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Connecticut Research and Development Credit
Extracted from PDF file 2023-connecticut-form-ct-1120-rdc.pdf, last modified December 2023Research and Development Credit
Department of Revenue Services State of Connecticut (Rev. 12/23) 2023 Form CT-1120 RDC Research and Development Expenditures Tax Credit 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‑1120 RDC to claim the tax credit available under Conn. Gen. Stat. § 12‑217n for research and development expenses paid or incurred during the income year for research and development conducted in Connecticut. Required Attachments Attach a detailed schedule that identifies the research and development expenses as to the type, amount, and location in Connecticut where conducted. Definitions Connecticut research and development expenses are those amounts deductible under § 174 of the Internal Revenue Code (IRC) of 1986, as in effect on May 28, 1993, (determined without regard to § 280C(c) thereof), and basic research payments as defined under IRC § 41, to the extent not deducted under IRC § 174. The expenses must be paid or incurred by the taxpayer for research and development and basic research conducted in Connecticut and may not be funded, within the meaning of IRC § 41(d)(4)(H), by any grant, contract, or otherwise by a person or governmental entity other than the taxpayer unless the other person is included in a combined return with the person paying or incurring the expenses. Overhead and other expenses, including general and administrative expenses that relate to a corporation’s activities as a whole and not specifically to the research and development effort will not qualify. Qualifying expenses include but are not limited to: • Expenses incurred in connection with the taxpayer’s trade or business that represent research and development costs in the experimental or laboratory sense; • All costs incident to the development of an experimental or pilot model, a plant process, a product, a formula, an invention, or similar property, and the improvement of already existing property of the type mentioned; and • Costs of obtaining a patent, such as attorneys’ fees expended in making and perfecting a patent application. Qualified Small Business is defined as a company that has gross income for the previous income year that does not exceed $100 million and has not met the gross income test through transactions with a related person, as defined in Conn. Gen. Stat. § 12‑217w. Tentative Tax Credit Computation For a qualified small business, the tentative tax credit allowed for research and development expenses is equal to 6% of such expenses. Any company other than a qualified small business must use the tentative rate schedule below to determine the amount of the tentative credit. The amount of credit available to companies that have revenues in excess of $3 billion, employing more than 2,500 employees, and headquartered in an Enterprise Zone shall be the tentative credit allowed or 3.5% of the total research and development expenses, whichever is greater. A company that pays or incurs research and development expenses in excess of $200 million for the income year must obtain an eligibility certificate from the Department of Economic and Community Development (DECD) prior to claiming the credit. Carryforward Any unused credit earned during an income year that began on or after January 1, 2021, may be carried forward for 15 income years. Any unused credit earned during an income year that began prior to January 1, 2021, may be carried forward indefinitely. No carryback is allowed. Additional Information See the Guide to Connecticut Business Tax Credits available on the Department of Revenue Services (DRS) website at portal.ct.gov/DRS. Part I - Tentative Research and Development Expenses Tax Credit Computation Enter the amount of Connecticut research and development expenses for the 2023 income year. Attach 1. detailed schedule. 1. 00 Enter the amount of incremental Connecticut research and experimental expenditures for the 2023 income 2. year according to Conn. Gen. Stat. § 12‑217j, from 2023 Form CT‑1120RC, Part I, Line 3. 2. 00 3. Net research and development expenses for 2023: Subtract Line 2 from Line 1. 3. 00 4. Tentative credit for 2023: Enter the amount from Line 4a, 4b, or 4c. 4. 00 5. Reduction of tentative tax credit for 2023: Applicable if Line 3 exceeds $200 million and workforce is reduced. 5. 00 6. Allowable tentative tax credit for 2023: Subtract Line 5 from Line 4. 6. 00 4a. Qualified small businesses multiply amount on Line 3 by 6% (.06). Companies headquartered in an Enterprise Zone, with revenues in excess of 4b. $3 billion, employing more than 2,500 employees, may elect to multiply amount on Line 3 by 3.5% (.035). 4a. 4b. 00 00 All other businesses determine amount from the Tentative Credit Rate Schedule 4c. 4c. on Page 2. 