CHAPTER 229
INCOME TAX

      Sec. 12-700. Imposition of tax on income. Rate. (a) There is hereby imposed on the Connecticut taxable income of each resident of this state a tax:

      (1) At the rate of four and one-half per cent of such Connecticut taxable income for taxable years commencing on or after January 1, 1992, and prior to January 1, 1996.

      (2) For taxable years commencing on or after January 1, 1996, but prior to January 1, 1997, in accordance with the following schedule:

      (A) For any person who files a return under the federal income tax for such taxable year as an unmarried individual or as a married individual filing separately:

      (B) For any person who files a return under the federal income tax for such taxable year as a head of household, as defined in Section 2(b) of the Internal Revenue Code:

      (C) For any husband and wife who file a return under the federal income tax for such taxable year as married individuals filing jointly or a person who files a return under the federal income tax as a surviving spouse, as defined in Section 2(a) of the Internal Revenue Code:

      (D) For trusts or estates, the rate of tax shall be 4.5% of their Connecticut taxable income.

      (3) For taxable years commencing on or after January 1, 1997, but prior to January 1, 1998, in accordance with the following schedule:

      (A) For any person who files a return under the federal income tax for such taxable year as an unmarried individual or as a married individual filing separately:

      (B) For any person who files a return under the federal income tax for such taxable year as a head of household, as defined in Section 2(b) of the Internal Revenue Code:

      (C) For any husband and wife who file a return under the federal income tax for such taxable year as married individuals filing jointly or any person who files a return under the federal income tax for such taxable year as a surviving spouse, as defined in Section 2(a) of the Internal Revenue Code:

      (D) For trusts or estates, the rate of tax shall be 4.5% of their Connecticut taxable income.

      (4) For taxable years commencing on or after January 1, 1998, but prior to January 1, 1999, in accordance with the following schedule:

      (A) For any person who files a return under the federal income tax for such taxable year as an unmarried individual or as a married individual filing separately:

      (B) For any person who files a return under the federal income tax for such taxable year as a head of household, as defined in Section 2(b) of the Internal Revenue Code:

      (C) For any husband and wife who file a return under the federal income tax for such taxable year as married individuals filing jointly or any person who files a return under the federal income tax for such taxable year as a surviving spouse, as defined in Section 2(a) of the Internal Revenue Code:

      (D) For trusts or estates, the rate of tax shall be 4.5% of their Connecticut taxable income.

      (5) For taxable years commencing on or after January 1, 1999, but prior to January 1, 2003, in accordance with the following schedule:

      (A) For any person who files a return under the federal income tax for such taxable year as an unmarried individual or as a married individual filing separately:

      (B) For any person who files a return under the federal income tax for such taxable year as a head of household, as defined in Section 2(b) of the Internal Revenue Code:

      (C) For any husband and wife who file a return under the federal income tax for such taxable year as married individuals filing jointly or any person who files a return under the federal income tax for such taxable year as a surviving spouse, as defined in Section 2(a) of the Internal Revenue Code:

      (D) For trusts or estates, the rate of tax shall be 4.5% of their Connecticut taxable income.

      (6) For taxable years commencing on or after January 1, 2003, but prior to January 1, 2009, in accordance with the following schedule:

      (A) For any person who files a return under the federal income tax for such taxable year as an unmarried individual or as a married individual filing separately:

      (B) For any person who files a return under the federal income tax for such taxable year as a head of household, as defined in Section 2(b) of the Internal Revenue Code:

      (C) For any husband and wife who file a return under the federal income tax for such taxable year as married individuals filing jointly or any person who files a return under the federal income tax for such taxable year as a surviving spouse, as defined in Section 2(a) of the Internal Revenue Code:

      (D) For trusts or estates, the rate of tax shall be 5.0% of the Connecticut taxable income.

      (7) For taxable years commencing on or after January 1, 2009, but prior to January 1, 2011, in accordance with the following schedule:

      (A) For any person who files a return under the federal income tax for such taxable year as an unmarried individual:

      (B) For any person who files a return under the federal income tax for such taxable year as a head of household, as defined in Section 2(b) of the Internal Revenue Code:

      (C) For any husband and wife who file a return under the federal income tax for such taxable year as married individuals filing jointly or any person who files a return under the federal income tax for such taxable year as a surviving spouse, as defined in Section 2(a) of the Internal Revenue Code:

      (D) For any person who files a return under the federal income tax for such taxable year as a married individual filing separately:

      (E) For trusts or estates, the rate of tax shall be 6.5% of the Connecticut taxable income.

      (8) For taxable years commencing on or after January 1, 2011, in accordance with the following schedule:

      (A) (i) For any person who files a return under the federal income tax for such taxable year as an unmarried individual:

      (ii) Notwithstanding the provisions of subparagraph (A)(i) of this subdivision, for each taxpayer whose Connecticut adjusted gross income exceeds fifty-six thousand five hundred dollars, the amount of the taxpayer's Connecticut taxable income to which the three-per-cent tax rate applies shall be reduced by one thousand dollars for each five thousand dollars, or fraction thereof, by which the taxpayer's Connecticut adjusted gross income exceeds said amount. Any such amount of Connecticut taxable income to which, as provided in the preceding sentence, the three-per-cent tax rate does not apply shall be an amount to which the five-per-cent tax rate shall apply.

      (iii) Each taxpayer whose Connecticut adjusted gross income exceeds two hundred thousand dollars shall pay, in addition to the tax computed under the provisions of subparagraphs (A)(i) and (A)(ii) of this subdivision, an amount equal to seventy-five dollars for each five thousand dollars, or fraction thereof, by which the taxpayer's Connecticut adjusted gross income exceeds two hundred thousand dollars, up to a maximum payment of two thousand two hundred fifty dollars.

