§ 12-704 — Credits for income taxes paid to other states.

Connecticut § 12-704

• Jurisdiction: Connecticut
• Title 12: Taxation
• Ch. 229: Income Tax

Text

(a)(1) Any resident or part-year resident of this state shall be allowed a credit against the tax otherwise due under this chapter in the amount of any income tax imposed on such resident or part-year resident for the taxable year by another state of the United States or a political subdivision thereof or the District of Columbia on income derived from sources therein and which is also subject to tax under this chapter. (2) In the case of a resident, the credit provided under this section shall not exceed the proportion of the tax otherwise due under this chapter that the amount of the taxpayer's Connecticut adjusted gross income derived from or connected with sources in the other taxing jurisdiction bears to such taxpayer's Connecticut adjusted gross income under this chapter. The provisions of this section shall also apply to resident trusts and estates and, wherever reference is made in this section to residents of this state, such reference shall be construed to include resident trusts and estates. (3) In the case of a part-year resident, the credit provided under this section shall not exceed the proportion of the tax otherwise due during the period of residency under this chapter that the amount of the taxpayer's Connecticut adjusted gross income derived from or connected with sources in the other jurisdiction during the period of residency bears to such taxpayer's Connecticut adjusted gross income during the period of residency under this chapter. The provisions of this section shall also apply to part-year resident trusts and, wherever reference is made in this section to part-year residents of this state, such reference shall be construed to include part-year resident trusts. (4) The allowance of the credit provided under this section shall not reduce the tax otherwise due under this chapter to an amount less than what would have been due if the income subject to taxation by such other jurisdiction were excluded from Connecticut adjusted gross income. (5) For purposes of this subsection, a tax on wages that is paid to another state of the United States or a political subdivision thereof or the District of Columbia by an employer on behalf of an employee and for which a credit is allowed by such other jurisdiction shall be considered an income tax and a comparable credit may be claimed by the resident or part-year resident, subject to the limitations set forth in this subsection, in the form and manner prescribed by the commissioner. (b) (1) (A) If, as a direct result of (i) the change to or correction of a taxpayer's income tax return filed with another state of the United States or a political subdivision thereof or the District of Columbia by the tax officers or other competent authority of such jurisdiction, or (ii) a taxpayer paying an assessment issued against the taxpayer by the tax officers or other competent authority of such jurisdiction for any taxable year for which the taxpayer has not filed an income tax return with such jurisdiction, the amount of tax of such other jurisdiction that the taxpayer is finally required to pay is different from the amount used to determine the credit allowed to any taxpayer under this section for any taxable year, the taxpayer shall provide notice of such difference to the commissioner by filing, on or before the date that is ninety days after the final determination of such amount, an amended return under this chapter, and shall concede the accuracy of such determination or state wherein it is erroneous. The commissioner may redetermine, and the taxpayer shall be required to pay, the tax for any taxable year affected, regardless of any otherwise applicable statute of limitations. (B) If a taxpayer files an amended return under this subdivision as a direct result of the taxpayer paying an assessment as set forth in subparagraph (A)(ii) of this subdivision, the taxpayer shall not be eligible for a refund if the amended return is filed more than five years after the original due date of the taxpayer's Connecticut income tax return, even if such amended return is filed within the time prescribed under subdivision (2) of subsection (b) of section 12-732 . (2) If, as a direct result of a taxpayer filing an amended income tax return with another state of the United States or a political subdivision thereof or the District of Columbia, the amount of tax of such other jurisdiction that the taxpayer is required to pay is different from the amount used to determine the credit allowed to any taxpayer under this section for any taxable year, the taxpayer shall provide notice of such difference to the commissioner by filing, on or before the date that is ninety days after the final determination is made on such amended return by the tax officers or other competent authority of such other jurisdiction, an amended return under this chapter and shall give such information as the commissioner may require. The commissioner shall treat any such amended return under this chapter reporting a tax overpayment as containing sufficient required information after proof of such final determination on such amended income tax return of such other jurisdiction by the tax officers or other competent authority of such other jurisdiction is submitted to the commissioner. The commissioner may redetermine, and the taxpayer shall be required to pay, the tax for any taxable year affected, regardless of any otherwise applicable statute of limitations. (3) The commissioner may by regulation prescribe such exceptions to the requirements of this subsection as he deems appropriate. (c) A taxpayer shall not be allowed credit under this section if such taxpayer has claimed or will claim a credit against the income tax imposed by such other jurisdiction for the tax paid or payable under this chapter. (d) Notwithstanding the provisions of subsection (c) of this section, if an individual 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 a taxable year and such individual is domiciled in another state of the United States, a political subdivision of such state, or the District of Columbia for the taxable year, such individual shall be allowed a credit under this section against the tax otherwise due under this chapter for income tax imposed by and paid to the qualifying jurisdiction in which such individual is domiciled on such individual's income from intangible personal property, to the extent such income is from property not employed in a business, trade, profession or occupation carried on in this state, and on such individual's income derived from or connected with sources within another state of the United States or the District of Columbia that does not impose an income tax on such income. This subsection shall apply only where the jurisdiction in which such individual is domiciled allows an income tax credit for the tax imposed by this state to an individual who is domiciled in this state for a taxable year but maintains a permanent place of abode in such jurisdiction and is in such jurisdiction for an aggregate of more than one hundred eighty-three days of the taxable year that is analogous to that provided in this subsection.

