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OLR Bill Analysis
sSB 252
AN ACT ESTABLISHING TAX CREDITS FOR EMPLOYERS WHO
MAKE PAYMENTS TOWARD TUITION COSTS OF EMPLOYEES
AND FOR TAXPAYERS WHO DONATE TO ENDOWED
PROFESSORSHIPS.
SUMMARY
This bill establishes a credit against the corporation business and
insurance premiums taxes for licensed Connecticut corporations that
make a payment to, or for, an employee for public or private higher
education institution tuition costs. The credit equals 50% of the payment
amount and is capped at $2,500 for each employee.
Additionally, the bill allows individuals and certain business entities
to claim a tax credit equal to 100% of the amount donated to an endowed
professorship at a Connecticut public higher education institution. The
bill caps the credit at $50,000 for any taxpayer and $2 million total for all
taxpayers in any fiscal year. (It is unclear how the $2 million cap would
be implemented, because the bill does not establish a process for
reserving or awarding credits to taxpayers.)
EFFECTIVE DATE: July 1, 2022, and applicable to income years
beginning on and after January 1, 2023.
EMPLOYER TAX CREDIT FOR EMPLOYEE TUITION PAYMENTS
The bill establishes the following additional conditions on an
employer who claims this tax credit:
1. the employer must make the tuition payment during the part of
the income year when the employee worked and lived in
Connecticut,
2. the employer must provide any documentation the Department
of Revenue Services commissioner requires, and 2022SB-00252-R000218-BA.DOCX
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3. the employer must not claim any other tax credit that may be
available under state law for the same tuition cost payment.
The bill specifies that, for purposes of this tax credit, an employee
who worked and lived in Connecticut for any part of a month is treated
as though he or she has lived in the state for the entire month.
TAX CREDIT FOR ENDOWED PROFESSORSHIP DONATION
Under the bill, the tax credit for endowed professorships may be
applied against the insurance premiums, utility companies, corporation
business, or personal income taxes, but not the withholding tax. An
“endowed professorship” is a faculty position permanently paid for
with endowment fund revenue and specifically established for that
purpose.
The bill requires the taxpayer to claim the credit in the income or tax
year when it is earned, or else it expires and is nonrefundable.
Additionally, if the taxpayer is an S corporation or partnership for
federal income tax purposes, the bill allows the credit to be claimed by
the taxpayer’s shareholders or partners. If the taxpayer is a single-
member limited liability company (LLC) that is disregarded as a
separate entity from its owner, then the bill allows the tax credit to be
claimed by the LLC’s owner.
COMMITTEE ACTION
Higher Education and Employment Advancement Committee
Joint Favorable Substitute
Yea 22 Nay 0 (03/17/2022)