CONNECTICUT INCENTIVES

Connecticut shows an average deal value of $5.4 million with 51 new jobs created per deal

URBAN AND INDUSTRIAL SITES REINVESTMENT TAX CREDIT

This statutory program is designed to drive investment to the state’s urban centers and other economically distressed communities without depleting valuable state bond dollars. The state may provide up to $100 million in tax credits over a ten-year period to support projects that create significant jobs and capital investment in these undeserved areas.

The amount of credits offered is based a strict due diligence process, which includes a comprehensive financial review and an impact analysis The commissioner of DECD must submit any requests for credits over $20 million to the legislature for their review.

Projects using these credits must be, at a minimum, revenue neutral to the state and the law provides strict audit, compliance and penalty provisions that are strictly adhered to throughout the life of a project. Direct investments must be made in a minimum amount of $5 million.

The real property of an "eligible industrial site investment project" or an "eligible urban reinvestment project" may be eligible to receive 50% property tax abatement on that portion of the property tax due that is attributable to the increased value of such property as a result of the approved remediation, construction or other development.  The corporate tax credit is dispersed to the recipient over a ten-year period on the following schedule:

 

FIRST FIVE PROGRAM

The First Five program provides incentives to businesses that, depending on the size of the company’s investment, create a minimum of 200 new, full-time jobs in the state within the next two years, or 200 new, full-time jobs in the state within five years.

First Five augments and combines the state's best incentive and tax credit programs to encourage job creation.  In addition to the incentives based on the creation of the first 200 new full-time jobs within Connecticut, businesses would continue to receive credits for each net new job created above 200, increasing the potential to thousands of jobs in the state.

The program was designed to: (1) Attract new companies into the state; (2) Keep the companies we already have and retain their current job levels; and (3) encourage businesses to expand and add new jobs.

The program provides for a fair amount of flexibility in the way the incentives are structured; for example, benefits have come in the form of: Low or zero interest loans, forgivable loans, cash grants, training grants, and sales/use tax exemptions. The terms under which the aforementioned incentives were awarded are based on specific milestones for both job creation and capital investment, and also provide flexibility for future employment growth.

NEW JOBS CREATION TAX CREDIT

A tax credit is available to taxpayers that create at least 10 new jobs in Connecticut.  The tax credit allowed is an amount up to 60% of the income tax deducted and withheld from the wages of new employees and paid over to the state according to Chapter 229 of the Connecticut General Statutes. No later than 30 days after the close of the taxpayer's income year, the taxpayer shall provide DECD with information regarding the number of new jobs created for the year and the income tax deducted and withheld from the wages of such new employees and paid over to the state for such year.

The Commissioner shall issue a certificate of eligibility which includes the amount of the credit certified for the year. The tax credit may be granted to a taxpayer for not more than five successive income years.  There is no carry-forward or carry-back for unused credits.

A taxpayer shall be required to recapture a percentage of the tax credit allowed if: 

  • The number of new employees on account of which a taxpayer claimed the tax credit decreases to less than the number for which the Commissioner issued an eligibility certificate during any of the four years succeeding the first full income year following the issuance of an eligibility certificate; and
  • Those employees are not replaced by other employees who have not been shifted from an existing location of the taxpayer or a related person in this state. The taxpayer will be required to recapture a percentage of the credit as follows: 
 

OTHER CONNECTICUT INCENTIVE PROGRAMS

  • Manufacturers Assistance Act
  • Small Business Express Program (EXP)
  • IT Direct Loan Program
  • Film Production and Digital Media Tax Credit
  • Research and Development Tax Credit
  • Corporate Business Tax Credits
  • Sales & Use Tax Exemptions
  • Angel Investor Tax Credit Program