2024 - Withholding Tax Information


What's New for 2024

The following are recent legislative changes that impact 2024 withholding requirements for Connecticut employers:

Reduction in Certain Income Tax Rates

Legislation lowers the two lowest marginal rates. Specifically, the 3% rate on the first $10,000 earned by unmarried individuals and the first $20,000 earned by married individuals filing jointly or earned by a person who files a return under the federal income tax as a surviving spouse, will decrease to 2%. The 5% rate on the next $40,000 earned by unmarried individuals and the next $80,000 earned by married individuals filing jointly or earned by a person who files a return under the federal income tax as a surviving spouse will decrease to 4.5%. These benefits will be capped for unmarried individual filers who earn $150,000 and for married individuals filing jointly or for a person who files a return under the federal income tax as a surviving spouse who earn $300,000. This legislation also includes a recapture provision. As such, each taxpayer whose Connecticut adjusted gross income exceeds one hundred five thousand dollars shall pay, in addition to the tax computed under the provisions of subparagraphs (A)(i) and (A)(ii), an amount equal to twenty-five dollars for each five thousand dollars, or fraction thereof, by which the taxpayer's Connecticut adjusted gross income exceeds one hundred five thousand dollars, up to a maximum payment of two hundred fifty dollars. This legislation is effective from passage and applicable to taxable years beginning on or after January 1, 2024.

Revisions to Subtraction Modification for Pension and Annuity Income and IRA Distributions

Legislation provides for a phase-out for allowable pension and annuity and IRA distribution deductions against the personal income tax. It extends the eligibility for the pension, annuity and IRA (other than Roth IRA) income tax subtraction modification to taxpayers with AGI of (1) at least $75,000, but less than $100,000 for single filers, and (2) at least $100,000 but less than $150,000 for joint filers. The legislation gradually reduces the amounts until they fully phase out at $100,000 or $150,000, as applicable. The income tax subtraction modification for IRA distributions (other than Roth IRA) phases in over four years as follows: 25% of such distribution for 2023, 50% of such distribution for 2024, 75% of such distribution for 2025 and 100% for 2026 and future years. This legislation is effective from passage and applicable to taxable years beginning on or after January 1, 2024.


Who Must Complete a Registration Application and File a Withholding Tax Return

If you are an employer starting a new business, and you are not already registered with the Department of Revenue Services (DRS) you must register for Connecticut income tax withholding. Visit myconneCT to register your business for withholding tax.

If you maintain an office or transact business in Connecticut and you are considered an employer for federal withholding purposes, you must withhold Connecticut income tax whether or not your payroll department is located in Connecticut. Special rules apply to payers of nonpayroll amounts and payers of compensation to professional athletes and entertainers.

If you are already registered with DRS for other state taxes you are still required to register to withhold Connecticut income tax if you have employees. Use myconneCT to register for withholding as an additional tax.

Click here to File, Pay, or Register Now on myconneCT!

Go to myconneCT, under Business Registration click New Business/Need a CT Registration Number? There is no fee for registering for Withholding Tax.

myconneCT is the new Connecticut Department of Revenue Services’ (DRS) online portal to file tax returns, make payments, view your filing history, and communicate with the agency simply and more efficiently on virtually any mobile device, including laptops, tablets, and smartphones, 24 hours a day, 7 days a week.

If you acquired an existing business you must register with DRS to obtain a Connecticut Tax Registration Number.

The DRS Tax Registration Number and Federal Employer Identification Number must appear on all Connecticut withholding forms and on all correspondence with DRS. Do not use the registration number issued by the Department of Labor (DOL) on DRS forms.

IMPORTANT: Employers are also required to register with the Connecticut Department of Labor for unemployment taxes. Please telephone that agency at 860-263-6000 or visit their website at DOL website.


Withholding Information for Connecticut Residents Who Work in Another State

A Connecticut resident is subject to Connecticut income tax on all of his or her income regardless of where the income is earned. However, if the resident works in another state that imposes an income tax, the individual is also subject to tax in the state in which he or she works.   

The employer will withhold tax for the state in which the individual works and will submit the tax to that state.  If the employer is also registered to withhold Connecticut income tax, Connecticut income tax must be withheld by the employer, but only to the extent that Connecticut income tax withholding exceeds the amount required to be withheld for the state in which the services are performed. For further information, employers should consult the Circular CT, Connecticut Employer's Tax Guide.

