Form Ct-1040 Nr/py - Connecticut Nonresident And Part-Year Resident Income Tax Return And Instructions - 2011 Page 35
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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 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
Schedule CT-1040BA, Nonresident Business Apportionment,
that satisfactorily disclose the portion of business income derived
(available on the DRS website at ) must
from or connected with sources within Connecticut, check the
be completed by nonresidents and part-year residents (for the
box in the space immediately below Schedule A. Do not complete
nonresidency portion of the year) if they are carrying on business
Schedule B.
both in and outside Connecticut and required to allocate or
If you report income using this method, your income reported
apportion business income.
to other states in which you carry on your business, where
Who Must Allocate or Apportion Business Income
the states permit allocation on the basis of separate books and
An allocation or apportionment of business income must be
records, must result in a consistent allocation of income. Where
made if you are a nonresident and you are carrying on business
another state does not permit allocation on the basis of separate
both in and outside of Connecticut.
books and records, such a consistent allocation of income may
not be possible.
Generally, you are considered to be carrying on business at the
location:
Example 3: Assume the same facts as in Example 1 except
1. Where you maintain, operate, or occupy desk space, an
that the plumber allocated, on the basis of separate books
offi ce, a shop, a store, a warehouse, a factory, an agency, or
and records, the income derived from his plumbing business
other place where your affairs are regularly carried on (this
on his Connecticut nonresident return. The income from his
summary is not all inclusive); or
plumbing business is $134,000, with $91,500 being from
2. Where your business is transacted with a fair measure of
Connecticut business and $42,500 from Massachusetts business.
permanency and continuity.
Therefore, on his Massachusetts return, this taxpayer must also
You are considered to be carrying on business outside
allocate $91,500 of this income to Connecticut and $42,500 to
Connecticut if you maintain, operate, or occupy outside
Massachusetts since Massachusetts permits allocation on the
Connecticut, an offi ce, a shop, a store, a warehouse, a factory,
basis of separate books and records.
an agency, or other place where your business matters are
systematically and regularly carried on.
Who Must Complete Schedule B
If your books and records do not satisfactorily disclose the
You are not considered to be carrying on business outside
portion of business income derived from or connected with
Connecticut and may not allocate or apportion business income
if you have an occasional or isolated business transaction outside
sources within Connecticut, income from business carried on
Connecticut or if you have no regular place of business outside
both in and outside of Connecticut must be apportioned by
of Connecticut.
using the business apportionment percentage (arrived at by
completing Schedule B) or by using an approved alternative
You are not considered to be carrying on business in Connecticut
method. Schedule B of Schedule CT-1040BA must be completed
if your business activities in Connecticut are considered casual,
for this purpose and attached to Form CT-1040NR/PY. If you
isolated, or inconsequential. See Activities Considered Casual,
submit an alternative method of apportionment, you must also
Isolated, or Inconsequential on Page 9.
complete Schedule CT-1040BA and include with it information
explaining the alternative method of apportionment.
Example 1: A plumber, who is a resident of Rhode Island,
The business apportionment percentage or alternative method is
carries on his business from an office in Danielson,
not applied to income from the rental of real property or gains
Connecticut. He has maintenance contracts with housing
authorities in the Worcester, Massachusetts, area that require
(losses) from the sale of real property. The entire rental income
him to regularly perform his services at various locations in and
from Connecticut real property or gain from the sale of the
around Worcester. This taxpayer is considered to be carrying on
property is allocated to Connecticut and the entire amount of
business in Connecticut (by reason of his offi ce in this state)
any loss from the sale is allocated to Connecticut. Rental income
and in Massachusetts (because his business is conducted there
from real property located outside Connecticut or gain from the
with a fair measure of permanency and continuity).
sale of this property is allocated outside Connecticut. Any loss
connected with the property is allocated outside Connecticut.
Example 2: Assume the same facts as in Example 1 except
The business apportionment percentage is applied to business
that the taxpayer carries on his business from an offi ce in
income (loss), farm income (loss), or to the income from
Auburn, Massachusetts, and has maintenance contracts with
intangible personal property (such as annuities, dividends,
housing authorities in northeast Connecticut that require him
interest, and gains from the disposition of intangible personal
to regularly perform his services at various locations in and
around Connecticut. This taxpayer is considered to be carrying
property) if the property is used in or connected with a business
on business in Massachusetts (by reason of his offi ce there) and
carried on both in and outside of Connecticut.
in Connecticut (because his business is conducted here with a
fair measure of permanency and continuity).
Page 35
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