      (B) (i) For any person who files a return under the federal income tax for such taxable year as a head of household, as defined in Section 2(b) of the Internal Revenue Code:

      (ii) Notwithstanding the provisions of subparagraph (B)(i) of this subdivision, for each taxpayer whose Connecticut adjusted gross income exceeds seventy-eight thousand five hundred dollars, the amount of the taxpayer's Connecticut taxable income to which the three-per-cent tax rate applies shall be reduced by one thousand six hundred dollars for each four thousand dollars, or fraction thereof, by which the taxpayer's Connecticut adjusted gross income exceeds said amount. Any such amount of Connecticut taxable income to which, as provided in the preceding sentence, the three-per-cent tax rate does not apply shall be an amount to which the five-per-cent tax rate shall apply.

      (iii) Each taxpayer whose Connecticut adjusted gross income exceeds three hundred twenty thousand dollars shall pay, in addition to the tax computed under the provisions of subparagraphs (B)(i) and (B)(ii) of this subdivision, an amount equal to one hundred twenty dollars for each eight thousand dollars, or fraction thereof, by which the taxpayer's Connecticut adjusted gross income exceeds three hundred twenty thousand dollars, up to a maximum payment of three thousand six hundred dollars.

      (C) (i) For any husband and wife who file a return under the federal income tax for such taxable year as married individuals filing jointly or any person who files a return under the federal income tax for such taxable year as a surviving spouse, as defined in Section 2(a) of the Internal Revenue Code:

      (ii) Notwithstanding the provisions of subparagraph (C)(i) of this subdivision, for each taxpayer whose Connecticut adjusted gross income exceeds one hundred thousand five hundred dollars, the amount of the taxpayer's Connecticut taxable income to which the three-per-cent tax rate applies shall be reduced by two thousand dollars for each five thousand dollars, or fraction thereof, by which the taxpayer's Connecticut adjusted gross income exceeds said amount. Any such amount of Connecticut taxable income to which, as provided in the preceding sentence, the three-per-cent tax rate does not apply shall be an amount to which the five-per-cent tax rate shall apply.

      (iii) Each taxpayer whose Connecticut adjusted gross income exceeds four hundred thousand dollars shall pay, in addition to the tax computed under the provisions of subparagraphs (C)(i) and (C)(ii) of this subdivision, an amount equal to one hundred fifty dollars for each ten thousand dollars, or fraction thereof, by which the taxpayer's Connecticut adjusted gross income exceeds four hundred thousand dollars, up to a maximum payment of four thousand five hundred dollars.

      (D) (i) For any person who files a return under the federal income tax for such taxable year as a married individual filing separately:

      (ii) Notwithstanding the provisions of subparagraph (D)(i) of this subdivision, for each taxpayer whose Connecticut adjusted gross income exceeds fifty thousand two hundred fifty dollars, the amount of the taxpayer's Connecticut taxable income to which the three-per-cent tax rate applies shall be reduced by one thousand dollars for each two thousand five hundred dollars, or fraction thereof, by which the taxpayer's Connecticut adjusted gross income exceeds said amount. Any such amount of Connecticut taxable income to which, as provided in the preceding sentence, the three-per-cent tax rate does not apply shall be an amount to which the five-per-cent tax rate shall apply.

      (iii) Each taxpayer whose Connecticut adjusted gross income exceeds two hundred thousand dollars shall pay, in addition to the tax computed under the provisions of subparagraphs (D)(i) and (D)(ii) of this subdivision, an amount equal to seventy-five dollars for each five thousand dollars, or fraction thereof, by which the taxpayer's Connecticut adjusted gross income exceeds two hundred thousand dollars, up to a maximum payment of two thousand two hundred fifty dollars.

      (E) For trusts or estates, the rate of tax shall be 6.70% of the Connecticut taxable income.

      (9) The provisions of this subsection shall apply to resident trusts and estates and, wherever reference is made in this subsection to residents of this state, such reference shall be construed to include resident trusts and estates, provided any reference to a resident's Connecticut adjusted gross income derived from sources without this state or to a resident's Connecticut adjusted gross income shall be construed, in the case of a resident trust or estate, to mean the resident trust or estate's Connecticut taxable income derived from sources without this state and the resident trust or estate's Connecticut taxable income, respectively.

      (b) There is hereby imposed on the Connecticut taxable income derived from or connected with sources within this state of each nonresident a tax which shall be the product of an amount equal to the tax computed as if such nonresident were a resident, multiplied by a fraction, the numerator of which is the nonresident's Connecticut adjusted gross income derived from or connected with sources within this state and the denominator of which is the nonresident's Connecticut adjusted gross income, provided, if the nonresident's Connecticut adjusted gross income is less than such nonresident's Connecticut adjusted gross income derived from or connected with sources within this state, (1) such nonresident's Connecticut adjusted gross income derived from or connected with sources within this state, reduced by the amount of the exemption provided in section 12-702, shall be such nonresident's Connecticut taxable income derived from or connected with sources within this state and shall be multiplied by the tax rate specified in subsection (a) of this section for the purposes of determining the tax pursuant to this section and (2) such nonresident's Connecticut adjusted gross income derived from or connected with sources within this state shall be such nonresident's Connecticut adjusted gross income for the purposes of determining the credit pursuant to section 12-703. The provisions of this subsection shall also apply to nonresident trusts and estates and, wherever reference is made in this subsection to nonresidents of this state, such reference shall be construed to include nonresident trusts and estates, provided any reference to a nonresident's Connecticut adjusted gross income derived from sources within this state or to a nonresident's Connecticut adjusted gross income shall be construed, in the case of a nonresident trust or estate, to mean the nonresident trust or estate's Connecticut taxable income derived from sources within this state and the nonresident trust or estate's Connecticut taxable income, respectively.

