CHAPTER 229

INCOME TAX

Table of Contents

Sec. 12-701. Definitions. Regulations.

Sec. 12-704c. Credits for taxes paid on primary residence or motor vehicle.

Sec. 12-704d. Credits for angel investors.

Sec. 12-704f. Credit for certain college graduates.

Sec. 12-730. Appeals.

Sec. 12-790a. Tax preparers and facilitators. Permits. Penalties. Inactive permit status. Exemptions. Confidentiality of personal financial information gathered pursuant to an investigation.


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

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

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

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

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

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

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

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

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

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

(10) “Connecticut fiduciary adjustment” means the net positive or negative total of the following items relating to income, gain, loss or deduction of a trust or estate: (A) There shall be added together (i) any interest income from obligations issued by or on behalf of any state, political subdivision thereof, or public instrumentality, state or local authority, district or similar public entity, exclusive of such income from obligations issued by or on behalf of the state of Connecticut, any political subdivision thereof, or public instrumentality, state or local authority, district or similar public entity created under the laws of the state of Connecticut and exclusive of any such income with respect to which taxation by any state is prohibited by federal law, (ii) any exempt-interest dividends, as defined in Section 852(b)(5) of the Internal Revenue Code, exclusive of such exempt-interest dividends derived from obligations issued by or on behalf of the state of Connecticut, any political subdivision thereof, or public instrumentality, state or local authority, district or similar public entity created under the laws of the state of Connecticut and exclusive of such exempt-interest dividends derived from obligations, the income with respect to which taxation by any state is prohibited by federal law, (iii) any interest or dividend income on obligations or securities of any authority, commission or instrumentality of the United States 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, (vii) expenses paid or incurred during the taxable year for the production or collection of income which is exempt from tax under this chapter, or the management, conservation or maintenance of property held for the production of such income, and the amortizable bond premium for the taxable year on any bond the interest on which is exempt from taxation under this chapter, to the extent that such expenses and premiums are deductible in determining federal taxable income prior to deductions relating to distributions to beneficiaries, (viii) to the extent deductible in determining federal taxable income prior to deductions relating to distributions to beneficiaries, the deduction allowable as qualified domestic production activities income, pursuant to Section 199 of the Internal Revenue Code, and (ix) to the extent not includable in federal taxable income prior to deductions relating to distributions to beneficiaries, the total amount of a lump sum distribution for the taxable year. (B) There shall be subtracted from the sum of such items (i) to the extent properly includable in gross income for federal income tax purposes, any income with respect to which taxation by any state is prohibited by federal law, (ii) to the extent allowable under section 12-718, exempt dividends paid by a regulated investment company, (iii) with respect to any trust or estate 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;

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

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

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

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

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

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

(B) There shall be subtracted therefrom:

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

(xv) To the extent properly includable in 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;

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

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

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

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

(xx) To the extent properly includable in gross income for federal income tax purposes, (I) for the taxable year commencing January 1, 2015, ten per cent of the income received from the state teachers' retirement system, (II) for the taxable years commencing January 1, 2016, to January 1, 2020, inclusive, twenty-five per cent of the income received from the state teachers' retirement system, and (III) for the taxable year commencing January 1, 2021, and each taxable year thereafter, fifty per cent of the income received from the state teachers' retirement system or the percentage, if applicable, pursuant to clause (xxi) of this subparagraph;

(xxi) To the extent properly includable in gross income for federal income tax purposes, except for retirement benefits under clause (iv) of this subparagraph and retirement pay under clause (xvii) of this subparagraph, for a person who files a return under the federal income tax as an unmarried individual whose federal adjusted gross income for such taxable year is less than seventy-five thousand dollars, or as a married individual filing separately whose federal adjusted gross income for such taxable year is less than ­seventy-five thousand dollars, or as a head of household whose federal adjusted gross income for such taxable year is less than seventy-five thousand dollars, or for a husband and wife who file a return under the federal income tax as married individuals filing jointly whose federal adjusted gross income for such taxable year is less than one hundred thousand dollars, (I) for the taxable year commencing January 1, 2019, fourteen per cent of any pension or annuity income, (II) for the taxable year commencing January 1, 2020, twenty-eight per cent of any pension or annuity income, (III) for the taxable year commencing January 1, 2021, forty-two per cent of any pension or annuity income, (IV) for the taxable year commencing January 1, 2022, fifty-six per cent of any pension or annuity income, (V) for the taxable year commencing January 1, 2023, seventy per cent of any pension or annuity income, (VI) for the taxable year commencing January 1, 2024, eighty-four per cent of any pension or annuity income, and (VII) for the taxable year commencing January 1, 2025, and each taxable year thereafter, any pension or annuity income;

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

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

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

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

(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), (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.

