CT-1120 RC: Research and Experimental Expenditures Credit (2024)
Connecticut · Connecticut DRS · Used for tax years 2024
Form CT-1120RC calculates Connecticut’s Research and Experimental Expenditures Tax Credit for 2024, equal to 20% of the increase in qualifying Connecticut expenditures over the previous income year. It also tracks credits applied, exchanged, and carried forward.
Who files this form
Corporations use Form CT-1120RC to claim a credit for increased research and experimental expenditures conducted in Connecticut.
For 2024, the credit is 20% of qualifying expenditures that exceed the corporation’s qualifying expenditures for 2023. If the increase is zero or less, the corporation is not eligible for this credit.
What you'll need
- Corporation name, Connecticut Tax Registration Number, and income-year beginning and ending dates.
- A required detailed schedule identifying where in Connecticut the research and experimentation took place and the amounts spent directly on it in 2024 and 2023.
- For Part II, credit records for the corresponding years shown on the form, including amounts earned, applied, and exchanged.
- If requesting a credit exchange, Form CT-1120 XCH with Form CT-1120RC and all required supporting schedules and documentation attached.
How to file
Complete the form in blue or black ink and attach the required detailed expenditure schedule.
- In Part I, enter qualifying Connecticut expenditures for 2024 and 2023.
- Subtract the 2023 amount from the 2024 amount. If the result is positive, multiply it by 20%.
- Enter the credit on Part I, Line 4, and on Form CT-1120K, Part I-C, Column B.
- Complete Part II using the carryforward instructions printed on the back.
If applying to exchange the credit: File Form CT-1120 XCH separately from Form CT-1120 or Form CT-1120CU. Attach Form CT-1120RC and all required supporting schedules and documentation to the exchange application.
At the same time you file Form CT-1120 or Form CT-1120CU, mail the completed exchange application and supporting information to:
Department of Revenue Services
Corporation and Pass-Through Audit Unit Attn: XCH
450 Columbus Blvd Ste 1
Hartford CT 06103-1837
Check the box at the top of Form CT-1120 or Form CT-1120CU indicating that you are exchanging research and development tax credits, and enter the requested refund amount.
Common mistakes
- Using the wrong year’s form. Each form is year specific. Use the 2024 form for the 2024 income year.
- Using staples or the wrong ink. Do not use staples. Complete the form in blue or black ink only.
- Leaving out the detailed schedule. It must identify the Connecticut research locations and direct expenditures for both the current and previous income years.
- Including general overhead. Overhead and general or administrative expenses relating to the corporation as a whole, rather than specifically to the research effort, do not qualify.
- Claiming a credit without an increase. If Part I, Line 3 is zero or less, the corporation is not eligible.
- Recording only the refund amount as an exchanged credit. Part II, Column E requires the full credit amount before the 65% exchange rate is applied.
Questions people ask
How much is the 2024 credit?
The credit is 20% of the increase in qualifying Connecticut research and experimental expenditures over 2023 expenditures.
What expenses can qualify?
Only direct research and experimental expenditures that may be deducted under Internal Revenue Code § 174 and related regulations qualify. Examples include experimental or laboratory research costs, development of experimental or pilot models and similar property, and patent application costs such as attorney’s fees.
Can unused credit be carried forward or back?
Any remaining credit balance that exceeds the credit applied or exchanged may be carried forward for 15 income years. No carryback is allowed.
Can the credit be exchanged for a refund?
A taxpayer with gross income of no more than $70 million who cannot use the credit because it has no Corporation Business Tax liability may elect to carry 100% forward or may qualify to exchange it for a refund equal to 65% of its value, subject to limitations. See Form CT-1120 XCH for eligibility. Only credits earned in the current year and entitled to be claimed in that year may be exchanged.
How do combined-group members report shared credits?
Members included in the 2024 Form CT-1120CU must include in Part II, Column D credits shared with and used by another member of the combined group.