Connecticut Payroll Taxes—All You Should Know
Understanding and managing payroll taxes is a vital part of running a business. Employers must withhold taxes from employees’ wages and meet several state-specific regulations to ensure that payroll taxes are filed accurately and on time. This guide will explain how Connecticut payroll taxes work, covering the minimum requirements, exempted entities, filing process, and statutory deadlines. You’ll also learn how a dedicated service—Harbor Compliance—can help streamline the entire process and help you meet different obligations.
Employer Witholding Tax Licensure
This section applies to employers that are applying for a license in Connecticut for the first time to withold taxes from payroll.
| Agency: | Connecticut Department of Revenue Services |
| Filing Method: | |
| Agency Fee: | $100 |
What Are Connecticut Payroll Taxes?
Connecticut payroll taxes are the mandatory contributions that employers must deduct from employee wages and remit to the state. These include:
- Withhold Income Tax—Employers are responsible for deducting state income taxes from employee wages based on the guidelines provided by the Connecticut Department of Revenue Services (DRS).
- Unemployment Insurance Tax—Employers must contribute to the state’s unemployment insurance program by paying taxes to the Connecticut Department of Labor, ensuring funds for unemployment benefits.
- Other Employment-Related Taxes—These may include additional contributions required by state-specific programs, such as paid family leave.
Who Is Subject to Connecticut Payroll Tax?
If your business transacts in Connecticut and you are an employer for federal withholding purposes, you are required to withhold Connecticut income tax from employees’ wages. This obligation applies regardless of where your payroll department is located.
Connecticut payroll taxes apply to various business types, including:
- Corporations
- LLCs
- Nonprofits with employees
- Sole proprietors with staff
Special rules apply to nonpayroll income, such as compensation for professional athletes and entertainers working in the state. For example, Connecticut venues or lessees are required to withhold 6.99% of gross payments to performers unless a reduced rate is granted through Form CT-588 or Form CT-590.
How Is Connecticut Payroll Tax Calculated?
Connecticut payroll tax is calculated based on the employee’s wages and the withholding code provided on Form CT-W4. Employers use withholding tables provided by the DRS to determine the correct amount of state income tax to withhold from employee paychecks.
To calculate Connecticut payroll tax for your employees, follow four steps:
- Determine your employee’s withholding code—Your employee will complete Form CT-W4, which gives you their withholding code based on their filing status and any extra allowances for withholding.
- Calculate taxable wages—Subtract any pre-tax deductions, such as health insurance premiums or retirement contributions, from your employee’s gross wages to determine their taxable wages.
- Use the withholding tables—Look up the correct amount to withhold using the DRS withholding tables, which are updated annually. The withholding amount depends on the employee’s taxable wages and their withholding code.
- Adjust for additional withholding—If your employee has requested additional withholding on Form CT-W4, make sure to add this to the calculated withholding amount.
After completing these steps, you’ll withhold the calculated tax from your employee’s paycheck and remit it to the DRS according to your filing schedule, which could be monthly, quarterly, or another frequency, based on your remitter status.
How To File and Pay Connecticut Payroll Taxes
Once you’ve calculated the payroll taxes, the next step is to file and pay them through the DRS. To file and pay online using the myconneCT portal, follow these four steps:
- Access myconneCT—Visit the myconneCT portal and log into your account. If you don’t already have an account, you’ll need to register.
- Select tax account—Once logged in, locate your tax account on the summary screen, then click Make a Payment and choose your payment method.
- Complete payment details—Enter the required payment information, such as your bank account details or credit/debit card information.
- Submit payment—After reviewing your payment, submit it through the portal. You’ll receive a confirmation number to track the transaction.
Besides myconneCT, the state offers additional electronic payment options. Refer to the table below for more details:
| Payment Method | Details |
|---|---|
| Direct payment | Authorizes DRS to withdraw funds directly from your bank account. You can schedule payment for the due date. |
| Credit/debit card | Pay using Visa, Mastercard, Discover, or American Express. In this case, a convenience fee applies, and you’ll be notified before completing the payment. |
| ACH credit | This method allows you to initiate payments through your bank in the ACH standard format. |
| Fed/State Employment Taxes (FSET) | You can file both state and federal payroll taxes through the FSET system, using payroll providers or approved software. |
Deadlines and Penalties for Connecticut Payroll Tax Filings
It’s essential to meet the deadlines for Connecticut payroll tax filings to avoid penalties and ensure your business remains in good standing. Employers are required to file withholding tax returns and remit payments based on a specific schedule determined by their remitter status—weekly, monthly, or quarterly.
