1 2017 Connecticut FORM Composite CT-1065/. CT-1120SI Income Tax Instructions This booklet contains information and instructions about the following forms: All Forms CT-1065/CT-1120SI. Form CT-1065/. CT-1120SI and their associated payments are required to be filed and paid Form CT-1065/ electronically. CT-1120SI EXT. Schedule CT K-1. Only amended returns and Form CT K-1T taxpayers who have valid electronic filing waivers from DRS. Form CT-1065/. CT-1120SI may submit paper returns. Supplemental Attachment Tax information is available on the DRS. website at More Department of Revenue Services (DRS) tax information is listed on the back cover. Page 1. Table of Contents What's 4 Member That Is Itself a Pass-Through 10. Other Taxes For Which the Pass- Through Entity May Be Liable .. 6 Composite Payment of Tax ..11. Registration ..6 Estimated Payments ..11. Abusive Tax Shelters .. 6 Domestic Production Activity Definitions.
2 7 Tax General 7 Angel Investor Tax Credit .. 11. Claiming the Tax Credits .. 12. How to Get 7. When to File Form CT-1065 12. Electronic Filing 7. Due 12. Forms and Publications .. 8. Extension Request .. 12. Taxpayer Service 8. Extension Request With Credit or Modernized e-File Program (MeF).. 8 Debit Card Payments .. 12. Who Must File .. 8 Extension of Time to Pay the Tax .. 13. Substantial Economic 8 Where to Accounting Period and Method of Payment Accounting .. 8 Pay Electronically .. 13. Pay by Credit Card or Debit Card .. 13. Requirement to Attach Copies of Federal 8 Interest and Penalties ..13. Interest .. 13. Requirement to Identify Exempt Members .. 8 Penalty for Late Payment or Late Filing .. 13. Disregarded 9 Penalty for Failure to File .. 14. Penalty for Willful Failure to File or Pay .. 14. Sale or Disposition of an Interest Penalty for Willful Filing of a in an Entity that Owns Property Fraudulent or Materially False Return.
3 14. in 9. Income Tax Refund ..14. Special Filing Requirements for Direct Deposit .. 14. Form CT-1040 9. Offset Against Debts .. 14. A PE Must Provide Schedule CT K-1s Waiver of Penalty .. 14. to All Members .. 9. Recordkeeping .. 14. How Members Report Resident Noncorporate Member .. 10. Nonresident Noncorporate Member .. 10. Electronic Filing! Free and secure! Page 2. Copies of Returns .. 14 Part VI Connecticut -Sourced Portion of Items From Federal Schedule K-1, Amended Returns .. 15 Form 1065, or Form 26. File a Paper 15 Part VII Connecticut Income Tax Credit Summary .. 29. Form CT-1065/CT-1120SI Instructions .16. Order in Which to Complete Schedules .. 16 Schedule CT K-1 Instructions .. 30. Pass-Through Entity Information .. 16 Part I Connecticut 30. Rounding Off to Whole Dollars .. 16 Part II Connecticut -Sourced Portion of Items From Federal Schedule K-1 of Part I Schedule A PE Computation of Form 1065 or Form 30.
4 Composite Tax Due .. 17. Part III Connecticut Income Tax Part I Schedule B PE Member 30. Composite 18. Part IV Connecticut Income Tax Part I Schedule C Federal Schedule K Credit 30. Information .. 19. Income Tax Credit 30. Part I Schedule D Connecticut -Sourced Income From Subsidiary PE(s) .. 21 Signature .. 30. Part II Allocation and Apportionment of Paid Preparer Signature .. 30. Income .. 22 Paid Preparer 30. Part III Place(s) of 23. Tax Information ..Back Cover Part IV Member Information .. 23. Part V Member's Share of Connecticut Modifications ..24. Additions .. 24. Subtractions .. 25. Electronic Filing! Free and secure! Page 3. What's New Angel Investor Tax Credit Businesses must source receipts from the sales Form CT-AIT, Angel Investor Tax Credit is of services and intangible property on a market obsolete and you are not required to complete it basis. Receipts from the rental, lease, or license of for taxable year 2017.
