CT-1041 booklet, Connecticut Income Tax Return for Trusts and ...

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The allowable credit must be separately computed foreach qualifying jurisdiction. Use separate columns for eachjurisdiction for which you are claiming a credit. If you needmore than two columns, you should create an identicalworksheet. Attach a copy of all income tax returns filed withqualifying jurisdictions to the back of your Form CT-1041or the credit will be disallowed.If you are claiming credit for income taxes paid to another stateand to one of its political subdivisions, follow these rules todetermine your credit:A. If the same amount of income is taxed by both the cityand state:1. Use only one column of the worksheet to calculate yourcredit;2. Enter the same income taxed by both the city and stateon Line 2 on the worksheet; and3. Combine the amounts of tax paid to the city and thestate on that income and enter the total on Line 6.B. If the amounts of income taxed by both the city and stateare not the same:1. Use two columns on the worksheet;2. Enter only the income taxed by both jurisdictions onLine 2 in the first column; and3. Enter the excess income taxed by only one of thejurisdictions in the next column.The credit claimed cannot exceed the amount of tax dueto Connecticut on that portion of income taxed in anotherjurisdiction.Worksheet InstructionsLine 1 - Connecticut Taxable Income of ResidentTrust or EstateEnter:1. The Connecticut taxable income from Form CT-1041,Line 1; and2. Any net loss derived from or connected with sources in oneor more qualifying jurisdiction(s) where you were subjectto income taxation whether or not income tax was actuallypaid to the jurisdiction(s).Example: Taxpayer B, a resident trust, has taxable incomeof $70,000, which includes income of $15,000 from businessactivities conducted in Massachusetts and a net loss of$15,000 from a business conducted in Rhode Island. Thefiduciary of this trust must add the $15,000 net loss to the$70,000 and enter $85,000 on Line 1.Part-Year Resident TrustEnter the amount from Schedule CT-1041FA, Part 1, Line 9,with the following exceptions:1. Add to the amount from Schedule CT-1041FA,Part 1, Line 9, any net loss derived from or connected withsources in one or more qualifying jurisdiction(s) where youwere subject to income taxation whether or not income taxwas actually paid to the jurisdiction(s); and2. For the period the trust is a Connecticut resident trust, addback any item of loss or deduction and subtract any itemof income or gain that is an item of special accrual.Enter the modified amount on Line 1 of the worksheet.Example: Taxpayer L, a part-year resident trust, has taxableincome from its residency period of $60,000, which includesincome of $15,000 from business activities conducted inMassachusetts and a net loss of $20,000 from a businessconducted in Rhode Island. The fiduciary of this trust mustadd the $20,000 net loss to the $60,000 and enter $80,000on Line 1.Line 2 - Non-Connecticut IncomeResident Trust or EstateEnter the total non-Connecticut income included on Line 1 andreported on another jurisdiction’s income tax return.Part-Year Resident TrustEnter the total non-Connecticut income for the period ofConnecticut residency included on Line 1 and reported onanother jurisdiction’s income tax return.For the period the trust is a Connecticut resident trust, addback any item of loss or deduction and subtract any item ofincome or gain that is an item of special accrual.Line 3Resident and Part-Year Resident TrustDivide Line 2 by Line 1. The result cannot exceed 1.0000.Round to four decimal places.Line 4 - Connecticut Income Tax LiabilityResident Trust or EstateEnter the Connecticut tax liability as shown onForm CT-1041, Line 2.Part-Year Resident TrustEnter the allocated Connecticut income tax liability asshown on Schedule CT-1041FA, Line 12. To determine theConnecticut income tax liability of a part-year resident trust,the tax applies to the income derived from or connected withsources within this state. The income derived from or connectedwith sources within this state for a part-year resident trust isthe sum of the trust’s Connecticut taxable income during theresidency portion of the taxable year and the trust’s incomederived from or connected with sources within Connecticutduring the nonresidency portion of the taxable year.Line 5Multiply Line 3 by Line 4 and enter the result.Line 6 - Income Tax Paid to Qualifying JurisdictionsResident Trust or EstateEnter the total amount of income tax paid to a qualifyingjurisdiction for the taxable year.Page 16