(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), (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.

(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.

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

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

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

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

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

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 the provisions of 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) (1) The credit allowed under this section shall not exceed (A) for taxable years commencing on or after January 1, 2011, but prior to January 1, 2016, three hundred dollars; and (B) for taxable years commencing on or after January 1, 2016, two 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 amount for each such taxable year.

(2) Notwithstanding the provisions of subsection (a) of this section, for the taxable years commencing January 1, 2017, to January 1, 2020, inclusive, the credit under this section shall be allowed only for a resident of this state (A) who has attained age sixty-five before the close of the applicable taxable year, or (B) who files a return under the federal income tax for the applicable taxable year validly claiming one or more dependents.

(c) (1) (A) For taxable years commencing on or after January 1, 2011, but prior to January 1, 2013, 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 fifteen 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, 2013, but prior to January 1, 2014, 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 fifteen 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, 2014, but prior to January 1, 2016, 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 forty-seven thousand five hundred dollars, the amount of the credit shall be reduced by fifteen 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, 2016, 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 forty-nine thousand five hundred dollars, the amount of the credit shall be reduced by fifteen 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 thirty-five thousand two hundred fifty dollars, the amount of the credit shall be reduced by fifteen 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 fifty-four thousand five hundred dollars, the amount of the credit shall be reduced by fifteen 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 seventy thousand five hundred dollars, the amount of the credit shall be reduced by fifteen per cent for each ten thousand dollars, or fraction thereof, by which the taxpayer's Connecticut adjusted gross income exceeds said amount.

(d) (1) Notwithstanding the provisions of subsections (b) and (c) of this section, for taxable years commencing on or after January 1, 2021, for any taxpayer who paid the conveyance tax on real property at the rate prescribed by subparagraph (C)(ii) of subdivision (2) of subsection (b) of section 12-494, the credit allowed under this section shall not exceed thirty-three and one-third per cent of the amount of the conveyance tax paid at such rate, in each of the three taxable years next succeeding the second taxable year after the taxable year in which such conveyance tax was paid. For any taxable year such taxpayer claims the credit or portion thereof under this subsection, such credit shall be in lieu of any credit such taxpayer may be eligible to claim under subsection (b) or (c) of this section.

(2) If any credit allowed under this subsection or portion thereof is not used because the amount of the credit exceeds the tax due and owing by the taxpayer or the amount of property tax paid by the taxpayer, the unused amount may be carried forward to each of the successive taxable years until such amount is fully taken, except that in no event may any amount of the credit be carried forward for a period of more than six taxable years.

(e) The credit allowed under 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.

(f) The credit may only be used to reduce a 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.

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

(h) 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, that 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; P.A. 06-186, S. 79; June Sp. Sess. P.A. 09-3, S. 124; P.A. 11-6, S. 111; P.A. 15-244, S. 70; June Sp. Sess. P.A. 17-2, S. 644; P.A. 19-117, S. 335.)

