by a taxpayer showing that the taxpayer owes an additional amount of tax for such taxable year, the period during which a notice of proposed deficiency assessment may be mailed shall not expire before the day sixty days after the day on which the commissioner receives such document.

(b) (1) If the taxpayer omits from Connecticut adjusted gross income, in the case of an individual, or from Connecticut taxable income, in the case of a trust or estate, an amount properly includable therein which is in excess of twenty-five per cent of the amount of Connecticut adjusted gross income or Connecticut taxable income, as the case may be, stated in the return, a notice of a proposed deficiency assessment may be mailed to the taxpayer not later than six years after the date on which the return is filed. For purposes of this subdivision, there shall not be taken into account any amount which is omitted in the return if such amount is disclosed in the return, or in a statement attached to the return, in a manner adequate to apprise the Commissioner of Revenue Services of the nature and the amount of such item.

(2) If the taxpayer omits from the Connecticut adjusted gross income derived from or connected with sources within this state, in the case of a nonresident individual or part-year resident individual, or from Connecticut taxable income derived from or connected with sources within this state, in the case of a nonresident trust or estate of part-year resident trust, an amount properly includable therein which is in excess of twenty-five per cent of the amount of Connecticut adjusted gross income derived from or connected with sources within this state or Connecticut taxable income derived from or connected with sources within this state, as the case may be, stated in the return, a notice of a proposed deficiency assessment may be mailed to the taxpayer not later than six years after the date on which the return is filed. For purposes of this subdivision, there shall not be taken into account any amount which is omitted in the return if such amount is disclosed in the return, or in a statement attached to the return, in a manner adequate to apprise the commissioner of the nature and the amount of such item.

(3) If an employer, as defined in section 12-707, omits from Connecticut wages an amount properly includable that is in excess of twenty-five per cent of the amount of Connecticut wages stated in the Connecticut withholding tax return required under section 12-707, a notice of a proposed deficiency assessment may be mailed to the employer not later than six years after the date on which the return is filed. For purposes of this subdivision, there shall not be taken into account any amount which is omitted in the return if such amount is disclosed in the return, or in a statement attached to the return, in a manner adequate to apprise the commissioner of the nature and the amount of such item.

(4) If an affected business entity, as defined in section 12-699, omits from the Connecticut adjusted gross income derived from or connected with sources within Connecticut of any member of such affected business entity an amount properly includable therein that is in excess of twenty-five per cent of the amount of Connecticut adjusted gross income derived from or connected with sources within Connecticut stated in the return filed pursuant to section 12-699 or section 12-719, a notice of a proposed deficiency assessment may be mailed to the taxpayer not later than six years after the date on which the return is filed. For purposes of this subdivision, there shall not be taken into account any amount that is omitted in the return if such amount is disclosed in the return, or in a statement attached to the return, in a manner adequate to apprise the commissioner of the nature and the amount of such item.

(c) (1) If no return is filed or if a taxpayer makes, wilfully or otherwise, a false or fraudulent return, a notice of deficiency assessment may be mailed to the taxpayer at any time.

(2) If a taxpayer wilfully attempts in any manner to defeat or evade a tax imposed by this chapter, a notice of deficiency assessment may be mailed to the taxpayer at any time.

(3) If a taxpayer fails to disclose a reportable transaction, as defined in Section 6707A of the Internal Revenue Code, on the taxpayer's federal tax return, a notice of deficiency assessment may be mailed to the taxpayer at any time not later than six years after the return required under this chapter for the same taxable year was filed.

(d) (1) If a taxpayer fails to comply with the requirements of section 12-727 by not reporting a change or correction by the United States Internal Revenue Service or other competent authority increasing, in the case of an individual, the individual's federal adjusted gross income or, in the case of a trust or estate, its federal taxable income, or by not reporting a change or correction which is treated in the same manner as if it were a deficiency for federal income tax purposes, or by not filing an amended return, a notice of a proposed deficiency assessment may be mailed to the taxpayer at any time. The provisions of this subdivision shall also apply if an individual's computation of tax under Section 1341(a)(4) or (5) of the Internal Revenue Code is changed or corrected by the United States Internal Revenue Service or other competent authority, and the individual fails to comply with the requirements of section 12-727.

