Today Governor Malloy signed legislation that expanded Connecticut’s Manufacturing Reinvestment Account (MRA) program, doubling the amount of tax benefits available and expanding the definition. In 2010, Connecticut was the first state in the nation to begin offering MRA’s which are similar to individual retirement accounts for businesses.
The tax benefit of establishing an MRA includes a Connecticut income tax deduction for the amount contributed to the account so long as the monies are utilized for qualified purchases in Connecticut, such as training, equipment and facilities. Under the recently enacted tax legislation and beginning January 1, 2014, contributions to the MRA continue to be 100% deductible for Connecticut income tax purposes in the year in which the contribution is made, but “qualified distributions” from the account are no longer considered taxable income. The legislation also reduces the number of manufacturers that can participate in the MRA program from 100 to 50, but increases the maximum number of employees a manufacturer may have to be eligible as a small manufacturer, from 50 to 150.