Legislative History

(June Sp. Sess. P.A. 91-3, S. 55, 168; May Sp. Sess. P.A. 92-5, S. 5, 37; P.A. 93-74, S. 40, 67; P.A. 96-94, S. 1, 2; P.A. 97-286, S. 4, 8; P.A. 98-244, S. 28, 35; June Sp. Sess. P.A. 01-6, S. 68, 85; P.A. 06-196, S. 92; P.A. 10-188, S. 12; P.A. 18-49, S. 19; 18-169, S. 42; P.A. 22-117, S. 2.) History: June Sp. Sess. P.A. 91-3, S. 55, effective August 22, 1991, and applicable to taxable years of taxpayers commencing on or after January 1, 1991; May Sp. Sess. P.A. 92-5 made various technical and minor changes, effective June 19, 1992, and applicable to taxable years of taxpayers commencing January 1, 1992; P.A. 93-74 made technical change in Subsec. (c), effective May 19, 1993, and applicable to taxable years commencing on and after January 1, 1993; P.A. 96-94 amended Subsec. (b) to make it applicable to taxable years commencing on or after January 1, 1991, effective May 8, 1996; P.A. 97-286 added new Subsec. (e) to enable commissioner to enter into agreements with other state taxing authorities, effective June 26, 1997, and applicable to taxable years commencing on or after January 1, 1997; P.A. 98-244 extended from 30 to 90 days the time period within which to report the filing of an amended return with another jurisdiction or changes or corrections made to the return filed by tax officials of another jurisdiction and eliminated the credit for taxes paid to a Canadian province, effective June 8, 1998, and applicable to taxable years commencing on or after January 1, 1998; June Sp. Sess. P.A. 01-6 amended Subsec. (a) to divide existing provisions into Subdivs. (1) to (4), making technical changes in Subdivs. (3) and (4), and to apply section to trusts and estates, effective July 1, 2001; P.A. 06-196 made technical changes in Subsec. (b)(1) and (2), effective June 7, 2006; P.A. 10-188 amended Subsec. (b)(2) to change date for filing amended return from 90 days after filing with another jurisdiction to 90 days after final determination on amended return is made by tax officers or other authority of such other jurisdiction, and to add provision re amended return treated as containing sufficient information after submission of proof of such final determination, effective June 7, 2010, and applicable to taxable years commencing on or after January 1, 2010; P.A. 18-49 amended Subsec. (a) to add Subdiv. (5) re comparable credit for tax on wages that is paid to another state, political subdivision thereof or the District of Columbia, effective May 31, 2018, and applicable to taxable years commencing on or after January 1, 2019; P.A. 18-169 made identical change as P.A. 18-49, effective June 14, 2018, and applicable to taxable years commencing on or after January 1, 2019; P.A. 22-117 amended Subsec. (b)(1) to redesignate existing provisions as Subpara. (A), add clause (i) designator and add clause (ii) re taxpayer paying assessment issued by other jurisdiction, and add Subpara. (B) re taxpayer filing amended return as direct result of paying such assessment, effective May 27, 2022, and applicable to taxable years commencing on or after January 1, 2022. Cited. 44 CS 461.