Connecticut Property Tax Credit
Connecticut residents must complete Schedule 3 to determine the amount of credit (if any) that may be taken against a Connecticut income tax liability. The credit is for property taxes paid during 2015 to a Connecticut political subdivision on a primary residence or privately owned or leased motor vehicle, or both.
Which Property Tax Bills Qualify
You may take credit against your 2015 Connecticut income tax liability for property tax payments you made on your primary residence or privately owned or leased motor vehicle, or both, to a Connecticut political subdivision. Generally, property tax bills due and paid during 2015 qualify for this credit. This includes any installment payments you made during 2015 that were due in 2015 and any installments you prepaid during 2015 due in 2016. Supplemental property tax bills that were due during 2015 or 2016 also qualify if paid during 2015. However, the late payment of any property tax bills or the payment of any interest, fees, or charges related to the property tax bill do not qualify for the credit.
Taxpayers who file a joint Connecticut income tax return may include property tax bills for which each spouse is individually or jointly liable.
You may take credit for a leased motor vehicle if you had a written lease agreement for a term of more than one year, and the property tax became due and was paid during 2015 (either by the leasing company or by you). Refer to your January 2016 billing statement from the leasing company to determine the amount of property taxes that may be eligible for the credit. Your statement will either indicate the amount of property taxes paid on your leased motor vehicle or provide you with a toll-free number you may call to obtain the necessary information. If you do not receive a billing statement in January 2016, contact your leasing company for the appropriate property tax information.
Example 1: Lisa received a property tax bill for a motor vehicle listed on her town’s October 1, 2013, grand list. The bill was payable in two installments, July 1, 2014, and January 1, 2015. If Lisa paid the January 1, 2015, installment on January 1, 2015, she is eligible to claim it on her 2015 income tax return. If she prepaid it during 2014, she is not eligible to take credit for it on her 2015 return, but she may have been eligible to take credit for it on her 2014 return.
Example 2: Mary received a property tax bill for a motor vehicle listed on her town’s October 1, 2014, grand list. The bill was payable in two installments, July 1, 2015, and January 1, 2016. Mary is eligible to take credit for both installments on her 2015 income tax return if she paid both installments during 2015. If Mary waited until January 1, 2016, to pay her second installment, she is not eligible to take credit on her 2015 return for this installment, but she may be eligible to take credit for it on her 2016 return.
Maximum Credit Allowed
The maximum credit allowed (on your primary residence or motor vehicle, or both) is $300 per return regardless of filing status.
This maximum property tax credit cannot exceed the amount of qualifying property taxes paid or the amount of tax entered on Form CT-1040, Line 10, and is phased out depending upon your Connecticut adjusted gross income. To be allowed this credit, you must complete Schedule 3 in its entirety and attach it to your return.
To view the 2015 Form CT-1040 instructions click here.