Sec. 12-719. Filing of returns. Returns for partnerships, S corporations and pass-through entities. Returns for nonresident athletes of professional teams.
Sec. 12-719. Filing of returns. Returns for partnerships, S corporations and
pass-through entities. Returns for nonresident athletes of professional teams. (a)
The income tax return required under this chapter shall be filed on or before the fifteenth
day of the fourth month following the close of the taxpayer's taxable year. A person
required to make and file a return shall, without assessment, notice or demand, pay any
tax due thereon to the Commissioner of Revenue Services on or before the date fixed
for filing such return, determined without regard to any extension of time for filing the
return. The commissioner shall prescribe by regulation the place for filing any return,
declaration, statement or other document required pursuant to this chapter and for the
payment of any tax.
(b) (1) With respect to each of its nonresident partners, each partnership doing
business in this state or having income derived from or connected with sources within
this state shall, for each taxable year, make payment to the commissioner as provided
in subdivision (2) of this subsection.
(2) (A) Any payment under this subdivision shall be in an amount equal to the
highest marginal tax rate in effect under section 12-700 for the taxable year multiplied
by the subject partner's distributive share of (i) such partnership's separately and nonseparately computed items, as described in Section 702(a) of the Internal Revenue Code,
to the extent derived from or connected with sources within this state, as determined
under this chapter, and (ii) any modification described in section 12-701 which relates
to an item of such partnership's income, gain, loss or deduction, to the extent derived
from or connected with sources within this state, as determined under this chapter. Any
amount paid by a partnership to this state with respect to any taxable year pursuant to
this subdivision shall be considered to be a payment by the partner on account of the
income tax imposed on the partner for such taxable year pursuant to this chapter. A
partnership shall not be liable to, and shall be entitled to recover a payment made pursuant
to this subdivision from, the partner on whose behalf the payment was made. Any payment for a taxable year shall be made on or before the date the annual return for such
taxable year is required to be filed pursuant to section 12-726. The partnership shall
furnish, on a form prescribed by the commissioner, to each partner on whose behalf
payment was made under this subdivision no later than the fifteenth day of the fourth
month following the close of the partnership's taxable year a record of the amount of
the tax paid on behalf of such partner by the partnership with respect to the taxable year.
(B) (i) If income from one or more pass-through entities, as defined in subparagraph
(D) of this subdivision, is the only source of income derived from or connected with
Connecticut sources of a partner, or the partner and his or her spouse if a joint federal
income tax return is or shall be made, the filing by the partnership of an annual return
pursuant to section 12-726 and the payment by the partnership on behalf of the partner
of the tax prescribed under subparagraph (A) of this subdivision shall satisfy the filing
and payment requirements otherwise separately imposed on the partner by this chapter.
The commissioner may make any deficiency assessment against, at the commissioner's
sole discretion, either the partnership or the partner, provided any such assessment
against the partner shall be limited to the partner's share thereof. Except as otherwise
provided in section 12-733, any such assessment shall be made not later than three years
after the partnership's annual return pursuant to section 12-726 is filed. The commissioner may refund or credit any overpayment to either the partnership or the partner, in
the commissioner's sole discretion. Except as otherwise provided in section 12-732,
any such overpayment shall be refunded or credited not later than three years from the
due date of the partnership's annual return pursuant to section 12-726 or, if the time for
filing such return was extended, not later than three years from the date on which such
return is filed or the extended due date of such return, whichever is earlier.
