Connecticut announced on September 23, 2026 that small businesses can apply for a state tax credit tied to offering an ICHRA through Access Health CT BusinessPlus. The law predates the announcement. It permits a credit of up to $1,000 per covered employee in each of two consecutive income years, but the actual amount and availability depend on contributions, tax liability, approval and a statewide reservation cap. Official materials disagree about the employee cutoff and timing. source source source source
An application announcement, not a new federal ICHRA rule
The governor's September 23 announcement says the credit is now available and directs businesses to the Department of Revenue Services application. The controlling provision is section 85 of Connecticut Public Act 26-76, enacted earlier in 2026 and applicable to income and taxable years beginning on or after January 1, 2026. The credit is a Connecticut tax incentive; it does not change the federal rules for establishing an ICHRA. source source source
Connecticut tied the incentive to participation through its state exchange. The statute says the credit is for ICHRA participation through the Connecticut Health Insurance Exchange; the DRS form asks applicants whether they adopted the arrangement through Access Health CT. BusinessPlus is the exchange's employer-facing route. That condition is about this state credit, not a general requirement that every ICHRA everywhere use a state exchange. source source source
How much could a business actually claim?
For each eligible income year, the statute sets the credit at the lesser of qualified ICHRA contributions or $1,000 times the number of covered employees. A covered employee is one for whom the employer made a qualified ICHRA contribution during that year; it is not necessarily every employee offered the arrangement. The credit is available in the first income year the business offers the ICHRA and the immediately succeeding year. Unused credit expires after the year earned and is not refundable. source source
DRS requires an application to reserve an allocation based on intended contributions for both years. Approved applicants receive a certification stating the reserved amount; the statute does not allow a claim above that reservation. Reservations are first-come, first-served and cannot exceed $5 million statewide in any income year. The form's existence therefore does not mean a particular business is approved, that the full $1,000 amount will apply, or that funds remain available. source source
Where Connecticut's own descriptions diverge
| Question | Enacted law and tax application | Other public wording | What to do with the difference |
|---|---|---|---|
| How many employees? | Fewer than 50 employees in Connecticut on the application date. | The governor says “50 or fewer employees.” Access Health CT says “50 or fewer full-time employees.” | Do not assume a business with exactly 50 Connecticut employees qualifies. The law and current DRS form use the narrower test. Seek DRS clarification on a borderline case. |
| Which employees count for the credit? | The formula uses covered employees for whom the business made a qualified contribution during the income year. | The announcement describes “per employee”; Access Health CT says each employee enrolled. | Model actual contributions and the statutory covered-employee definition, not the entire payroll or merely the number offered an ICHRA. |
| When does it apply? | Section 85 applies to income and taxable years beginning on or after January 1, 2026; the form asks for the first year the ICHRA was offered. | The September 23 announcement says the credit is now available. Access Health CT's explainer says “Starting in 2027.” | Keep statutory applicability separate from operational enrollment and claiming. The public wording does not reconcile the dates for a particular employer. |
These are differences in official descriptions, not evidence that the underlying ICHRA law changed this week. The current form and enacted text support the fewer-than-50 test. They do not explain why the governor's and exchange's summaries use broader or differently qualified counts. source source source source
Must an employer have had a group plan before?
The statute defines a qualified business in part as one that adopted an ICHRA “in lieu of” a traditional employer-provided health insurance plan, and the DRS form repeats that condition. Neither document reviewed here clearly says whether an employer must have terminated an existing group plan or may choose an ICHRA instead of starting one. The governor's broad description of helping small businesses offer coverage does not settle that interpretation. Businesses considering a first-time benefit should obtain a DRS or Access Health CT answer for their facts before counting on the credit. source source source
What an employer should verify before budgeting the credit
- Count employees in Connecticut on the application date and check the business's applicable Connecticut tax type.
- Confirm the proposed ICHRA's BusinessPlus/exchange route and whether the “in lieu of” condition applies to the prior benefit history.
- Calculate intended qualified contributions and covered employees for each of the first two income years.
- Use the current DRS forms listing and obtain a written reservation decision before treating the credit as approved.
- Model year three without the credit and separately evaluate the insurance and out-of-pocket costs employees will face.
Our ICHRA foundation guide explains the underlying arrangement. The ICHRA versus group guide helps compare benefits without assuming the credit decides the outcome. Connecticut's separate 2027 rate decision describes insurance-market averages, not this credit's employer savings.
What the launch does not yet prove
The announcement and application do not establish the number of approved employers, covered employees, claims actually used, previous benefit arrangements, employee plan choices or changes in employer and employee costs. A particularly useful future measure is whether employers retain the ICHRA after the second credit year. Applications and reserved dollars alone would not answer that question. See our selected-state policy review for how Connecticut compares with other enacted credits and proposals.
Practical conclusion
Connecticut has a real, limited ICHRA tax credit with an application route. Use the statute and DRS form as the starting point, preserve the conflicts in the state's public summaries, and do not put an unapproved credit into a benefits budget as guaranteed savings.
Sources and evidence
Review dates are recorded for each source above. Company pages are useful for confirming how a product is described, but they do not prove service quality or customer results.