Form An 2008 - Special Instructions For Stimulus Depreciation

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STATE OF CONNECTICUT
AN 2008(7)
DEPARTMENT OF REVENUE SERVICES
25 Sigourney Street
Hartford CT 06106-5032
ANNOUNCEMENT
Stimulus Depreciation and Special Instructions
for Stimulus Depreciation Claimed by Non-Calendar Year Filers of
the 2007 Connecticut Corporation Business Tax Return
Purpose: This Announcement provides special
on or after December 31, 2007, corporations whose
2007 income year ends in 2008 (non-calendar year
instructions to non-calendar year filers on how to
filers) may claim the stimulus depreciation on their
report on their 2007 Connecticut corporation business
tax return the 50% additional first year depreciation
2007 federal income tax return.
(stimulus depreciation) deduction provided for in
Internal Revenue Code (I.R.C.) §168(k) for assets
placed in service after December 31, 2007, but
Will corporations that are subject to the
disallowed for purposes of calculating their 2007
Connecticut corporation business tax be
Connecticut corporation business tax liability.
eligible to claim the stimulus depreciation?
No. The 50% stimulus depreciation passed by the
United States Congress in the Stimulus Act is set
Effective Date: Applicable to property placed in
forth in I.R.C. §168(k). In 2002, the Connecticut
service after December 31, 2007, that is subject to the
General Assembly amended Conn. Gen. Stat.
50%
stimulus
depreciation
allowed
under
§12-217(b) to provide that, in determining net
I.R.C. §168(k).
income for purposes of the Connecticut corporation
business tax, the deduction allowed for depreciation
in I.R.C. §168(k) would not apply. See 2002 Conn.
Pub. Acts 1, §56 (May 9 Spec. Sess.).
Statutory Authority: Conn. Gen. Stat. §12-217(b).
If the stimulus depreciation is claimed for federal
income tax purposes, there will be a difference
Stimulus Depreciation: Section 103 of the
between Modified Accelerated Cost Recovery
Economic Stimulus Act of 2008, Pub. L. No. 110-
System (MACRS) depreciation allowed for federal
185, 122 Stat. 613 (February 13, 2008) (Stimulus
purposes and MACRS depreciation allowed for
Act) amends I.R.C. §168(k) to allow a 50% stimulus
Connecticut corporation business tax purposes. If a
depreciation for certain qualified property acquired
corporation claims the stimulus depreciation for
and placed in service after December 31, 2007, and
federal purposes, the regular MACRS depreciation is
before January 1, 2009, (before January 1, 2010, for
calculated after reducing the adjusted basis of the
certain transportation property and certain property
new property by the stimulus depreciation. Because
with a long production period). See also Rev. Proc.
this allowance is not permitted for Connecticut
2008-54, 2008-38 I.R.B. (August 29, 2008). As the
corporation business tax purposes, the corporation
stimulus
depreciation
may
be
claimed
by
will use a different basis to calculate MACRS
corporations that place qualifying property in service
depreciation for Connecticut and federal purposes.
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