We’ll examine two essential areas to consider when filing and paying Connecticut payroll taxes:
- Filing and payment deadlines
- Late payment penalties
Filing and Payment Deadlines
Connecticut payroll tax filing and payment schedules vary depending on your assigned remitter status—refer to the table below for more details.
| Remitter Status | Details |
|---|---|
| Weekly | Payments are due by the second Wednesday following a payday that falls on a Saturday, Sunday, Monday, or Tuesday. For paydays that fall on Wednesday, Thursday, or Friday, the due date is the Wednesday following the payday. |
| Monthly | Payments are due by the 15th of the following month for any payroll conducted during the prior month. |
| Quarterly | Filings are due on the last day of the month following the end of each calendar quarter (April 30, July 31, October 31, and January 31). |
Late Payment Penalties
Missing the payment deadline can result in several penalties, including:
- Late filing penalty—10% of the unpaid tax amount, or, if no tax is due, $50.
- Interest on late payments—Charged at a rate of 1% per month on any unpaid tax until the balance is cleared.
Additional Statutory Obligations
Beyond payroll tax obligations, Connecticut businesses may have additional requirements, such as registering for sales and use tax with the DRS if they sell taxable goods or services. Employers may also need to obtain specific business licenses or permits, depending on their industry or local regulations. These might include certifications for operating in certain sectors, such as food and beverage or construction.
Keeping up with these diverse obligations, along with payroll tax filings, can become overwhelming, especially as your business grows. To avoid potential lapses like missed filings or overlooked legal requirements, consider engaging a specialized service provider like Harbor Compliance to manage these processes and help your business meet all state requirements efficiently.
Engage With Harbor Compliance for Connecticut Payroll Tax Solutions
Harbor Compliance offers a robust Payroll Tax Registration Service to help you efficiently manage the registration process for payroll tax in Connecticut. We handle all the necessary filings on your behalf, ensuring that they are completed accurately and promptly. Our service saves your business valuable time so you can focus on growth and day-to-day operations.
With our Tax Manager software, you can easily track tax IDs, monitor filing statuses, and receive timely notifications about important deadlines. This system helps you stay organized and avoid potential penalties, ensuring your business remains in good standing.
Here are some benefits of partnering with us:
- Streamlined payroll tax registration—We take care of the entire registration process, ensuring that your business is properly set up with the DRS and the Department of Labor.
- Ongoing management of renewals—We track and manage your payroll tax renewals to ensure that all filings are completed on time.
- Expert support—Our team provides tailored advice and guidance, helping you navigate every step of the payroll tax process.
- Nationwide presence—Whether your business operates only in Connecticut or across multiple states, Harbor Compliance provides comprehensive payroll tax management services nationwide.
How To Partner With Harbor Compliance
To order our Payroll Tax Registration Service, follow four steps:
- Visit our Payroll Tax Registration Service page.
- Select Order Online.
- Fill in the required business information on the form.
- Complete your order by clicking Check Out.
Once you’ve placed your order, our team will manage the entire process for you and provide regular updates along the way.
Additional Services
Besides helping with payroll tax registration, Harbor Compliance offers solutions to help you stay on top of multiple obligations. You can refer to the table below for more details on our most popular offerings:
| Service Category | Services |
|---|---|
| Tax-related services | Assistance with sales and use tax registration and Employer Identification Number (EIN) registration |
| Business licensing support | Support with securing general business licenses and industry-specific permits like construction and engineering |
| Nonprofit formation | Help with 501(c) tax exemption, nonprofit incorporation, and charitable registration |
| Lifecycle support | Filing of DBA registrations, withdrawals, name reservations, amendments, and initial and annual reports |
| Registered agent service | Serving as your registered agent and receiving legal correspondence on your behalf, as well as helping with changing your registered agent |
| Document filing and retrieval | Help with drop-off filing, articles of reinstatement, certificate of good standing, certified copies, and certificate of authority |
| Beneficial ownership information (BOI) reporting | BOI reporting services and tools like the Records Manager for managing ownership information |
FAQs About Connecticut Payroll Taxes
Below are answers to some frequently asked questions about Connecticut payroll tax. For more in-depth information, explore our Information Center.
No, the DRS does not automatically mail quarterly reconciliations. Employers are required to file Form CT-941, which is available online.
Yes, DRS provides withholding tables and calculation tools to help employees determine the correct amount of tax to withhold from their paychecks. These resources are available on its website.
All employers or payers who file Forms W-2 must submit these returns electronically through the myconneCT portal.
Streamline Your Connecticut Payroll Tax Filing With Harbor Compliance
Handling Connecticut payroll taxes doesn’t have to be a burden. Harbor Compliance offers a seamless approach to managing tax filings, ensuring that all submissions are completed accurately and on time so you can stay focused on running your business.
Order our Payroll Tax Registration Service today, and we’ll handle the entire process, from registration to renewal, reducing your administrative load.
For an in-depth evaluation of your regulatory standing, get a free Harbor Compliance Score™. You can also contact us for personalized advice or schedule a demo to see how our software simplifies payroll tax management.
For more information about our services in other U.S. states and territories, refer to the table below.
