CHAPTER 229
INCOME TAX

Table of Contents

Sec. 12-700. Imposition of tax on income. Rate.
Sec. 12-701. *(See end of section for amended version of subparagraph (B) of subdivision (20) and subdivisions (24) and (30) of subsection (a) and effective date.) Definitions.
Sec. 12-702. Exemptions.
Sec. 12-703. Credits based on adjusted gross income.
Sec. 12-704c. Credits for taxes paid on primary residence or motor vehicle.
Sec. 12-728. Deficiency assessments. Notice. Penalty.
Sec. 12-730. Appeals.
Sec. 12-733. Limits on time for making of deficiency assessments.
Sec. 12-743a. Contribution from refunds to the Military Family Relief Fund.

      Sec. 12-700. Imposition of tax on income. Rate.

      State has power to tax separate from that of federal government and therefore it cannot be limited by federal statutes nor regulations. 49 CS 38.

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      Sec. 12-701. *(See end of section for amended version of subparagraph (B) of subdivision (20) and subdivisions (24) and (30) of subsection (a) and effective date.) Definitions. (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" shall mean 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 which 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 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, and (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. (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 which is a shareholder of an S corporation which is carrying on, or which 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 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 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, (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 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, and (ix) for property placed in service after September 10, 2001, but prior to September 11, 2004, in taxable years ending after September 10, 2001, any additional allowance for depreciation under subsection (k) of Section 168 of the Internal Revenue Code, as provided by Section 101 of the Job Creation and Worker Assistance Act of 2002, to the extent deductible in determining federal adjusted gross income.

      *(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) 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, to the extent properly includable in gross income for federal income tax purposes, (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, as provided by Section 101 of the Job Creation and Worker Assistance Act of 2002, for property placed in service after December 31, 2001, but prior to September 10, 2004, was added to federal adjusted gross income pursuant to subparagraph (A) (ix) of this subdivision in computing Connecticut adjusted gross income for a taxable year ending after December 31, 2001, 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 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; and (II) 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, (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 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, and (xiv) to the extent properly includable in gross income for federal income tax purposes of an account holder, as defined in section 31-51ww, interest earned on funds deposited in the individual development account, as defined in section 31-51ww, of such account holder.

      (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 subsection (a) of this section or subparagraph (B)(i), (B)(ii), (B)(v), (B)(vi), (B)(vii), (B)(viii), (B)(ix), (B)(x) or (B)(xiii) of subdivision (20) of subsection (a) of this section, 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 subsection (a) of this section, 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) or (B)(xiii) of subdivision (20) of subsection (a) of this section, 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 subsection (a) of this section, 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) or (B)(xiii) of subdivision (20) of subsection (a) of this section.

      (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 subsection (a) of this section, 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 subsection (a) of this section or subparagraph (B)(i), (B)(ii), (B)(iii), (B)(iv), (B)(v), (B)(vi) or (B)(vii) of subdivision (10) of subsection (a) of this section, 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 subsection (a) of this section, 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 subsection (a) of this section, 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 subsection (a) of this section 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 subsection (a) of this section.

      (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 subsection (a) of this section or subparagraph (B)(i), (B)(ii), (B)(v), (B)(vi), (B)(vii), (B)(viii), (B)(ix), (B)(x) or (B)(xiii) of subdivision (20) of subsection (a) of this section, 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 subsection (a) of this section, 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) or (B)(xiii) of subdivision (20) of subsection (a) of this section, 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 subsection (a) of this section 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) or (B)(xiii) of subdivision (20) of subsection (a) of this section.

      (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 subsection (a) of this section or subparagraph (B)(i), (B)(ii), (B)(iii), (B)(iv), (B)(v), (B)(vi) or (B)(vii) of subdivision (10) of subsection (a) of this section, 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 subsection (a) of this section, 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 subsection (a) of this section, 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 subsection (a) of this section, 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 subsection (a) of this section.

      (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.

      (b) Any term used in this chapter shall have 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 shall mean 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.)

      *Note: On and after June 30, 2005, and applicable to taxable years commencing on or after January 1, 2008, subparagraph (B) of subdivision (20) and subdivisions (24) and (30) of subsection (a) of this section, as amended by sections 71 to 73, inclusive, of public act 05-251, are to read as follows:

      "(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) 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, to the extent properly includable in gross income for federal income tax purposes, (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, as provided by Section 101 of the Job Creation and Worker Assistance Act of 2002, for property placed in service after December 31, 2001, but prior to September 10, 2004, was added to federal adjusted gross income pursuant to subparagraph (A)(ix) of this subdivision in computing Connecticut adjusted gross income for a taxable year ending after December 31, 2001, 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 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; and (II) 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, (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 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, (xiv) to the extent properly includable in gross income for federal income tax purposes of an account holder, as defined in section 31-51ww, interest earned on funds deposited in the individual development account, as defined in section 31-51ww, of such account holder, and (xv) to the extent properly included in gross income for federal income tax purposes, fifty per cent of the 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."

      "(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 subsection (a) of this section 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 subsection (a) of this section, 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 subsection (a) of this section, 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 subsection (a) of this section, 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 subsection (a) of this section, 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 subsection (a) of this section."

      "(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 subsection (a) of this section 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 subsection (a) of this section, 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 subsection (a) of this section, 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 subsection (a) of this section, 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 subsection (a) of this section 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 subsection (a) of this section."

      (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.)

      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 Subdiv. (4) of Subsec. (a) 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 Subdiv. (12) of Subsec. (a), deleting existing definition of "assumed tax" and replacing it with definition of "required annual payment", amended Subdiv. (18) of Subsec. (a), defining "person" by changing statutory citation from Sec. 1-1 to Sec. 12-1, made technical change in Subdiv. (20) of Subsec. (a) 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 Subdiv. (4) of Subsec. (a) 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 (1) in Subdiv. (4) of Subsec. (a) 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, (2) in Subdiv. (20) of Subsec. (a) 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, (3) in Subdiv. (24) of Subsec. (a) 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, (4) in Subdivs. (26) and (27) of Subsec. (a) modified definitions of "Connecticut minimum tax" and "adjusted net Connecticut minimum tax" to provide that the Connecticut minimum tax is the lesser of nineteen per cent of the adjusted federal tentative minimum tax or five per cent 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 Subdiv. (18) of Subsec. (a) to include reference to Secs. 12-735 and 12-737, amended Subdivs. (26) and (27) of Subsec. (a) 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 Subsec. (e) of Sec. 12-700a 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 Subdivs. (10), (28) and (31) of Subsec. (a) to make technical relettering and renumbering corrections, effective May 29, 1996; P.A. 96-175 amended Subdivs. (10) and (20) of Subsec. (a) to add reference to Subsec. (c) of Sec. 12-217, effective May 31, 1996, and applicable to income years commencing on or after January 1, 1997; P.A. 96-180 amended Subdivs. (10), (28) and (31) of Subsec. (a) to make technical relettering and renumbering changes in Subpara. and clause designations, effective June 3, 1996; P.A. 96-221 amended Subsec. (a)(10) to add Subpara. (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 Subdiv. (27) of Subsec. (a) 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 Subpara. (B)(x) of Subdiv. (20) of Subsec. (a) 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 amended Subsec. (a)(20)(B) to add (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 amended Subdiv. (20) of Subsec. (a) to add Subpara. (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 twenty-five per cent of taxable Social Security income for joint filers and heads of household with an adjusted gross income under sixty thousand dollars and single filers with an adjusted gross income under fifty thousand dollars, 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 Subdivs. (24) and (30) of Subsec. (a) to make said Subdivs. consistent with substantive changes in said act and to make technical changes for purposes of gender neutrality and further amended Subsec. (a) to add Subdivs. (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 five to five and one-half per cent 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 amended Subsec. (a)(20)(B) to add clause (xv) excluding fifty per cent 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.

