Sec. 12-211a. Limit on credits under this chapter. Exceptions.

(a)(1) Notwithstanding any provision of the general statutes, and except as otherwise provided in subdivision (5) of this subsection or in subsection (b) of this section, the amount of tax credit or credits otherwise allowable against the tax imposed under this chapter for any calendar year shall not exceed seventy per cent of the amount of tax due from such taxpayer under this chapter with respect to such calendar year of the taxpayer prior to the application of such credit or credits.

(2) For the calendar year commencing January 1, 2011, “type one tax credits” means tax credits allowable under section 12-217jj, 12-217kk or 12-217ll; “type two tax credits” means tax credits allowable under section 38a-88a; “type three tax credits” means tax credits that are not type one tax credits or type two tax credits; “thirty per cent threshold” means thirty per cent of the amount of tax due from a taxpayer under this chapter prior to the application of tax credit; “fifty-five per cent threshold” means fifty-five per cent of the amount of tax due from a taxpayer under this chapter prior to the application of tax credits; and “seventy per cent threshold” means seventy per cent of the amount of tax due from a taxpayer under this chapter prior to the application of tax credits.

(3) For the calendar year commencing January 1, 2012, “type one tax credits” means the tax credit allowable under section 12-217ll; “type two tax credits” means tax credits allowable under section 38a-88a; “type three tax credits” means tax credits that are not type one tax credits or type two tax credits; “thirty per cent threshold” means thirty per cent of the amount of tax due from a taxpayer under this chapter prior to the application of tax credit; “fifty-five per cent threshold” means fifty-five per cent of the amount of tax due from a taxpayer under this chapter prior to the application of tax credits; and “seventy per cent threshold” means seventy per cent of the amount of tax due from a taxpayer under this chapter prior to the application of tax credits.

(4) For calendar years commencing on or after January 1, 2013, “type one tax credits” means the tax credit allowable under sections 12-217jj, 12-217kk and 12-217ll; “type two tax credits” means tax credits allowable under section 38a-88a; “type three tax credits” means tax credits that are not type one tax credits or type two tax credits; “thirty per cent threshold” means thirty per cent of the amount of tax due from a taxpayer under this chapter prior to the application of tax credit; “fifty-five per cent threshold” means fifty-five per cent of the amount of tax due from a taxpayer under this chapter prior to the application of tax credits; and “seventy per cent threshold” means seventy per cent of the amount of tax due from a taxpayer under this chapter prior to the application of tax credits.

(5) For calendar years commencing on or after January 1, 2011, and subject to the provisions of subdivisions (2), (3) and (4) of this subsection, the amount of tax credit or credits otherwise allowable against the tax imposed under this chapter shall not exceed:

(A) If the tax credit or credits being claimed by a taxpayer are type three tax credits only, thirty per cent of the amount of tax due from such taxpayer under this chapter with respect to said calendar years of the taxpayer prior to the application of such credit or credits.

(B) If the tax credit or credits being claimed by a taxpayer are type one tax credits and type three tax credits, but not type two tax credits, fifty-five per cent of the amount of tax due from such taxpayer under this chapter with respect to said calendar years of the taxpayer prior to the application of such credit or credits, provided (i) type three tax credits shall be claimed before type one tax credits are claimed, (ii) the type three tax credits being claimed may not exceed the thirty per cent threshold, and (iii) the sum of the type one tax credits and the type three tax credits being claimed may not exceed the fifty-five per cent threshold.

(C) If the tax credit or credits being claimed by a taxpayer are type two tax credits and type three tax credits, but not type one tax credits, seventy per cent of the amount of tax due from such taxpayer under this chapter with respect to said calendar years of the taxpayer prior to the application of such credit or credits, provided (i) type three tax credits shall be claimed before type two tax credits are claimed, (ii) the type three tax credits being claimed may not exceed the thirty per cent threshold, and (iii) the sum of the type two tax credits and the type three tax credits being claimed may not exceed the seventy per cent threshold.

(D) If the tax credit or credits being claimed by a taxpayer are type one tax credits, type two tax credits and type three tax credits, seventy per cent of the amount of tax due from such taxpayer under this chapter with respect to said calendar years of the taxpayer prior to the application of such credits, provided (i) type three tax credits shall be claimed before type one tax credits or type two tax credits are claimed, and the type one tax credits shall be claimed before the type two tax credits are claimed, (ii) the type three tax credits being claimed may not exceed the thirty per cent threshold, (iii) the sum of the type one tax credits and the type three tax credits being claimed may not exceed the fifty-five per cent threshold, and (iv) the sum of the type one tax credits, the type two tax credits and the type three tax credits being claimed may not exceed the seventy per cent threshold.

