CT HB05492

Establishes a 20% income tax credit for eligible farmers who invest in farm machinery, equipment, or buildings acquired or constructed on or after January 1, 2025, with credit effective for tax years beginning January 1, 2025.

Defines eligible farmers as those whose federal gross income from farming is at least two-thirds of their excess federal gross income (total income above $30,000), with option to use three-year average income for eligibility determination.

Requires farm investment property to have a class life of more than four years, be located in Connecticut, and be held and used in agricultural production for at least five years; recaptures 100% of credit if property is not held for three full years or 50% if not held for five full years.

Increases optional property tax exemption thresholds for farm machinery from $100,000 to $250,000 for additional municipal exemptions and for farm buildings used in farming from $100,000 to $500,000.

Allows credits to be claimed by S corporation shareholders or partnership partners, with excess credits refunded without interest; prohibits claiming the farm investment credit alongside other tax credits for the same property.