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      Sec. 12-702. Exemptions. (a)(1)(A) Any person, other than a trust or estate, subject to the tax under this chapter for any taxable year who files under the federal income tax for such taxable year as a married individual filing separately or, for taxable years commencing prior to January 1, 2000, who files income tax for such taxable year as an unmarried individual shall be entitled to a personal exemption of twelve thousand dollars in determining Connecticut taxable income for purposes of this chapter.

      (B) In the case of any such taxpayer whose Connecticut adjusted gross income for the taxable year exceeds twenty-four thousand dollars, the exemption amount shall be reduced by one thousand dollars for each one thousand dollars, or fraction thereof, by which the taxpayer's Connecticut adjusted gross income for the taxable year exceeds said amount. In no event shall the reduction exceed one hundred per cent of the exemption.

      (2) For taxable years commencing on or after January 1, 2000, any person, other than a trust or estate, subject to the tax under this chapter for any taxable year who files under the federal income tax for such taxable year as an unmarried individual shall be entitled to a personal exemption in determining Connecticut taxable income for purposes of this chapter as follows:

      (A) For taxable years commencing on or after January 1, 2000, but prior to January 1, 2001, twelve thousand two hundred fifty dollars. In the case of any such taxpayer whose Connecticut adjusted gross income for the taxable year exceeds twenty-four thousand five hundred dollars, the exemption amount shall be reduced by one thousand dollars for each one thousand dollars, or fraction thereof, by which the taxpayer's Connecticut adjusted gross income for the taxable year exceeds said amount. In no event shall the reduction exceed one hundred per cent of the exemption;

      (B) For taxable years commencing on or after January 1, 2001, but prior to January 1, 2004, twelve thousand five hundred dollars. In the case of any such taxpayer whose Connecticut adjusted gross income for the taxable year exceeds twenty-five thousand dollars, the exemption amount shall be reduced by one thousand dollars for each one thousand dollars, or fraction thereof, by which the taxpayer's Connecticut adjusted gross income for the taxable year exceeds said amount. In no event shall the reduction exceed one hundred per cent of the exemption;

      (C) For taxable years commencing on or after January 1, 2004, but prior to January 1, 2007, twelve thousand six hundred twenty-five dollars. In the case of any such taxpayer whose Connecticut adjusted gross income for the taxable year exceeds twenty-five thousand two hundred fifty dollars, the exemption amount shall be reduced by one thousand dollars for each one thousand dollars, or fraction thereof, by which the taxpayer's Connecticut adjusted gross income for the taxable year exceeds said amount. In no event shall the reduction exceed one hundred per cent of the exemption;

      (D) For taxable years commencing on or after January 1, 2007, but prior to January 1, 2008, twelve thousand seven hundred fifty dollars. In the case of any such taxpayer whose Connecticut adjusted gross income for the taxable year exceeds twenty-five thousand five hundred dollars, the exemption amount shall be reduced by one thousand dollars for each one thousand dollars, or fraction thereof, by which the taxpayer's Connecticut adjusted gross income for the taxable year exceeds said amount. In no event shall the reduction exceed one hundred per cent of the exemption;

      (E) For taxable years commencing on or after January 1, 2008, but prior to January 1, 2009, thirteen thousand dollars. In the case of any such taxpayer whose Connecticut adjusted gross income for the taxable year exceeds twenty-six thousand dollars, the exemption amount shall be reduced by one thousand dollars for each one thousand dollars, or fraction thereof, by which the taxpayer's Connecticut adjusted gross income for the taxable year exceeds said amount. In no event shall the reduction exceed one hundred per cent of the exemption;

      (F) For taxable years commencing on or after January 1, 2009, but prior to January 1, 2010, thirteen thousand five hundred dollars. In the case of any such taxpayer whose Connecticut adjusted gross income for the taxable year exceeds twenty-seven thousand dollars, the exemption amount shall be reduced by one thousand dollars for each one thousand dollars, or fraction thereof, by which the taxpayer's Connecticut adjusted gross income for the taxable year exceeds said amount. In no event shall the reduction exceed one hundred per cent of the exemption;

      (G) For taxable years commencing on or after January 1, 2010, but prior to January 1, 2011, fourteen thousand dollars. In the case of any such taxpayer whose Connecticut adjusted gross income for the taxable year exceeds twenty-eight thousand dollars, the exemption amount shall be reduced by one thousand dollars for each one thousand dollars, or fraction thereof, by which the taxpayer's Connecticut adjusted gross income for the taxable year exceeds said amount. In no event shall the reduction exceed one hundred per cent of the exemption;

      (H) For taxable years commencing on or after January 1, 2011, but prior to January 1, 2012, fourteen thousand five hundred dollars. In the case of any such taxpayer whose Connecticut adjusted gross income for the taxable year exceeds twenty-nine thousand dollars, the exemption amount shall be reduced by one thousand dollars for each one thousand dollars, or fraction thereof, by which the taxpayer's Connecticut adjusted gross income for the taxable year exceeds said amount. In no event shall the reduction exceed one hundred per cent of the exemption;

      (I) For taxable years commencing on or after January 1, 2012, fifteen thousand dollars. In the case of any such taxpayer whose Connecticut adjusted gross income for the taxable year exceeds thirty thousand dollars, the exemption amount shall be reduced by one thousand dollars for each one thousand dollars, or fraction thereof, by which the taxpayer's Connecticut adjusted gross income for the taxable year exceeds said amount. In no event shall the reduction exceed one hundred per cent of the exemption.

      (b) (1) Any person subject to tax under this chapter 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, shall be entitled to a personal exemption of nineteen thousand dollars in determining Connecticut taxable income for purposes of this chapter.

      (2) In the case of any such taxpayer whose Connecticut adjusted gross income for the taxable year exceeds thirty-eight thousand dollars, the exemption amount shall be reduced by one thousand dollars for each one thousand dollars, or fraction thereof, by which the taxpayer's Connecticut adjusted gross income for the taxable year exceeds the said amount. In no event shall the reduction exceed one hundred per cent of the exemption.

      (c) (1) Any husband and wife subject to tax under this chapter for any taxable year who file a return under the federal income tax for such taxable year as married individuals filing a joint return or any person who files a return for such taxable year as a surviving spouse, as defined in Section 2(a) of the Internal Revenue Code, shall be entitled to a single personal exemption of twenty-four thousand dollars in determining Connecticut taxable income for purposes of this chapter. Any husband and wife who elect to file a joint return under the federal income tax for any taxable year shall be required to file jointly with respect to such taxable year for purposes of this chapter, in which event their tax liability under this chapter shall be joint and several, except as otherwise provided in section 12-702a, and any husband and wife who elect to file separately under the federal income tax for any taxable year shall be required to file separately with respect to such taxable year for purposes of this chapter, provided (A) if either the husband or wife is a resident and the other is a nonresident, separate taxes shall be determined on their separate Connecticut taxable incomes on separate forms as married individuals filing separately unless such husband and wife determine their federal taxable income jointly and both elect to determine their joint Connecticut taxable income as if both were residents, or (B) if any husband and wife, both of whom are nonresidents, elect to file a joint return under the federal income tax for any taxable year and only one of them has income derived from or connected with sources within this state during such taxable year, only the spouse with income derived from or connected with sources within this state shall be required to file a return in this state and, if only the spouse with income derived from or connected with this state files such a return in this state, a separate tax shall be determined on such spouse's separate Connecticut taxable income as a married individual filing separately unless such husband and wife both elect to determine their joint Connecticut taxable income as if both had income derived from or connected with sources within this state.

