NEW HAVEN, Conn. (WTNH) — In your rush to get your taxes filed by the April 18 deadline, don’t forget to check if you qualify for any breaks.
In Connecticut, multiple items can be deducted from gross income, like moving expenses for military members, health savings account contributions, alimony, and student loan interest. Jury duty pay can also be deducted.
Federal credits can be taken for family and dependents, being a homeowner, and owning an electric vehicle.
The IRS will begin accepting and processing tax returns on Monday, and your employer has until the end of January to put your forms in the mail. If you need an extension on filing your taxes, you must apply before April 18 — but the taxes you owe are still due on Tax Day.
Your return may be smaller this year, as well, because the Child Tax Credit, Earned Income Tax Credit, and Child and Dependent Care Credit will return to pre-pandemic amounts.
Here are some state tax breaks you may not have heard of:
You can qualify for an angel investor tax credit by investing between $25,000 and $1 million in a qualifying startup. The company must have fewer than 25 employees, be less than seven years old, receive less than $2 million in investments, and have made less than $1 million in gross revenue in the previous year.
Venture capitalists, banks, savings and loan associates, trust companies, insurance companies and people who control at least 50% of the business receiving the investment are ineligible for the credit.
The investor can receive a 25% credit against the state income tax if approved.
Looking to make a movie? Connecticut has potential tax credits for digital animation companies.
Companies can receive a tax credit between 10-30%. The credit is based on the number of qualified production expenses or costs spent in Connecticut, with a threshold of at least $100,000.
To qualify, a company must maintain studio facilities in Connecticut and employ at least 200 people full-time.
Promotional tax credits are available for those who film a movie in the Constitution State, ranging from a 10% credit for $100,000 spent to 30% for meeting a threshold of at least $1 million.
To be eligible, a film company must conduct at least half of its principal photography days in Connecticut, spend at least 50% of its postproduction costs here or spend at least $1 million on postproduction costs in the state.
Additional credits are available for building facilities to film in.
Looking to revitalize some property? You could invest while getting some tax credits out of it, too.
Companies that revitalize urban and industrial sites can receive a tax credit of up to 100% — with a cap of $100 million. In order to qualify, there must be an investment of $5 million in distressed communities, $2 million for a historic preservation facility redeveloped for mixed us, or $50 million in all other communities.
This old home can turn into a nice tax break.
Rehabilitating a home listed on the National or State Register of Historic Places, or in a historic district, can lead to a tax credit worth 30% of the cost of the project. The tax credit cannot be greater than $30,000 per dwelling for a historic home if it has a private owner. If owned by a nonprofit, that increases to $50,000.
A little goodwill can take you far. Donating land for open space or educational purposes can give you a tax credit of 50% of the value of the land.