Business Reinvestment

Research & Experimental (Nonincremental) Tax Credit

This tax credit was created in order to reward companies for investing in research and development within the State of Connecticut. A small business (gross income less than $100 million) is entitled to a tax credit equal to 6% of research and development costs. For companies making more than $100 million a year, there are different percentages for different levels of R&D costs.

Research and Experimental (Incrementable) Expenses Tax Credit

A tax credit for the incremental increase in research and experimental expenditures conducted in CT. To find the total tax credit amount, multiply by 20% the excess of the research and experimental expenditures conducted in CT during the current income year over the amount spent on such expenditures during the preceding income year.

Human Capital Investment Tax Credit

Corporations investing in human capital may be applicable for a tax credit equal to 5% of the amount paid or incurred by the corporation for human capital investment. Human capital investment includes funding of work education programs, in-state job training, and donations or contributions to higher education for improvements of technology, plus many others.

Fixed Capital Investment Tax Credit

This tax credit was created by the State in order to help businesses recover costs incurred for fixed capital within the State. This tax credit is 5% of the amount incurred in buying the fixed capital. This tax credit does not count towards inventory, land, buildings/structures or mobile transportation property. Qualified small business means a company that has gross income for the previous income year that does not exceed $100 million and has not met the gross income test through transactions with a related person.

Electronic Data Processing Equipment Property Tax Credit

A tax credit equal to 100% of the personal property tax owed and paid on electronic data processing equipment during any income year may be applied against the taxes owed. Electronic data processing equipment means computers, printers, peripheral computer equipment, bundled software, and any computer-based equipment acting as a computer.