Connecticut Application for Exchange of Research and Development or Research and Experimental Expenditures Tax Credits by a Qualified Small Business

Application for Exchange of Research and Development or Research and Experimental Expenditures Tax Credits by a Qualified Small Business
Form CT-1120 XCH
For Income Year Beginning
Company name

2023

Form CT-1120 XCH

Department of Revenue Services
State of Connecticut
(Rev. 12/23)
1120XCH 1223W 01 9999

Application for Exchange of
Research and Development or
Research and Experimental Expenditures
Tax Credits by a Qualified Small Business


M

M

-

D

D

-

2023
Y

Y

Y

and Ending 

Y

M



M

-

D

D

-

Y

Y

Y

Y

Connecticut Tax Registration Number



Designated Taxable Member name (Form CT-1120CU filers only)

Connecticut Tax Registration Number





Part I - Eligibility Criteria
1.

2.

3.

Does the company report no net income or pay the $250 minimum tax on Form CT‑1120,
Schedule C, Line 1a, or on the credit claimant’s column on Form CT‑1120CU, Part II, Line 1? If Yes,
the company may be eligible to obtain a tax credit to be issued in the form of a refund.
Did the company engage in transactions with related persons during the 2023 income year?
If Yes, identify the related persons, their gross incomes, their relationship to the company, and
provide an organizational chart of related persons in which the company is a member. Also attach a
separate schedule describing each of the company’s transactions with these related persons during
the 2023 income year, the gross income of the company derived from each of these transactions,
and the dates of these transactions.

1. 

Yes



No

2. 

Yes



No

Enter the total gross income of the company for the previous income year from all sources, including
the total gross income of the company derived from transactions with related persons, as noted above.
The gross income of the company should be annualized if this application is for a short period. If the
total gross income of the company for the previous income year exceeds $70 million, the company
is not eligible for an exchange of tax credits. Do not check the applicable box on Form CT‑1120
3. 
or Form CT‑1120CU.

4.

Does the company or its combined unitary group, on the date of this application, have any taxes
due and unpaid to the State of Connecticut including interest, penalties, fees, and other related
charges? If Yes, attach a schedule that describes the nature and amounts of any unpaid taxes.

.00
4. 

Yes



No

Part II - Computation of Exchange Amount
1a. Enter the amount of 2023 Research and Experimental Expenditures
Tax Credit from 2023 Form CT-1120RC, Part I, Line 4.
1a. 

.00

1b. Enter the amount of 2023 Research and Experimental Expenditures
Tax Credit applied from 2023 Form CT‑1120RC, Part II, Line 16,
Column D.
1b. 

.00

1. Enter the amount of 2023 Research and Experimental Expenditures Tax Credit available for
exchange. Subtract Line 1b from Line 1a.

1.

2a. Enter the amount of 2023 Research and Development Tax Credit
from 2023 Form CT-1120 RDC, Part II, Line 2.

2a. 

.00

2b. Enter the amount of 2023 Research and Development Tax Credit
applied from 2023 Form CT-1120 RDC, Part III, Line 16, Column D. 2b. 

.00

2. Enter the amount of 2023 Research and Development Tax Credit available for exchange.
Subtract Line 2b from Line 2a.

2.



.00

3. Add Line 1 and Line 2.

3.



4. Total credit to be issued in the form of a refund requested: Multiply amount on Line 3 by 65% (.65).
Do not exceed $1.5 million.
4.

.00



.00

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



.00

Form CT-1120 XCH
Page 2 of 2
(Rev. 12/23)
1120XCH 1223W 02 9999

Part III - Required Attachments
In addition to Form CT‑1120RC, Form CT‑1120 RDC, or both if applicable, attach detailed schedules supporting the claimed research
expenditures. The detailed schedules must include:
•	 A full and complete description of the nature of the research projects conducted by the company during the income year and the
location(s) where the research is conducted;
•	 A full and complete description of the methods used to obtain: (a) the amount spent directly on research and experimental expenditures
conducted in Connecticut, in accordance with Conn. Gen. Stat. § 12-217j; and (b) the total expenditures and payments for research
and experimentation, and basic research conducted in Connecticut, in accordance with Conn. Gen. Stat. § 12-217n;
•	 A detailed description of each source of information used to compute the credit, including the methods and calculations of expense
allocation, if any; and
•	 The job title and detailed job description of each employee whose wages are included in the research expenditures.
Contact Person
Name

Telephone number

–	–

Title
Address	 (number and street)

PO Box

City or town

State

Zip code

General Information
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 XCH to exchange with the State of Connecticut any
tax credit under Conn. Gen. Stat. §§ 12‑217j or 12‑217n for a credit to
be issued in the form of a refund equal to 65% of the value of the credit.
A taxpayer may receive a credit to be issued in the form of a refund of
not more than $1.5 million in any one income year. See Conn. Gen. Stat.
§ 12‑217ee.
File Form CT‑1120 XCH separately from Form CT‑1120, Corporation
Business Tax Return, or Form CT‑1120CU, Combined Unitary
Corporation Business Tax Return.
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 separately to:
	
Department of Revenue Services
	
PO Box 150420
	
Hartford CT 06115-0420
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.

Eligibility

In order to be eligible for a credit to be issued in the form of a refund, a
taxpayer must have no Corporation Business Tax liability. For purposes of
this credit to be issued in the form of a refund, payment of a capital base
tax under Conn. Gen. Stat. § 12‑219 in a year that the taxpayer reports
no net income as defined in Conn. Gen. Stat. § 12‑213, or payment of
the $250 minimum tax under Conn. Gen. Stat. § 12‑219, shall not be
considered a liability.

A company included in a combined group that files as part of Form
CT‑1120CU must separately determine if it is eligible to exchange credits.
This includes a separate determination as to whether the company
claiming the credit to be issued in the form of a refund has no tax liability
for purposes of the eligibility requirements of this credit exchange. If other
requirements are satisfied, a company that files as part of a combined
group is eligible to exchange credits if the group pays tax on the capital
base and:
•	 The company’s apportioned amount of the combined group’s net income
is zero or negative, regardless of its portion of the capital base; or
•	 The company’s portion of the capital base tax is equal to $250.

Definitions

Qualified Small Business for the purposes of the tax credit exchange
means a company that has gross income for the previous income year that
does not exceed $70 million and has not met this test through transactions
with a related person.
Gross Income means gross income as defined by the Internal Revenue
Code including any interest or exempt interest dividends, but not including
dividends received by a domestic United States corporation from a foreign
corporation on account of foreign taxes deemed paid when the domestic
corporation elects the foreign tax credit or dividends received directly or
indirectly from a passive investment company.
Related Person means a corporation, partnership, association, or trust
controlled by the corporation; an individual, corporation, partnership,
association, or trust that is in control of the corporation; a corporation,
partnership, association, or trust controlled by an individual, corporation,
partnership, association, or trust that is in control of the corporation; or a
member of the same controlled group as the corporation.

Additional Information

See the Guide to Connecticut Business Tax Credits available on the
Department of Revenue Services (DRS) website at portal.ct.gov/DRS.

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