Withholding Taxes: Connecticut

Federal law and guidance on this subject should be reviewed together with this section.

Author: Vicki M. Lambert, The Payroll Advisor

Summary

• Employees are subject to Connecticut income tax withholding depending on whether they are a resident or nonresident of the state. Different income tax withholding rules apply when a Connecticut resident works in another state, when a nonresident works in Connecticut and when an expatriate works abroad. Connecticut employers must withhold income tax from all wages paid to certain nonresident telecommuters. See Withholding on Residents, Nonresidents and Expatriates.
• Employers are required to obtain a completed Form CT-W4, Employee's Withholding Certificate, for each new employee when hired. Certain nonresidents must complete Form CT-W4NA. See Employee Withholding Forms.
• Withholding on supplemental wage payments, such as bonuses, is calculated differently depending on whether the payments are made simultaneously with, or separately from, regular wages. See Supplemental Wages.
• Employers are required to provide employees with certain information annually. In Connecticut, all current employees must be given a federal Form W-2 by January 31 of the following calendar year. Special rules apply if an employee terminates before the end of the year. See Form W-2 Requirements.
• Connecticut employers must keep certain records for each employee for four years. The records must be made available for inspection at the request of the Department of Revenue Services. See Recordkeeping Requirements.