Worksheet for Credit for Income Taxes Paid to Qualifying JurisdictionsResident estates and full or part-year resident trusts only1. Connecticut taxable income ............................................ 1.Enter name of each qualifying jurisdiction. .....................2. Non-Connecticut income included on Line 1 above ....... 2.3. Divide Line 2 by Line 1 (may not exceed 1.0000). ........ 3. . .4. Connecticut tax liability .................................................. 4.5. Multiply Line 3 by Line 4. .............................................. 5.6. Income tax paid to a qualifying jurisdiction .................... 6.7. Enter the lesser of Line 5 or Line 6. ................................7.Column AColumn B8. Total Credit: Add the amount on Line 7 for each column. ..................................... 8..00Income tax paid means the lesser of the tax liability to thatjurisdiction or the tax the trust or estate paid to that jurisdiction,excluding any penalty or interest, as reported on a return filedwith that jurisdiction. Do not report taxes withheld for thequalifying jurisdiction.Part-Year Resident TrustEnter the total amount of income tax paid to a qualifyingjurisdiction for the period of Connecticut residency only.Income tax paid means the lesser of the trust’s tax liabilityto the qualifying jurisdiction or the tax the trust paid to thatjurisdiction, excluding any penalty or interest, as reported on areturn filed with that jurisdiction. Do not report taxes withheldfor the qualifying jurisdiction.If the tax the trust paid to that jurisdiction was also based onincome earned during the nonresidency period, prorate theamount of tax for which you are claiming credit. The prorationis based upon the relationship that the income earned in thatjurisdiction during the period of Connecticut residency bears tothe total amount of income the trust earned in that jurisdictionin the taxable year.Example: Taxpayer H, a part-year resident trust, conductedbusiness in Rhode Island all year and paid $1,200 in RhodeIsland tax in 2009. The trust’s total Rhode Island income for2009 was $20,000 of which $15,000 was earned while thetrust was a Connecticut resident trust. The income tax paid toRhode Island during the Connecticut residency period is:$15,000$20,000X $1,200 = $900The fiduciary of this trust should enter $900 on Line 6.Line 7Enter the lesser of Line 5 or Line 6.Line 8 - Total Credit for Income Taxes Paid toQualifying JurisdictionsAdd the amounts from Line 7A, Line 7B, and Line 7 ofany additional worksheets. The amount on Line 8 cannotexceed the amount on Line 5. Enter the total here and onForm CT-1041, Line 4.Attach a copy of the income tax return filed with eachqualifying jurisdiction to the Connecticut income tax returnor the credit will be disallowed.Connecticut Fiduciary AdjustmentUse Schedule A to compute the Connecticut fiduciaryadjustment, which is then allocated among the trust or estateand its beneficiaries in Schedule CT-1041B, Part 1. Thefiduciary adjustment is the net amount of the additions andsubtractions enumerated on Schedule A, which relate to itemsof income, gain, loss, or deduction of the trust or estate.Amount Paid or Set Aside for Charitable PurposesWhen calculating the fiduciary adjustment on Schedule A,do not include the modifications for any amount paid orset aside for a charitable purpose during the taxable year.See instructions for federal Form 1041-A, U.S. InformationReturn Trust Accumulation of Charitable Amounts, andfederal Form 5227, Split-Interest Trust Information Return,for information on charitable deductions.Member of a Pass-Through EntityIf the trust or estate has income as a member of a pass-throughentity, any additions or subtractions that apply to the incomeshould be included on Schedule A. You may obtain the trust’sor estate’s share of the entity’s items from Schedule CT K-1,Member’s Share of Certain Connecticut Items.Page 17
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