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 2014 to a Connecticut political subdivision on a primary residence, privately owned or leased motor vehicle,
or both. You must attach Schedule 3 to Form CT-1040 or your credit will be disallowed. If you entered zero on Form CT-1040, Line 10, do not complete this schedule. See Informational Publication 2014(25), Q&A: Income Tax Credit for Property Taxes Paid to a Connecticut Political Subdivision.
Which Property Tax Bills Qualify
You may take credit against your 2014 Connecticut income tax liability for qualifying property tax payments you made on your primary residence, privately owned or leased motor vehicle, or both, to a Connecticut political subdivision. Generally, property tax bills due and paid during 2014 qualify for this credit. This includes any installment payments you made during 2014 that were due in 2014 and any installments you prepaid during 2014 due in 2015. Supplemental property tax bills that were due during 2014 or 2015 also qualify if paid during 2014. 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 fi le 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 2014 (either by the leasing company or by you). Refer to your January 2015 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 2015, 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, 2012, grand list. The bill was payable in two installments, July 1, 2013, and January 1, 2014. If Lisa paid the January 1, 2014, installment on January 1, 2014, she is eligible to claim it on her 2014 income tax return. If she prepaid it during 2013, she is not eligible to take credit for it on her 2014 return, but she may have been eligible to take credit for it on her 2013 return. Example 2: Mary 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. Mary is eligible to take credit for both installments on her 2014 income tax return if she paid both installments during 2014. If Mary waited until January 1, 2015, to pay her second installment, she is not eligible to take credit on her 2014 return for this installment, but she may be eligible to take credit for it on her 2015 return.
Maximum Credit Allowed
The maximum credit allowed (on your primary residence, motor vehicle, or both) is $300 per return regardless of fi ling 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.
Motor Vehicle Credit Restrictions
The number of motor vehicles eligible for this credit depends on your fi ling status as shown on the front of your Connecticut income tax return. Any individual whose fi ling status is single, fi ling separately, or head of household is limited to the property tax paid on one motor vehicle even if the individual sells a motor vehicle and purchases a replacement motor vehicle during the taxable year and only owns one motor vehicle at any time during the taxable year. Individuals whose fi ling status is fi ling jointly or qualifying widow(er) with dependent child are limited to the property taxes paid on two motor vehicles.