COMPTROLLER'S SEAL STATE OF CONNECTICUT

STATE OF CONNECTICUT

NANCY WYMAN
COMPTROLLER

OFFICE OF THE STATE COMPTROLLER
55 ELM STREET
HARTFORD, CONNECTICUT 06106-1775

MARK OJAKIAN
DEPUTY COMPTROLLER

MEMORANDUM NO. 97-1

January 1, 1997

TO THE HEADS OF ALL STATE AGENCIES

ATTENTION: Chief Administrative and Fiscal Officers, Business Managers, and Payroll and Personnel Officers.
SUBJECT: Notice of Election to Not Withhold Federal and State Income Tax on the Value of Non-Business Use of Employer-Provided Vehicles.

Until further notice, the State of Connecticut will continue its election to not withhold income and employment taxes, other than social security, on the imputed value of an employee's non-business use of an employer-provided vehicle in the 1997 calendar year.

It is imperative that, prior to January 31, 1997, each agency notify its employees of the State's decision to not withhold Federal and State income tax on the vehicle use benefits. In your notification to agency employees, inclusion of the following information is recommended.

"Personal Use of a non-exempt State vehicle by State employee(s) for commuting or other non-business purposes must be considered taxable compensation and reported on the employee's Form W-2. Although the State does not withhold income and employment taxes, employee(s) will still be incurring a tax liability. The payment of this tax liability may be postponed until the employee's return is filed.

However, employees should recognize that the required annual withholding is the smaller of:

  1. 90% of your total expected tax for the current year, or
  2. 100% of the previous year's tax liability

If needed, it is the employee's responsibility to seek tax counseling insofar as increasing payments by revisions to his or her Form W-4 and CT-W4 and/or estimated taxes.

Questions may be directed to the Comptroller's Policy Evaluation & Review Division at (860-702-3436).

NANCY WYMAN
STATE COMPTROLLER

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