      (2) In the case of any such taxpayer whose Connecticut adjusted gross income for the taxable year exceeds forty-eight thousand dollars, the exemption amount shall be reduced by one thousand dollars for each one thousand dollars, or fraction thereof, by which the taxpayer's Connecticut adjusted gross income for the taxable year exceeds the said amount. In no event shall the reduction exceed one hundred per cent of the exemption.

      (June Sp. Sess. P.A. 91-3, S. 53, 168; May Sp. Sess. P.A. 92-5, S. 3, 37; May Sp. Sess. P.A. 92-17, S. 12, 59; P.A. 99-48, S. 3, 10; 99-173, S. 5, 65; P.A. 00-174, S. 40, 83; 00-230, S. 10, 11; May 9 Sp. Sess. P.A. 02-1, S. 78; June 30 Sp. Sess. P.A. 03-1, S. 115; P.A. 05-251, S. 74.)

      History: June Sp. Sess. P.A. 91-3, S. 53, 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; May Sp. Sess. P.A. 92-17 amended Subdiv. (1) of Subsec. (c) to create a method by which a nonresident taxpayer with a nonresident spouse who has no Connecticut sourced income could file a separate return even if the couple filed jointly for federal purposes, commencing June 19, 1992, and applicable to taxable years of taxpayers commencing on or after January 1, 1992; P.A. 99-48 amended Subsec. (c) to add provision re joint and several liability in Subdiv. (1), effective May 27, 1999; P.A. 99-173 amended Subsec. (a) to increase, annually, the unmarried single filer standard exemption from fifty per cent to sixty-two and five-tenths per cent of the joint filer standard exemption over an eight-year period, from twelve thousand two hundred fifty dollars in tax year commencing January 1, 2000, to fifteen thousand dollars in tax year commencing January 1, 2007, effective June 23, 1999, and applicable to tax years commencing on or after January 1, 2000; P.A. 00-174 amended Subsec. (a)(2) to adjust the exemption amounts for single filers, effective May 26, 2000; P.A. 00-230 made technical changes in Subsecs. (a) and (c); May 9 Sp. Sess. P.A. 02-1 amended Subsec. (a)(2) to defer by two years the increase in the exemption for single filers, effective July 1, 2002, and applicable to taxable years commencing on or after January 1, 2002; June 30 Sp. Sess. P.A. 03-1 amended Subsec. (a)(2) to add new Subpara. (C) re exemption amount for unmarried filers for taxable year 2004, redesignate existing Subparas. (C) to (H) as Subparas. (D) to (I) and amend said Subparas. to delay the increased exemption amounts for unmarried filers by one year, effective August 16, 2003, and applicable to taxable years commencing on or after January 1, 2004; P.A. 05-251 amended Subsec. (a)(2) to defer by two years the increase in the exemption for single filers, effective June 30, 2005, and applicable to taxable years commencing on or after January 1, 2005.

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      Sec. 12-703. Credits based on adjusted gross income. (a)(1) Any person, other than a trust or estate, subject to the tax under this chapter for any taxable year who files under the federal income tax for such taxable year as a married individual filing separately or for taxable years commencing prior to January 1, 2000, who files under the federal income tax for such taxable year as an unmarried individual shall be entitled to a credit in determining the amount of tax liability for purposes of this chapter in accordance with the following schedule:

Connecticut
Adjusted Gross Income
 
Amount of Credit
    Over $12,000 but
        not over $15,000
 
75%
    Over $15,000 but
        not over $15,500
 
70%
    Over $15,500 but
        not over $16,000
 
65%
    Over $16,000 but
        not over $16,500
 
60%
    Over $16,500 but
        not over $17,000
 
55%
    Over $17,000 but
        not over $17,500
 
50%
    Over $17,500 but
        not over $18,000
 
45%
    Over $18,000 but
        not over $18,500
 
40%
    Over $18,500 but
        not over $20,000
 
35%
    Over $20,000 but
        not over $20,500
 
30%
    Over $20,500 but
        not over $21,000
 
25%
    Over $21,000 but
        not over $21,500
 
20%
    Over $21,500 but
        not over $25,000
 
15%
    Over $25,000 but
        not over $25,500
 
14%
    Over $25,500 but
        not over $26,000
 
13%
    Over $26,000 but
        not over $26,500
 
12%
    Over $26,500 but
        not over $27,000
 
11%
    Over $27,000 but
        not over $48,000
 
10%
    Over $48,000 but
        not over $48,500
 
  9%
    Over $48,500 but
        not over $49,000
 
  8%
    Over $49,000 but
        not over $49,500
 
  7%
    Over $49,500 but
        not over $50,000
 
  6%
    Over $50,000 but
        not over $50,500
 
  5%
    Over $50,500 but
        not over $51,000
 
  4%
    Over $51,000 but
        not over $51,500
 
  3%
    Over $51,500 but
        not over $52,000
 
  2%
    Over $52,000 but
        not over $52,500
 
  1%

      (2) For taxable years commencing on or after January 1, 2000, any person, other than a trust or estate, subject to the tax under this chapter for any taxable year who files under the federal income tax for such taxable year as an unmarried individual shall be entitled to a credit in determining the amount of tax liability for purposes of this chapter in accordance with the following schedule:

      (A) For taxable years commencing on or after January 1, 2000, but prior to January 1, 2001:

Connecticut
Adjusted Gross Income
 
Amount of Credit
    Over $12,250 but
        not over $15,300
 
75%
    Over $15,300 but
        not over $15,800
 
70%
    Over $15,800 but
        not over $16,300
 
65%
    Over $16,300 but
        not over $16,800
 
60%
    Over $16,800 but
        not over $17,300
 
55%
    Over $17,300 but
        not over $17,800
 
50%
    Over $17,800 but
        not over $18,300
 
45%
    Over $18,300 but
        not over $18,800
 
40%
    Over $18,800 but
        not over $20,400
 
35%
    Over $20,400 but
        not over $20,900
 
30%
    Over $20,900 but
        not over $21,400
 
25%
    Over $21,400 but
        not over $21,900
 
20%
    Over $21,900 but
        not over $25,500
 
15%
    Over $25,500 but
        not over $26,000
 
14%
    Over $26,000 but
        not over $26,500
 
13%
    Over $26,500 but
        not over $27,000
 
12%
    Over $27,000 but
        not over $27,500
 
11%
    Over $27,500 but
        not over $49,000
 
10%
    Over $49,000 but
        not over $49,500
 
  9%
    Over $49,500 but
        not over $50,000
 
  8%
    Over $50,000 but
        not over $50,500
 
  7%
    Over $50,500 but
        not over $51,000
 
  6%
    Over $51,000 but
        not over $51,500
 
  5%
    Over $51,500 but
        not over $52,000
 
  4%
    Over $52,000 but
        not over $52,500
 
  3%
    Over $52,500 but
        not over $53,000
 
  2%
    Over $53,000 but
        not over $53,500
 
  1%

      (B) For taxable years commencing on or after January 1, 2001, but prior to January 1, 2004:

