Form Ct-1040 Nr/py - Connecticut Nonresident And Part-Year Resident Income Tax Return And Instructions - 2013 Page 34
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56Part 3 – Part-Year Resident Information
Who Must Complete Schedule A
All part-year residents must complete this section in its entirety.
Any nonresidents who are required to allocate or apportion
income because they carry on business both in and outside of
Attach Schedule CT-1040AW to Form CT-1040NR/PY.
Connecticut must complete Schedule A.
Schedule CT-1040BA Instructions
If income is determined from separate books and records of
the business (allocation of income): If you carry on business both
General Instructions
in and outside of Connecticut and maintain books and records that
Schedule CT-1040BA, Nonresident Business Apportionment,
satisfactorily disclose the portion of business income derived from
(available on the DRS website at ) must
or connected with sources within Connecticut, check the box in the
be completed by nonresidents and part-year residents (for the
space immediately below Schedule A. Do not complete Schedule B.
nonresidency portion of the year) if they are carrying on business
If you report income using this method, your income reported
both in and outside Connecticut and are required to allocate or
to other states in which you carry on your business, where the
apportion business income.
states permit allocation on the basis of separate books and records,
Who Must Allocate or Apportion Business Income
must result in a consistent allocation of income. Where another
An allocation or apportionment of business income must be made
state does not permit allocation on the basis of separate books
if you are a nonresident and you are carrying on business both in
and records, such a consistent allocation of income may not be
and outside of Connecticut.
possible.
Generally, you are considered to be carrying on business at the
Example 3: Assume the same facts as in Example 1 except
location:
that the plumber allocated, on the basis of separate books and
1. Where you maintain, operate, or occupy desk space, an offi ce, a
records, the income derived from his plumbing business on his
shop, a store, a warehouse, a factory, an agency, or other place
Connecticut nonresident return. The income from his plumbing
where your affairs are regularly carried on (this summary is
business is $134,000, with $91,500 from Connecticut business
not all inclusive); or
and $42,500 from Massachusetts business. Therefore, on his
2. Where your business is transacted with a fair measure of
Massachusetts return, this taxpayer must also allocate $91,500
permanency and continuity.
of this income to Connecticut and $42,500 to Massachusetts
since Massachusetts permits allocation on the basis of separate
You are considered to be carrying on business outside
books and records.
Connecticut if you maintain, operate, or occupy outside
Connecticut, an offi ce, a shop, a store, a warehouse, a factory,
Who Must Complete Schedule B
an agency, or other place where your business matters are
systematically and regularly carried on.
If your books and records do not satisfactorily disclose the portion
of business income derived from or connected with sources
You are not considered to be carrying on business outside
within Connecticut, income from business carried on both in and
Connecticut and may not allocate or apportion business income
outside of Connecticut must be apportioned by using the business
if you have an occasional or isolated business transaction outside
apportionment percentage (arrived at by completing Schedule B)
Connecticut or if you have no regular place of business outside
or by using an approved alternative method. Schedule B of
of Connecticut.
Schedule CT-1040BA must be completed for this purpose and
You are not considered to be carrying on business in Connecticut
attached to Form CT-1040NR/PY. If you submit an alternative
if your business activities in Connecticut are considered casual,
method of apportionment, you must also complete Schedule
isolated, or inconsequential. See Activities Considered Casual,
CT-1040BA and include with it information explaining the
Isolated, or Inconsequential, on Page 8.
alternative method of apportionment.
The business apportionment percentage or alternative method is
Example 1: A plumber, who is a resident of Rhode Island,
not applied to income from the rental of real property or gains
carries on his business from an office in Danielson,
(losses) from the sale of real property. The entire rental income
Connecticut. He has maintenance contracts with housing
from Connecticut real property or gain from the sale of the
authorities in the Worcester, Massachusetts area that require
property is allocated to Connecticut and the entire amount of any
him to regularly perform his services at various locations in and
loss from the sale is allocated to Connecticut. Rental income from
around Worcester. This taxpayer is considered to be carrying on
real property located outside Connecticut or gain from the sale of
business in Connecticut (by reason of his offi ce in this state)
this property is allocated outside Connecticut. Any loss connected
and in Massachusetts (because his business is conducted there
with the property is allocated outside Connecticut.
with a fair measure of permanency and continuity).
The business apportionment percentage is applied to business
Example 2: Assume the same facts as in Example 1 except
income (loss), farm income (loss), or to the income from intangible
that the taxpayer carries on his business from an offi ce in
personal property (such as annuities, dividends, interest, and
Auburn, Massachusetts and has maintenance contracts with
gains from the disposition of intangible personal property) if the
housing authorities in northeast Connecticut that require him
property is used in or connected with a business carried on both
to regularly perform his services at various locations in and
in and outside of Connecticut.
around Connecticut. This taxpayer is considered to be carrying
If you carried on more than one business for which an
on business in Massachusetts (by reason of his offi ce there) and
apportionment of business income is required on Schedule
in Connecticut (because his business is conducted here with a
CT-1040BA, prepare a separate Schedule CT-1040BA for each
fair measure of permanency and continuity).
business and attach all schedules to Form CT-1040NR/PY.
Page 34
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