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. 2000-38

July 19, 2000

TO THE HEADS OF ALL STATE AGENCIES

Attention:

Chief Administrative and Fiscal Officers, Business Managers, and Payroll and Personnel Officers

Subject: Payroll Procedures - Connecticut Income Tax Withholding

I. PURPOSE

To provide information on procedures for withholding Connecticut income tax and to provide information on the new exemption and credit for single filers.

This memorandum supersedes all other instructions that have been issued prior to this date and contains significant modifications to previous instructions. Please incorporate these changes in your methods for entering future payroll transactions.

II. AUTHORITY

Conn. Gen. Stat. 12-705 and regulations thereunder. See Informational Publication 2000 (11), Connecticut Circular CT -- Employer's Tax Guide, for an in-depth explanation of Connecticut income tax withholding rules and requirements. This publication is issued by the Connecticut Department of Revenue Services and may be downloaded from its Web site: www.drs.state.ct.us.

III. REVISED FORM CT-W4

Beginning January 1, 2000 and extending over an eight-year period, the personal exemption and credit for single filers will be increased. Form CT-W4 has been revised for Connecticut income tax withholding purposes for wages paid on or after July 1, 2000. A new Box F was added to separate single filers from the other filers listed in Box A.

Agencies must distribute a copy of the new Form CT-W4 (revised July 1, 2000) to employees who checked Box A on a previously filed Form CT-W4.

IV. ESTABLISHING WITHHOLDING AMOUNT

The following steps should be taken when an agency initiates Connecticut income tax withholding for an employee:

1. Distribute a copy of Form CT-W4 (revised July 1, 2000) to the employee.

2. Upon receipt of the completed Form CT-W4, the agency should review the form generally for accurate payroll information (such as employee name and social security number). Any Form CT-W4 claiming exemption from Connecticut withholding must be sent with Form CT-941, Connecticut Quarterly Reconciliation of Withholding, to the Connecticut Department of Revenue Services if it is determined that the employee's wages will exceed three times the maximum exemption amount for the employee's filing status. See Information Publication 2000 (11), Connecticut Circular CT -- Employer's Tax Guide, Page 11.

3. The appropriate Form CT-W4 information should be entered on Screen 160.

4. The employee's Form CT-W4 should be retained by the agency for filing.

V. PAYROLL PROCEDURES

A. Tax Methods:

0 Standard calculation and zero fill the State Amt/Pct field.

0
Standard calculation with the amount coded in the State Amt/Pct field is the REDUCTION amount to be taken.

2
Exempt from withholding. Zero fill the State Amt/Pct field.

4
Standard calculation with the amount coded in the State Amt/Pct field is the ADDITIONAL amount to be taken.

B. Filing Status:

CT-W4
Filing Status

Description
Enter
Filing Status
A Married filing separately, or
Married filing jointly, both spouses
work and combined income is
$100,500 or less

5
B Head of Household H
C Married filing jointly and one
spouse is not employed

M
  D        Married filing jointly, both spouses
work and combined income is more
than $100,500, or significant non-wage
income and wish to avoid having too
little tax withheld, or non-resident individual
with substantial other income
S, H or M and special tax indicator = 07
E Exempt *
F Single S

* If exempt, tax method must be 2 and State Amt/Pct field must be zero filled.

C. AMT/PCT:

1. To decrease the Withholding Amount (Tax Method 0).

Do not use leading zeros. Code as whole dollars, no cents.

Examples:

W-4 Input
$ 10.00 equals .10
$ 5.00 equals .05
$125.00 equals 1.25

 

2. To increase the Withholding Amount (Tax Method 4)

Do not use leading zeros. Code as whole dollars, no cents.

Examples:

W-4 Input
$ 10.00 equals 10.00
$ 5.00 equals 5.00
$125.00 equals 125.00

Agency payroll personnel must be careful to use the appropriate method when entering this field. Note: The dollar value for additional withholding is different than the dollar value for coding a reduction amount (i.e., $10 is coded as .10 for tax method 0 to reduce withholding and 10.00 for tax method 4 to increase withholding).

D. Work State: 07 is already coded into the system.

E. Residence State: State number is already coded into the system.

F. Special Tax Indicator:

Option D Only - Input 07 into this field.

G. Exemption from Withholding (Tax Method Code 2):

If an employee is paid any other earnings, you must set the taxing options not to take Connecticut income tax withholding for every D/OE the employee is paid as follows:

D/OE Type Code Other CD
D/OE # 9 b121111 T

VI. OTHER INFORMATION

All wages that are subject to federal income tax withholding are also subject to Connecticut income tax withholding.

Base Pay: Connecticut income tax withholding is based on the employee's taxable wages and filing status. The MSA payroll system will determine the employee's taxable wages and look up this amount in the Connecticut income tax withholding tables to find the amount to be withheld.

Lump Sum and Other Earnings Payments: (Example: Retro, merit bonus, etc.) Will be taxed at a rate of 4.5% for 2000.

Filing Status Default: If the marital status field contains a blank or invalid value, the default value will be Option D (unless tax method equals 2).

Agencies must withhold Connecticut income tax at a flat rate of 4.5% (.045) without allowance for exemption on the gross taxable wages of employees who do not return a completed Form CT-W4. For employees who checked Box A on a Form CT-W4 prior to July 1, 2000, continue to withhold at the amount listed under Column A in the Connecticut income tax withholding tables until a Form CT-W4 (revised July 1, 2000) is received from the employee.

Wage Executions: All wage executions for unpaid debts (Conn. Gen. Stat. 52-361a) must be recalculated to determine the correct amount of deduction.

VII. QUESTIONS

Questions concerning this memorandum should be directed as follows:

Application of the Tax Law: Department of Revenue Services,
Taxpayer Services Division, 1-800-382-9463
(toll-free from within Connecticut) or
(860) 297-5962 (from anywhere).
For forms and publications, visit the DRS Websiteat: www.drs.state.ct.us or call (860) 297-4753.
Memorandum Interpretation: Office of the State Comptroller
Policy Services Division, (860) 702-3440;

Payroll Procedures: Office of the State Comptroller

On-Line: Payroll Services Division, (860) 702-3448;
Remote Job Entry: Payroll Services Division, (860) 702-3451.

 

NANCY WYMAN
STATE COMPTROLLER

NW:CH:jrs

Back to Comptroller's Home Page
Back to Index of 2000 Comptroller's Memoranda