      (c) (1) There is hereby imposed on the Connecticut taxable income derived from or connected with sources within this state of each part-year resident a tax which shall be a product equal to the tax computed as if such part-year resident were a resident, multiplied by a fraction, the numerator of which is the part-year resident's Connecticut adjusted gross income derived from or connected with sources within this state, as described in subsection (a) of section 12-717, and the denominator of which is the part-year resident's Connecticut adjusted gross income, as described in subdivision (2) of this subsection, provided, if the part-year resident's Connecticut adjusted gross income is less than such part-year resident's Connecticut adjusted gross income derived from or connected with sources within this state, (A) such part-year resident's Connecticut adjusted gross income derived from or connected with sources within this state, reduced by the amount of the exemption provided in section 12-702, shall be such part-year resident's Connecticut taxable income derived from or connected with sources within this state and shall be multiplied by the tax rate specified in subsection (a) of this section for the purposes of determining the tax pursuant to this section and (B) such part-year resident's Connecticut adjusted gross income derived from or connected with sources within this state shall be such part-year resident's adjusted gross income for the purposes of determining the credit pursuant to section 12-703. The provisions of this subsection shall apply to part-year resident trusts and, wherever reference is made in this subsection to part-year residents, such reference shall be construed to include part-year resident trusts, provided any reference to a part-year resident's Connecticut adjusted gross income derived from sources within this state or a part-year resident's Connecticut adjusted gross income shall be construed, in the case of a part-year resident trust, to mean the part-year resident trust's Connecticut taxable income derived from sources within this state and the part-year resident trust's Connecticut taxable income, respectively.

      (2) For purposes of subdivision (1) of this subsection and subsection (a), the Connecticut adjusted gross income of a part-year resident (A) changing his status from resident to nonresident shall be increased or decreased, as the case may be, by the items accrued under subdivision (1) of subsection (c) of section 12-717, to the extent not otherwise includable in Connecticut adjusted gross income for the taxable year and (B) changing his status from nonresident to resident shall be increased or decreased, as the case may be, by the items accrued under subdivision (2) of subsection (c) of section 12-717, to the extent included in Connecticut adjusted gross income for the taxable year.

      (d) The provisions of this chapter shall be applicable with respect to any person, trust or estate. Whenever, in this chapter, "any person" appears without "trust or estate", the reference to any person shall be deemed to include any trust and any estate unless, in the context of the particular provision, the reference to any person could not be applicable in the case of a trust or in the case of an estate.

      (June Sp. Sess. P.A. 91-3, S. 51, 168; May Sp. Sess. P.A. 92-5, S. 1, 37; P.A. 93-74, S. 63, 67; 93-332, S. 6, 42; P.A. 95-160, S. 30, 69; P.A. 96-139, S. 8, 12, 13; P.A. 97-309, S. 8, 23; 97-322, S. 5, 7, 9; P.A. 03-2, S. 22; June Sp. Sess. P.A. 09-3, S. 119; P.A. 11-6, S. 107.)

      History: June Sp. Sess. P.A. 91-3, S. 51, effective August 22, 1991, and applicable to taxable years of taxpayers commencing on or after January 1, 1991; May Sp. Sess. P.A. 92-5 made various technical and minor changes, effective June 19, 1992, and applicable to taxable years of taxpayers commencing on or after January 1, 1992; P.A. 93-74 amended Subsec. (c) to add provisions re applicability of tax for part-year residents as Subdiv. (2), designating previously existing provisions as Subdiv. (1) and prior Subdivs. as Subparas. (A) and (B), effective May 19, 1993, and applicable to taxable years commencing on and after January 1, 1993; P.A. 93-332 amended Subsec. (c)(2) making technical changes, effective June 25, 1993, and applicable to taxable years on or after January 1, 1993; P.A. 95-160 amended Subsecs. (a) to (c) to decrease tax rate to 3% from 4.5% in accordance with the schedules in Subsec. (a)(2) and (3), effective June 1, 1995, and applicable to income years commencing on or after January 1, 1996; P.A. 96-139 amended Subsec. (a) to add references to filing return status under the federal income tax as defined in the Internal Revenue Code, and amended Subsec. (a)(3)(C) to change the rate of tax for persons filing joint returns on taxable income over $9,000 from $180.00 to $270.00, plus 4.5% of the excess over $9,000, effective May 29, 1996, and changed effective date of P.A. 95-160 but without affecting this section; P.A. 97-309 added Subsec. (a)(4) to increase amount of taxable income taxed at 3% for the taxable year commencing January 1, 1998, and Subsec. (a)(5) to increase amount of taxable income taxed at 3% for taxable years commencing on or after January 1, 1999, effective the later of July 1, 1997, or the first day of the calendar month immediately following the last action necessary to make effective a final budget for the biennium ending June 30, 1999, provided for purposes of this section any legislative action to continue the appropriations for the fiscal year ending June 30, 1997, with adjustments shall not constitute a final budget for the biennium ending June 30, 1999, and shall be applicable to income years commencing on or after January 1, 1998; P.A. 97-322 amended Subsec. (a)(3) and (5) to increase amount of taxable income subject to 3% rate, effective July 1, 1997 and revised effective date of P.A. 97-309 but without affecting this section; P.A. 03-2 amended Subsec. (a)(5) and added new Subdiv. (6) to increase the top rate to 5% and redesignated existing Subdiv. (6) as Subdiv. (7), effective February 28, 2003, and applicable to taxable years commencing on or after January 1, 2003; June Sp. Sess. P.A. 09-3 amended Subsec. (a) to add "but prior to January 1, 2009," in Subdiv. (6), to add Subdiv. (7) re new rate schedule and to redesignate existing Subdiv. (7) as Subdiv. (8), effective September 9, 2009, and applicable to taxable years commencing on or after January 1, 2009; P.A. 11-6 amended Subsec. (a) to add Subdiv. (8) re tax rates for taxable years commencing on or after January 1, 2011, re phasing out the 3% tax rate for certain taxpayers and re benefit recapture for certain taxpayers, and redesignated existing Subdiv. (8) as Subdiv. (9), effective May 4, 2011, and applicable to taxable years commencing on or after January 1, 2011.

