Correction Of Instructions To 1992 CT-1120SI
PURPOSE: The purpose of this Announcement is to inform taxpayers of an error in Part VI of the instructions for the 1992 Form CT-1120SI and to clarify other instructions for this Part.
The sentence on page 7 of the instructions immediately below the solid block introducing Part VI incorrectly directs the S corporation to:
"Multiply the shareholder's pro rata share of Lines 1 through 10 by the S corporation's apportionment fraction."
Instead, enter each shareholder's full pro rata share of the items on lines 1, 2, 3, 5, 6, 7, 8, and 10. Only the shareholder's pro rata share of items on lines 4 and 9 is to be multiplied by the S corporation's Corporation Business Tax apportionment fraction under Conn. Gen. Stat. § 12-218.
The instructions to Line 5 of Part VI on page 8 state, in part, that one of the positive modifications (increasing federal adjusted gross income) to be reported to shareholders is:
"Income taxes paid to Connecticut to the extent deductible in determining federal adjusted gross income."
The term income taxes means income taxes that are imposed pursuant to Conn. Gen. Stat. § 12-700 et seq. and that were paid by the S corporation (with a composite return) on behalf of its nonresident shareholders (to the extent these taxes were deductible by the shareholders in determining federal adjusted gross income).
The term income taxes does not mean the Connecticut corporation business tax. No positive modification is required for Connecticut corporation business tax paid by the S corporation, even if the tax was deductible by the shareholder in determining federal adjusted gross income.
PLEASE NOTE THE FOLLOWING NEW INFORMATION ABOUT DRS.
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