This tax credit will not be allowed for any new employee hired by a qualified small business in any income year commencing on or after January 1, 2013. For information on tax credits available for new jobs created on or after January 1, 2012 through December 31, 2013, please see the Job Expansion Credit section.

Description and Applicable Taxes

A tax credit is available for tax years beginning on or after January 1, 2010, and prior to January 1, 2013, for a qualified small business that hires a new employee. The tax credit may be applied against the tax imposed under Chapters 207, 208, or 229, other than the liability imposed by §12-707, of the Connecticut General Statutes.

Definitions

Qualified small business means an employer who employs less than 50 employees in Connecticut and is subject to tax under Chapters 207, 208, or 229 of the Connecticut General Statutes.

New employee means a person hired after May 6, 2010, by a qualified small business, but does not include a person who was employed in Connecticut by a person related to the qualified small business during the prior 12 months or a temporary or seasonal employee.

Tax Credit Amount

The tax credit is equal to $200 per month for hiring a Connecticut resident. The new employee must be hired to fill a full-time job after May 6, 2010, and during the income years beginning on or after January 1, 2010, and before January 1, 2013. The tax credit can be claimed in the year of the hire and the next two income years.

No qualified small business may claim a tax credit for a new employee who is an owner, member, or partner in the business or who in not employed at the close of the income year of the qualified small business. No qualified small business may claim this tax credit and any other tax credit with respect to the same new employee.

Carryforward and Carryback Limitations

No carryforward or carryback is allowed.

How to Apply

A qualified small business shall apply to the Department of Economic and Community Development (DECD) and shall provide DECD with a list of its primary activities, its NAICS code, the number of employees on the date of its application, and any other information that DECD requires with the application. Within 30 days of receiving the application, DECD shall render a decision on the application and shall issue a certification letter if the qualified small business’ application is approved.

Flow-Through of the Tax Credit

If the qualified small business is an S corporation or an entity treated as a partnership for federal income tax purposes, then the tax credit may be claimed by the shareholders or partners. It the qualified small business is a single member limited liability company that is disregarded as an entity separate from its owner, then the tax credit may be claimed by its owner.

How to Claim the Tax Credit

Complete Form CT-1120 SBJ, Qualified Small Business Job Creation Tax Credit, and attach it to Form CT-1120K, Business Tax Credit Summary, and/or Form CT-207K, Insurance/Health Care Tax Credit Schedule.

To take this tax credit against the tax imposed by Chapter 229 of the Connecticut General Statutes, see the applicable income tax instruction booklet. 

Where to Get Additional Information

Direct inquiries to:

Connecticut Department of Economic and Community Development

Office of Business & Industry Development

Attn: Patricia Paesani

505 Hudson Street

Hartford CT 06106

860-270-8215

Patricia.paesani@ct.gov

www.ct.gov/ecd

Statutory and Regulatory References

Conn. Gen. Stat. §12-217nn