LCO \\PRDFS1\SCOUSERS\FORZANOF\WS\2019SB-00435-R02-
SB.docx
1 of 3
General Assembly Substitute Bill No. 435
January Session, 2019
AN ACT ESTABLISHING A TAX CREDIT FOR EMPLOYERS MAKING
EDUCATION LOAN PAYME NTS FOR EMPLOYEES.
Be it enacted by the Senate and House of Representatives in General
Assembly convened:
Section 1. (NEW) (Effective January 1, 2020, and applicable to taxable 1
years commencing on or after January 1, 2020) (a) As used in this section: 2
(1) "Qualified employee" means an employee who (A) is required to 3
work at least thirty-five hours per week, (B) is a resident of the state, 4
and (C) is not an owner, member or partner of a qualified employer or 5
a family member of an owner, member or partner of a qualified 6
employer; 7
(2) "Qualified employer" means a corporation licensed to operate a 8
business in the state that employs a qualified employee and is subject 9
to tax under chapter 207 or 208 of the general statutes; and 10
(3) "Eligible education loan" means a loan made by the Connecticut 11
Higher Education Supplemental Loan Authority or by any other 12
private or governmental lender to a qualified employee to finance 13
attendance at a private occupational school or a public or independent 14
institution of higher education in the state. "Eligible education loan" 15
does not include a refinanced or consolidated loan, unless the 16
refinanced or consolidated loan is made by the Connecticut Higher 17
Education Supplemental Loan Authority. 18 Substitute Bill No. 435
LCO {\\PRDFS1\SCOUSERS\FORZANOF\WS\2019SB-00435-
R02-SB.docx }
2 of 3
(b) (1) Commencing January 1, 2020, and in each taxable year 19
thereafter, any qualified employer that employs a qualified employee 20
and makes loan payments directly to a lender on an eligible education 21
loan on behalf of the qualified employee may claim a credit against the 22
tax imposed under chapter 207 or 208 of the general statutes. Such 23
credit shall be equal to fifty per cent of the amount of the monthly loan 24
payment made by such employer on the eligible education loan, 25
multiplied by the number of months during the taxable year (A) such 26
employer made such loan payments, and (B) the qualified employee 27
was employed by such employer. No qualified employer may claim a 28
credit against the tax imposed under both chapters 207 and 208 of the 29
general statutes for the same loan payment amount. 30
(2) A qualified employer may claim a credit under this subsection 31
for a loan payment made to a lender on an eligible education loan, 32
during the part of the taxable year that the qualified employee worked 33
and resided in the state, provided a qualified employee who worked 34
and resided in the state for any part of a month shall be deemed to 35
have worked and resided in the state for the entire month for the 36
purposes of this section. 37
(3) A qualified employer may not claim a credit under this 38
subsection (A) for a loan payment made during any month of the 39
taxable year during which the employee was not a qualified employee, 40
(B) for loan payments in excess of the amounts due on the eligible 41
education loan during the taxable year, or (C) for more than thirty-six 42
months of loan payments made on behalf of any qualified employee. 43
(c) A qualified employer that claims the credit under subsection (b) 44
of this section shall provide any documentation required by the 45
Commissioner of Revenue Services in a form and manner prescribed 46
by the commissioner. 47
This act shall take effect as follows and shall amend the following
sections:
Substitute Bill No. 435
LCO {\\PRDFS1\SCOUSERS\FORZANOF\WS\2019SB-00435-
R02-SB.docx }
3 of 3
Section 1 January 1, 2020, and
applicable to taxable years
commencing on or after
January 1, 2020
New section
Statement of Legislative Commissioners:
In Subsec. (b)(1), "or lenders" was deleted for conciseness, "on behalf of
the qualified employee", "both" and Subpara. designators were added
for clarity; in Subsec. (b)(2), "loan payments", "loans" and "loan
payment amounts" were made singular for consistency with the style
of the general statutes, "actually", "relevant", "or lenders only with
respect to" and the Subpara. designators were deleted for conciseness,
"and resided" was added for accuracy and "for the purposes of this
section" was added for clarity; in Subsec. (b)(3), "with respect to
months" was changed to "for a loan payment made during any month"
for clarity, "on the eligible education loan" was added for clarity and
"with respect to any specific" was changed to "of loan payments made
on behalf of any" for clarity.
HED Joint Favorable Subst.