5 Report the Angel Investor tangible personal property are sourced according Tax Credit on Part I, Schedule B, Column E and on to the location of the property. Receipts from the Part VII Connecticut Income Tax Credit sale of tangible personal property continue to be Summary, Line 3. sourced based upon the location of the purchaser. Businesses that cannot reasonably determine where Penalty Waiver Requests their receipts should be sourced under the statutory rules may petition the Commissioner to use an There is a one year statute of limitations imposed alternate method that reasonably approximates on penalty waiver requests received on or after such sourcing rules. July 1, 2017. The Commissioner cannot consider a request received more than one year from the date a Sales of intangible property and tangible personal notice of such penalty was first sent to the taxpayer property are excluded from the apportionment requesting the waiver.
6 For the pass-through entity calculation (numerator and denominator) if such that self reports the penalty on its tax return, the property is not held by the business primarily for filing date of such return is considered the date on sale to customers in the ordinary course of the which the pass-through entity was notified of such company's trade or business. penalty. See Policy Statement 2017(6), Requests Do not apply the apportionment fraction to for Waiver of Civil Penalties. income from the rental of real property or gains or losses from the sale of real property. The entire Paid Preparers rental income from Connecticut real property or Paid tax preparers should include their tax Preparer gain from the sale of the property is allocated to Tax Identification Number (PTIN) issued by the Connecticut and the entire amount of any loss from Internal Revenue Service, not their Social Security the sale is allocated to Connecticut .
7 Rental income Number. from real property located outside Connecticut or any gain or loss from the sale of this property is Pass-through Entities allocated out of state. Single-Sales Factor Apportionment and If receipts from the sale of tangible personal Market-Based Sourcing: For taxable years property are excluded from the sales factor, the net beginning on or after January 1, 2017, a business, gain (or loss) from such sale should be allocated to trade, profession, or occupation carried on in the state where the property is located and is not Connecticut and outside of Connecticut must subject to apportionment. apportion its income using a single factor gross income percentage. These multistate businesses See Special Notice 2017(1), Legislative Changes are required to utilize market-based sourcing Regarding Single-Sales Factor Apportionment and for purposes of determining their gross income Market-Based Sourcing.
8 Percentage. Timely Filed Returns April 17, 2018. The 2017 Connecticut income tax return (and payments) will be considered timely if filed on Tuesday, April 17, 2018. In 2018, the due date for filing a Connecticut income tax return (April 15) falls on a Sunday. The next business day is Monday, April 16, which is a legal holiday in the District of Columbia (Emancipation Day). Therefore, for filing purposes the next business day is Tuesday, April 17, 2018. Page 4. Determination of nonresident partner's, Service providers includes an individual, corporation, shareholder's or beneficiary's share of income subchapter S corporation, partnership, personal within Connecticut : Effective for taxable years service corporation, and noncorporate entity that beginning on or after January 1, 2017, nonresident would be a personal service corporation if it were partners, shareholders, or beneficiaries must a corporation, qualified service corporation, and determine their share of income derived from noncorporate entity that would be a qualified service or connected with sources within Connecticut corporation if it were a corporation.
9 According to the statutory apportionment Pursuant to Conn. Gen. Stat. 12-711(a), provisions of Conn. Gen. Stat. 12-711, rather than compensation from nonqualified deferred according to Conn. Agencies Regs. 12-711(c)-3 compensation plans attributable to services and 12-711(c)-4 to the extent such regulations are performed within Connecticut , including inconsistent with the revisions to Conn. Gen. Stat. compensation required to be included in federal gross 12-711(c). income under section 457A of the Internal Revenue Code ( ), is subject to Connecticut income Internal Revenue Code section 457A tax. Thus, if you are a service provider to whom Reporting Requirements of Deferred 457A applies, you must report such income Compensation as Connecticut -sourced. The Tax Extenders and Alternative Minimum To the extent not properly included in income for Tax Relief Act of 2008 enacted Internal Revenue federal income tax purposes, any compensation Code section 457A.
10 Required to be recognized under 26 457A. Section 457A applies to deferred compensation that is attributable to services performed within paid to any service provider under a nonqualified Connecticut must be included as an addition deferred compensation plan of a nonqualified entity modification on Part V, Line 5. that is attributable to services performed after Consult your tax advisor to determine whether December 31, 2008. 457A applies to you. Deferred compensation attributable to services performed before January 1, 2009 must be reported on or before taxable year 2017. This requirement includes management companies providing services to offshore hedge funds. Electronic Filing! Free and secure! Page 5. Other Taxes For Which the Pass-Through Entity May Be Liable The information that follows is a general description of Controlling Interest Transfer Taxes other Connecticut taxes for which a pass-through entity Tax is imposed on the sale or transfer for consideration (PE) may be liable.