Connecticut
Adjusted Gross Income
 
Amount of Credit
    Over $12,500 but
        not over $15,600
 
75%
    Over $15,600 but
        not over $16,100
 
70%
    Over $16,100 but
        not over $16,600
 
65%
    Over $16,600 but
        not over $17,100
 
60%
    Over $17,100 but
        not over $17,600
 
55%
    Over $17,600 but
        not over $18,100
 
50%
    Over $18,100 but
        not over $18,600
 
45%
    Over $18,600 but
        not over $19,100
 
40%
    Over $19,100 but
        not over $20,800
 
35%
    Over $20,800 but
        not over $21,300
 
30%
    Over $21,300 but
        not over $21,800
 
25%
    Over $21,800 but
        not over $22,300
 
20%
    Over $22,300 but
        not over $26,000
 
15%
    Over $26,000 but
        not over $26,500
 
14%
    Over $26,500 but
        not over $27,000
 
13%
    Over $27,000 but
        not over $27,500
 
12%
    Over $27,500 but
        not over $28,000
 
11%
    Over $28,000 but
        not over $50,000
 
10%
    Over $50,000 but
        not over $50,500
 
  9%
    Over $50,500 but
        not over $51,000
 
  8%
    Over $51,000 but
        not over $51,500
 
  7%
    Over $51,500 but
        not over $52,000
 
  6%
    Over $52,000 but
        not over $52,500
 
  5%
    Over $52,500 but
        not over $53,000
 
  4%
    Over $53,000 but
        not over $53,500
 
  3%
    Over $53,500 but
        not over $54,000
 
  2%
    Over $54,000 but
        not over $54,500
 
  1%

      (C) For taxable years commencing on or after January 1, 2004, but prior to January 1, 2007:

Connecticut
Adjusted Gross Income
 
Amount of Credit
    Over $12,625 but
        not over $15,750
 
75%
    Over $15,750 but
        not over $16,250
 
70%
    Over $16,250 but
        not over $16,750
 
65%
    Over $16,750 but
        not over $17,250
 
60%
    Over $17,250 but
        not over $17,750
 
55%
    Over $17,750 but
        not over $18,250
 
50%
    Over $18,250 but
        not over $18,750
 
45%
    Over $18,750 but
        not over $19,250
 
40%
    Over $19,250 but
        not over $21,050
 
35%
    Over $21,050 but
        not over $21,550
 
30%
    Over $21,550 but
        not over $22,050
 
25%
    Over $22,050 but
        not over $22,550
 
20%
    Over $22,550 but
        not over $26,300
 
15%
    Over $26,300 but
        not over $26,800
 
14%
    Over $26,800 but
        not over $27,300
 
13%
    Over $27,300 but
        not over $27,800
 
12%
    Over $27,800 but
        not over $28,300
 
11%
    Over $28,300 but
        not over $50,500
 
10%
    Over $50,500 but
        not over $51,000
 
  9%
    Over $51,000 but
        not over $51,500
 
  8%
    Over $51,500 but
        not over $52,000
 
  7%
    Over $52,000 but
        not over $52,500
 
  6%
    Over $52,500 but
        not over $53,000
 
  5%
    Over $53,000 but
        not over $53,500
 
  4%
    Over $53,500 but
        not over $54,000
 
  3%
    Over $54,000 but
        not over $54,500
 
  2%
    Over $54,500 but
        not over $55,000
 
  1%

      (D) For taxable years commencing on or after January 1, 2007, but prior to January 1, 2008:

Connecticut
Adjusted Gross Income
 
Amount of Credit
    Over $12,750 but
        not over $15,900
 
75%
    Over $15,900 but
        not over $16,400
 
70%
    Over $16,400 but
        not over $16,900
 
65%
    Over $16,900 but
        not over $17,400
 
60%
    Over $17,400 but
        not over $17,900
 
55%
    Over $17,900 but
        not over $18,400
 
50%
    Over $18,400 but
        not over $18,900
 
45%
    Over $18,900 but
        not over $19,400
 
40%
    Over $19,400 but
        not over $21,300
 
35%
    Over $21,300 but
        not over $21,800
 
30%
    Over $21,800 but
        not over $22,300
 
25%
    Over $22,300 but
        not over $22,800
 
20%
    Over $22,800 but
        not over $26,600
 
15%
    Over $26,600 but
        not over $27,100
 
14%
    Over $27,100 but
        not over $27,600
 
13%
    Over $27,600 but
        not over $28,100
 
12%
    Over $28,100 but
        not over $28,600
 
11%
    Over $28,600 but
        not over $51,000
 
10%
    Over $51,000 but
        not over $51,500
 
  9%
    Over $51,500 but
        not over $52,000
 
  8%
    Over $52,000 but
        not over $52,500
 
  7%
    Over $52,500 but
        not over $53,000
 
  6%
    Over $53,000 but
        not over $53,500
 
  5%
    Over $53,500 but
        not over $54,000
 
  4%
    Over $54,000 but
        not over $54,500
 
  3%
    Over $54,500 but
        not over $55,000
 
  2%
    Over $55,000 but
        not over $55,500
 
  1%

      (E) For taxable years commencing on or after January 1, 2008, but prior to January 1, 2009:

Connecticut
Adjusted Gross Income
 
Amount of Credit
    Over $16,300 but
        not over $16,800
 
70%
    Over $16,800 but
        not over $17,300
 
65%
    Over $17,300 but
        not over $17,800
 
60%
    Over $17,800 but
        not over $18,300
 
55%
    Over $18,300 but
        not over $18,800
 
50%
    Over $18,800 but
        not over $19,300
 
45%
    Over $19,300 but
        not over $19,800
 
40%
    Over $19,800 but
        not over $21,700
 
35%
    Over $21,700 but
        not over $22,200
 
30%
    Over $22,200 but
        not over $22,700
 
25%
    Over $22,700 but
        not over $23,200
 
20%
    Over $23,200 but
        not over $27,100
 
15%
    Over $27,100 but
        not over $27,600
 
14%
    Over $27,600 but
        not over $28,100
 
13%
    Over $28,100 but
        not over $28,600
 
12%
    Over $28,600 but
        not over $29,100
 
11%
    Over $29,100 but
        not over $52,000
 
10%
    Over $52,000 but
        not over $52,500
 
  9%
    Over $52,500 but
        not over $53,000
 
  8%
    Over $53,000 but
        not over $53,500
 
  7%
    Over $53,500 but
        not over $54,000
 
  6%
    Over $54,000 but
        not over $54,500
 
  5%
    Over $54,500 but
        not over $55,000
 
  4%
    Over $55,000 but
        not over $55,500
 
  3%
    Over $55,500 but
        not over $56,000
 
  2%
    Over $56,000 but
        not over $56,500
 
  1%

      (F) For taxable years commencing on or after January 1, 2009, but prior to January 1, 2010:

Connecticut
Adjusted Gross Income
 
Amount of Credit
    Over $13,500 but
        not over $16,900
 
75%
    Over $16,900 but
        not over $17,400
 
70%
    Over $17,400 but
        not over $17,900
 
65%
    Over $17,900 but
        not over $18,400
 
60%
    Over $18,400 but
        not over $18,900
 
55%
    Over $18,900 but
        not over $19,400
 
50%
    Over $19,400 but
        not over $19,900
 
45%
    Over $19,900 but
        not over $20,400
 
40%
    Over $20,400 but
        not over $22,500
 
35%
    Over $22,500 but
        not over $23,000
 
30%
    Over $23,000 but
        not over $23,500
 
25%
    Over $23,500 but
        not over $24,000
 
20%
    Over $24,000 but
        not over $28,100
 
15%
    Over $28,100 but
        not over $28,600
 
14%
    Over $28,600 but
        not over $29,100
 
13%
    Over $29,100 but
        not over $29,600
 
12%
    Over $29,600 but
        not over $30,100
 
11%
    Over $30,100 but
        not over $54,000
 
10%
    Over $54,000 but
        not over $54,500
 
  9%
    Over $54,500 but
        not over $55,000
 
  8%
    Over $55,000 but
        not over $55,500
 
  7%
    Over $55,500 but
        not over $56,000
 
  6%
    Over $56,000 but
        not over $56,500
 
  5%
    Over $56,500 but
        not over $57,000
 
  4%
    Over $57,000 but
        not over $57,500
 
  3%
    Over $57,500 but
        not over $58,000
 
  2%
    Over $58,000 but
        not over $58,500
 
  1%

      (G) For taxable years commencing on or after January 1, 2010, but prior to January 1, 2011:

Connecticut
Adjusted Gross Income
 
Amount of Credit
    Over $14,000 but
        not over $17,500
 
75%
    Over $17,500 but
        not over $18,000
 
70%
    Over $18,000 but
        not over $18,500
 
65%
    Over $18,500 but
        not over $19,000
 
60%
    Over $19,000 but
        not over $19,500
 
55%
    Over $19,500 but
        not over $20,000
 
50%
    Over $20,000 but
        not over $20,500
 
45%
    Over $20,500 but
        not over $21,000
 
40%
    Over $21,000 but
        not over $23,300
 
35%
    Over $23,300 but
        not over $23,800
 
30%
    Over $23,800 but
        not over $24,300
 
25%
    Over $24,300 but
        not over $24,800
 
20%
    Over $24,800 but
        not over $29,200
 
15%
    Over $29,200 but
        not over $29,700
 
14%
    Over $29,700 but
        not over $30,200
 
13%
    Over $30,200 but
        not over $30,700
 
12%
    Over $30,700 but
        not over $31,200
 
11%
    Over $31,200 but
        not over $56,000
 
10%
    Over $56,000 but
        not over $56,500
 
  9%
    Over $56,500 but
        not over $57,000
 
  8%
    Over $57,000 but
        not over $57,500
 
  7%
    Over $57,500 but
        not over $58,000
 
  6%
    Over $58,000 but
        not over $58,500
 
  5%
    Over $58,500 but
        not over $59,000
 
  4%
    Over $59,000 but
        not over $59,500
 
  3%
    Over $59,500 but
        not over $60,000
 
  2%
    Over $60,000 but
        not over $60,500
 
  1%

      (H) For taxable years commencing on or after January 1, 2011, but prior to January 1, 2012:

Connecticut
Adjusted Gross Income
 
Amount of Credit
    Over $14,500 but
        not over $18,100
 
75%
    Over $18,100 but
        not over $18,600
 
70%
    Over $18,600 but
        not over $19,100
 
65%
    Over $19,100 but
        not over $19,600
 
60%
    Over $19,600 but
        not over $20,100
 
55%
    Over $20,100 but
        not over $20,600
 
50%
    Over $20,600 but
        not over $21,100
 
45%
    Over $21,100 but
        not over $21,600
 
40%
    Over $21,600 but
        not over $24,200
 
35%
    Over $24,200 but
        not over $24,700
 
30%
    Over $24,700 but
        not over $25,200
 
25%
    Over $25,200 but
        not over $25,700
 
20%
    Over $25,700 but
        not over $30,200
 
15%
    Over $30,200 but
        not over $30,700
 
14%
    Over $30,700 but
        not over $31,200
 
13%
    Over $31,200 but
        not over $31,700
 
12%
    Over $31,700 but
        not over $32,200
 
11%
    Over $32,200 but
        not over $58,000
 
10%
    Over $58,000 but
        not over $58,500
 
  9%
    Over $58,500 but
        not over $59,000
 
  8%
    Over $59,000 but
        not over $59,500
 
  7%
    Over $59,500 but
        not over $60,000
 
  6%
    Over $60,000 but
        not over $60,500
 
  5%
    Over $60,500 but
        not over $61,000
 
  4%
    Over $61,000 but
        not over $61,500
 
  3%
    Over $61,500 but
        not over $62,000
 
  2%
    Over $62,000 but
        not over $62,500
 
  1%

      (I) For taxable years commencing on or after January 1, 2012:

Connecticut
Adjusted Gross Income
 
Amount of Credit
    Over $15,000 but
        not over $18,800
 
75%
    Over $18,800 but
        not over $19,300
 
70%
    Over $19,300 but
        not over $19,800
 
65%
    Over $19,800 but
        not over $20,300
 
60%
    Over $20,300 but
        not over $20,800
 
55%
    Over $20,800 but
        not over $21,300
 
50%
    Over $21,300 but
        not over $21,800
 
45%
    Over $21,800 but
        not over $22,300
 
40%
    Over $22,300 but
        not over $25,000
 
35%
    Over $25,000 but
        not over $25,500
 
30%
    Over $25,500 but
        not over $26,000
 
25%
    Over $26,000 but
        not over $26,500
 
20%
    Over $26,500 but
        not over $31,300
 
15%
    Over $31,300 but
        not over $31,800
 
14%
    Over $31,800 but
        not over $32,300
 
13%
    Over $32,300 but
        not over $32,800
 
12%
    Over $32,800 but
        not over $33,300
 
11%
    Over $33,300 but
        not over $60,000
 
10%
    Over $60,000 but
        not over $60,500
 
  9%
    Over $60,500 but
        not over $61,000
 
  8%
    Over $61,000 but
        not over $61,500
 
  7%
    Over $61,500 but
        not over $62,000
 
  6%
    Over $62,000 but
        not over $62,500
 
  5%
    Over $62,500 but
        not over $63,000
 
  4%
    Over $63,000 but
        not over $63,500
 
  3%
    Over $63,500 but
        not over $64,000
 
  2%
    Over $64,000 but
        not over $64,500
 
  1%

      (b) Any person subject to tax under this chapter 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, shall be entitled to a credit in determining the amount of tax liability for purposes of this chapter in accordance with the following schedule:

Connecticut
Adjusted Gross Income
 
Amount of Credit
    Over $19,000 but
        not over $24,000
 
75%
    Over $24,000 but
        not over $24,500
 
70%
    Over $24,500 but
        not over $25,000
 
65%
    Over $25,000 but
        not over $25,500
 
60%
    Over $25,500 but
        not over $26,000
 
55%
    Over $26,000 but
        not over $26,500
 
50%
    Over $26,500 but
        not over $27,000
 
45%
    Over $27,000 but
        not over $27,500
 
40%
    Over $27,500 but
        not over $34,000
 
35%
    Over $34,000 but
        not over $34,500
 
30%
    Over $34,500 but
        not over $35,000
 
25%
    Over $35,000 but
        not over $35,500
 
20%
    Over $35,500 but
        not over $44,000
 
15%
    Over $44,000 but
        not over $44,500
 
14%
    Over $44,500 but
        not over $45,000
 
13%
    Over $45,000 but
        not over $45,500
 
12%
    Over $45,500 but
        not over $46,000
 
11%
    Over $46,000 but
        not over $74,000
 
10%
    Over $74,000 but
        not over $74,500
 
  9%
    Over $74,500 but
        not over $75,000
 
  8%
    Over $75,000 but
        not over $75,500
 
  7%
    Over $75,500 but
        not over $76,000
 
  6%
    Over $76,000 but
        not over $76,500
 
  5%
    Over $76,500 but
        not over $77,000
 
  4%
    Over $77,000 but
        not over $77,500
 
  3%
    Over $77,500 but
        not over $78,000
 
  2%
    Over $78,000 but
        not over $78,500
 
  1%

      (c) Any husband and wife subject to tax under this chapter for any taxable year who file a return under the federal income tax for such taxable year as married individuals filing joint returns or any person who files a return for such taxable year as a surviving spouse, as defined in Section 2(a) of the Internal Revenue Code, shall be entitled to a credit in determining the amount of tax liability for purposes of this chapter in accordance with the following schedule:

Connecticut
Adjusted Gross Income
 
Amount of Credit
    Over $24,000 but
        not over $30,000
 
75%
    Over $30,000 but
        not over $30,500
 
70%
    Over $30,500 but
        not over $31,000
 
65%
    Over $31,000 but
        not over $31,500
 
60%
    Over $31,500 but
        not over $32,000
 
55%
    Over $32,000 but
        not over $32,500
 
50%
    Over $32,500 but
        not over $33,000
 
45%
    Over $33,000 but
        not over $33,500
 
40%
    Over $33,500 but
        not over $40,000
 
35%
    Over $40,000 but
        not over $40,500
 
30%
    Over $40,500 but
        not over $41,000
 
25%
    Over $41,000 but
        not over $41,500
 
20%
    Over $41,500 but
        not over $50,000
 
15%
    Over $50,000 but
        not over $50,500
 
14%
    Over $50,500 but
        not over $51,000
 
13%
    Over $51,000 but
        not over $51,500
 
12%
    Over $51,500 but
        not over $52,000
 
11%
    Over $52,000 but
        not over $96,000
 
10%
    Over $96,000 but
        not over $96,500
 
  9%
    Over $96,500 but
        not over $97,000
 
  8%
    Over $97,000 but
        not over $97,500
 
  7%
    Over $97,500 but
        not over $98,000
 
  6%
    Over $98,000 but
        not over $98,500
 
  5%
    Over $98,500 but
        not over $99,000
 
  4%
    Over $99,000 but
        not over $99,500
 
  3%
    Over $99,500 but
        not over $100,000
 
  2%
    Over $100,000 but
        not over $100,500
 
  1%

      (June Sp. Sess. P.A. 91-3, S. 54, 168; May Sp. Sess. P.A. 92-5, S. 4, 37; May Sp. Sess. P.A. 94-4, S. 25, 85; P.A. 95-160, S. 64, 69; P.A. 99-173, S. 6, 65; May 9 Sp. Sess. P.A. 02-1, S. 79; June 30 Sp. Sess. P.A. 03-1, S. 116; P.A. 05-251, S. 75.)

      History: June Sp. Sess. P.A. 91-3, S. 54, 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 a technical change, effective June 19, 1992, and applicable to taxable years of taxpayers commencing on or after January 1, 1992; May Sp. Sess. P.A. 94-4 amended section to graduate the tax credits from seventy-five per cent to one per cent and to expand the income levels eligible for the credits from forty-eight thousand dollars to fifty-two thousand dollars for individuals, from seventy-four thousand dollars to seventy-eight thousand five hundred dollars for heads of households and from ninety-six thousand dollars to one hundred thousand five hundred dollars, effective January 1, 1995, and applicable to taxable years commencing on or after said date; P.A. 95-160 revised effective date of May Sp. Sess. P.A. 94-4 but without affecting this section; P.A. 99-173 amended Subsec. (a) to adjust the credit schedule for unmarried single filers over an eight-year period from a starting amount of twelve thousand two hundred fifty dollars in 2000 to fifteen thousand dollars in 2007, effective June 23, 1999, and applicable to tax years commencing on or after January 1, 2000; May 9 Sp. Sess. P.A. 02-1 amended Subsec. (a)(2) to defer by two years the increase in the credit for single filers, effective July 1, 2002, and applicable to taxable years commencing on or after January 1, 2002; June 30 Sp. Sess. P.A. 03-1 amended Subsec. (a)(2) to add new Subpara. (C) re credit amount for unmarried filers for taxable year 2004, redesignate existing Subparas. (C) to (H) as Subparas. (D) to (I) and amend said Subparas. to delay the change in credit amounts for unmarried filers by one year, effective August 16, 2003, and applicable to taxable years commencing on or after January 1, 2004; P.A. 05-251 amended Subsec. (a)(2)(C) to (I) to delay for two years the change in credit amounts for single filers, effective June 30, 2005, and applicable to taxable years commencing on or after January 1, 2005.

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      Sec. 12-704c. Credits for taxes paid on primary residence or motor vehicle. (a) Any resident of this state, as defined in subdivision (1) of subsection (a) of section 12-701, subject to the tax under this chapter for any taxable year shall be entitled to a credit in determining the amount of tax liability under this chapter, for all or a portion, as permitted by this section, of the amount of property tax, as defined in this section, first becoming due and actually paid during such taxable year by such person on such person's primary residence or motor vehicle in accordance with this section, provided in the case of a person who files a return under the federal income tax for such taxable year as an unmarried individual, a married individual filing separately or a head of household, one motor vehicle shall be eligible for such credit and in the case of a husband and wife who file a return under federal income tax for such taxable year as married individuals filing jointly, no more than two motor vehicles shall be eligible for a credit under the provisions of this section.

      (b) The credit allowed under this section shall not exceed two hundred fifteen dollars for the taxable year commencing on or after January 1, 1997, and prior to January 1, 1998; for taxable years commencing on or after January 1, 1998, but prior to January 1, 1999, three hundred fifty dollars; for taxable years commencing on or after January 1, 1999, but prior to January 1, 2000, four hundred twenty-five dollars; for taxable years commencing on or after January 1, 2000, but prior to January 1, 2003, five hundred dollars; for taxable years commencing on or after January 1, 2003, three hundred fifty dollars; for taxable years commencing on or after January 1, 2005, but prior to January 1, 2006, three hundred fifty dollars; and for taxable years commencing on or after January 1, 2006, four hundred dollars. In the case of any husband and wife who file a return under the federal income tax for such taxable year as married individuals filing a joint return, the credit allowed, in the aggregate, shall not exceed such amounts for each such taxable year.

      (c) (1) (A) For taxable years commencing prior to January 1, 2000, in the case of any such taxpayer who files under the federal income tax for such taxable year as an unmarried individual whose Connecticut adjusted gross income exceeds fifty-two thousand five hundred dollars, the amount of the credit that exceeds one hundred dollars shall be reduced by ten per cent for each ten thousand dollars, or fraction thereof, by which the taxpayer's Connecticut adjusted gross income exceeds said amount.

      (B) For taxable years commencing on or after January 1, 2000, but prior to January 1, 2001, in the case of any such taxpayer who files under the federal income tax for such taxable year as an unmarried individual whose Connecticut adjusted gross income exceeds fifty-three thousand five hundred dollars, the amount of the credit that exceeds one hundred dollars shall be reduced by ten per cent for each ten thousand dollars, or fraction thereof, by which the taxpayer's Connecticut adjusted gross income exceeds said amount.

      (C) For taxable years commencing on or after January 1, 2001, but prior to January 1, 2004, in the case of any such taxpayer who files under the federal income tax for such taxable year as an unmarried individual whose Connecticut adjusted gross income exceeds fifty-four thousand five hundred dollars, the amount of the credit shall be reduced by ten per cent for each ten thousand dollars, or fraction thereof, by which the taxpayer's Connecticut adjusted gross income exceeds said amount.