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

      (b) The credit allowed under this section shall not exceed two hundred fifteen dollars for the taxable year commencing on or after January 1, 1997, and prior to January 1, 1998; for taxable years commencing on or after January 1, 1998, but prior to January 1, 1999, three hundred fifty dollars; for taxable years commencing on or after January 1, 1999, but prior to January 1, 2000, four hundred twenty-five dollars; for taxable years commencing on or after January 1, 2000, but prior to January 1, 2003, five hundred dollars; for taxable years commencing on or after January 1, 2003, three hundred fifty dollars; for taxable years commencing on or after January 1, 2005, but prior to January 1, 2006, three hundred fifty dollars; for taxable years commencing on or after January 1, 2006, but prior to January 1, 2011, five hundred dollars; and for taxable years commencing on or after January 1, 2011, three hundred dollars. In the case of any husband and wife who file a return under the federal income tax for such taxable year as married individuals filing a joint return, the credit allowed, in the aggregate, shall not exceed such amounts for each such taxable year.

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

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

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

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

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

      (F) For taxable years commencing on or after January 1, 2008, but prior to January 1, 2011, in the case of any such taxpayer who files under the federal income tax for such taxable year as an unmarried individual whose Connecticut adjusted gross income exceeds fifty-six thousand five hundred dollars, the amount of the credit shall be reduced by ten per cent for each ten thousand dollars, or fraction thereof, by which the taxpayer's Connecticut adjusted gross income exceeds said amount.

      (G) For taxable years commencing on or after January 1, 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.

      (H) 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.

      (I) For taxable years commencing on or after January 1, 2014, but prior to January 1, 2015, in the case of any such taxpayer who files under the federal income tax for such taxable year as an unmarried individual whose Connecticut adjusted gross income exceeds sixty-two thousand five hundred dollars, the amount of the credit shall be reduced by fifteen per cent for each ten thousand dollars, or fraction thereof, by which the taxpayer's Connecticut adjusted gross income exceeds said amount.

      (J) For taxable years commencing on or after January 1, 2015, in the case of any such taxpayer who files under the federal income tax for such taxable year as an unmarried individual whose Connecticut adjusted gross income exceeds sixty-four thousand five hundred dollars, the amount of the credit shall be reduced by 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 fifty 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 seventy-eight 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 one hundred 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) The credit allowed under the provisions of this section shall be available for any person leasing a motor vehicle pursuant to a written agreement for a term of more than one year. Such lessee shall be entitled to the credit in accordance with the provisions of this section for the taxes actually paid by the lessor or lessee on such leased vehicle, provided the lessee was lawfully in possession of the motor vehicle at such time when the taxes first became due. The lessor shall provide the lessee with documentation establishing, to the satisfaction of the Commissioner of Revenue Services, the amount of property tax paid during the time period in which the lessee was lawfully in possession of the motor vehicle. The lessor of the motor vehicle shall not be entitled to a credit under the provisions of this section.

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

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

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

      (P.A. 97-309, S. 7, 23; 97-322, S. 4, 7, 9; P.A. 98-110, S. 1, 27; 98-262, S. 15, 22; P.A. 99-173, S. 2, 7, 65; May 9 Sp. Sess. P.A. 02-1, S. 80; June 30 Sp. Sess. P.A. 03-1, S. 101; P.A. 04-216, S. 52; P.A. 05-251, S. 76, 77; P.A. 06-186, S. 79; June Sp. Sess. P.A. 09-3, S. 124; P.A. 11-6, S. 111.)

      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.

      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 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 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;

      (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; and

      (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.

      (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 two hundred fifty thousand dollars. The credit shall be claimed in the taxable year in which such cash investment is made by the angel investor and shall not be transferable.

      (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 executive director of Connecticut Innovations, Incorporated, may require.

      (2) Said executive director shall, on or before August 1, 2010, and monthly thereafter, 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 three million dollars in each fiscal year thereafter. Connecticut Innovations, Incorporated, shall not reserve tax credits under this section for any investment made on or after July 1, 2014.

      (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 effectiveness of the credit under this section shall be conducted by Connecticut Innovations, Incorporated, by July 1, 2014. Such review shall be submitted to the joint standing committee of the General Assembly having cognizance of matters relating to commerce.

      (P.A. 10-75, S. 15; P.A. 11-254, S. 1; Oct. Sp. Sess. P.A. 11-1, S. 29.)

      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.

      Sec. 12-704e. Earned income tax credit. (a) Any resident of this state, as defined in subdivision (1) of subsection (a) of section 12-701, who is subject to the tax imposed under this chapter for any taxable year shall be allowed a credit against the tax otherwise due under this chapter in an amount equal to thirty per cent of the earned income credit claimed and allowed for the same taxable year under Section 32 of the Internal Revenue Code, as defined in subsection (a) of section 12-701.

      (b) If the amount of the credit allowed pursuant to this section exceeds the taxpayer's liability for the tax imposed under this chapter, the Commissioner of Revenue Services shall treat such excess as an overpayment and, except as provided under section 12-739 or 12-742, shall refund the amount of such excess, without interest, to the taxpayer.

      (c) If a married individual who is otherwise eligible for the credit allowed hereunder has filed a joint federal income tax return for the taxable year, but is required to file a separate return under this chapter for such taxable year, the credit for which such individual is eligible under this section shall be an amount equal to thirty per cent of the earned income credit claimed and allowed for such taxable year under said Section 32 of the Internal Revenue Code multiplied by a fraction, the numerator of which is such individual's federal adjusted gross income, as reported on such individual's separate return under this chapter, and the denominator of which is the federal adjusted gross income, as reported on the joint federal income tax return.

      (d) To the extent permitted under federal law, any state or federal earned income tax credit shall not be counted as income when received by an individual who is an applicant for, or recipient of, benefits or services under any state or federal program that provides such benefits or services based on need, nor shall any such earned income tax credit be counted as resources, for the purpose of determining the individual's or any other individual's eligibility for such benefits or services, or the amount of such benefits or services.

      (P.A. 11-6, S. 110; June Sp. Sess. P.A. 11-1, S. 3, 4, 14.)