00 Visit us at portal.ct.gov/DRS for more information. Tentative Tax Credit Rate Schedule If Net Research and Development Expenses (Line 5) are: The tentative tax credit allowed is: $50 million or less 1% of Net Research and Development Expenses more than $50 million but not more than $100 million $500,000 + 2% of amount over $50 million more than $100 million but not more than $200 million $1.5 million + 4% of amount over $100 million more than $200 million $5.5 million + 6% of amount over $200 million Part II - Research and Development Expenses Tax Credit Computation 1. Allowable tentative tax credit for 2023 from Part I, Line 6. 1. 00 2. Multiply Line 1 by 33⅓% (.3333). 2. 00 Enter the 2023 Connecticut Corporation Business Tax liability or, in the case of a Combined Unitary 3. Corporation Business Tax Return, the combined group’s total Corporation Business Tax liability, due after 3. the application of the total amount of Connecticut Corporation Business Tax credits except the Research and Development Expenditures tax credit. 00 4. Multiply Line 3 by 50% (.50). 00 4. 5a. Multiply Line 1 by two (2). 5a. 00 5b. Enter 90% (.90) of Line 3. 5b. 00 5. Enter the lesser of Line 5a or Line 5b. 5. 00 6. Enter the greater of Line 4 or Line 5. 6. 00 7. 2023 Research and Development Expenditures tax credit: Enter the lesser of Line 2 or Line 6 here and on 7. Form CT‑1120K, Part I‑C, Column B. 00 Exchange of Tax Credit Application Procedure for Exchange of Tax Credits A taxpayer whose gross income does not exceed $70 million and who cannot take the credit as a result of having no tax liability under the Corporation Business Tax, may elect to carry 100% of the credit forward or may be eligible to exchange the credit with the state for a credit to be issued in the form of a refund equal to 65% of its value, subject to certain limitations. See Conn. Gen. Stat. § 12‑217ee. See Form CT‑1120 XCH, Application for Exchange of Research and Development or Research and Experimental Expenditures Tax Credits by a Qualified Small Business, for eligibility. File Form CT‑1120 XCH separately from Form CT‑1120, Corporation Business Tax Return, or Form CT‑1120CU, Combined Unitary Corporation Business Tax Return. Only tax credits earned in the current year and entitled to be claimed in the current year may be exchanged. Attach Form CT‑1120RC, Research and Experimental Expenditures Tax Credit, or Form CT‑1120 RDC, Research and Development Expenditures Tax Credit, and all required supporting schedules and documentation to Form CT‑1120 XCH. At the same time as filing Form CT‑1120 or Form CT‑1120CU, mail the completed application and supporting information to: Department of Revenue Services Corporation Tax Audit Unit Attn: XCH 450 Columbus Blvd Ste 1 Hartford CT 06103-1837 Check the box at the top of Form CT‑1120 or Form CT‑1120CU, to indicate that you are exchanging research and development tax credits and enter the amount of credit to be issued in the form of a refund requested. Form CT-1120 RDC (Rev. 12/23) Visit us at portal.ct.gov/DRS for more information. Page 2 of 3 Part III - Computation of Carryforward - See instructions below. A Total Credit Earned B C Credit Carryforward to 2023 Applied Subtract Column B 1995 Through 2022 from Column A. 1. Form CT-1120 RDC Credits Earned 1995 through 2008 2. 2009 Form CT-1120 RDC, Part I, Line 8 3. 2010 Form CT-1120 RDC, Part I, Line 8 4. 2011 Form CT-1120 RDC, Part I, Line 8 5. 2012 Form CT-1120 RDC, Part I, Line 8 6. 2013 Form CT-1120 RDC, Part I, Line 8 7. 2014 Form CT-1120 RDC, Part I, Line 6 8. 2015 Form CT-1120 RDC, Part I, Line 6 9. 2016 Form CT-1120 RDC, Part I, Line 6 10. 2017 Form CT-1120 RDC, Part I, Line 6 11. 2018 Form CT-1120 RDC, Part I, Line 6 12. 2019 Form CT-1120 RDC, Part I, Line 6 13. 2020 Form CT-1120 RDC, Part I, Line 6 14. 2021 Form CT-1120 RDC, Part I, Line 6 15. 2022 Form CT-1120 RDC, Part I, Line 6 16. 2023 Form CT-1120 RDC, Part I, Line 6 17. Total Research and Development tax credit applied to 2023: Add Lines 1 through 16, Column D. D Credit Applied to 2023 E Credit Exchanged F Carryforward to 2024 18. Total Research and Development tax credit carryforward to 2024: Add Lines 1 through 16, Column F. Computation of Carryforward Instructions Lines 1 through 16, Columns A through D - Enter the amount for each corresponding year. Lines 1 through 15, Column E - Enter the full amount of credit that was exchanged before the 65% exchange rate was applied for each corresponding year. Line 16, Column E - Enter the full amount of credit being exchanged before the 65% exchange rate is applied, from 2023 Form CT‑1120 XCH, Part II, Line 2. Lines 1 through 15, Column F - Subtract Column D and Column E from Column C. Line 16, Column F - Subtract Column D and Column E from Column A. Members included in 2023 Form CT‑1120CU, Combined Unitary Corporation Business Tax Return: Include in Column D credits shared to and used by another member of the combined group. Form CT-1120 RDC (Rev. 12/23) Visit us at portal.ct.gov/DRS for more information. Page 3 of 3
Form CT-1120 RDC
More about the Connecticut Form CT-1120 RDC Corporate Income Tax Tax Credit TY 2023
We last updated the Research and Development Credit in February 2024, so this is the latest version of Form CT-1120 RDC, fully updated for tax year 2023. You can download or print current or past-year PDFs of Form CT-1120 RDC directly from TaxFormFinder. You can print other Connecticut tax forms here.