      (D) For taxable years commencing on or after January 1, 2004, but prior to January 1, 2007, in the case of any such taxpayer who files under the federal income tax for such taxable year as an unmarried individual whose Connecticut adjusted gross income exceeds fifty-five thousand dollars, the amount of the credit shall be reduced by ten per cent for each ten thousand dollars, or fraction thereof, by which the taxpayer's Connecticut adjusted gross income exceeds said amount.

      (E) For taxable years commencing on or after January 1, 2007, but prior to January 1, 2008, in the case of any such taxpayer who files under the federal income tax for such taxable year as an unmarried individual whose Connecticut adjusted gross income exceeds fifty-five thousand five hundred dollars, the amount of the credit shall be reduced by ten per cent for each ten thousand dollars, or fraction thereof, by which the taxpayer's Connecticut adjusted gross income exceeds said amount.

      (F) For taxable years commencing on or after January 1, 2008, but prior to January 1, 2009, in the case of any such taxpayer who files under the federal income tax for such taxable year as an unmarried individual whose Connecticut adjusted gross income exceeds fifty-six thousand five hundred dollars, the amount of the credit shall be reduced by ten per cent for each ten thousand dollars, or fraction thereof, by which the taxpayer's Connecticut adjusted gross income exceeds said amount.

      (G) For taxable years commencing on or after January 1, 2009, but prior to January 1, 2010, in the case of any such taxpayer who files under the federal income tax for such taxable year as an unmarried individual whose Connecticut adjusted gross income exceeds fifty-eight thousand five hundred dollars, the amount of the credit shall be reduced by ten per cent for each ten thousand dollars, or fraction thereof, by which the taxpayer's Connecticut adjusted gross income exceeds said amount.

      (H) For taxable years commencing on or after January 1, 2010, but prior to January 1, 2011, in the case of any such taxpayer who files under the federal income tax for such taxable year as an unmarried individual whose Connecticut adjusted gross income exceeds sixty thousand five hundred dollars, the amount of the credit shall be reduced by ten per cent for each ten thousand dollars, or fraction thereof, by which the taxpayer's Connecticut adjusted gross income exceeds said amount.

      (I) For taxable years commencing on or after January 1, 2011, but prior to January 1, 2012, in the case of any such taxpayer who files under the federal income tax for such taxable year as an unmarried individual whose Connecticut adjusted gross income exceeds sixty-two thousand five hundred dollars, the amount of the credit shall be reduced by ten per cent for each ten thousand dollars, or fraction thereof, by which the taxpayer's Connecticut adjusted gross income exceeds said amount.

      (J) For taxable years commencing on or after January 1, 2012, in the case of any such taxpayer who files under the federal income tax for such taxable year as an unmarried individual whose Connecticut adjusted gross income exceeds sixty-four thousand five hundred dollars, the amount of the credit shall be reduced by ten per cent for each ten thousand dollars, or fraction thereof, by which the taxpayer's Connecticut adjusted gross income exceeds said amount.

      (2) In the case of any such taxpayer who files under the federal income tax for such taxable year as a married individual filing separately whose Connecticut adjusted gross income exceeds fifty thousand two hundred fifty dollars, the amount of the credit shall be reduced by ten per cent for each five thousand dollars, or fraction thereof, by which the taxpayer's Connecticut adjusted gross income exceeds said amount.

      (3) In the case of a taxpayer who files under the federal income tax for such taxable year as a head of household whose Connecticut adjusted gross income exceeds seventy-eight thousand five hundred dollars, the amount of the credit shall be reduced by ten per cent for each ten thousand dollars or fraction thereof, by which the taxpayer's Connecticut adjusted gross income exceeds said amount.

      (4) In the case of a taxpayer who files under federal income tax for such taxable year as married individuals filing jointly whose Connecticut adjusted gross income exceeds one hundred thousand five hundred dollars, the amount of the credit shall be reduced by ten per cent for each ten thousand dollars, or fraction thereof, by which the taxpayer's Connecticut adjusted gross income exceeds said amount.

      (d) The credit allowed under the provisions of this section shall be available for any person leasing a motor vehicle pursuant to a written agreement for a term of more than one year. Such lessee shall be entitled to the credit in accordance with the provisions of this section for the taxes actually paid by the lessor or lessee on such leased vehicle, provided the lessee was lawfully in possession of the motor vehicle at such time when the taxes first became due. The lessor shall provide the lessee with documentation establishing, to the satisfaction of the Commissioner of Revenue Services, the amount of property tax paid during the time period in which the lessee was lawfully in possession of the motor vehicle. The lessor of the motor vehicle shall not be entitled to a credit under the provisions of this section.

      (e) The credit may only be used to reduce such qualifying taxpayer's tax liability for the year for which such credit is applicable and shall not be used to reduce such tax liability to less than zero.

      (f) The amount of tax due pursuant to sections 12-705 and 12-722 shall be calculated without regard to this credit.

      (g) For the purposes of this section: (1) "Property tax" means the amount of property tax exclusive of any interest, fees or charges thereon for which a taxpayer is liable, or in the case of any husband and wife who file a return under the federal income tax for such taxable year as married individuals filing a joint return, for which the husband or wife or both are liable, to a Connecticut political subdivision on the taxpayer's primary residence or motor vehicles; (2) "motor vehicle" means a motor vehicle, as defined in section 14-1, which is privately owned or leased; and (3) property tax first becomes due, if due and payable in a single installment, on the date designated by the legislative body of the municipality as the date on which such installment shall be due and payable and, if due and payable in two or more installments, on the date designated by the legislative body of the municipality as the date on which such installment shall be due and payable or, at the election of the taxpayer, on the date designated by the legislative body of the municipality as the date on which any earlier installment of such tax shall be due and payable.

      (P.A. 97-309, S. 7, 23; 97-322, S. 4, 7, 9; P.A. 98-110, S. 1, 27; 98-262, S. 15, 22; P.A. 99-173, S. 2, 7, 65; May 9 Sp. Sess. P.A. 02-1, S. 80; June 30 Sp. Sess. P.A. 03-1, S. 101; P.A. 04-216, S. 52; P.A. 05-251, S. 76, 77.)

      History: P.A. 97-309 effective July 1, 1997, and applicable to income years commencing on or after January 1, 1997; P.A. 97-322 amended Subsec. (b) to increase amount of credit for taxable years commencing on or after January 1, 1998, from two hundred seventy-five to two hundred eighty-five dollars, effective July 1, 1997, and changed effective date of P.A. 97-309 but without affecting this section; P.A. 98-110 amended Subsec. (b) to increase amount of credit from two hundred eighty-five dollars to three hundred fifty dollars, effective May 19, 1998, and applicable to taxable years commencing on or after January 1, 1998; P.A. 98-262 allowed credit for installment in January 1998, and amended definition of property tax to clarify that interest, fees and charges are excluded, effective June 8, 1998, and applicable to taxable years commencing on or after January 1, 1998; P.A. 99-173 amended Subsec. (b) to increase credit from three hundred fifty dollars to four hundred twenty-five dollars for tax years commencing on or after January 1, 1999, and from four hundred twenty-five dollars to five hundred dollars for tax years commencing on or after January 1, 2000, effective June 23, 1999, and applicable to taxable years commencing on or after January 1, 1999, amended Subsec. (c) to divide into Subdivs. and to add new Subparas. (B) to (I) inclusive, re income limits for unmarried single filers in Subdiv. (1), effective June 23, 1999, and applicable to tax years commencing on or after January 1, 2000; May 9 Sp. Sess. P.A. 02-1 amended Subsec. (c)(1) to defer by two years the increase in the credit for single filers, effective July 1, 2002, and applicable to taxable years commencing on or after January 1, 2002; June 30 Sp. Sess. P.A. 03-1 amended Subsec. (b) to lower the maximum credit to three hundred fifty dollars and amended Subsec. (c) to eliminate minimum credit of one hundred dollars, to add new Subdiv. (2)(D) re credit amount for unmarried filers for taxable year 2004, to redesignate existing Subparas. (D) to (I) as Subparas. (E) to (J) in Subdiv. (2) and to amend said Subparas. to delay change in credit amounts for unmarried filers by one year, effective August 16, 2003, and applicable to taxable years commencing on or after January 1, 2003; P.A. 04-216 amended Subsec. (b) to increase the maximum credit to five hundred dollars for taxable years commencing January 1, 2005, effective July 1, 2005, and applicable to taxable years commencing on or after January 1, 2005; P.A. 05-251 amended Subsec. (b) to decrease the maximum credit amount to three hundred fifty dollars prior to January 1, 2006, and four hundred dollars thereafter, effective July 1, 2005, and applicable to taxable years commencing on or after January 1, 2005, and amended Subsec. (c)(1)(D) to (J) to delay for two years the change in credit amounts for single filers, effective June 30, 2005, and applicable to taxable years commencing on or after January 1, 2005.