(ii) If income from one or more pass-through entities, as defined in subparagraph
(D) of this subdivision, is not the only source of income derived from or connected with
Connecticut sources of a partner, or the partner and his or her spouse if a joint federal
income tax return is or shall be made, nothing in this subdivision shall be construed as
excusing the partner from the obligation to file his or her own separate tax return under
this chapter. In such event, the partner shall receive credit for the income tax paid under
this subdivision by the partnership on his or her behalf. The commissioner may make
any deficiency assessment that is related to the partner's share of partnership items
against either, in the commissioner's sole discretion, the partnership or the partner. If
the commissioner chooses to make any deficiency assessment against the partnership,
then, except as otherwise provided in section 12-733, any such assessment shall be made
not later than three years after the partnership's annual return pursuant to section 12-726 is filed. The commissioner may refund or credit any overpayment that is related to
the partner's share of partnership items to either, in the commissioner's sole discretion,
the partnership or the partner. If the commissioner chooses to refund or credit any overpayment to the partnership, then, except as otherwise provided in section 12-732, any
such overpayment shall be refunded or credited not later than three years from the due
date of the partnership's annual return pursuant to section 12-726 or, if the time for
filing such return was extended, not later than three years from the date on which such
return is filed or the extended due date of such return, whichever is earlier.
(C) Notwithstanding any provision of subparagraph (A) of this subdivision, a partnership shall not be required to make a payment on account of the income tax imposed
on a partner for a taxable year pursuant to this chapter if (i) the partner's distributive
share of partnership income, to the extent derived from or connected with sources within
this state, as reflected on the partnership's annual return for the taxable year under
section 12-726, is less than one thousand dollars; (ii) the department has determined by
regulation, ruling or instruction that the partner's income is not subject to the provisions
of this subdivision; or (iii) the partnership is a publicly traded partnership, as defined
in Section 7704(b) of the Internal Revenue Code, that is treated as a partnership for
federal income tax purposes and that has agreed to file the annual return pursuant to
section 12-726, and to report therewith the name, address, Social Security number or
federal employer identification number, and other information required by the department concerning each unitholder whose distributive share of partnership income, to the
extent derived from or connected with sources within this state, as reflected on such
annual return, is more than five hundred dollars.
(D) If a member of a pass-through entity, referred to in this subparagraph as an
"upper-tier pass-through entity", is itself a pass-through entity, the member, referred to
in this subparagraph as a "lower-tier pass-through entity", shall be subject to the same
requirements to make payment, on behalf of its members, of the income tax imposed
on those members pursuant to this chapter that apply to the upper-tier pass-through
entity under this subdivision. The department shall apply the income tax paid by the
upper-tier pass-through entity, on behalf of the lower-tier pass-through entity, to the
income tax required to paid by the lower-tier pass-through entity, on behalf of its members. For purposes of this subdivision, "pass-through entity" means an S corporation,
general partnership, limited partnership, limited liability partnership or limited liability
company that is treated as a partnership for federal income tax purposes; and "member"
means a shareholder of an S corporation, a partner in a general partnership, a limited
partnership, or a limited liability partnership and a member of a limited liability company
that is treated as a partnership for federal income tax purposes.
(E) For purposes of section 12-740, a nonresident individual who is a member of
a pass-through entity, as defined in subparagraph (D) of this subdivision, shall not be
required to file an income tax return under this chapter for a taxable year if, for such
taxable year, the only source of income derived from or connected with Connecticut
sources of such member, or the member and his or her spouse if a joint federal income
tax return is or shall be made, is from one or more pass-through entities, and the sum
of such income derived from or connected with Connecticut sources from such one or
more pass-through entities is less than one thousand dollars.
(c) (1) With respect to each of its nonresident shareholders, each S corporation
doing business in this state or having income derived from or connected with sources
within this state shall, for each taxable year, make payment to the commissioner as
provided in subdivision (2) of this subsection.
(2) (A) Any payment under this subdivision shall be in an amount equal to the
highest marginal tax rate in effect under section 12-700 for the taxable year multiplied
by the subject shareholder's pro rata share of (i) such S corporation's separately and
nonseparately computed items, as described in Section 1366 of the Internal Revenue
Code, to the extent derived from or connected with sources within this state, as determined under this chapter, and (ii) any modification described in section 12-701 which
relates to an item of such S corporation's income, gain, loss or deduction, to the extent
derived from or connected with sources within this state, as determined under this chapter. Any amount paid by an S corporation to this state with respect to any taxable year
pursuant to this subdivision shall be considered to be a payment by the shareholder on
account of the income tax imposed on the shareholder for such taxable year pursuant
to this chapter. An S corporation shall not be liable to, and shall be entitled to recover
a payment made pursuant to this subdivision from, the shareholder on whose behalf the
payment was made. Any payment for a taxable year shall be made at or before the date
the annual return for such taxable year is required to be filed pursuant to section 12-726. The S corporation shall furnish, on a form prescribed by the department, to each
shareholder on whose behalf payment was made under this subdivision no later than
the fifteenth day of the fourth month following the close of the S corporation's taxable
year a record of the amount of the tax paid on behalf of such shareholder by the S
corporation with respect to the taxable year.