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 $275 to $285, 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 $285 to $350, 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 $350 to $425 for tax years commencing on or after January 1, 1999, and from $425 to $500 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, and divided Subsec. (c) into Subdivs., adding 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 $350 and amended Subsec. (c) to eliminate minimum credit of $100, 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 $500 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 $350 prior to January 1, 2006, and $400 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; P.A. 06-186 amended Subsec. (b) to increase credit from $400 to $500, effective July 1, 2006, and applicable to taxable years commencing on or after January 1, 2006; June Sp. Sess. P.A. 09-3 amended Subsec. (c)(1)(F) to (J) to delay change in credit amounts for single filers for 3 years, effective September 9, 2009, and applicable to taxable years commencing on or after January 1, 2009; P.A. 11-6 amended Subsec. (b) to reduce maximum property tax credit from $500 to $300, amended Subsec. (c) to reduce income threshold in Subdiv. (1)(G) from $58,500 to $56,500, and to increase the reduction in amount of the credit in Subdiv. (1)(G) to (J) and Subdivs. (2) to (4) from 10% to 15% and made technical changes, effective May 4, 2011, and applicable to taxable years commencing on or after January 1, 2011; P.A. 15-244 amended Subsec. (a) to make a technical change, amended Subsec. (b) to decrease maximum credit amount to $200 for taxable years commencing on or after January 1, 2016, amended Subsec. (c)(1)(I) to delay for one year the change in credit amount for any taxpayer who files as an unmarried individual and reduce the income threshold from $62,500 to $47,500, amended Subsec. (c)(1)(J) to delay for one year the change in credit amount for any taxpayer who files as an unmarried individual and reduce the income threshold from $64,500 to $49,500, and amended Subsec. (c)(2) to (4) to reduce the income thresholds, effective July 1, 2015, and applicable to income years commencing on or after January 1, 2015; June Sp. Sess. P.A. 17-2 amended Subsec. (b) to designate existing provisions as Subdiv. (1), amend same to delete credit amounts for taxable years prior to January 1, 2006 and add Subpara. designators, and add Subdiv. (2) re limits on credit eligibility for taxable years commencing January 1, 2017, and January 1, 2018, effective October 31, 2017, and applicable to taxable years commencing on or after January 1, 2017; P.A. 19-117 amended Subsec. (b) to delete Subpara. (A) re credit for taxable years commencing on or after January 1, 2006, but prior to January 1, 2011, redesignate existing Subparas. (B) and (C) as new Subparas. (A) and (B) and make a technical change in Subdiv. (1), and replace “and January 1, 2018” with “to January 1, 2020, inclusive” in Subdiv. (2), amended Subsec. (c)(1) to delete former Subparas. (A) to (F) re credit reductions for taxable years commencing prior to January 1, 2011, and redesignate existing Subparas. (G) to (J) as new Subparas. (A) to (D), added new Subsec. (d) re property tax credit for taxable years commencing on or after January 1, 2021, redesignated existing Subsecs. (e) to (g) as Subsecs. (f) to (h) and made a technical change in redesignated Subsecs. (f) and (h), effective June 26, 2019.

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

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

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

(3) “Connecticut business” means any business with its principal place of business in Connecticut;

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

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

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

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

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

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

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

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

(c) To qualify for a tax credit pursuant to this section, a cash investment shall be in a Connecticut business that (1) has been approved as a qualified Connecticut business pursuant to subsection (d) of this section; (2) had annual gross revenues of less than one million dollars in the most recent income year of such business; (3) has fewer than twenty-five employees, not less than seventy-five per cent of whom reside in this state; (4) has been operating in this state for less than seven consecutive years; (5) is primarily owned by the management of the business and their families; and (6) received less than two million dollars in cash investments eligible for the tax credits provided by this section.

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

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

(e) (1) Any angel investor that intends to make a cash investment in a business on such list may apply to Connecticut Innovations, Incorporated, to reserve a tax credit in the amount indicated by such investor. The aggregate amount of all tax credits under this section that may be reserved by Connecticut Innovations, Incorporated, shall not exceed six million dollars annually for the fiscal years commencing July 1, 2010, to July 1, 2012, inclusive, and shall not exceed five million dollars in each fiscal year thereafter. Each fiscal year, Connecticut Innovations, Incorporated, shall not reserve more than seventy-five per cent of the tax credits available under this section for investments in emerging technology businesses, except if any credits remain available for reservation after April first in any fiscal year, such remaining credits may be reserved for investments in such businesses, and may be prioritized for veteran-owned, women-owned or minority-owned businesses and businesses owned by individuals with disabilities. Connecticut Innovations, Incorporated, shall not reserve tax credits under this section for any investment made on or after July 1, 2024.

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

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

(g) A review of the cumulative effectiveness of the credit under this section shall be conducted by Connecticut Innovations, Incorporated, by July 1, 2014, and by July first annually thereafter. Such review shall include, but need not be limited to, the number and type of Connecticut businesses that received angel investments, the number of angel investors and the aggregate amount of cash investments, the current status of each Connecticut business that received angel investments, the number of employees employed in each year following the year in which such Connecticut business received the angel investment, and the economic impact in the state, of the Connecticut business that received the angel investment. Such review shall be submitted to the Office of Policy and Management and to the joint standing committee of the General Assembly having cognizance of matters relating to commerce, in accordance with the provisions of section 11-4a.

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

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

Sec. 12-704f. Credit for certain college graduates. Section 12-704f is repealed, effective June 26, 2019.

(June Sp. Sess. P.A. 17-2, S. 648; P.A. 19-117, S. 397.)

