DRS: SN 92(2), Credit for Taxes Paid to Other Jurisdictions

 

STATE OF CONNECTICUT
DEPARTMENT OF REVENUE SERVICES

450 Columbus Blvd
Hartford CT 06103
 
 
 
 
 
 

 
 

SN 92(2)

Credit For Taxes Paid to Other Jurisdictions


This Special Notice has been issued to clarify the instructions for how the credit for income taxes paid to other jurisdictions is calculated when tax is paid to another state and political subdivision of that state (e.g. New York State and New York City). In determining the credit allowed by a resident taxpayer for tax paid to another state and city of that state the following rules will apply:

A. If the same amount of income is taxed by both the city and state:

1. Enter that amount in only one column on form CT-1040 Schedule 2;
2. Include the income only once. See example 1.

B. If the amounts of income taxed by both the city and state are not equal:

1. Use two columns on form CT-1040 Schedule 2;
2. Include only the same income taxed by both in the first column;
3. Include the excess income in the next column. See example 2.

Example #1: Taxpayer A is a resident of Connecticut

(1) A's Connecticut AGI
$160,000
(2) New York State Income
80,000
(3) New York City Income
80,000
(4) Identical income subject to tax in both jurisdictions
80,000
(5) New York State Tax:
4,800*
(6) New York City Tax:
360*
(7) Connecticut Tax:
2,400*

CT-1040 SCHEDULE 2-CREDIT FOR INCOME TAXES PAID TO OTHER JURISDICTIONS

COLUMN A: (N.Y. State and N.Y. City)

Line 40 Modified Connecticut AGI $160,000
Line 41 Non-Connecticut income included on Line 40 and reported on another jurisdictions income tax return
(NY State & NY City)
80,000
Line 42 Divide Line 41 by Line 40
.50
Line 43 Connecticut income tax liability
2,400
Line 44 Multiply Line 42 by Line 43
1,200
Line 45 Income tax paid to another jurisdiction
(NY State & NY City)
5,160
Line 46 Enter smaller of Line 44 or Line 45
1,200
Line 47 Total Credit
$1,200

Example #2: Taxpayer B is a resident of Connecticut

(1) B's Connecticut AGI
$100,000
(2) New York State Income
40,000
(3) New York City Income
50,000
(4) Identical income subject to tax in both jurisdictions
40,000
(5) New York State Tax:
2,400*
(6) New York City Tax:
225*
(7) Connecticut Tax:
1,500*

CT-1040 SCHEDULE 2-CREDIT FOR INCOME TAXES PAID TO OTHER JURISDICTIONS

Step 1: COLUMN A: (N.Y. State and N.Y. City)

Line 40 Modified Connecticut AGI $100,000
Line 41 Non-Connecticut income included on Line 40 and reported on another jurisdiction's income tax return
40,000
Line 42 Divide Line 41 by Line 40
.40
Line 43 Connecticut income tax liability
1,500
Line 44 Multiply Line 42 by Line 43
600
Line 45 Income tax paid to another jurisdiction
New York State (based on $40,000) 2,400
New York City (based on $40,000) 4/5 x 225 180**
2,580
Line 46 Enter smaller of Line 44 or Line 45
600
Line 47 Total Credit
600

Step 2: COLUMN B (N.Y. City Excess)

Line 40 Modified Connecticut AGI $100,000
Line 41 Non-Connecticut income included on Line 40 and reported on another jurisdictions income tax return
10,000
Line 42 Divide Line 41 by Line 40
.10
Line 43 Connecticut income tax liability
1,500
Line 44 Multiply Line 42 by Line 43
150
Line 45 Income tax paid to another jurisdiction
New York City (based on $10,000) 1/5 x 225
45**
Line 46 Enter smaller of Line 44 or Line 45
45
Line 47 Total Credit
$45

Step 3:

Total Credit:

Step No. 1 $600
Step No. 2    45
$645

*The amount of New York State, New York City and Connecticut Tax indicated are solely for purposes of illustration.

** NY City income Prorated
included in this column X NY City Tax = NY City
Total NY City income Tax

PLEASE NOTE THE FOLLOWING NEW INFORMATION ABOUT DRS.

FOR FURTHER INFORMATION: To order forms and publications or for further information, call the Department of Revenue Services at 860-297-5962 (Hartford area or out-of-state) or 1-800-382-9463 (in-state). Forms and publications may be ordered through voice-mail 24-hours a day by choosing Option 3 on your touch tone telephone.

Electronic Delivery Options: You can also obtain tax forms and publications 24-hours a day from our Web home page at http://www.ct.gov/drs. Telecommunications Device for the Deaf (TDD/TT) users only call 860-297-4911 during business hours.


SN 92(2)
Credit For Taxes Paid to Other Jurisdictions