(B) (i) If income from one or more pass-through entities, as defined in subparagraph
(D) of this subdivision, is the only source of income derived from or connected with
Connecticut sources of a shareholder, or the shareholder and his or her spouse if a joint
federal income tax return is or shall be made, the filing by the S corporation of an annual
return pursuant to section 12-726 and the payment by the S corporation on behalf of the
shareholder of the tax prescribed under subparagraph (A) of this subdivision shall satisfy
the filing and payment requirements otherwise separately imposed on the shareholder
by this chapter. The commissioner may make any deficiency assessment against, at the
commissioner's sole discretion, either the S corporation or the shareholder, provided
any such assessment against the shareholder shall be limited to the shareholder's share
thereof. Except as otherwise provided in section 12-733, any such assessment shall be
made not later than three years after the S corporation's annual return pursuant to section
12-726 is filed. The commissioner may refund or credit any overpayment to either the
S corporation or the shareholder, in the commissioner's sole discretion. Except as otherwise provided in section 12-732, any such overpayment shall be refunded or credited
not later than three years from the due date of the S corporation's annual return pursuant
to section 12-726 or, if the time for filing such return was extended, not later than three
years from the date on which such return is filed or the extended due date of such return,
whichever is earlier.
(ii) If income from one or more pass-through entities, as defined in subparagraph
(D) of subdivision (2) of subsection (b) of this section, is not the only source of income
derived from or connected with Connecticut sources of a shareholder, or the shareholder
and his or her spouse if a joint federal income tax return is or shall be made, nothing in
this subdivision shall be construed as excusing the shareholder from the obligation to
file his or her own separate tax return under this chapter. In such event, the shareholder
shall receive credit for the income tax paid under this subdivision by the S corporation
on his or her behalf. The commissioner may make any deficiency assessment that is
related to the shareholder's share of S corporation items against either, in the commissioner's sole discretion, the S corporation or the shareholder. If the commissioner
chooses to make any deficiency assessment against the S corporation, then, except as
otherwise provided in section 12-733, any such assessment shall be made not later than
three years after the S corporation's annual return pursuant to section 12-726 is filed.
The commissioner may refund or credit any overpayment that is related to the shareholder's share of S corporation items to either, in the commissioner's sole discretion, the S
corporation or the shareholder. If the commissioner chooses to refund or credit any
overpayment to the S corporation, then, except as otherwise provided in section 12-732,
any such overpayment shall be refunded or credited not later than three years from the
due date of the S corporation's annual return pursuant to section 12-726 or, if the time
for filing such return was extended, not later than three years from the date on which
such return is filed or the extended due date of such return, whichever is earlier.
(C) Notwithstanding the provisions of subparagraph (A) of this subdivision, an S
corporation shall not be required to make a payment on account of the income tax
imposed on a shareholder for a taxable year pursuant to this chapter if (i) the shareholder's distributive share of S corporation income, to the extent derived from or connected
with sources within this state, as reflected on the S corporation's annual return for the
taxable year under section 12-726, is less than one thousand dollars; or (ii) the department
has determined by regulation, ruling or instruction that the shareholder's income is not
subject to the provisions of this subdivision.
(D) For purposes of this subdivision, the provisions of subparagraphs (D) and (E)
of subdivision (2) of subsection (b) of this section apply.