Sec. 12-730. Appeals. Notwithstanding the provisions of chapter 54 to the contrary, any taxpayer aggrieved because of any determination or disallowance by the commissioner under section 12-729, 12-729a or 12-732 may, not later than thirty days after notice of the commissioner's determination or disallowance is mailed to the taxpayer, take an appeal therefrom to the superior court for the judicial district of New Britain, which shall be accompanied by a citation to the commissioner to appear before said court. Such citation shall be signed by the same authority, and such appeal shall be returnable at the same time and served and returned in the same manner, as is required in case of a summons in a civil action. The authority issuing the citation shall take from the appellant a bond or recognizance to the state of Connecticut, with surety to prosecute the appeal to effect and to comply with the orders and decrees of the court in the premises. Such appeals shall be preferred cases, to be heard unless cause appears to the contrary, at the first session by the court or by a committee appointed by it. Said court may grant such relief as may be equitable and, if such tax has been paid prior to the granting of such relief, may order the Treasurer to pay the amount of such relief, with interest at the rate of two-thirds of one per cent per month or fraction thereof, to the aggrieved taxpayer. If the appeal has been taken without probable cause, the court may charge double or triple costs, as the case demands, and upon all such appeals which may be denied, costs may be taxed against the appellant at the discretion of the court but no costs shall be taxed against the state.

(P.A. 88-230, S. 1, 12; P.A. 90-98, S. 1, 2; June Sp. Sess. P.A. 91-3, S. 81, 168; P.A. 93-142, S. 4, 7, 8; P.A. 95-26, S. 41, 52; 95-220, S. 4-6; P.A. 99-215, S. 24, 29; P.A. 03-107, S. 5; P.A. 19-186, S. 27.)

History: P.A. 88-230 mandated replacement of “judicial district of Hartford-New Britain” with “judicial district of Hartford”, effective September 1, 1991; P.A. 90-98 changed effective date of P.A. 88-230 from September 1, 1991, to September 1, 1993, and expanded applicability to 1991 public and special acts; June Sp. Sess. P.A. 91-3, S. 81, effective August 22, 1991, and applicable to taxable years of taxpayers commencing on or after January 1, 1991; P.A. 93-142 changed the effective date of P.A. 88-230 from September 1, 1993, to September 1, 1996, effective June 14, 1993; P.A. 95-26 lowered interest rate from 9% per annum to 0.66% per month, 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. 95-220 changed the effective date of P.A. 88-230 from September 1, 1996, to September 1, 1998, effective July 1, 1995; P.A. 99-215 replaced “judicial district of Hartford” with “judicial district of New Britain”, effective June 29, 1999; P.A. 03-107 added reference to Sec. 12-729a to include jeopardy assessment appeals under this section, effective June 18, 2003; P.A. 19-186 replaced “within one month” with “not later than thirty days”, effective July 8, 2019.

Sec. 12-790a. Tax preparers and facilitators. Permits. Penalties. Inactive permit status. Exemptions. Confidentiality of personal financial information gathered pursuant to an investigation. (a) As used in sections 12-790a to 12-790c, inclusive, “attorney”, “certified public accountant”, “commissioner”, “creditor”, “facilitator”, “refund anticipation check”, “refund anticipation loan”, “return”, “tax preparation services” and “tax preparer” have the same meanings as provided in section 12-790, and “commercial tax return preparation business” means a person that employs tax preparers.

(b) (1) On and after January 1, 2019, no person, except as provided in subsection (e) of this section, shall engage in the business of, solicit business as or advertise as furnishing tax preparation services or acting as a facilitator or make representations to be a tax preparer or facilitator, without a tax preparer permit or a facilitator permit, as applicable, issued by the commissioner. Each applicant for such permit and renewal of such permit shall apply by electronic means in the form and manner prescribed by the commissioner.

(2) Each individual applying for a permit shall (A) be eighteen years of age or older, (B) have obtained a high school diploma, (C) possess a preparer tax identification number issued by the Internal Revenue Service that shall be used by the tax preparer or facilitator for each return such tax preparer is required to sign and each refund anticipation loan or refund anticipation check such facilitator is required to sign, and (D) for a tax preparer, present evidence satisfactory to the commissioner that the applicant has experience, education or training in tax preparation services, which evidence shall include, on and after January 1, 2022, a certificate of completion of an annual filing season program administered by the Internal Revenue Service.

