Hartford, CT - The Connecticut Department of Revenue Services (DRS) today released additional information and a form to help taxpayers who may experience over withholding of state income tax as a result of bonuses, overtime, other extraordinary compensation, and / or who earn income in another state.
Said DRS Commissioner Kevin B. Sullivan, “The method chosen to implement state income tax changes on a catch-up basis for the 2011 tax year has resulted in a number of challenges for taxpayers, employers, payroll processors, and the Department. We have worked since May to get ahead of these challenges and have also responded quickly as issues arise. Still, we are aware that many employers continue to have difficulty calculating and withholding the tax when employees receive any form of extraordinary compensation, such as overtime or a bonus, or when taxpayers earn taxable income in another state. That’s why we are now providing instructions and a withholding form to help employees who experience having too much income tax taken out and wish to correct their withholding for the rest of 2011.”
DRS Announcement 2011(6), Additional Guidance Regarding Withholding Calculation Rules for Supplemental Compensation and Use of Newly Issued Form CT-W4T tells interested employees how to calculate their expected Connecticut income tax liability for 2011. Using this and the total amount of Connecticut tax withheld to date, workers can determine how much tax should be withheld from their remaining paychecks for 2011. They would then submit the new Form CT-W4T, 2011 Withholding Certificate to their employer.
Commissioner Sullivan added, “This is an option for taxpayers, not a requirement. I also want to remind employees who experience under withholding during this transition year, despite evidence of good faith efforts, — including satisfying the “safe harbor” provision of having at least as much withheld during 2011 as they owed for the 2010 tax year — that they as well as their employers will not be penalized. Then, the good news is that all this settles down for the 2012 tax year.”
Taxpayers adjusting their withholding amounts for 2011 will need to submit a new Form CT-W4 to their employer in the new year to prevent these changes from continuing into 2012.
Workers believing they may be under withheld by their employer can send an estimated income tax payment to DRS using Form CT-1040ES, Estimated Connecticut Income Tax Payment for Individuals.
Taxpayers making estimated income tax payments are asked to calculate their expected annual income and apply the new tax rates. Their October and January payments will be the difference between the tax already paid to the state and what they now owe.
Visit the DRS website at www.ct.gov/DRS to view Announcement 2011(6) and the attached Form CT-W4T, or to find other tax information and to file and pay Connecticut taxes online. For telephone assistance, call the DRS Taxpayer Services Division at (800) 382-9463 (Connecticut calls outside the Greater Hartford area) or (860) 297-5962 (from anywhere). Media calls only should be directed to the Communications Office at (860) 297-5610 or emailed to sarah.kaufman@po.state.ct.us.