      History: P.A. 11-6 effective May 4, 2011, and applicable to taxable years commencing on or after January 1, 2011; June Sp. Sess. P.A. 11-1, S. 3 and 4, amended Subsecs. (a) and (c) to change tax credit from 30% to 25%, effective July 1, 2011, and applicable to taxable years commencing on or after January 1, 2011; pursuant to June Sp. Sess. P.A. 11-1, S. 14, the changes made by June Sp. Sess. P.A. 11-1, S. 3 and 4, to Subsecs. (a) and (c) ceased to be effective on August 22, 2011, and the provisions of Subsecs. (a) and (c) in effect immediately prior to July 1, 2011, were reinstated.

      Sec. 12-707. Payment to commissioner of taxes withheld by employers or by purchasers of a business. (a)(1) Each employer required to deduct and withhold tax under this chapter from the wages of employees shall be liable for such tax and shall file a withholding return as prescribed by the Commissioner of Revenue Services and pay over to the commissioner, or to a depositary designated by the commissioner, the taxes so required to be deducted and withheld at the times specified in subsection (b) of this section.

      (2) Each payer of nonpayroll amounts shall deduct and withhold tax under this chapter from the nonpayroll amounts of payees, shall be liable for such tax, and shall file a withholding return as prescribed by the commissioner and pay over to the commissioner, or to a depository designated by the commissioner, the taxes so required to be deducted and withheld at the times specified in subsection (b) of this section.

      (b) (1) (A) With respect to the tax required to be deducted and withheld under this chapter from wages paid during any calendar year beginning on or after January 1, 2005, and in accordance with an annual determination described in subdivision (2) of this subsection, each employer shall be either a weekly remitter, monthly remitter or quarterly remitter for the calendar year. If an employer is a weekly remitter, the employer shall pay over to the commissioner the tax required to be deducted and withheld under this chapter in accordance with subdivision (3) of this subsection. If an employer is a monthly remitter, the employer shall pay over to the commissioner the tax required to be deducted and withheld under this chapter in accordance with subdivision (4) of this subsection. If an employer is a quarterly remitter, the employer shall pay over to the commissioner the tax required to be deducted and withheld under this chapter in accordance with subdivision (5) of this subsection. Notwithstanding any provision of this subsection, if an employer is a household employer, the employer shall pay over to the commissioner the tax required to be deducted and withheld under this chapter in accordance with subdivision (6) of this subsection.

      (B) With respect to the tax required to be deducted and withheld under this chapter from nonpayroll amounts paid during any calendar year beginning on or after January 1, 2005, and in accordance with an annual determination described in subdivision (2) of this subsection, each payer shall be either a weekly remitter, monthly remitter or quarterly remitter for the calendar year. If a payer is a weekly remitter, the payer shall pay over to the commissioner the tax required to be deducted and withheld under this chapter in accordance with subdivision (3) of this subsection. If a payer is a monthly remitter, the payer shall pay over to the commissioner the tax required to be deducted and withheld under this chapter in accordance with subdivision (4) of this subsection. If a payer is a quarterly remitter, the payer shall pay over to the commissioner the tax required to be deducted and withheld under this chapter in accordance with subdivision (5) of this subsection.

      (2) (A) The annual determination for an employer required to deduct and withhold tax under this chapter shall be based on the employer's reported liability for the tax required to be deducted and withheld under this chapter during the twelve-month look-back period, provided, if any employer fails timely to file one or more required withholding tax returns for the four quarterly periods within the twelve-month look-back period, the commissioner may base the annual determination for the employer on any information available to the commissioner. If an employer's reported liability for the tax required to be deducted and withheld under this chapter during the twelve-month look-back period was more than ten thousand dollars, the employer is a weekly remitter for the calendar year next succeeding such twelve-month period. If an employer's reported liability for the tax required to be deducted and withheld under this chapter during the twelve-month look-back period was more than two thousand dollars but not more than ten thousand dollars, the employer is a monthly remitter for the calendar year next succeeding such twelve-month period. If an employer's reported liability for the tax required to be deducted and withheld under this chapter during the twelve-month look-back period was two thousand dollars or less, the employer is a quarterly remitter for the calendar year next succeeding such twelve-month period. Notwithstanding any provision of this section, if an employer is a seasonal employer, the annual determination shall be based on the seasonal employer's reported liability for the tax required to be deducted and withheld under this chapter during the twelve-month look-back period multiplied by a fraction, the numerator of which is four, and the denominator of which is the number of quarterly periods during such twelve-month period that the employer paid wages to employees.

      (B) The annual determination for a payer required to deduct and withhold tax under this chapter shall be based on the payer's reported liability for the tax required to be deducted and withheld under this chapter during the look-back calendar year, provided, if any payer fails timely to file the required withholding tax return for the look-back calendar year, the commissioner may base the annual determination for the payer on any information available to the commissioner. If a payer's reported liability for the tax required to be deducted and withheld under this chapter during the look-back calendar year was more than ten thousand dollars, the payer is a weekly remitter for the calendar year for which the annual determination is being made. If a payer's reported liability for the tax required to be deducted and withheld under this chapter during the look-back calendar year was more than two thousand dollars but not more than ten thousand dollars, the payer is a monthly remitter for the calendar year for which the annual determination is being made. If a payer's reported liability for the tax required to be deducted and withheld under this chapter during the look-back calendar year was two thousand dollars or less, the payer is a quarterly remitter for the calendar year for which the annual determination is being made.

      (3) (A) An employer that is a weekly remitter shall pay over to the department the tax required to be deducted and withheld from wages under this chapter on or before the Wednesday next succeeding the weekly period during which the wages from which the tax was required to be deducted and withheld were paid to employees.

      (B) A payer that is a weekly remitter shall pay over to the department the tax required to be deducted and withheld from nonpayroll amounts under this chapter on or before the Wednesday next succeeding the weekly period during which the nonpayroll amounts from which the tax was required to be deducted and withheld were paid to payees.