Returns to be Filed in Connecticut and in the Other State

A Connecticut resident who works in another state that imposes an income tax will be required to file a nonresident income tax return for the other state and a resident return for Connecticut.  The Connecticut resident will receive credit from Connecticut for income tax paid to the other state on income earned for services performed in the other state.  The credit allowed will be the lesser of the tax paid to the other state or the tax which Connecticut imposes on the resident's out-of-state wages. The credit is claimed by completing Form CT-1040, Schedule 2, and attaching a copy of the return filed with the other state.  The resident should contact the state in which he or she worked to determine the correct form to file to report the income earned in that state.


Estimated Payments

The taxpayer who owes $1,000 or more in Connecticut income tax, after subtracting:

  • the credit for taxes paid to another jurisdiction,
  •  the Connecticut income tax withheld, and
  • any Connecticut PE Tax Credit the taxpayer is allowed to claim, should make estimated tax payments. 

Estimated payments may be required if the taxpayer earns significant income that is not subject to withholding in the other state (such as interest income, capital gain, or dividends).  Estimated payments for calendar year taxpayers are due on April 15, June 15, September 15, and January 15, and are made using Form CT-1040ES. For a fast, free, easy, and secure way to schedule Estimated payments use myconneCT.


Withholding Information for Nonresidents Who Work in Connecticut

Wages of a nonresident employee are subject to Connecticut income tax withholding if the wages are paid for services rendered in Connecticut. Wages of a nonresident are not subject to Connecticut income tax withholding if the wages are paid for services performed entirely outside of Connecticut.

Example: Working solely within Connecticut: A resident of Massachusetts works in Connecticut for an employer that is doing business in Connecticut and in Massachusetts. The employer is required to withhold Connecticut income tax because the services are performed in Connecticut.

Example: Working solely outside Connecticut: A resident of New York works in New York for an employer whose main office, including the payroll department, is located in Connecticut. The employer is not required to withhold Connecticut income tax even though payment is made from a point in Connecticut, because the employee is a nonresident and performs all services outside Connecticut.

Example: Working partly within and partly outside Connecticut: A resident of Rhode Island works partly in Connecticut and partly in Rhode Island for an employer who is doing business in Connecticut and Rhode Island. The employer is required to withhold Connecticut income tax on wages paid to the nonresident employee in the same proportion that the employee’s wages derived from or connected with sources within Connecticut relate to the employee’s total wages.

Further information on withholding requirements for nonresidents working in Connecticut are found in the Circular CT, Employer's Tax Guide.


Convenience of the Employer Test in Determining Connecticut Sourced Income for a Nonresident Employee

For taxable years beginning on or after January 1, 2019, residents of states with a “convenience of the employer” test will be subject to similar rules for work performed for a Connecticut employer.

Generally, in a state that applies this test, wages earned by a nonresident are allocated to the employer’s location unless the nonresident works from an out-of-state location due to the necessity of the employer rather than the convenience of the employee.

For example, under this new law, in determining whether income earned by a New York resident individual telecommuting for a Connecticut employer will be deemed Connecticut source income, Connecticut will apply the New York “convenience of the employer” test.

Nonresident employees working for a Connecticut employer from a remote location and residing in a state with a “convenience of the employer” test will have Connecticut income tax withheld. If no income tax is withheld, such employee should make estimated payments.


Filing Due Dates

Employers and Nonpayroll Payers are required to file all withholding forms and remit all withholding payments electronically.

Employers Weekly, Monthly, and Quarterly Remitter Due Dates

Form

Weekly Remitter

Monthly Remitter

Quarterly Remitter

Form CT-WH.

 

Must be paid Electronically.

If the payday falls on a Saturday, Sunday, Monday, or Tuesday, the due date is the second Wednesday following the payday. (See Weekly Remitter Payday falls on a Saturday, Sunday, Monday, or Tuesday, below.)

 

If the payday falls on a Wednesday, Thursday, or Friday, the due date is the Wednesday following the payday. (See Weekly Remitter Payday falls on a Wednesday, Thursday, or Friday, below).

The fifteenth day of the following month. Example: For Paydays occurring in February, the due date is March 15.

Last day of the month following the calendar quarter. Same due date as Form CT-941.