(d) (1) In lieu of filing a return pursuant to this section, the commissioner may, if
he determines that the enforcement of this chapter would not be adversely affected and
pursuant to requirements and conditions set forth in forms and instructions, provide for
the filing of a composite return for every qualifying nonresident member of a professional athletic team by such team, if such team is doing business in this state or the
members of such team have compensation which is received for services rendered as
members of such team and which is derived from or connected with sources within
this state.
(2) If a professional athletic team is required to file a composite return pursuant to
this subsection, the commissioner may, if he determines that the enforcement of this
chapter would not be adversely affected, require such team, in lieu of deducting and
withholding Connecticut income tax as may otherwise be required under section 12-705, to make payment to the commissioner of tax, estimated tax, additions to tax, interest
and penalties otherwise required to be paid to the commissioner by such qualifying
nonresident members.
(3) The commissioner may, if he determines that the enforcement of this chapter
would not be adversely affected, require a professional athletic team, in lieu of deducting
and withholding Connecticut income tax as may otherwise be required under section
12-705, to make payment to the commissioner of tax, estimated tax, additions to tax,
interest and penalties otherwise required to be paid to the commissioner by every (A)
resident member, but only with respect to compensation which is received for services
rendered as a member of a professional athletic team and (B) nonresident member who
is not a qualifying nonresident member, but only with respect to compensation which
is received for services rendered as a member of a professional athletic team and which
is derived from or connected with sources within this state.
(4) Any amount paid by a professional athletic team to this state with respect to any
taxable period pursuant to this subsection shall be considered to be a payment by the
member on account of the income tax imposed on the member for such taxable period
pursuant to this chapter. The team shall be entitled to recover a payment made pursuant
to this subsection from the member on whose behalf the payment was made.
(5) For purposes of this subsection, "qualifying nonresident member" means a
member of a professional athletic team who is a nonresident individual for the entire
taxable year, who does not maintain a permanent place of abode in Connecticut at any
time during the taxable year, who does not have income derived from or connected with
sources within this state other than compensation which is received for services rendered
as a member of a professional athletic team and which is derived from or connected
with sources within this state.
(June Sp. Sess. P.A. 91-3, S. 70, 168; May Sp. Sess. P.A. 92-5, S. 14, 37; P.A. 95-263, S. 1, 4; P.A. 96-175, S. 4, 5;
P.A. 98-262, S. 11, 22; P.A. 04-216, S. 54; P.A. 06-159, S. 5.)
History: June Sp. Sess. P.A. 91-3, S. 70, effective August 22, 1991, and applicable to taxable years of taxpayers
commencing on or after January 1, 1991; May Sp. Sess. P.A. 92-5 made various technical and minor changes, effective
June 19, 1992, and applicable to taxable years of taxpayers commencing on or after January 1, 1992; P.A. 95-263 added
Subsec. (d) to permit filing a composite return for qualifying nonresident members of professional athletic teams, effective
July 6, 1995, and applicable to taxable years commencing on or after January 1, 1996; P.A. 96-175 amended Subsec. (c)(3)
to add the amount of the shareholder's pro rata share of the corporations' nonseparately computed items, reduced by the
amount subject to tax under chapter 208 to the calculation of payment, effective May 31, 1996, and applicable to income
years commencing on or after January 1, 1997; P.A. 98-262 amended Subsec. (c)(3) to clarify language relating to how a
nonresident shareholder must calculate tax for nonseparately stated income derived from or connected with sources within
this state, effective June 8, 1998, and applicable to taxable years commencing on or after January 1, 1998; P.A. 04-216
deleted former Subsec. (b) and added new Subsec. (b) re group returns of partnerships with nonresident partners and
amended Subsec. (c) to add provisions re group returns of S corporations with nonresident shareholders and make conforming changes, effective May 6, 2004, and applicable to taxable years commencing on or after January 1, 2004, and to
estimated composite income tax payments required to be made on or after May 6, 2004; P.A. 06-159 amended Subsecs.
(b) and (c) to eliminate group tax returns for partnerships, S corporations and pass-through entities, to require such businesses
to pay the taxes nonresident partners owe on income from such businesses and to make conforming changes, effective
June 6, 2006, and applicable to taxable years commencing on or after January 1, 2006.