      (4) (A) An employer that is a monthly remitter shall pay over to the department the tax required to be deducted and withheld from wages under this chapter on or before the fifteenth day of the month next succeeding the month during which the wages from which the tax was required to be deducted and withheld were paid to employees.

      (B) A payer that is a monthly remitter shall pay over to the department the tax required to be deducted and withheld from nonpayroll amounts under this chapter on or before the fifteenth day of the month next succeeding the month during which the nonpayroll amounts from which the tax was required to be deducted and withheld were paid to payees.

      (5) (A) An employer that is a quarterly remitter shall pay over to the department the tax required to be deducted and withheld from wages under this chapter on or before the last day of the month next succeeding the quarterly period during which the wages from which the tax was required to be deducted and withheld were paid to employees.

      (B) A payer that is a quarterly remitter shall pay over to the department the tax required to be deducted and withheld from nonpayroll amounts under this chapter on or before the last day of the month next succeeding the quarterly period during which the nonpayroll amounts from which the tax was required to be deducted and withheld were paid to payees.

      (6) An employer that is a household employer shall pay over to the department the tax required to be deducted and withheld under this chapter on or before the April fifteenth next succeeding the calendar year during which the wages from which the tax was required to be deducted and withheld were paid to household employees.

      (c) In the case of an overpayment of tax under this chapter by an employer, refund or credit shall be made to the employer only to the extent that the amount of such overpayment was not deducted and withheld by the employer.

      (d) The amount of tax required to be deducted and withheld and paid over to the commissioner under this chapter, when so deducted and withheld, shall be held to be a special fund in trust for the state. No employee or other person shall have any right of action against the employer in respect to any moneys deducted and withheld from wages and paid over to the commissioner in compliance or in intended compliance with this chapter.

      (e) (1) If an employer required to deduct and withhold tax under this chapter from the wages of employees and to pay over to the commissioner the taxes so required to be deducted and withheld sells out the employer's business or stock of goods or quits the employer's business, such employer's successors or assigns shall withhold a sufficient portion of the purchase price to cover the amount of such taxes, and any interest and penalties thereon, due and unpaid, as of the time of such sale or quitting of the business, until the employer produces a receipt from the commissioner showing that the taxes, interest and penalties have been paid or a certificate indicating that no such taxes are due.

      (2) If the purchaser of a business or stock of goods fails to withhold a portion of the purchase price as required, the purchaser shall be personally liable for the payment of the amount required to be withheld by the purchaser, to the extent of the purchase price, valued in money. Not later than sixty days after the latest of the dates specified in subdivision (3) of this subsection, the commissioner shall either issue a certificate indicating that no taxes are due or mail notice to the purchaser in the manner provided in section 12-728 of the amount that must be paid as a condition of issuing the certificate. Failure of the commissioner to mail the notice shall release the purchaser from any further obligation to withhold a portion of the purchase price as provided in this subsection. The period within which the obligation of the successor may be enforced shall begin when the employer sells out the employer's business or stock of goods or quits the business or when the assessment against the employer becomes final, whichever event occurs later.

      (3) For purposes of subdivision (2) of this subsection, the latest of the following dates shall apply:

      (A) The date that the commissioner receives a written request from the purchaser for a certificate;

      (B) The date of the sale or quitting of the business; or

      (C) The date that the employer's records are made available to the commissioner for audit.

      (f) As used in this section:

      (1) "Employer" means an employer, as defined in Section 3401 of the Internal Revenue Code;

      (2) "Payer" means a person making a payment of nonpayroll amounts to one or more payees;

      (3) "Payee" means a person receiving a payment of nonpayroll amounts from a payer;

      (4) "Nonpayroll amounts" includes (A) gambling winnings, other than Connecticut lottery winnings, that are paid to a resident, or to a person receiving payment on behalf of a resident, and that are subject to federal income tax withholding; (B) Connecticut lottery winnings that are required to be reported by the Connecticut Lottery Corporation to the Internal Revenue Service, whether or not subject to federal income tax withholding, whether paid to a resident, nonresident or a part-year resident, and whether paid to an individual, trust or estate; (C) pension and annuity distributions, where the recipient is a resident individual and has requested that tax be deducted and withheld under this chapter; (D) military retired pay, where the payee is a resident individual and has requested that tax be deducted and withheld under this chapter; (E) unemployment compensation, where the recipient has requested that tax be deducted and withheld under this chapter; and (F) payments made to an athlete or entertainer, where the payments are not wages for federal income tax withholding purposes and where the commissioner requires the payer to deduct and withhold tax under this chapter;

      (5) "Reported liability" means, in the case of an employer, the liability for the tax required to be deducted and withheld under this chapter, as shown on the employer's withholding tax returns for the four quarterly periods within the twelve-month look-back period, and, in the case of a payer, the liability for the tax required to be deducted and withheld under this chapter, as shown on the payer's withholding tax return for the look-back calendar year;

      (6) "Twelve-month look-back period" means the twelve-month period that ended on the June thirtieth next preceding the calendar year for which the annual determination for an employer is made by the commissioner;

      (7) "Look-back calendar year" means the calendar year preceding by two years the calendar year for which the annual determination for a payer is made by the commissioner;

      (8) "Seasonal employer" means an employer that regularly in the same one or more quarterly periods of each calendar year pays no wages to employees;

      (9) "Household employee" means an employee whose services of a household nature in or about a private home of an employer constitute domestic service in a private home of the employer, as the phrase is used in Section 3121(a)(7) of the Internal Revenue Code or in regulations adopted thereunder;

      (10) "Household employer" means an employer of a household employee;

      (11) "Weekly period" means the seven-day period beginning on a Saturday and ending on the following Friday; and

      (12) "Quarterly period" means the period of three full months beginning on the first day of January, April, July or October.

      (June Sp. Sess. P.A. 91-3, S. 58, 168; May Sp. Sess. P.A. 92-5, S. 7, 37; P.A. 94-139, S. 1, 2; P.A. 96-221, S. 21, 25; P.A. 03-107, S. 4; P.A. 04-201, S. 5; P.A. 11-61, S. 58.)

