CT-1040CRC: Claim of Right Credit (2024)
Connecticut · Connecticut DRS · Used for tax years 2024
Form CT-1040 CRC is used to calculate and claim Connecticut’s 2024 claim of right credit for income repaid after being included in an earlier year’s Connecticut adjusted gross income. It reports the income repaid, the reason for repayment, and the change in Connecticut income tax
Who files this form
Complete Form CT-1040CRC to claim the 2024 Connecticut claim of right credit if you meet all of these conditions:
- You are a resident, nonresident, or part-year resident individual who included income in Connecticut adjusted gross income for an earlier tax year.
- You were required to repay that income during the 2024 tax year.
- The repayment was more than $3,000.
- You determined your 2024 federal income tax liability under the claim of right rules using either the credit method or a qualifying deduction method.
If you used the deduction method, the repayment must have been deducted in determining federal taxable income and reported on Schedule A of federal Form 1040 or Form 1040-SR. You are not eligible if you deducted the repayment in determining federal adjusted gross income.
Trusts and estates are not eligible for this Connecticut credit.
What you'll need
Submit all of the following with your 2024 Connecticut income tax return:
- A completed Form CT-1040CRC.
- A copy of the completed 2024 federal income tax return you signed and filed, including all schedules and attachments.
- Proof that you were required to repay income included in Connecticut adjusted gross income for the earlier year or years, such as an employer’s letter requiring repayment of sales commissions.
- A copy of the completed federal income tax return you signed and filed for each year you received the income, including all schedules and attachments.
- Proof that you repaid the income during 2024, such as a copy of a cancelled check.
You will also need the Connecticut income tax liability for the earlier year or years to complete Lines 4 and 5.
How to file
Electronic filing: Select the Form CT-1040CRC indicator on your Connecticut income tax return. Complete Form CT-1040CRC and upload it as an attachment.
Paper filing: Complete the form in blue or black only and place it on top of your completed Connecticut income tax return. The Line 6 instructions tell you to check the Form CT-1040CRC box on the front of your Connecticut return. The supplied text does not give a mailing address.
Complete the credit calculation:
- On Line 1, list the years you received the income, the type and amount of income repaid during 2024, and the reasons for repayment.
- On Line 2, select your federal deduction or credit method. If you select the credit method, skip Line 3. If you select the deduction method, answer the Schedule A question on Line 3.
- On Line 4, enter your Connecticut income tax liability for the years you received the income, as originally filed, adjusted by DRS, or later amended.
- On Line 5, enter the Connecticut tax liability for those years after excluding the income repaid during 2024.
- Subtract Line 5 from Line 4. Report the Line 6 credit on your 2024 Form CT-1040, Line 20b; Form CT-1040NR/PY, Line 22a; or Form CT-1040X, Line 22b.
Submit the required supporting documents with your return.
Common mistakes
- Using the wrong year’s form. DRS warns that each form is year-specific and that using the correct year’s form helps prevent processing delays.
- Filing when the total repayment is $3,000 or less. The form says to stop and not file because you are not entitled to the credit.
- Continuing after answering “No” on Line 3. If you used the deduction method but did not report the repayment on Schedule A, the form says to stop and not file.
- Including income that was not in your earlier Connecticut adjusted gross income. The Line 1 instructions say the repaid income must have been included in that income.
- Overlooking a Social Security benefits recalculation. Repaying Social Security benefits may require recalculating taxable benefits to determine the amount to exclude from Connecticut adjusted gross income.
Questions people ask
How is the Connecticut claim of right credit calculated?
The credit is the decrease in your Connecticut income tax for the earlier year or years that results from excluding the income you repaid during 2024. Subtract Line 5 from Line 4 to calculate it.
Can I qualify if I used the federal deduction method?
Yes, if you meet the other eligibility conditions and deducted the repayment in determining federal taxable income on Schedule A of Form 1040 or Form 1040-SR. You do not qualify if the repayment was deducted in determining federal adjusted gross income.
Can nonresidents and part-year residents claim the credit?
Yes, if they meet the eligibility conditions. If you were a nonresident or part-year resident in the year you received the income, exclude the repaid income from that year’s Connecticut adjusted gross income when recalculating the tax. Also exclude it from Connecticut-sourced income to the extent the repayment is derived from or connected with Connecticut sources.
How is the credit applied to my 2024 tax?
The credit is treated as a tax payment against your 2024 Connecticut income tax liability. It is credited on the due date for payment of that liability.
Can a federal loss carryback from the repayment produce a Connecticut refund for an earlier year?
If the deduction creates a federal net operating loss carried back to years before the repayment year, no Connecticut refund claim is allowed for those earlier years on account of that loss carryback.