Connecticut Service Facility Credit

Service Facility Credit
Form CT-1120SF
Department of Revenue Services
State of Connecticut

2023

Form CT-1120SF

Service Facility Tax Credit

(Rev. 12/23)

For Income Year Beginning:________________________ , 2023 and Ending:_________________________ ,__________ .
Corporation name

Connecticut Tax Registration Number

DECD Eligibility Certificate Number (If applicable)

Complete this form in blue or black ink only. Do not use staples.
Please note that each form is year specific. The correct year’s form
must be used.
Use Form CT‑1120SF, to claim the credit allocable to a service
facility located outside of an Enterprise Zone in a targeted investment
community, as allowed under Conn. Gen. Stat. § 12‑217e against
the Corporation Business Tax.
A service facility located in an Enterprise Zone cannot qualify for
this credit.
This credit is administered by the Department of Economic and
Community Development (DECD). To be eligible for this credit, a
written application must have been submitted to and approved by
the Commissioner of DECD. See Conn. Gen. Stat. § 32‑9r.

Credit Percentages
There are six different credit percentages as provided in the chart
on Page 2 to be applied against the portion of the Connecticut
Corporation Business Tax that is allocable to the service facility.
The percentage varies depending on the number of new employees
working at the service facility, as determined on Schedule A, Line 5.
The credit period is ten years and begins with the first full income
year following the year of issuance of the eligibility certificate and
continues for the following nine income years. If within the ten year
period the facility ceases to qualify as a service facility or the taxpayer
ceases to occupy the property, entitlement to the credit terminates
and there is no pro rata application of the credit during the income
year in which the entitlement or occupancy terminates.
No carryforward or carryback is allowed.
This credit is being sunset. You may not claim this credit unless
your ten year credit period began prior to your 2018 income year.

Schedule A - Employment Criteria
1.

Enter the highest number of employees in Connecticut in the year preceding the formal
application for certification with DECD.

1.

2.

Enter the number of employees in Connecticut during 2023.

2.

3.

Enter the number of new employees in Connecticut. Subtract Line 1 from Line 2. If zero or less
the corporation is not eligible for this credit.

3.

4.

Enter the number of employees working at the service facility during 2023.

4.

5.

Number of new employees working at the service facility: Enter the lesser of Line 3 or Line 4.

5.

Schedule B - Credit Computation
See instructions for the computation of tangible property
and wages, salaries, and other compensation on
Page 2.

Column A
Eligible Facility
Approved by DECD

Column B
Total Facilities
Within Connecticut
(Including Eligible Facility)

Column C

1a. Depreciable assets
Tangible
Property
Average monthly
net book value
Wages, Salaries, and
Other Compensation

Facility
Credit
Ratio

Tax Credit
Calculation

1b. Land
1c. Capitalized rent
1d. Other

For Line 1 and Line 2, divide
Column A by Column B.
Carry to six decimal places.

1.

Total

1.

.

2.

Total

2.

.

3.

Total: Add Line 1 and Line 2 in Column C.

3.

4.

Facility ratio: Divide Line 3 by two.

4.

5.

Tax from Form CT-1120, Schedule C, Line 1, Total Tax, or the credit claimant’s
total tax from the appropriate column reported on Form CT‑1120CU,
5.
Part I, Line 9.

6.

Balance: Multiply Line 5 by Line 4.

6.

7.

Tax credit percentage: See instructions.

7.

8.

Tax credit: Multiply Line 6 by Line 7. Enter here and on Form CT-1120K,
Part I-B, Column A.

8.

Visit us at portal.ct.gov/DRS for more information.

.

Form CT-1120SF Instructions
Credit Percentage Chart
Number of New
Employees Working
at the Service Facility

	

300-599­	
600-899­	
	
900-1,199­	
	1,200-1,499	
	
1,500-1,999­	
	
2,000 or more­	
	

Credit
Percentage
15%­
20%­
25%­
30%­
40%­
50%­

Wages, Salaries, and Other Compensation: Column A
consists of all wages, salaries, and other compensation paid
during the income year to employees of the taxpayer whose
positions are directly attributable to the eligible service facility.
Column B consists of the sum of wages, salaries, and other
compensation paid during the income year to all employees
of the taxpayer in Connecticut.
An employee’s position is directly attributable to an eligible
service facility if the:

See the Guide to Connecticut Business Tax Credits available on
the Department of Revenue Services (DRS) website at
portal.ct.gov/DRS, or contact the Department of Economic and
Community Development.

•	 Employee’s service is performed or base of operation is

Schedule A

•	 Position would not have been created but for the

Schedule A is used to determine whether the service facility
meets the employment criteria for the tax credit. The available
percentage of the tax credit depends upon the number of new
employees working at the facility. Complete Lines 1 through 5
as indicated.

Schedule B
Schedule B is used to determine the amount of the tax credit.
Tangible Property: Column A includes the average monthly
net book value of the eligible service facility including all
machinery and equipment specifically acquired for and
installed at that site without reduction for any encumbrance.
When rented, the value of the eligible service facility and
all machinery and equipment specifically acquired for and
installed at that site should be computed by multiplying the
gross rents payable by the taxpayer during the income year
by eight. Column B consists of the average monthly net book
value of all real property, machinery, and equipment held and
owned by the taxpayer in Connecticut plus the value of all real
property, machinery, and equipment rented to the taxpayer in
Connecticut, computed by multiplying the combined gross rents
payable during the income year by eight. Gross rents means
gross rents as defined in Conn. Gen. Stat. § 12‑218(j)(3)(B).

at the eligible service facility;

•	 Position did not exist prior to the construction, renovation,

expansion, or acquisition of the eligible service facility; and
construction, renovation, expansion, or acquisition of the
eligible service facility.

Schedule B - Line Instructions
Lines 1 through 4 - Complete as indicated.
Line 5 - Enter the tax from Form CT‑1120, Schedule C, Line 1,
Total Tax, or the credit claimant’s total tax from the appropriate
column reported on Form CT‑1120CU, Part I, Line 9.
Line 7 - Enter the tax credit percentage. This percentage is
determined from the number of new employees working at
the facility. See chart above.
Line 8 - Enter the tax credit. Multiply Line 6 by Line 7, enter
here and on Form CT‑1120K, Part I‑B, Column A.

Form CT-1120SF (Rev. 12/23)

Page 2 of 2

Visit us at portal.ct.gov/DRS for more information.