(3) The commissioner may issue a permit under this subsection to an applicant that presents evidence satisfactory to the commissioner that the applicant is authorized to act as a tax preparer or facilitator in a state that has professional requirements substantially similar to the requirements for tax preparers or facilitators in this state. The commissioner shall provide written notice of the commissioner's decision approving or denying an application for issuance or renewal of a permit not later than sixty days after receipt of the application.

(4) The fee for an initial application shall be one hundred dollars. A permit issued pursuant to this subsection shall expire after two years and a tax preparer or facilitator seeking renewal shall submit a renewal application and renewal fee of fifty dollars.

(5) If an individual acts as both a tax preparer and a facilitator, the commissioner shall issue a single permit covering both activities.

(c) (1) If, at any time following the issuance or renewal of a permit issued pursuant to subsection (b) of this section, any information provided to the commissioner by the tax preparer or facilitator is no longer accurate, such tax preparer or facilitator shall promptly provide updated information to the commissioner.

(2) The issuance of a tax preparer permit or a facilitator permit shall not be advertised as an endorsement by the commissioner of the tax preparer's or facilitator's services.

(d) (1) On and after January 1, 2019, the commissioner may impose on any tax preparer or facilitator that has not been issued a permit pursuant to this section a civil penalty of one hundred dollars for each day that the commissioner finds such tax preparer or facilitator to have provided tax preparation services or acted as a facilitator.

(2) On and after January 1, 2019, if a tax preparer, facilitator or commercial tax return preparation business employs an individual to provide tax preparation services or a person to act as a facilitator that is not exempt under subsection (e) of this section and has not been issued a permit pursuant to this section, the commissioner may impose on such employing tax preparer, facilitator or business a civil penalty of five hundred dollars per violation.

(3) On and after January 1, 2019, whenever a tax preparer ceases to engage in the preparation of or in advising or assisting in the preparation of personal income tax returns or a facilitator ceases to engage in the activities of a facilitator, such tax preparer or facilitator may apply to the commissioner for inactive permit status. A permit that is granted inactive status shall not require renewal, except that such permit may be reactivated before its expiration upon application to the commissioner with a payment of the renewal fee.

(4) A tax preparer or facilitator whose permit is inactive shall neither act as a tax preparer or facilitator nor advertise such tax preparer's or facilitator's status as being permitted to act as a tax preparer or facilitator.

(e) The following persons shall be exempt from the provisions of sections 12-790a to 12-790c, inclusive:

(1) An accountant holding (A) an active license issued by the State Board of Accountancy, or (B) a valid and active permit, license or equivalent professional credential issued by another state or jurisdiction of the United States;

(2) An attorney and any person engaged in providing tax preparation services under the supervision of such attorney;

(3) An individual enrolled to practice before the Internal Revenue Service under Circular 230;

(4) An individual employed by a local, state or federal governmental agency while engaged in the performance of such person's official duties;

(5) An individual serving as an employee of or assistant to a tax preparer or a person exempted under this subsection, in the performance of official duties for such tax preparer or exempt person;

(6) An individual employed, full-time or part-time, to act as a tax preparer solely for the business purposes of such individual's employer;

(7) A person acting as a fiduciary on behalf of an estate; and

(8) An Internal Revenue Services qualified volunteer tax preparer, including, but not limited to, a tax preparer sponsored by the Tax Counseling for the Elderly program or the Volunteer Income Tax Assistance program.

(f) The commissioner shall maintain a public registry containing the names and principal business address of each person holding a permit pursuant to this section.

(g) The commissioner shall keep confidential any personal financial information gathered pursuant to an investigation of any alleged violation of sections 12-790a to 12-790c, inclusive, unless disclosure is (1) considered necessary for the investigation or prosecution of an alleged violation of this section or any regulation or order adopted thereunder, or (2) otherwise expressly authorized under the provisions of federal or state law. For purposes of this subsection, “personal financial information” includes, but is not limited to, returns and return information, as defined under federal and state law.

(P.A. 17-147, S. 16; P.A. 19-186, S. 7.)

History: P.A. 17-147 effective October 1, 2018; P.A. 19-186 amended Subsec. (b)(2) by adding “for a tax preparer,” and replacing “2020” with “2022” in Subpara. (D), amended Subsec. (d)(3) by adding “before its expiration” re reactivation of inactive permit, and amended Subsec. (e)(8) by adding “volunteer” re qualified tax preparer, effective July 8, 2019.