Tax Alert: Connecticut Gives Employers Incentives for Hiring
2/13/2012
The State of Connecticut has two programs that provide job credits to employers who hire full-time workers. For the 2011 tax year, employers have until February 28, 2012 to take advantage of the Qualified Small Business Job Creation Tax Credit (“QSBJC”) and, for the 2012 tax year, employers have the option of claiming the QSBJC or the newly created Job Expansion Tax Credit (“JET Credit").
Both credits, which are administered by the Department of Economic and Community Development (“DECD”), are detailed below:
QSBJC
A small business (C corporation, S corporation, LLC, partnership, or sole proprietorship with less than 50 employees) can qualify for a credit of $200 per month for each new employee hired in 2011 or 2012. To qualify for the QSBJC, the new hire must:
- Reside in Connecticut;
- Be hired for a job that did not exist prior to 1/1/11;
- Be employed at the end of the calendar year;
- Be required to work at least 35 hours per week for not less than 48 weeks in the calendar year; and
- Not be a temporary or seasonal worker.
The same employee cannot qualify for more than one year/credit. The application process requires Letters of Good Standing (or equivalent) from the Secretary of State, Department of Labor, and Department of Revenue Services.
If your business meets the above qualifications, you must complete an application for the 2011 credit by February 28, 2012. However, the DECD will accept Letters of Good Standing after this date in certain situations. The initial application fee is $100. Click here for additional information and to access the application.
Employers should also note that unlike other Connecticut credits, the QSBJC can offset individual income tax. The QSBJC sunsets December 31, 2012.
JET Credit
Connecticut businesses may also be eligible for the JET Credit which is either $500 per month for each new full‐time job created in 2012, or $900 per month for a "qualified employee," who is unemployed, disabled, or a veteran. In order to claim this credit, employers must register with the DECD prior to hiring the new employee. The credit must be used in the year generated; there are no carry-forward provisions. To qualify:
- 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; and
- Businesses with more than 100 employees must hire at least 10 new full-time employees.
Click here for additional information and to access the application.
Eligible businesses should review the requirements for both 2011 and 2012 to determine whether to apply for the QSBJC or JET Credit and take the required steps in order to qualify for the credits. For more information, please contact Matthew Nick, CPA, a J.H. Cohn senior manager, at mnick@jhcohn.com or 860-629-5033, or Brenden M. Healy, CPA, a J.H. Cohn senior manager, at bhealy@jhcohn.com or 860-368-5246.
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This has been prepared for information purposes and general guidance only and does not constitute professional advice. You should not act upon the information contained in this publication without obtaining specific professional advice. No representation or warranty (express or implied) is made as to the accuracy or completeness of the information contained in this publication, and J.H. Cohn LLP, its members, employees and agents accept no liability, and disclaim all responsibility, for the consequences of you or anyone else acting, or refraining to act, in reliance on the information contained in this publication or for any decision based on it.