  • 1st (Jan.- Mar.) is due April 30
  • 2nd (Apr.-Jun.) is due July 31
  • 3rd (Jul.-Sept.) is due October 31
  • 4th (Oct.- Dec.) is due January 31

Weekly Remitter:  If the payday falls on a Saturday, Sunday, Monday, or Tuesday, the due date is the second Wednesday following the payday. 

Example: If payday falls on Monday the 8th the due date is Wednesday the 17th.

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Weekly Remitter: If the payday falls on a Wednesday, Thursday, or Friday, the due date is the Wednesday following the payday. 

Example: If payday falls on Thursday the 4th the due date is Wednesday the 10th.

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Form Purpose

Employers

Household Employers

Seasonal*

Agricultural*

Weekly and Monthly

Quarterly

To make your withholding tax payments: All payments must be made electronically

Form CT-WH, Connecticut Withholding Tax Payment Form

Form CT-WH or

Form CT-941, Connecticut Quarterly Reconciliation of Withholding

Form CT-941 HHE, Connecticut Reconciliation of Withholding for Household Employers

Form CT-WH or Form CT-941

Form CT-WH or Form CT-941, Connecticut Quarterly Reconciliation of Withholding

To file your quarterly reconciliations: Must be filed electronically

Form CT-941

Form CT-941

N/A

Form CT-941

Form CT-941

To file annual reconciliation with Forms W-2: Must be filed electronically

Form CT-W3, Connecticut Annual Reconciliation of Withholding

Form CT-W3, Connecticut Annual Reconciliation of Withholding

Form CT-W3 HHE,

Connecticut Annual Reconciliation of Withholding for Household Employers

Form CT-W3, Connecticut Annual Reconciliation of Withholding

Form CT-W3, Connecticut Annual Reconciliation of Withholding

Quarterly and Annual Reconciliation Forms

* You must request and receive permission from DRS to file as a seasonal or agricultural filer.

Employer Quarterly and Annual Reconciliation Due Dates

Form

Quarterly filers

Form CT-941

Last day of the month following the quarter. Example: First quarter is January 1 through March 31 - the due date is April 30.

Form CT-W3

Submit to DRS Form CT-W3 along with federal Forms W-2 by January 31.


Electronic Payment Options

All Withholding Tax payments must be made electronically. Non-electronic payments made without an electronic payment waiver will be subject to penalty. See Informational Publication 2022(6), Filing and Paying Connecticut Taxes Electronically.

There are multiple options to pay electronically:

myconneCT

Click here to File, Pay, or Register Now on myconneCT!

Visit myconneCT to make an electronic payment. After logging in to myconneCT, find your tax account on the Summary screen, select the Make a Payment link and choose your payment method.

  • Pay by Direct Payment: Using this option authorizes DRS to electronically withdraw a payment from your bank account (checking or savings) on a date you select up to the due date.

  • Pay by Credit Card or Debit Card: You may elect to pay your tax liability using a credit card (American Express®, Discover®, MasterCard®, VISA®) or comparable debit card. A convenience fee will be charged by the credit card service provider.  You will be informed of the amount of the fee and may elect to cancel the transaction. Your payment will be effective on the date you make the charge.

At the end of the transaction, you will receive a confirmation number for your records. As a reminder, even if you pay electronically, you must still file your return by the due date. Tax not paid on or before the due date will be subject to penalty and interest.


Fed/State Employment Taxes Program (FSET)

DRS participates in the FSET program through which you can initiate federal taxes, Connecticut withholding and unemployment compensation payments and file multiple government returns through the same portal.

The FSET program is used by software developers, transmitters, and payroll service providers. It enables businesses to file payroll tax returns and make payments.

Transmission using the FSET system may be made by an individual employer or a third party, using the required XML format.

If your company is interested in using the FSET system for the quarterly filing of state and federal tax and wage reports and making employment tax payments ask your payroll company to contact DRS to get more information, or contact an Approved FSET Vendor.


ACH Credit

ACH credit method users should consult with their banking institution for guidelines to ensure that payment is received timely. (Taxpayers must preā€‘register with the DRS Electronic Commerce Unit (ECU) prior to using this option). The taxpayer initiates an electronic payment through their banking institution. This payment must be sent in the ACH standard CCD+TXP format. For detailed information and a list of FAQ’s, review Informational Publication 2022(6), Filing and Paying Connecticut Taxes Electronically.