Captive Insurance Tax Information
- Who Must File an Insurance Premium Tax Return - Captive Companies
- When to File
- How to File
- Electronic Payment Options
- Minimum and Maximum Tax
- Tax Rate Schedules
- Interest and Penalties
Who Must File an Insurance Premium Tax Return – Captive Companies
Captive insurance companies shall pay to the Commissioner of Revenue Services, a tax on the direct premiums collected or contracted for on policies or contracts of insurance written by the captive insurance company during the year ending December thirty-first next preceding, after deducting from the direct premiums subject to the tax the amounts paid to policyholders as return premiums which shall include dividends on unabsorbed premiums or premium deposits returned or credited to policyholders, except that no tax shall be due or payable as to considerations received for annuity contracts.
Each captive insurance company shall pay to the Commissioner of Revenue Services, a tax on assumed reinsurance premiums collected or contracted for on policies or contracts of insurance written by the captive insurance company during the year ending December thirty-first next preceding, provided no tax under Conn. Gen. Stat. § 38a-91nn(b) shall apply to premiums for risks or portions of risks that are subject to taxation on a direct basis pursuant to Conn. Gen. Stat. §38a-91nn(a) of this section. No tax under Conn. Gen. Stat. § 38a-91nn(b) shall be payable in connection with the receipt of assets in exchange for the assumption by a captive insurance company of loss reserves and other liabilities of another insurer under common ownership and control, if such transaction is part of a plan to discontinue the operations of such other insurer and if the intent of the parties to such transaction is to renew or maintain such business with the captive insurance company.
Form 207C, Insurance Premiums Tax Return Captive Insurance Companies is due on or before March 1 of the succeeding calendar year for insurance premiums tax liability for the preceding calendar year.
To request additional time to file a Connecticut Captive Insurance Premiums Tax Return, see Form 207C EXT, Application for Extension of Time to File Connecticut Captive Insurance Premiums Tax Return.
File and pay Form 207C electronically using myconneCT. See Informational Publication 2022(6), Filing and Paying Connecticut Taxes Electronically.
Click here to File, Pay, or Register Now on myconneCT!
Visit myconneCT to make an electronic payment. After logging in to myconneCT, find your tax account on the Summary screen, select the Make a Payment link, and choose your payment method.
- Pay by Direct Payment: Using this option authorizes DRS to electronically withdraw a payment from your bank account (checking or savings) on a date you select up to the due date.
- Pay by Credit Card or Debit Card: You may elect to pay your tax liability using a credit card (American Express®, Discover®, Master Card®, Visa®) or comparable debit card. A convenience fee will be charged by the credit card service provider. You will be informed of the amount of the fee and may elect to cancel the transaction. Your payment will be effective on the date that you make the charge.
At the end of the transaction, you will receive a confirmation number for your records. As a reminder, even if you pay electronically, you must still file your return by the due date. Tax not paid on or before the due date will be subject to penalty and interest.
ACH credit method users should consult with their banking institution for guidelines to ensure that payment is received timely. (Taxpayers must pre‑register with the DRS Electronic Commerce Unit (ECU) prior to using this option). The taxpayer initiates an electronic payment through their banking institution. This payment must be sent in the ACH standard CCD+TXP format. For more information, see Informational Publication 2022(6), Filing and Paying Connecticut Taxes Electronically
The annual minimum tax is $7,500.00. The annual maximum aggregate tax is $200,000.00. The maximum aggregate tax to be paid by a sponsored insurance company applies to each protected cell and not to the sponsored captive insurance company as a whole.
|If Line 7 Is:||The Amount of the Tax Is:|
|$20,000,000 or less||Line 7 multiplied by 0.0038|
|Over $20,000,000 but not
|$76,000 plus the excess over
20,000,000 multiplied by 0.00285
|Over $40,000,000 but not
|$133,000 plus the excess of
$40,000,000 multiplied by 0.0019
|Over $60,000,000||$171,000 plus the excess over
$60,000,000 multiplied by 0.00072
|If Line 24 Is:||The Amount of the Tax Is:|
|$20,000,000 or less||Line 24 multiplied by 0.00214|
|Over $20,000,000 but not
|$48,200 plus the excess over
$20,000,000 multiplied by 0.00143
|Over $40,000,000 but not
|$71,4000 plus the excess of
$40,000,000 multiplied by 0.00048
|Over $60,000,000||$81,000 plus the excess over
$60,000,000 multiplied by 0.00024
Two or more captive insurance companies under common ownership and control may file a single return (consolidated return) and pay tax as a single captive insurance company. A special purpose financial captive insurance company may not be consolidated with another captive insurance company that is not a special purpose financial captive insurance company. Captive insurance companies filing a consolidated return must attach a list which contains the name and federal employer identification number of the companies included on the consolidated return.
Common ownership and control means ownership and control of two or more captive insurance companies by the same person or group of persons.
Ownership and control is defined as:
The direct or indirect ownership of 80% or more of the outstanding voting stock of the insurer.
Mutual or nonprofit corporations
The direct or indirect ownership of 80% or more of the surplus and voting power of the corporation.
Limited liability companies
The direct or indirect ownership of 80% or more of the membership interests in the company.
Sponsored captive insurance companies
A protected cell shall be treated as a separate captive insurance company owned and controlled by the protected cell’s participants.
In general, interest and penalty apply to any portion of the tax not paid on or before the original due date of the return.
Late Payment Penalties
The late payment penalty is the greater of 10% of the tax due or $50. Late payments are subject to interest at the rate of 1% per month or fraction of a month until the tax is paid in full.