Related Connecticut Corporate Income Tax Forms:
TaxFormFinder has an additional 85 Connecticut income tax forms that you may need, plus all federal income tax forms. These related forms may also be needed with the Connecticut Form CT-1120 RDC.
| Form Code | Form Name |
|---|---|
| Form CT-1120 A-LP | Corporation Business Tax Return Apportionment of Limited Partnership Interests |
| Form CT-1120 Instructions | Connecticut Corporation Business Tax Instructions |
| Form CT-1120 EXT | Application for Extension of Time to File Connecticut Corporation Tax Return |
| Form CT-1120X | Amended Corporation Business Tax Return |
| Form CT-1120 | Corporation Business Tax Return |
| Form CT-1120 MEC | Machinery and Equipment Expenditure Credit |
| Form CT-1120 CC | Authorization and Consent to be Included in a Combined Return |
| Form CT-1120 EDPC | Electronic Data Processing Equipment Property Tax Credit |
| Form CT-1120 ES | Estimated Corporation Business Tax Payment Coupons |
| Form CT-1120 FCIC | Fixed Capital Investment Credit |
View all 86 Connecticut Income Tax Forms
Form Sources:
Connecticut usually releases forms for the current tax year between January and April. We last updated Connecticut Form CT-1120 RDC from the Department of Revenue Services in February 2024.
Form CT-1120 RDC is a Connecticut Corporate Income Tax form. States often have dozens of even hundreds of various tax credits, which, unlike deductions, provide a dollar-for-dollar reduction of tax liability. Some common tax credits apply to many taxpayers, while others only apply to extremely specific situations. In most cases, you will have to provide evidence to show that you are eligible for the tax credit, and calculate the amount of the credit to which you are entitled.
About the Corporate Income Tax
The IRS and most states require corporations to file an income tax return, with the exact filing requirements depending on the type of company.
Sole proprietorships or disregarded entities like LLCs are filed on Schedule C (or the state equivalent) of the owner's personal income tax return, flow-through entities like S Corporations or Partnerships are generally required to file an informational return equivilent to the IRS Form 1120S or Form 1065, and full corporations must file the equivalent of federal Form 1120 (and, unlike flow-through corporations, are often subject to a corporate tax liability).
Additional forms are available for a wide variety of specific entities and transactions including fiduciaries, nonprofits, and companies involved in other specific types of business.
Historical Past-Year Versions of Connecticut Form CT-1120 RDC
We have a total of twelve past-year versions of Form CT-1120 RDC in the TaxFormFinder archives, including for the previous tax year. Download past year versions of this tax form as PDFs here:
2016 Form CT-1120 RDC
CT-1120 RDC, 2016 Research and Development Expenditures Tax Credit
2015 Form CT-1120 RDC
CT-1120 RDC, 2015 Research and Development Expenditures Tax Credit
2014 Form CT-1120 RDC
CT-1120 RDC, 2014 Research and Development Expenditures Tax Credit
2013 Form CT-1120 RDC
CT-1120 RDC, Research and Development Expenditures Tax Credit
2012 Form CT-1120 RDC
CT-1120 RDC, 2012 Research and Development Expenditures Tax Credit
2011 Form CT-1120 RDC
CT-1120 RDC, Research and Development Expenditures Tax Credit
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