Modification Required To 1992 Form CT-1120I In Determining Assumed Tax To Account For Reduced Surtax Rate
PURPOSE: The purpose of this Announcement is to inform taxpayers of an error in the line instructions to 1992 Form CT-1120I, which if followed, will result in the incorrect entry of the assumed tax and to explain to taxpayers how to calculate correctly the assumed tax.
INCORRECT LINE INSTRUCTION:
The instructions to Line 3 of the 1992 Form CT-1120I (Computation of Interest Due on Estimated Tax) incorrectly directs the taxpayer to enter as the assumed tax the amount found in Line 3 of Schedule C of the 1991 Form CT-1120 (Corporation Tax Return).
The "assumed tax" is the tax for the preceding income year recalculated, if necessary, using the current year rate. The corporation business tax surtax decreased from 20% to 10% with respect to income years commencing on or after January 1, 1992 and prior to January 1, 1993. Therefore, the assumed tax is not the amount entered on Line 3 of the 1991 Form CT-1120 but rather is the 1991 tax recalculated using the 1992 rate.
CALCULATION OF ASSUMED TAX: To determine the assumed tax, the amount entered on Line 1 of Schedule C of the 1991 Form CT-1120 should be multiplied by 10%. That product plus the amount entered on Line 1 of Schedule C of the 1991 Form CT-1120 equals the assumed tax.
PLEASE NOTE THE FOLLOWING NEW INFORMATION ABOUT DRS.
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Corporation business tax