Form Ct-1040crc - Claim Of Right Credit - Connecticut Department Of Revenue - 2014 Page 2
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2Nonresidents or Part-Year Residents
Line 5: Compute the amount of your Connecticut income tax liability
for the year(s) of receipt after you exclude from your Connecticut
If you are a nonresident or part-year resident in the year of receipt
adjusted gross income for the year(s) of receipt the income you
and repaid income during your 2014 taxable year, you determine
repaid during your 2014 taxable year.
the decrease in your Connecticut income tax liability for the year
of receipt by excluding the repaid income from your Connecticut
Repayments of Social Security benefi ts may require the recalculation
adjusted gross income. To the extent the repayment is derived from
of your taxable benefi ts to determine the amount to exclude from
or connected with sources within this state, you also exclude this
Connecticut adjusted gross income.
repayment from your Connecticut-sourced income.
Line 6: Subtract Line 5 from Line 4. Include this amount on your
Documentation Needed to Prove Eligibility for the
2014 Form CT-1040, Line 20b; Form CT-1040NR/PY, Line 22a;
or Form CT-1040X, Line 22b. This amount is considered a tax
Connecticut Claim of Right Credit
payment and will be credited against your Connecticut income tax
You must submit all of the following documentation with your 2014
liability for your 2014 taxable year on the due date for payment of
Connecticut income tax return:
your 2014 Connecticut income tax liability. Check the box for Form
• A completed Form CT-1040CRC (attached to the back of your
CT-1040CRC on the front of your Connecticut return.
completed Connecticut income tax return);
• A copy of your completed 2014 federal income tax return,
Example 1: In December 2013, James, a Connecticut
including all schedules and attachments, that you signed and
resident, was advanced commissions by his employer. These
fi led for your 2014 taxable year;
commissions were included in his 2013 Connecticut adjusted
• Proof you were required to repay income you included in
gross income of $45,000. In May 2014, James’s employer
Connecticut adjusted gross income for the year(s) of receipt,
advised him that some of his customers had decided to cancel
such as a letter from your employer requiring you to repay sales
their purchases and he must repay $4,000 of the commissions
commissions;
he received during 2013. If James was required to determine
his federal income tax liability for the 2014 taxable year using
• A copy of your completed federal income tax return, including
the deduction method (IRC §1341(a)(4)), he would deduct
all schedules and attachments, that you signed and fi led for the
year(s) of receipt; and
the $4,000 as an itemized deduction on federal Form 1040,
Schedule A. Assuming James’s fi ling status on his 2013 and
• Proof you repaid the income during your 2014 taxable year, such
2014 Connecticut income tax returns is fi ling separately and
as a copy of your cancelled check.
his 2014 Connecticut adjusted gross income is $50,000, he
How to Compute the Connecticut Claim of Right Credit
computes his 2014 Connecticut income tax liability as follows:
Your Connecticut income tax liability for the year of repayment is
2014 Connecticut income tax liability on $50,000
$2,186
an amount equal to:
Minus difference between:
2013 tax payable on $45,000
= $1,846
• The tax for the year of repayment computed as if there was no
and
Connecticut claim of right credit; minus
2013 tax payable on $41,000 ($45,000 - $4,000) = $1,666
• The decrease in tax for the year(s) of receipt that would result
Claim of right credit
–
$ 180
solely from the exclusion of the amount of income you were
2014 Connecticut income tax liability
$2,006
subsequently required to repay from your Connecticut adjusted
If James was required to determine his federal income tax
gross income for the year(s) of receipt.
liability for the 2014 taxable year using the credit method (I.R.C.
Line Instructions
§1341(a)(5)), he would also compute his Connecticut income
tax liability as shown above.
Line 1: If you repaid income during your 2014 taxable year that you
included in your Connecticut adjusted gross income for an earlier
Example 2: In February 2013, Donna, a nonresident individual
taxable year(s), enter:
who works in Connecticut, realized a capital gain of $5,000 from
•
The year(s) of receipt;
the sale of a capital asset. The gain was not derived from or
•
A description of the type of income repaid;
connected with Connecticut sources. Donna included the gain
•
The reason for the repayment; and
in her 2013 Connecticut adjusted gross income of $35,000. In
September 2014, Donna was required to repay the purchaser
•
The amount of income repaid. This income must have been
of the assets $5,000 as a result of failure to fulfi ll conditions of
included in your Connecticut adjusted gross income for the
the purchase agreement.
year(s) of receipt.
If Donna was required to determine her federal income tax
Line 2: Check the box to indicate if you used the deduction method
liability for the 2014 taxable year using the deduction method
or the credit method to determine your 2014 federal income tax
(IRC §1341(a)(4)), she would deduct the repayment as a capital
liability. See Exceptions on the front for more information. If you
loss on her federal Form 1040, Schedule D. For Connecticut
checked the credit method, skip Line 3 and go to Line 4.
income tax purposes, Donna is not eligible for the claim of right
credit because she deducted the repayment under IRC §1341(a)
Line 3: Check the box to indicate if you reported the repayment as
(4) in determining her federal adjusted gross income.
a deduction on Schedule A of your 2014 federal Form 1040.
If Donna was required to determine her federal income tax
Line 4: Enter the amount of your Connecticut income tax liability
liability using the credit method (IRC §1341(a)(5)), she is
reported on your Connecticut income tax return for the year(s) of
eligible for the Connecticut claim of right credit to the extent that
receipt. Enter the amount as originally fi led, as adjusted by the
her 2013 tax liability would be decreased as a result of excluding
Department of Revenue Services (DRS), or as you later amended it.
the $5,000 she subsequently repaid.
12/14
Form CT-1040CRC Back (Rev.
)
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