(2) If a taxpayer fails to comply with the requirements of subsection (b) of section 12-704 by not reporting a change or correction by tax officers or other competent authority of another jurisdiction affecting the amount of tax of such other jurisdiction that the taxpayer is finally required to pay, or by not filing an amended return, a notice of a proposed deficiency assessment may be mailed to the taxpayer at any time.

(e) (1) If the taxpayer, pursuant to section 12-727, reports a change or correction by the United States Internal Revenue Service or other competent authority increasing, in the case of an individual, the individual's federal adjusted gross income or, in the case of a trust or estate, its federal taxable income or reports a change or correction which is treated in the same manner as if it were a deficiency for federal income tax purposes, or files an amended return, the assessment, if not deemed to have been made upon the filing of the report or amended return, may be made at any time not later than three years after such report or amended return is filed. The provisions of this subdivision shall also apply if an individual's computation of tax under Section 1341(a)(4) or (5) of the Internal Revenue Code is changed or corrected by the United States Internal Revenue Service or other competent authority, and the individual, pursuant to section 12-727, reports the change or correction.

(2) If the taxpayer, pursuant to subsection (b) of section 12-704, reports a change or correction by tax officers or other competent authority of another jurisdiction affecting the amount of tax of such other jurisdiction that the taxpayer is finally required to pay, or files an amended return, the assessment, if not deemed to have been made upon the filing of the report or amended return, may be made not later than three years after such report or amended return is filed.

(f) Where, before the expiration of the time prescribed in this section for the assessment of a deficiency, both the commissioner and the taxpayer shall have consented in writing to its assessment after such time, the deficiency may be assessed at any time prior to the expiration of the period agreed upon. The period so agreed upon may be extended by a subsequent agreement in writing made before the expiration of the period previously agreed upon and the commissioner may, in such a case, waive the statute of limitations against a claim for refund by such taxpayer.

(g) For purposes of this section an income tax return filed before the last day prescribed by law or by any regulation adopted pursuant to law for the filing thereof, determined without regard to any extension of time for filing, shall be deemed to be filed on such last day. If a return of withholding tax for any period ending with or within a calendar year is filed before April fifteenth of the succeeding calendar year, such return shall be deemed to be filed on April fifteenth of such succeeding calendar year.

(June Sp. Sess. P.A. 91-3, S. 84, 168; May Sp. Sess. P.A. 92-5, S. 23, 37; P.A. 95-5, S. 5, 6; P.A. 97-243, S. 43, 67; P.A. 98-244, S. 33, 35; P.A. 99-121, S. 25, 28; P.A. 00-174, S. 44, 83; P.A. 02-103, S. 38, 39; P.A. 05-116, S. 4; P.A. 11-61, S. 59; P.A. 18-26, S. 6; 18-49, S. 6; P.A. 23-204, S. 364.)

