DRS: 12-719-2, Alternatives to filing group return for S corporations only: agreements or composite return

DRS has reproduced this regulation. This is an unofficial copy. Official copies of regulations ONLY are available from the Commission on Official Legal Publications. 111 Phoenix Avenue. Enfield, CT 06082. colp@jud.state.ct.us Copies of DRS forms and publications are available at http://www.ct.gov/drs

Conn. Agencies Regs. § 12-719-2. Alternatives to filing group return for S corporations only: agreements or composite return.

(a) With respect to any nonresident individuals who are shareholders of an S corporation doing business in Connecticut or having income derived from or connected with Connecticut sources whose shareholders are not included in a Form CT-G under §12-719-1 of this Part, the S corporation shall either (1) file an agreement (Form CT-1NA) on behalf of each such shareholder, as described in subsection (b) of this section, or (2) complete and file the composite return portion of the Form CT-1120SI and pay Connecticut income tax on behalf of each such shareholder, as provided in subsection (c) of this section.

(b) A nonresident individual who is a shareholder of an S corporation and who is not included in a Form CT-G under §12-719-1 of this Part may execute a Form CT-1NA in which he or she agrees (1) to file a declaration of estimated tax and all other required returns and to make timely payments of Connecticut income tax, including estimated tax payments, and (2) to be subject to personal jurisdiction in this state for the collection of Connecticut income tax and any additions to tax, interest and penalties. Such agreement shall be binding upon the shareholder’s heirs, representatives, assigns, successors, executors and administrators. Each such Form CT-1NA shall be attached to the Form CT-1120SI filed with the Department by the S corporation and shall remain in effect until a written notice of revocation is sent by the shareholder to the S corporation.

(c)(1) For any nonresident individuals who are shareholders of an S corporation described in subsection (a) and who are not included in a Form CT-G and who do not execute a Form CT-1NA, the S corporation shall complete and file the composite return portion of the Form CT-1120SI and pay Connecticut income tax on behalf of such shareholders. Such payments by an S corporation on behalf of such nonresident shareholders are considered to be Connecticut income tax paid by such shareholders. The tax shall be calculated at the highest marginal rate on each nonresident shareholder’s pro rata share of S corporation separately computed income derived from or connected with Connecticut sources (as determined under Part VII). The filing of a composite return and the payment of tax by an S corporation on behalf of a nonresident shareholder shall not satisfy any filing and payment requirements for Connecticut income tax or Connecticut alternative minimum tax that apply to such shareholder on account of his or her income other than from the S corporation.

(2) An S corporation paying tax on behalf of its nonresident shareholders pursuant to this subsection may recover such payments from the shareholders for whom they were made.

(3) Payments of Connecticut income tax by an S corporation on behalf of its nonresident shareholders shall be made on or before the fifteenth day of the fourth month following the close of the taxable year of the S corporation.

(d) While this section pertains to Section 12-719 of the general statutes, for purposes of supplementary interpretation, as the phrase is used in Section 12-2 of the general statutes, the adoption of this section is authorized by Section 12-740(a) of the general statutes.

(Effective November 18, 1994.)