Manufacturers’ Investment Program Expanded
Earlier this year, state lawmakers created a vehicle to allow some smaller manufacturers to put aside money to grow their operations and workforces in Connecticut. Now, the Jobs Bill is expanding the state’s fledgling Manufacturing Reinvestment Account (MRA) program to increase its scope and impact.
The new MRA program allows small manufacturers—with 50 or fewer employees—to invest in an interest-bearing, tax-deferred account for up to five years to save for the purchase of machinery, equipment, facilities, or for workforce training and development.
As passed by lawmakers earlier this year, the MRA allowed the Department of Economic and Community Development to choose 50 companies to participate. And the maximum amount manufacturers could invest was $50,000 per year.
The Jobs Bill expands the number of companies that can participate in the program to 100 and increases the annual deposit potential to $100,000.
When manufacturers decide to withdraw funds for the program’s express purposes, money withdrawn will be taxed at a rate of 3.5%, regardless of the companies’ corporate or business structure.
The program applies to both C corporations and to pass-through entities such as S corporations and limited liability companies.
Any balance remaining after five years will be taxed at the full rate of 7.5% (which currently adds a 10% surcharge).
What’s more, each year, money deposited in the MRA is deductible from the company’s year’s gross income for that year.
Interested employers can get more information and face-to-face help with the MRA at any of the DECD events taking place across Connecticut. They may also visit the DECD website for more information.
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