The Seal of the Office of the State Comptroller

To: All Agency Payroll and Personnel Officers
From: Gary Reardon, Director Payroll Services
Date: November 29, 1999
Subject: Social Security Wage and Tax Information
Federal and State Filing Status
Advance Payment of Earned Income Credit

Social Security Wage & Tax Information

Effective January 1, 2000 the Social Security wage base will increase to $76,200. The maximum employee share contribution will be $4,724.40.
 
There continues to be no limit on wages subject to the Medicare tax. All covered wages are subject to a 1.45% contribution from employees.
 
The combined FICA/Medicare tax rate will remain at 7.65% for tax year 2000 (FICA tax rate is 6.2% and Medicare tax rate is 1.45%).

Federal & State Filing Status

In accordance with Federal Circular E and State Circular CT, all employees filing exempt status are required to complete a new W-4 form by the 15th of February of each year. If employees are filing exempt status from both Federal and State taxes, then you must obtain a new Federal form, W-4 and a new State form CT-W-4. To assist the agencies, we have included in your paperwork this week (if applicable) a report of employees we have identified as filing exempt for tax purposes.
 
If an employee does not comply with this request, you are to begin withholding Federal and State taxes at the applicable rates,
Fed   = single with zero withholding
State   = flat 4.5% (D with special tax indicator = 07)

Advanced Payment of Earned Income Credit

For those employees that have a form W-5 (Advance Payment of Earned Income Credit) on file for tax year 1999 - this form will become invalid on December 31, 1999.
 
If the employee is eligible for advance Earned Income Credit payments for tax year 2000, a new form W-5 must be submitted - refer to memorandum 94-15 for coding instructions.
 
If the agency does not receive a new form W-5, the deduction must be closed effective with the January 14, 2000, paycheck.

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