CT-1120 MEC: Machinery and Equipment Expenditure Credit (2025)
Connecticut · Connecticut DRS · Used for tax years 2025
Form CT-1120 MEC calculates Connecticut’s Machinery and Equipment Expenditures Tax Credit for corporations. It compares qualifying 2025 expenditures with 2024 expenditures and uses the number of full-time permanent employees to determine the credit percentage.
Who files this form
Corporations use Form CT-1120 MEC to claim a credit for an increase in spending on qualifying machinery and equipment acquired for and installed in a Connecticut facility.
For the 2025 credit, qualifying spending must exceed qualifying spending in the 2024 income year. The credit rates are:
- 250 or fewer full-time permanent employees in Connecticut: 10% of the increase.
- 251 to 800 full-time permanent employees in Connecticut: 5% of the increase.
If 2025 qualifying spending minus 2024 qualifying spending is zero or less, the corporation is not eligible for this credit.
What you'll need
To complete the form, have:
- Schedules showing Connecticut machinery and equipment expenditures for the 2025 and 2024 income years. Attach a schedule for each year.
- The number of full-time permanent employees for 2025.
- The corporation’s name and Connecticut Tax Registration Number.
- The income year’s beginning and ending dates.
The calculated credit also goes on Form CT-1120K, Part I-B, Column A.
Common mistakes
- Using the wrong year’s form. Each form is year specific, and the correct year’s form must be used.
- Using ink other than blue or black. Complete the form in blue or black ink only.
- Stapling the form. The form says not to use staples.
- Claiming the same expenditures for another credit. Expenditures claimed for this credit cannot also be claimed for any other Corporation Business Tax credit.
- Claiming a credit when spending did not increase. If Line 3 is zero or less, the corporation is not eligible.
Questions people ask
How do I calculate the 2025 credit?
Subtract qualifying 2024 expenditures from qualifying 2025 expenditures. If the result is positive, multiply it by 10% for a corporation with 250 or fewer full-time permanent employees in Connecticut, or 5% for one with 251 to 800. Enter the credit on Line 6 and on Form CT-1120K, Part I-B, Column A.
What counts as a full-time permanent employee?
The employee’s wages, salary, or other compensation must be paid in Connecticut. The job must require an average of at least 35 hours of service each week for at least eight consecutive weeks.
What machinery and equipment expenditures qualify?
Qualifying expenditures are for machinery and equipment acquired for and installed in a Connecticut facility used by the corporation in its trade or business. Machinery includes its component parts and devices needed to control, regulate, or operate it. Equipment is a separate device that is essential to the business. Repair and replacement parts can also qualify.
Do furniture, vehicles, or construction equipment qualify?
Furniture, fixtures, automobiles, and other property used for transportation are excluded from both the machinery and equipment definitions. Construction equipment is also excluded from the equipment definition.