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      Sec. 12-728. Deficiency assessments. Notice. Penalty. (a)(1) After a final return pursuant to the provisions of this chapter is filed, the commissioner shall cause the same to be examined and may make such further audit or investigation or reaudit as the commissioner deems necessary, and if the commissioner determines that there is a deficiency with respect to the payment of any tax due under this chapter, the commissioner shall assess or reassess the additional taxes, penalties and interest due to this state, give notice of such assessment or reassessment to the taxpayer and make demand upon the taxpayer for payment. Not later than sixty days after the mailing of such notice, the taxpayer shall pay to the commissioner, in cash or by check, draft or money order drawn to the order of the commissioner, the amount of the deficiency. Such amount shall bear interest at the rate of one per cent per month or fraction thereof from the date when the original tax became due and payable.

      (2) When it appears that any part of the deficiency for which a deficiency assessment is made is due to negligence or intentional disregard of the provisions of this chapter or regulations adopted thereunder, there shall be imposed a penalty equal to ten per cent of the amount of such deficiency assessment. When it appears that any part of the deficiency for which a deficiency assessment is made is due to fraud or intent to evade the provisions of this chapter or regulations adopted thereunder, there shall be imposed a penalty equal to twenty-five per cent of the amount of such deficiency assessment. For audits of returns commencing on or after January 1, 2006, when it appears that any part of the deficiency for which a deficiency assessment is made is due to failure to disclose a listed transaction, as defined in Section 6707A of the Internal Revenue Code of 1986, or any subsequent corresponding internal revenue code of the United States, as from time to time amended, on the taxpayer's federal tax return, there shall be imposed a penalty equal to seventy-five per cent of the amount of such deficiency assessment.

      (3) No taxpayer shall be subject to more than one penalty under this section in relation to the same tax period.

      (4) Any decision rendered by any federal court holding that a taxpayer has filed a fraudulent return with the Director of Internal Revenue shall subject the taxpayer to the twenty-five per cent penalty imposed by this subsection without the necessity of further proof thereof, except when it can be shown that the return to the state so differed from the return to the federal government as to afford a reasonable presumption that the attempt to defraud did not extend to the state.

      (b) A notice of deficiency shall set forth the reason for the proposed assessment. The notice shall be mailed to the taxpayer at his last-known address. In the case of a joint return, the notice of deficiency may be a single joint notice except that if the commissioner is notified by either spouse that separate residences have been established he shall mail joint notices to each spouse. If the taxpayer is deceased or under a legal disability, a notice of deficiency may be mailed to his last-known address unless the commissioner has received notice of the existence of a fiduciary relationship with respect to such taxpayer.

      (June Sp. Sess. P.A. 91-3, S. 79, 168; P.A. 95-26, S. 40, 52; P.A. 99-121, S. 23, 28; P.A. 05-116, S. 3; 05-260, S. 8.)

      History: June Sp. Sess. P.A. 91-3, S. 79, effective August 22, 1991, and applicable to taxable years of taxpayers commencing on or after January 1, 1991; P.A. 95-26 amended Subsec. (a) to lower interest rate from one and one-fourth to one per cent, effective July 1, 1995, and applicable to taxes due and owing on or after July 1, 1995, whether or not those taxes first became due before said date; P.A. 99-121 amended Subsec. (a) to make technical changes and to provide that twenty-five per cent penalty applies where federal court held taxpayer filed a fraudulent federal income tax return, effective June 3, 1999; P.A. 05-116 amended Subsec. (a) by dividing it into Subdivs. (1) to (4), made technical changes in Subdiv. (1) and amended Subdiv. (2) to add a penalty for failure to disclose a listed transaction, effective June 24, 2005, and applicable to taxable years commencing on or after January 1, 2005; P.A. 05-260 amended Subsec. (a)(2) to allow the seventy-five per cent penalty for failure to report listed transactions to apply to returns audited on or after January 1, 2006, effective July 13, 2005.

      See Sec. 12-30c re penalty on promoter of abusive tax shelters.

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      Sec. 12-730. Appeals.

      It is plaintiff's burden to show that he has no income tax liability or was exempt from payment of the tax. 49 CS 38.

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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 within six years after the return is filed. For purposes of this subsection, 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 within six years after the return is filed. For purposes of this subsection, 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.

      (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 listed 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.)

      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 sixty 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.

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      Sec. 12-743a. Contribution from refunds to the Military Family Relief Fund. (a) Any taxpayer filing a return under this chapter for taxable years commencing on or after January 1, 2005, may contribute all or part of a refund under this chapter to the Military Family Relief Fund established in section 27-100a, by indicating on the tax return the amount to be contributed to the fund.

      (b) A contribution or designation made pursuant to this section shall be irrevocable upon the filing of the return. A taxpayer making a contribution or designation pursuant to this subsection shall so indicate on the tax return in a manner provided for by the Commissioner of Revenue Services.

      (c) A contribution of all or part of a refund shall be made in the full amount indicated if the refund found due the taxpayer upon the initial processing of the return, and after any deductions required by this chapter, is greater than or equal to the indicated contribution. If the refund due, as determined upon initial processing, and after any deductions required by this chapter, is less than the indicated contribution, the contribution shall be made in the full amount of the refund. The Commissioner of Revenue Services shall subtract the amount of any contribution of all or part of a refund from the amount of the refund initially found due the taxpayer and shall certify (1) the amount of the refund initially found due the taxpayer, (2) the amount of any such contribution, and (3) the amount of the difference to the Secretary of the Office of Policy and Management and the State Treasurer for payment to the taxpayer in accordance with this chapter. For the purposes of any subsequent determination of the taxpayer's net tax payment, such contribution shall be considered a part of the refund paid to the taxpayer.

      (d) The Commissioner of Revenue Services, after notification of and approval by the Secretary of the Office of Policy and Management, may deduct and retain from the moneys collected under subsections (a) to (c), inclusive, of this section an amount equal to the costs of administering this section, but in any fiscal year beginning on or after July 1, 2006, not to exceed four per cent of such moneys collected in such fiscal year. The Commissioner of Revenue Services shall deposit the remaining moneys collected in the Military Family Relief Fund.

      (June Sp. Sess. P.A. 05-3, S. 11.)

      History: June Sp. Sess. P.A. 05-3 effective July 1, 2005, and applicable to taxable years commencing on or after January 1, 2005.

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