1. Subtract the amount of interest earned on funds deposited in a Connecticut individual development account, to the extent included in federal adjusted gross income.
2. Subtract any interest paid on indebtedness incurred to acquire investments that provide income taxable in Connecticut but exempt for federal purposes, that is not deductible in determining federal adjusted gross income, and that is attributable to a trade or business of that individual.
3. Subtract expenses paid or incurred for the production (including management, conservation, and maintenance of property held for production) or collection of income taxable in Connecticut but exempt from federal income tax, which were not deductible in determining federal adjusted gross income, and that is attributable to a trade or business of that individual.
4. Subtract any amortizable bond premium on bonds that provide interest income taxable in Connecticut but exempt from federal income tax, which premiums were not deductible in determining federal adjusted gross income, and that is attributable to a trade or business of that individual.
5. Subtract the amount of any interest income from notes, bonds, or other obligations of the State of Connecticut which interest income is included in federal adjusted gross income.

Do not subtract income subject to tax in a qualifying jurisdiction. See Schedule 2 - Credit for Income Taxes Paid to Qualifying Jurisdictions below, or income of a nonresident spouse (see Special Rules for Married Individuals on Page 14) here.

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