CT-1120 RDC: Research and Development Credit (2025)
Connecticut · Connecticut DRS · Used for tax years 2025
Form CT-1120 RDC calculates Connecticut’s Research and Development Expenditures Tax Credit for 2025. It reports qualifying Connecticut research and development expenses, the credit available for the year, and credits applied, exchanged, or carried forward.
Who files this form
Use Form CT-1120 RDC to claim the credit for research and development expenses paid or incurred during the 2025 income year for research and development conducted in Connecticut.
Taxpayers with research and development expenses exceeding $200 million for the income year must obtain an eligibility certificate from the Department of Economic and Community Development (DECD) before claiming the credit.
What you'll need
- A required detailed schedule showing the type and amount of research and development expenses and the Connecticut location where the work was conducted.
- The eligible taxpayer’s name, Connecticut Tax Registration Number, and income-year beginning and ending dates.
- A DECD eligibility certificate number, if applicable.
- The amount from 2025 Form CT-1120RC, Part I, Line 3, for incremental Connecticut research and experimental expenditures.
- Your 2025 Connecticut Corporation Business Tax liability after other credits, or the combined group’s liability if filing a combined unitary return.
- Records of credits earned, applied, exchanged, and carried forward for the years listed in Part III.
If applying to exchange the credit, attach Form CT-1120 RDC or Form CT-1120RC, along with all required supporting schedules and documentation, to Form CT-1120 XCH.
How to file
Complete the form in blue or black ink and attach the required expense schedule. Use Part I to calculate the allowable tentative credit, Part II to calculate the 2025 credit, and Part III to calculate carryforwards. Enter the Part II, Line 7 credit on Form CT-1120K, Part I-C, Column B.
If applying to exchange the credit:
- 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 Form CT-1120 or Form CT-1120CU, mail the completed exchange application and supporting information to:
Department of Revenue Services
Corporation Tax 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. The form is year-specific, so use the 2025 version for the 2025 income year.
- Completing the form in ink other than blue or black.
- Using staples. The form says not to use them.
- Leaving out the required detailed schedule identifying expenses by type, amount, and Connecticut location.
Questions people ask
What counts as qualifying research and development expenses?
Examples include experimental or laboratory research costs connected with the taxpayer’s trade or business; costs of developing or improving an experimental model, process, product, formula, invention, or similar property; and patent application costs. The work must be conducted in Connecticut. General overhead and administrative expenses that relate to the corporation as a whole, rather than specifically to research and development, do not qualify.
What is a qualified small business for this credit?
It is a taxpayer whose gross income for the previous income year does not exceed $100 million and that has not met this test through transactions with a related person as defined in the cited Connecticut law. Part I, Line 4a directs qualified small businesses to multiply net research and development expenses on Line 3 by 6%.
Can unused credits be carried forward?
Unused credits earned during income years beginning on or after January 1, 2021, may be carried forward for 15 income years. Unused credits earned during income years beginning before January 1, 2021, may be carried forward indefinitely. No carryback is allowed.
Can I exchange the credit for a refund?
A taxpayer with gross income of no more than $70 million that 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. Only credits earned in the current year and entitled to be claimed in that year may be exchanged. See Form CT-1120 XCH for eligibility.