Description and Applicable Taxes

A tax credit is available for tax years beginning on or after January 1, 2010, for an employer that hires a new qualifying employee. The tax credit may be applied against the tax imposed under Chapters 207, 208, or 229, other than the liability imposed by §12-707, of the Connecticut General Statutes.

Definitions

New qualifying employee means a person who is receiving vocational rehabilitation services from the Bureau of Rehabilitative Services and is hired after May 6, 2010, during the employer’s income years beginning on or after January 1, 2010, and prior to January 1, 2012, but does not include a person who was employed in Connecticut by a person related to the employer during the prior 12 months.

Tax Credit Amount

The tax credit is equal to $200 per month for hiring a new qualifying employee who is a Connecticut resident. The new employee must be hired after May 6, 2010, and during the income years beginning on or after January 1, 2010 and prior to January 1, 2012. The new qualifying employee must be required to work at least 20 hours per week for 48 weeks or more annually. The tax credit can be claimed in the year of the hire and the next two income years.

No employer may claim a tax credit for a new employee who is an owner, member, or partner in the business or who is not employed at the close of the income year of the qualified small business. No employer may claim this tax credit and any other tax credit with respect to the same new qualifying employee.

Carryforward and Carryback Limitations

No carryforward or carryback is allowed.

How to Apply

An employer shall apply to the Department of Economic and Community Development (DECD) and shall provide DECD with a list of its primary activities, its NAICS Code, the name and position of the new qualifying employee, and any other information that DECD requires with its application. Within 30 days of receiving the application, DECD shall render a decision on the application and shall issue a certification letter if the employer’s application is approved.

Flow-Through of the Tax Credit

If the qualified small business is an S corporation or an entity treated as a partnership for federal income tax purposes, then the tax credit may be claimed by the shareholders or partners. If the qualified small business is a single member limited liability company that is disregarded as an entity separate from its owner, then the tax credit may be claimed by its owner.

How to Claim the Tax Credit

Complete Form CT-1120 VRJ, Vocational Rehabilitation Job Creation Tax Credit, and attach it to Form CT-1120K, Business Tax Credit Summary, and/or Form CT-207K, Insurance/Health Care Tax Credit Schedule.

To take this tax credit against the tax imposed by Chapter 229 of the Connecticut General Statutes, see the applicable income tax booklet.

Where to Get Additional Information

Direct inquiries to:

Connecticut Department of Economic and Community Development

Office of Business& Industry Development

Attn: Patricia Paesani

505 Hudson Street

Hartford CT 06106-7107

860-270-8215

Patricia.paesani@ct.gov

www.ct.gov/ecd

Statutory and Regulatory References

Conn. Gen. Stat. §12-217oo