Connecticut General Statutes 12-217qq – Tax credit for employers making certain student loan payments
(a) As used in this section:
Terms Used In Connecticut General Statutes 12-217qq
- Commissioner: means the Commissioner of Revenue Services. See Connecticut General Statutes 12-213
- Corporation: A legal entity owned by the holders of shares of stock that have been issued, and that can own, receive, and transfer property, and carry on business in its own name.
- Income year: means the calendar year upon the basis of which net income is computed under this part, unless a fiscal year other than the calendar year has been established for federal income tax purposes, in which case it means the fiscal year so established or a period of less than twelve months ending as of the date on which liability under this chapter ceases to accrue by reason of dissolution, forfeiture, withdrawal, merger or consolidation. See Connecticut General Statutes 12-213
- month: means a calendar month, and the word "year" means a calendar year, unless otherwise expressed. See Connecticut General Statutes 1-1
- Paid: means "paid or accrued" or "paid or incurred" construed according to the method of accounting upon the basis of which net income is computed under this part. See Connecticut General Statutes 12-213
- Partner: means a partner, as defined in the Internal Revenue Code, and includes a member of a limited liability company that is treated as a partnership for federal income tax purposes. See Connecticut General Statutes 12-213
- Received: means "received" or "accrued" construed according to the method of accounting upon the basis of which net income is computed under this part. See Connecticut General Statutes 12-213
(1) “Authority” means the Connecticut Higher Education Supplemental Loan Authority;
(2) “Commissioner” means the Commissioner of Revenue Services;
(3) “Eligible education loan” means an authority loan, as defined in section 10a-223, that is in repayment;
(4) “Full-time” means required to work at least thirty-five hours per week;
(5) “Qualified employee” means an individual who (A) is a resident of the state, (B) has earned his or her first bachelor’s degree from an institution of higher education in the immediately preceding five-year period, (C) is employed full-time in the state by a qualified employer, (D) is not an owner, member or partner of such qualified employer or a family member of an owner, member or partner of such qualified employer, and (E) has received an eligible education loan;
(6) “Qualified employer” means a corporation licensed to operate a business in the state that is subject to tax under this chapter or chapter 207; and
(7) “Qualified small business” means a qualified employer that has gross receipts of not more than five million dollars for the calendar or income year, as applicable, for which a credit under this section is allowed.
(b) (1) For calendar or income years commencing on and after January 1, 2022, each qualified employer that employs a qualified employee and makes a payment directly to the authority on behalf of such qualified employee on an eligible education loan that was used to finance the qualified employee’s attendance at an institution of higher education may claim a credit against the tax imposed under this chapter or chapter 207. Such credit shall be granted in an amount equal to fifty per cent of the amount of payments made to the outstanding principal balance of such loans by the qualified employer during the calendar or income year, provided (A) the credit shall not be allowed against the tax imposed under this chapter and chapter 207 for the same loan payment, and (B) the amount of credit allowed for any calendar or income year with respect to a specific qualified employee shall not exceed two thousand six hundred twenty-five dollars.
(2) A qualified employer may claim the credit under subdivision (1) of this subsection for a payment made during the part of the calendar or income year the qualified employee worked and resided in the state, provided a qualified employee who worked and resided in the state for any part of a month shall be deemed to have worked and resided in the state for the entire month for purposes of this section.
(c) A qualified employer that claims the credit under subsection (b) of this section shall provide any documentation required by the commissioner in a form and manner prescribed by the commissioner.
(d) (1) A qualified small business may apply to the commissioner in accordance with the provisions of subdivision (2) of this subsection to exchange any credit allowed under subsection (b) of this section for a credit refund equal to the value of the credit. Any amount of credit refunded under this subsection shall be refunded to the qualified small business in accordance with the provisions of this chapter or chapter 207, as applicable. No interest shall be allowed or paid on any amount of credit refunded under this subsection. Any amount of credit refunded under this subsection shall be subject to the provisions of section 12-39h.
(2) Each application for a credit refund under this subsection shall be filed, on such forms and containing such information as prescribed by the commissioner, on or before the original due date of the return prescribed under section 12-205 or 12-222, as applicable, for the calendar or income year for which such credit was earned or, if applicable, the extended due date of such year’s return. No application for a credit refund under this subsection may be filed after the due date or extended due date, as the case may be, of such return.