      History: June Sp. Sess. P.A. 91-3, S. 58, effective August 22, 1991, and applicable to taxable years of taxpayers commencing on or after January 1, 1991; May Sp. Sess. P.A. 92-5 made various technical and minor changes, effective June 19, 1992, and applicable to taxable years of taxpayers commencing on or after January 1, 1992; P.A. 94-139 allowed employer withholding less than $500 to file return and pay over taxes on or before the last day of the month next succeeding the calendar quarter for which the taxes were deducted and withheld, effective May 24, 1994, and applicable to taxes deducted and withheld on or after January 1, 1995; P.A. 96-221 limited provision re payment of taxes withheld of less than $500 per quarter to cases where federal law requires employer to pay withheld federal taxes on or before the last day of the month next succeeding such calendar quarter, effective June 4, 1996; P.A. 03-107 divided existing provisions into Subsecs. (a) and (b), added provision in Subsec. (a) re certain refunds to employers and made a technical change in Subsec. (b), effective for calendar years commencing on or after January 1, 2003; P.A. 04-201 divided existing provision into Subsecs. (a)(1), (c) and (d), amended Subsec. (a) to delete provision re deduction and withholding and make conforming changes in Subdiv. (1) and add Subdiv. (2) re nonpayroll amounts withheld by employers, added new Subsec. (b) re schedule for remittance of withheld amounts and added new Subsec. (e) re definitions, effective January 1, 2005, and applicable to wages and nonpayroll amounts paid on or after that date; P.A. 11-61 added new Subsec. (e) re withholding requirements upon purchase of a business or stock of goods and redesignated existing Subsec. (e) as Subsec. (f), effective July 1, 2011, and applicable to sales of a business or stock of goods occurring on or after that date.

      Sec. 12-733. Limits on time for making of deficiency assessments. (a) Except as otherwise provided in this chapter, a notice of proposed deficiency assessment shall be mailed to the taxpayer within three years after the return is filed. No deficiency shall be assessed or collected with respect to the year for which the return is filed unless the notice is mailed within the three-year period or the period otherwise fixed. Where, within the sixty-day period ending on the day on which the time prescribed by this chapter for mailing a notice of proposed deficiency assessment for any taxable year would otherwise expire, the commissioner receives a written document signed by a taxpayer showing that the taxpayer owes an additional amount of tax for such taxable year, the period during which a notice of proposed deficiency assessment may be mailed shall not expire before the day sixty days after the day on which the commissioner receives such document.

      (b) (1) If the taxpayer omits from Connecticut adjusted gross income, in the case of an individual, or from Connecticut taxable income, in the case of a trust or estate, an amount properly includable therein which is in excess of twenty-five per cent of the amount of Connecticut adjusted gross income or Connecticut taxable income, as the case may be, stated in the return, a notice of a proposed deficiency assessment may be mailed to the taxpayer not later than six years after the date on which the return is filed. For purposes of this subdivision, there shall not be taken into account any amount which is omitted in the return if such amount is disclosed in the return, or in a statement attached to the return, in a manner adequate to apprise the Commissioner of Revenue Services of the nature and the amount of such item.

      (2) If the taxpayer omits from the Connecticut adjusted gross income derived from or connected with sources within this state, in the case of a nonresident individual or part-year resident individual, or from Connecticut taxable income derived from or connected with sources within this state, in the case of a nonresident trust or estate of part-year resident trust, an amount properly includable therein which is in excess of twenty-five per cent of the amount of Connecticut adjusted gross income derived from or connected with sources within this state or Connecticut taxable income derived from or connected with sources within this state, as the case may be, stated in the return, a notice of a proposed deficiency assessment may be mailed to the taxpayer not later than six years after the date on which the return is filed. For purposes of this subdivision, there shall not be taken into account any amount which is omitted in the return if such amount is disclosed in the return, or in a statement attached to the return, in a manner adequate to apprise the commissioner of the nature and the amount of such item.

      (3) If an employer, as defined in section 12-707, omits from Connecticut wages an amount properly includable that is in excess of twenty-five per cent of the amount of Connecticut wages stated in the Connecticut withholding tax return required under section 12-707, a notice of a proposed deficiency assessment may be mailed to the employer not later than six years after the date on which the return is filed. For purposes of this subdivision, there shall not be taken into account any amount which is omitted in the return if such amount is disclosed in the return, or in a statement attached to the return, in a manner adequate to apprise the commissioner of the nature and the amount of such item.

      (4) If a pass-through entity, as defined in subparagraph (D) of subdivision (2) of subsection (b) of section 12-719, omits from the Connecticut adjusted gross income derived from or connected with sources within Connecticut of any nonresident individual who is a member of such pass-through entity an amount properly includable therein which is in excess of twenty-five per cent of the amount of Connecticut adjusted gross income derived from or connected with sources within Connecticut stated in the return, a notice of a proposed deficiency assessment may be mailed to the taxpayer not later than six years after the date on which the return is filed. For purposes of this subdivision, there shall not be taken into account any amount which is omitted in the return if such amount is disclosed in the return, or in a statement attached to the return, in a manner adequate to apprise the commissioner of the nature and the amount of such item.

      (c) (1) If no return is filed or if a taxpayer makes, wilfully or otherwise, a false or fraudulent return, a notice of deficiency assessment may be mailed to the taxpayer at any time.

      (2) If a taxpayer wilfully attempts in any manner to defeat or evade a tax imposed by this chapter, a notice of deficiency assessment may be mailed to the taxpayer at any time.

      (3) If a taxpayer fails to disclose a listed transaction, as defined in Section 6707A of the Internal Revenue Code, on the taxpayer's federal tax return, a notice of deficiency assessment may be mailed to the taxpayer at any time not later than six years after the return required under this chapter for the same taxable year was filed.