History: June Sp. Sess. P.A. 91-3, S. 84, effective August 22, 1991, and applicable to taxable years of taxpayers commencing on or after January 1, 1991; May Sp. Sess. P.A. 92-5 amended Subsec. (f) to make a technical change, effective June 19, 1992, and applicable to taxable years of taxpayers commencing on or after January 1, 1992; P.A. 95-5 amended Subsec. (a) to allow 60 days for mailing a deficiency assessment notice after an amended tax return is filed, effective April 13, 1995, and applicable to taxable years commencing on or after January 1, 1995; P.A. 97-243 amended Subsec. (b) to add “Connecticut adjusted” before “gross income” and “Connecticut taxable income in the case of a trust or estate”, effective June 24, 1997, and applicable to taxable years commencing on or after January 1, 1997; P.A. 98-244 amended Subsec. (b) to number existing text as Subdiv. (1) and added Subdiv. (2) re nonresident and part-year resident individuals, effective June 8, 1998, and applicable to taxable years commencing on or after January 1, 1998; P.A. 99-121 amended Subsecs. (d) and (e) to allow commissioner to make an assessment at any time where a taxpayer's federal adjusted gross income is changed or corrected by the IRS, whether or not the taxpayer's federal taxable income increases, if the taxpayer does not file an amended Connecticut income tax return, and to make technical changes, effective June 3, 1999; P.A. 00-174 amended Subsec. (c) to allow an assessment to be mailed at any time in the case of a false or fraudulent return, without regard to taxpayer's intent, amended Subsecs. (d) and (e) to allow a proposed assessment to be sent where computation of tax is changed or corrected by the Internal Revenue Service and amended Subsec. (g) to provide that determination of when return is deemed filed for purposes of section is without regard to any extension of time for filing, effective May 26, 2000, and applicable to returns for taxable years commencing on or after January 1, 1999; P.A. 02-103 made technical changes in Subsecs. (d)(1) and (e)(1); P.A. 05-116 amended Subsec. (c) by designating existing provisions as Subdiv. (1), inserting “assessment” therein, and adding Subdivs. (2) and (3) re limits on time for deficiency assessments where taxpayer attempted to defeat or evade tax or failed to disclose a listed transaction, effective June 24, 2005, and applicable to taxable years commencing on or after January 1, 2005; P.A. 11-61 amended Subsec. (b) to add Subdiv. (3) re time limit for deficiency assessment on an employer, add Subdiv. (4) re time limit for deficiency assessment on a pass-through entity, and make technical changes, effective June 21, 2011, and applicable to taxable years commencing on or after January 1, 2011; P.A. 18-26 amended Subsec. (c)(3) to replace “listed” with “reportable”, effective May 29, 2018; P.A. 18-49 amended Subsec. (b)(4) to replace references to pass-through entity with references to affected business entity, delete “nonresident individual who is a” re member of pass-through entity, add “required under section 12-699” re return and make technical changes, effective May 31, 2018, and applicable to taxable years commencing on or after January 1, 2018; P.A. 23-204 amended Subsec. (b)(4) to replace “return required under section 12-699” with “return filed pursuant to section 12-699 or section 12-719”, effective January 1, 2024, and applicable to taxable years commencing on or after January 1, 2024.

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Sec. 12-746. Rebate. (a) Any taxpayer subject to tax pursuant to this chapter who files a Connecticut income tax return for the taxable year commencing January 1, 1997, on or before May 1, 1998, or, for a taxpayer who has been granted an extension to file such return, October 16, 1998, and has paid property tax, which first became due and was paid in such income year, to a Connecticut political subdivision on the taxpayer's primary residence or motor vehicle, shall be entitled to a rebate in accordance with the following schedule:

(1) For any person who files a return under the federal income tax for such taxable year as an unmarried individual or as a married individual filing separately, an amount equal to the lesser of the taxpayer's income tax liability as shown on such return or seventy-five dollars, but in no case less than fifty dollars;

(2) For any person who files a return under the federal income tax for such taxable year as a head of household, an amount equal to the lesser of the taxpayer's income tax liability as shown on such return or one hundred twenty dollars, but in no case less than fifty dollars;

(3) For any husband and wife who file a return under the federal income tax for such taxable year as married individuals filing jointly or a person who files a return under the federal income tax as a surviving spouse, an amount equal to the lesser of the taxpayer's income tax liability as shown on such return or one hundred fifty dollars, but in no case less than fifty dollars.

(b) This section shall not apply to trusts and estates.

(c) Amounts rebated pursuant to this section shall be subject to the provisions for set-off as provided in sections 12-739 and 12-742.

(d) As used in this section, “income tax liability as shown on such return” means the liability after application of the credit for property taxes allowed and taken on such return pursuant to section 12-704c, as corrected for mathematical error by the Commissioner of Revenue Services on the original return filed by such taxpayer.

(e) Amounts rebated pursuant to this section shall not be considered income for purposes of sections 8-119 l , 8-345, 12-170d, 12-170aa, 47-88d and 47-287.

(f) The Commissioner of Revenue Services shall notify the State Comptroller of the amount of the rebates pursuant to this section, and the State Comptroller shall draw an order on the State Treasurer in the amount thereof for payment to the taxpayer. For taxpayers who have filed a Connecticut income tax return for the taxable year commencing January 1, 1997, on or before May 1, 1998, such rebates shall be issued no later than July 31, 1998. All remaining rebates shall be issued no later than December 15, 1998.

(P.A. 98-110, S. 2, 3, 27; P.A. 13-234, S. 89; P.A. 23-204, S. 294.)

History: P.A. 98-110 effective May 19, 1998; P.A. 13-234 amended Subsec. (e) to delete reference to Sec. 17b-490, effective January 1, 2014; P.A. 23-204 amended Subsec. (e) by deleting reference to Sec. 17b-550, effective June 12, 2023.

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