CT-1120 RC: Research and Experimental Expenditures Credit (2025)
Connecticut · Connecticut DRS · Used for tax years 2025
Form CT-1120RC calculates Connecticut’s Research and Experimental Expenditures Tax Credit, equal to 20% of the increase in qualifying Connecticut expenditures over the previous income year. It reports current and prior-year expenditures, credits applied or exchanged, and credit c
Who files this form
Use Form CT-1120RC to claim Connecticut’s Research and Experimental Expenditures Tax Credit. The credit equals 20% of the increase in qualifying Connecticut research and experimental expenditures over the previous income year.
For the 2025 credit, your qualifying 2025 expenditures must exceed your qualifying 2024 expenditures. If the difference is zero or less, you are not eligible for this credit.
What you'll need
- A detailed schedule identifying where in Connecticut the research and experimentation took place and the amounts spent directly on it in the 2025 and 2024 income years. This schedule must accompany the form.
- Your eligible taxpayer name, Connecticut Tax Registration Number, and income-year beginning and ending dates.
- For Part II, credit amounts earned in the listed years from 2010 through 2025, along with amounts applied or exchanged.
- If applying to exchange the credit, Form CT-1120 XCH with Form CT-1120RC or Form CT-1120 RDC and all required supporting schedules and documentation.
How to file
Complete the 2025 form in blue or black ink and attach the required detailed schedule.
- Enter qualifying Connecticut research and experimental expenditures for 2025 on Part I, Line 1, and for 2024 on Line 2.
- Subtract Line 2 from Line 1. If the result is zero or less, you are not eligible for the credit.
- Multiply a positive result by 20%. Enter the credit on Line 4 and on Form CT-1120K, Part I-C, Column B.
- Complete Part II to calculate credits applied to 2025 and carryforward to 2026.
If requesting a credit exchange: File Form CT-1120 XCH separately from Form CT-1120 or Form CT-1120CU. Attach the credit form and all required supporting schedules and documentation. At the same time you file the corporation return, mail the exchange application and supporting information to:
Department of Revenue Services
Corporation 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. This mailing address is provided for the exchange application.
Common mistakes
- Using the wrong year’s form. Each form is year specific. Use the 2025 form for the 2025 income year.
- Using other ink or staples. Use blue or black ink only. Do not use staples.
- Leaving out the detailed schedule. It must show the Connecticut research locations and direct expenditures for the current and previous income years.
- Including nonqualifying expenses. Overhead and general or administrative expenses relating to the business as a whole, rather than specifically to the research effort, do not qualify.
- Claiming a credit without an increase. You are not eligible if Part I, Line 3 is zero or less.
- Entering the refund amount as the credit exchanged in Part II, Column E. Enter the full credit amount before the 65% or 90% exchange rate is applied.
- Trying to exchange an older credit. Only credits earned in the current year and entitled to be claimed in that year may be exchanged.
Questions people ask
How much is the 2025 credit?
The credit is 20% of the amount by which qualifying Connecticut research and experimental expenditures for 2025 exceed those for 2024. If there is no increase, you are not eligible.
What expenses can qualify?
The form defines qualifying expenditures as those deductible under Internal Revenue Code § 174 and related regulations, limited to amounts spent directly on research and experimentation. Examples include experimental or laboratory research costs, development or improvement of products and processes, and patent application costs such as attorney’s fees.
Can unused credit be carried forward or back?
Any remaining credit balance beyond the amount 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% of the credit forward or may qualify to exchange it for a refund equal to 65% or 90% of its value, subject to limitations. See Form CT-1120 XCH for eligibility. Only credits earned and entitled to be claimed in the current year may be exchanged.