(E) If the tax credit or credits being claimed by a taxpayer are type one tax credits and type two tax credits only, but not type three tax credits, seventy per cent of the amount of tax due from such taxpayer under this chapter with respect to said calendar years of the taxpayer prior to the application of such credits, provided (i) the type one tax credits shall be claimed before type two tax credits are claimed, (ii) the type one tax credits being claimed may not exceed the fifty-five per cent threshold, and (iii) the sum of the type one tax credits and the type two tax credits being claimed may not exceed the seventy per cent threshold.

(b) (1) For a calendar year commencing on or after January 1, 2011, and prior to January 1, 2013, the amount of tax credit or credits otherwise allowable against the tax imposed under this chapter for such calendar year may exceed the amount specified in subsection (a) of this section only by the amount computed under subparagraph (A) of subdivision (2) of this subsection, provided in no event may the amount of tax credit or credits otherwise allowable against the tax imposed under this chapter for such calendar year exceed one hundred per cent of the amount of tax due from such taxpayer under this chapter with respect to such calendar year of the taxpayer prior to the application of such credit or credits.

(2) (A) The taxpayer's average monthly net employee gain for a calendar year shall be multiplied by six thousand dollars.

(B) The taxpayer's average monthly net employee gain for a calendar year shall be computed as follows: For each month in the calendar year, the taxpayer shall subtract from the number of its employees in this state on the last day of such month the number of its employees in this state on the first day of the calendar year. The taxpayer shall total the differences for the twelve months in the calendar year, and such total, when divided by twelve, shall be the taxpayer's average monthly net employee gain for the calendar year. For purposes of this computation, only employees who are required to work at least thirty-five hours per week and only employees who were not employed in this state by a related person, as defined in section 12-217ii, within the twelve months prior to the first day of the calendar year may be taken into account in computing the number of employees.

(C) If the taxpayer's average monthly net employee gain is zero or less than zero, the taxpayer may not exceed the amount specified in subsection (a) of this section.

(June 30 Sp. Sess. P.A. 03-1, S. 86; P.A. 11-6, S. 75; 11-61, S. 48; Oct. Sp. Sess. P.A. 11-1, S. 54; Dec. Sp. Sess. P.A. 12-1, S. 42; P.A. 13-184, S. 72; P.A. 15-244, S. 85; June Sp. Sess. P.A. 17-2, S. 625.)

History: June 30 Sp. Sess. P.A. 03-1 effective August 16, 2003; P.A. 11-6 designated existing provisions as Subsec. (a)(1) and amended same to change “income year” to “calendar year”, added Subsec. (a)(2) re two-year 30% cap on credits and added Subsec. (b) re allowable credit for average monthly net employee gain, effective May 4, 2011, and applicable to calendar years commencing on or after January 1, 2011; P.A. 11-61 amended Subsec. (a) by adding new Subdiv. (2) re definitions, re designating existing Subdiv. (2) re tax credit limit as Subdiv. (3)(A) and adding Subdiv. (3)(B) to (E) re amount of allowable tax credits, and amended Subsec. (b)(2)(C) by replacing reference to 30% limit with reference to amount specified in Subsec. (a), effective June 21, 2011, and applicable to calendar years commencing on or after January 1, 2011; Oct. Sp. Sess. P.A. 11-1 amended Subsec. (a)(2) by adding Secs. 12-217jj and 12-217kk as type one tax credits, effective October 27, 2011; Dec. Sp. Sess. P.A. 12-1 amended Subsec. (a) to replace “For purposes of this subsection” with “For the calendar year ending December 31, 2011” in Subdiv. (2), add new Subdiv. (3) re definitions applicable for the calendar year ending December 31, 2012, redesignate existing Subdiv. (3) as Subdiv. (4) and add “and subject to the provisions of subdivisions (2) and (3) of this subsection” therein, and make a technical change, effective December 21, 2012; P.A. 13-184 amended Subsec. (a) to add new Subdiv. (4) re limits for calendar years 2013 and 2014, redesignate existing Subdiv. (4) as Subdiv. (5), and make technical changes, effective June 18, 2013, and applicable to calendar years commencing on or after January 1, 2013; P.A. 15-244 amended Subsec. (a)(4) to apply limits to calendar years commencing January 1, 2015, and January 1, 2016, and amended Subsec. (a)(5) to apply limits to calendar years commencing prior to January 1, 2017, effective June 30, 2015, and applicable to calendar years commencing on or after January 1, 2015; June Sp. Sess. P.A. 17-2 amended Subsec. (a) to replace “For the calendar years commencing January 1, 2013, January 1, 2014, January 1, 2015, and January 1, 2016” with “For calendar years commencing on or after January 1, 2013,” in Subdiv. (4) and to delete “and prior to January 1, 2017,” in Subdiv. (5), effective October 31, 2017.