      (d) (1) If a taxpayer fails to comply with the requirements of section 12-727 by not reporting a change or correction by the United States Internal Revenue Service or other competent authority increasing, in the case of an individual, the individual's federal adjusted gross income or, in the case of a trust or estate, its federal taxable income, or by not reporting a change or correction which is treated in the same manner as if it were a deficiency for federal income tax purposes, or by not filing an amended return, a notice of a proposed deficiency assessment may be mailed to the taxpayer at any time. The provisions of this subdivision shall also apply if an individual's computation of tax under Section 1341(a)(4) or (5) of the Internal Revenue Code is changed or corrected by the United States Internal Revenue Service or other competent authority, and the individual fails to comply with the requirements of section 12-727.

      (2) If a taxpayer fails to comply with the requirements of subsection (b) of section 12-704 by not reporting a change or correction by tax officers or other competent authority of another jurisdiction affecting the amount of tax of such other jurisdiction that the taxpayer is finally required to pay, or by not filing an amended return, a notice of a proposed deficiency assessment may be mailed to the taxpayer at any time.

      (e) (1) If the taxpayer, pursuant to section 12-727, reports a change or correction by the United States Internal Revenue Service or other competent authority increasing, in the case of an individual, the individual's federal adjusted gross income or, in the case of a trust or estate, its federal taxable income or reports a change or correction which is treated in the same manner as if it were a deficiency for federal income tax purposes, or files an amended return, the assessment, if not deemed to have been made upon the filing of the report or amended return, may be made at any time not later than three years after such report or amended return is filed. The provisions of this subdivision shall also apply if an individual's computation of tax under Section 1341(a)(4) or (5) of the Internal Revenue Code is changed or corrected by the United States Internal Revenue Service or other competent authority, and the individual, pursuant to section 12-727, reports the change or correction.

      (2) If the taxpayer, pursuant to subsection (b) of section 12-704, reports a change or correction by tax officers or other competent authority of another jurisdiction affecting the amount of tax of such other jurisdiction that the taxpayer is finally required to pay, or files an amended return, the assessment, if not deemed to have been made upon the filing of the report or amended return, may be made not later than three years after such report or amended return is filed.

      (f) Where, before the expiration of the time prescribed in this section for the assessment of a deficiency, both the commissioner and the taxpayer shall have consented in writing to its assessment after such time, the deficiency may be assessed at any time prior to the expiration of the period agreed upon. The period so agreed upon may be extended by a subsequent agreement in writing made before the expiration of the period previously agreed upon and the commissioner may, in such a case, waive the statute of limitations against a claim for refund by such taxpayer.

      (g) For purposes of this section an income tax return filed before the last day prescribed by law or by any regulation adopted pursuant to law for the filing thereof, determined without regard to any extension of time for filing, shall be deemed to be filed on such last day. If a return of withholding tax for any period ending with or within a calendar year is filed before April fifteenth of the succeeding calendar year, such return shall be deemed to be filed on April fifteenth of such succeeding calendar year.

      (June Sp. Sess. P.A. 91-3, S. 84, 168; May Sp. Sess. P.A. 92-5, S. 23, 37; P.A. 95-5, S. 5, 6; P.A. 97-243, S. 43, 67; P.A. 98-244, S. 33, 35; P.A. 99-121, S. 25, 28; P.A. 00-174, S. 44, 83; P.A. 02-103, S. 38, 39; P.A. 05-116, S. 4; P.A. 11-61, S. 59.)

      History: June Sp. Sess. P.A. 91-3, S. 84, effective August 22, 1991, and applicable to taxable years of taxpayers commencing on or after January 1, 1991; May Sp. Sess. P.A. 92-5 amended Subsec. (f) to make a technical change, effective June 19, 1992, and applicable to taxable years of taxpayers commencing on or after January 1, 1992; P.A. 95-5 amended Subsec. (a) to allow 60 days for mailing a deficiency assessment notice after an amended tax return is filed, effective April 13, 1995, and applicable to taxable years commencing on or after January 1, 1995; P.A. 97-243 amended Subsec. (b) to add "Connecticut adjusted" before "gross income" and "Connecticut taxable income in the case of a trust or estate", effective June 24, 1997, and applicable to taxable years commencing on or after January 1, 1997; P.A. 98-244 amended Subsec. (b) to number existing text as Subdiv. (1) and added Subdiv. (2) re nonresident and part-year resident individuals, effective June 8, 1998, and applicable to taxable years commencing on or after January 1, 1998; P.A. 99-121 amended Subsecs. (d) and (e) to allow commissioner to make an assessment at any time where a taxpayer's federal adjusted gross income is changed or corrected by the IRS, whether or not the taxpayer's federal taxable income increases, if the taxpayer does not file an amended Connecticut income tax return, and to make technical changes, effective June 3, 1999; P.A. 00-174 amended Subsec. (c) to allow an assessment to be mailed at any time in the case of a false or fraudulent return, without regard to taxpayer's intent, amended Subsecs. (d) and (e) to allow a proposed assessment to be sent where computation of tax is changed or corrected by the Internal Revenue Service and amended Subsec. (g) to provide that determination of when return is deemed filed for purposes of section is without regard to any extension of time for filing, effective May 26, 2000, and applicable to returns for taxable years commencing on or after January 1, 1999; P.A. 02-103 made technical changes in Subsecs. (d)(1) and (e)(1); P.A. 05-116 amended Subsec. (c) by designating existing provisions as Subdiv. (1), inserting "assessment" therein, and adding Subdivs. (2) and (3) re limits on time for deficiency assessments where taxpayer attempted to defeat or evade tax or failed to disclose a listed transaction, effective June 24, 2005, and applicable to taxable years commencing on or after January 1, 2005; P.A. 11-61 amended Subsec. (b) to add Subdiv. (3) re time limit for deficiency assessment on an employer, add Subdiv. (4) re time limit for deficiency assessment on a pass-through entity, and make technical changes, effective June 21, 2011, and applicable to taxable years commencing on or after January 1, 2011.