Form Ct-1120 Pic - Connecticut Information Return For Passive Investment Companies (Page 2 of 3) in pdf

Department of Revenue Services

Form CT-1120 PIC

State of Connecticut

Information Return for Passive Investment Companies

(Rev. 12/13)

Instructions

Complete this form in blue or black ink only. Use Form CT-1120

Intangible investments of a PIC are limited to:

PIC, Information Return for Passive Investment Companies,

• Loans secured by real property, as defined in Conn. Gen.

to establish that the corporation meets the requirements of a

Stat. §12-218b(a)(11); or

passive investment company (PIC) as defined in Conn. Gen.

• Short-term investments of cash.

Stat. §12-213(a)(27).

Line Instructions

Filing Instructions

Line 1 - Enter the date the PIC began commercial operations

If the PIC parent company (taxpayer) is subject to the Connecticut

corporation business tax, Form CT-1120 PIC must be attached

and the date the PIC began commercial operations in

Connecticut.

to Form CT-1120, Corporation Business Tax Return. If the PIC

parent company is not subject to such tax, Form CT-1120 PIC

Line 2 - Enter the PIC’s parent company name and its

must be filed with the Department of Revenue Services (DRS)

Connecticut Tax Registration Number.

by April 1, following the close of its taxable year.

Line 3 - Check the appropriate box to indicate whether a common

Mail to: Department of Revenue Services

paymaster is used. If Yes, indicate the common paymaster’s

PO Box 2974

name and Connecticut Tax Registration Number.

Hartford CT 06104-2974

Line 4 - Check the appropriate box to indicate whether the PIC

Definitions

had at least five full-time equivalent employees in Connecticut.

Passive investment company (PIC) means any corporation

Enter the number of employees on the appropriate line(s).

which is a related person to a financial service company or to an

If the company did not have at least five full-time equivalent

insurance company, as defined in Conn. Gen. Stat. §12-218b,

employees in Connecticut, the company does not qualify as a

and:

PIC, and its income will be subject to tax. Do not complete this

• Employs not less than five full-time equivalent employees

informational return.

in the state;

A full-time employee must work 35 hours or more per week.

• Maintains an office in the state; and

See Conn. Gen. Stat. §12-217u(d); Conn. Agencies Regs.

§31-236-58(c)(2). A dual employee works for both the PIC and

• Confines its activities to the purchase, receipt, maintenance,

the parent company. Part-time or dual employees may be used

management, and sale of its intangible investments, and

in calculating the number of full-time equivalent employees. The

the collection and distribution of the income from such

PIC must employ the number of full-time, part-time, and/or dual

investments, including but not limited to interest and gains

employees that will add up to at least five full-time equivalent

from the sale, transfer, or assignment of such investments

employees, when calculating the amount of time such employees

or from the foreclosure upon or sale, transfer, or assignment

work on PIC-related matters. However, the maximum number of

of the collateral securing such investments.

employees whose time may be allocated to attain the requisite

five full-time equivalent employees is 25.

Related person means:

• A corporation, limited liability company, partnership,

Line 5 - Check the appropriate box to identify the method used

association, or trust controlled by the taxpayer;

to determine the number of full-time equivalent employees. The

• An individual, corporation, limited liability company,

five full-time equivalent employees may be established from the

partnership, association, or trust in control of the taxpayer;

employees’ time records. In lieu of relying on actual time records

maintained throughout the year, taxpayers may use an annual

• A corporation, limited liability company, partnership,

safe-harbor test based on the employees’ time records for either

association, or trust controlled by an individual, corporation,

the first 30 days of the taxable year or an average of the first

limited liability company, partnership, association, or trust in

three months in such taxable year (“the applicable period”).

control of the taxpayer; or

• A member of the same controlled group as the taxpayer.

Line 6 - Check the appropriate box to identify the method used

to allocate expenses and employee costs to the PIC.

Control, with respect to a corporation, means ownership,

PIC-related expenses and costs may be allocated to a PIC

directly or indirectly, of stock possessing 50% or more of

on any reasonable basis provided in I.R.C. §482. Use of such

the total combined voting power of all classes of the stock

method will require the taxpayer to maintain adequate books and

of such corporation entitled to vote. Control, with respect to a

records. In lieu of this method, the taxpayer is allowed to make

trust, means ownership, directly or indirectly, of 50% or more of

one of two alternative safe harbor elections on its return each

the beneficial interest in the principal or income of such trust.

year in determining the reasonable allocation of the aggregate

The ownership of stock in a corporation, of a capital or profits

pool of expenses and employee costs to the PIC.

interest in a partnership or association, or of a beneficial interest

in a trust shall be determined in accordance with the rules for

constructive ownership of stock provided in I.R.C. §267(c) other

than paragraph (3) of said section.

Page 2 of 3

Form Ct-1120 Pic - Connecticut Information Return For Passive Investment Companies Page 2

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