CT-1120 SF: Service Facility Credit (2024)
Connecticut · Connecticut DRS · Used for tax years 2024
Form CT-1120SF calculates the Service Facility Tax Credit against Connecticut Corporation Business Tax. It reports employment figures, property values, compensation, and tax information used to determine the credit for a DECD-approved service facility.
Who files this form
Use Form CT-1120SF to claim the Service Facility Tax Credit against the Connecticut Corporation Business Tax for an eligible service facility outside an Enterprise Zone in a targeted investment community.
To qualify:
- A written application must have been submitted to and approved by the Commissioner of the Department of Economic and Community Development (DECD).
- Your ten-year credit period must have begun before your 2018 income year. The credit is being phased out.
- The facility must meet the employment criteria. If Schedule A, Line 3 is zero or less, the corporation is not eligible.
A service facility located in an Enterprise Zone cannot qualify for this credit.
What you'll need
Have the following information ready to complete the 2024 form:
- Corporation name, Connecticut Tax Registration Number, income-year beginning and ending dates, and DECD eligibility certificate number, if applicable.
- The highest number of Connecticut employees in the year before the formal application for DECD certification.
- The number of Connecticut employees during 2024 and the number working at the service facility during 2024.
- Average monthly net book values and gross rents for property, machinery, and equipment at the eligible facility and across all Connecticut facilities.
- Wages, salaries, and other compensation paid during the income year, both for employees whose positions are directly attributable to the eligible facility and for all Connecticut employees.
- Total tax from Form CT-1120, Schedule C, Line 1, or the credit claimant’s total tax from the appropriate column of Form CT-1120CU, Part I, Line 9.
The calculated credit is also entered 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, or stapling the form. The form says to use blue or black ink only and not to use staples.
- Claiming the credit for a facility inside an Enterprise Zone. Such a facility cannot qualify.
- Claiming the credit when the ten-year credit period did not begin before the 2018 income year.
- Carrying the credit forward or back. Neither is allowed.
- Claiming a partial-year credit when eligibility ends. If the facility stops qualifying or the taxpayer stops occupying the property during the ten-year period, entitlement ends and no prorated credit is allowed for that income year.
Questions people ask
How long does the credit last?
The credit period is ten years. It starts with the first full income year after the year the eligibility certificate was issued and continues for the next nine income years. You may claim this credit only if that period began before your 2018 income year.
How do I count new employees at the service facility?
On Schedule A, subtract the highest Connecticut employee count in the year before the formal DECD certification application from the Connecticut employee count during 2024. If the result is zero or less, the corporation is not eligible. Line 5 is the smaller of that result and the number of employees working at the service facility during 2024.
What credit percentage applies?
The percentage depends on the number of new employees working at the service facility, as determined on Schedule A, Line 5:
- 300–599: 15%
- 600–899: 20%
- 900–1,199: 25%
- 1,200–1,499: 30%
- 1,500–1,999: 40%
- 2,000 or more: 50%
The percentage applies to the portion of Connecticut Corporation Business Tax allocated to the service facility, not automatically to the corporation’s entire tax.
How is rented property valued for Schedule B?
For rented property, machinery, and equipment, multiply gross rents payable during the income year by eight. Column A covers the eligible facility and machinery and equipment specifically acquired for and installed there. Column B includes property, machinery, and equipment rented to the taxpayer throughout Connecticut.
Where do I report the calculated credit?
Multiply Schedule B, Line 6 by Line 7. Enter the credit on Schedule B, Line 8 and on Form CT-1120K, Part I-B, Column A.