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Connecticut JET Credit Report Due As Soon As Possible

January 16, 2013

Laura L. House, CPA
Tax Manager 

A business that has applied for and is eligible to claim the Connecticut Job Expansion Tax (JET) Credit must complete and return Connecticut Department of Economic and Community Development (DECD) Forms JET-1, Summary of New Full-time Employment Positions Created and Retained, and JET-2, Schedule of Employees at End of Reporting Period, along with the supporting documentation to the DECD as soon as possible in order for the business to determine the tax credit it is eligible to claim on its 2012 Connecticut income tax return.  The DECD has mailed Forms JET-1 and JET-2 to businesses that applied for credit eligibility after the close of their respective tax years.

Once the DECD reviews the business’ completed Forms JET-1 and JET-2, it will issue a Certificate of Eligibility to the business which discloses the amount of tax credit the business earned based on the net increase in jobs above the applicant’s baseline employment status at the time it applied for credit eligibility. The Certificate of Eligibility substantiates the tax credit the business is able to claim on its 2012 income tax return.  Businesses should submit FORMS JET-1 and JET-2 to the DECD as soon as possible to potentially enable the business to file its Connecticut tax return on a timely basis without needing to request a filing extension.

Please click on this link to be connected to the DECD’s website to obtain further information on the CT JET Credit Program, all applicable JET credit and application forms and instructions.

 

Connecticut Job Expansion Credit – Background

A Connecticut business can be eligible for tax credits of $500 or $900 per month, depending on the employee’s status classification, for each new full‐time job created by the business. The credit is available to regular “C” corporations as well as pass-through entities such as partnerships, limited liability companies and S corporations.

JET credit eligibility - new employee thresholds based on business size:

  • Businesses with under 50 employees must hire at least one new full‐time employee
  • Businesses with 50 to 100 employees must hire at least five new full‐time employees
  • Businesses with over 100 employees must hire at least ten new full‐time employees

CT JET credit application process/next steps:

Below is a brief summary on the process of applying for and claiming the CT JET credit:

  1. An Eligibility Application is submitted to the DECD by the applicant.
     
  2. An eligibility review is then conducted by the DECD.
     
  3. The DECD sends a Tax Credit Eligibility Letter back to the applicant indicating its eligibility status. 
     
  4. DECD will provide the applicant with the DECD Reporting Forms JET‐1 and JET-2 after the end of the applicant’s fiscal year.  These forms must be completed as soon as possible after the company’s reporting year and returned to the DECD.
     
  5. Once the DECD reviews the submitted Forms JET-1 and JET-2, it will issue a Certificate of Eligibility to the business which discloses the tax credits the business earned based on the net increase in jobs above the applicant’s baseline employment status at the time it applied for credit eligibility. 
     
  6. In order to claim the credit, the company is required to complete Form CT-1120 JET, Job Expansion Tax Credit, (based on the Certificate of Eligibility received from the DECD) and attach it to its 2012 CT income tax return. 

Disclaimer: Under U.S. Treasury Department guidelines, we hereby inform you that (1) any tax advice contained in this communication is not intended or written to be used, and cannot be used by you, for the purpose of avoiding penalties that may be imposed on you by the Internal Revenue Service (or state and local or other tax authorities), and (2) no part of any tax advice contained in this communication is intended to be used, and cannot be used, by any party to promote, market or recommend any transaction or tax-related matter(s) addressed herein without the express and written consent of Blum, Shapiro & Company, P.C.

 

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