On May 26, 2026, Connecticut Gov. Ned Lamont signed into law the fiscal year 2027 budget adjustment bill. Included in the bill is a provision expanding the availability of Research and Development (R&D, also referred to as Research and Experimental, or R&E) tax credits within the state. Prior to this law, CT limited the applicability of R&D tax credits to C corporations. Now, all other entity types can claim benefits on qualifying R&D activities occurring within the state.
Connecticut Expands Access to the R&D Credit for More Businesses
The R&D credit expansion will be effective for tax years starting on and after Jan. 1, 2026, and can apply to all R&D activities, up to a maximum of $1.5 million, occurring within CT as long as they are “not funded by a grant, contract or government entity, or person other than the taxpayer.” These R&D tax credits are refundable up to 65% for qualified small businesses and 90% for biotechnology businesses.
Claiming the credit will involve applying for tax credit vouchers through the Department of Economic and Community Development; however, the full details of the process are not yet public.
Taking full advantage of this opportunity means preparing now. Contact CBIZ today to discuss how to unlock tax savings, determine your eligibility for R&D credits on qualifying activity within Connecticut, and prepare to full advantage of Connecticut’s new, more expansive R&D tax credit program.
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