Payroll Connecticut, Unique Aspects of Connecticut Payroll Law and Practice

By: Charles Read
Submitted: 2007-01-17 16:16:44
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The Connecticut State Agency that oversees the collection and reporting of State income taxes deducted from payroll checks is:

Department of Revenue Services
25 Sigourney Street
Hartford, CT 06106
860-297-5962
800-382-9463
www.drs.state.ct.us/index.html

Connecticut requires that you use Connecticut form "CT-W4, Employee's Withholding or Exemption Certificate" instead of a Federal W-4 Form for Connecticut State Income Tax Withholding.

Not all states allow salary reductions made under Section 125 cafeteria plans or 401(k) to be treated in the same manner as the IRS code allows. In Connecticut cafeteria plans are: not taxable for income tax calculation; taxable for unemployment insurance purposes. 401(k) plan deferrals are: not taxable for income taxes; taxable for unemployment purposes.

In Connecticut no special rate for taxing supplemental wages instead supplemental wages are to be aggregated.

You must file your Connecticut State W-2s by magnetic media if you are have at least 25 W2's to file and are required to file your federal W-2s by magnetic media.

The Connecticut State Unemployment Insurance Agency is:

Unemployment Insurance Tax Division
Connecticut Labor Department
200 Folly Brook Blvd.
Wethersfield, CT 06109-1114
860-263-6550
www/ctdol.state.ct.us/uitax/txmenu.htm

The State of Connecticut taxable wage base for unemployment purposes is wages up to $15,000.00.

Connecticut requires Magnetic media reporting of quarterly wage reporting if the employer has at least 250 employees that they are reporting that quarter.

Unemployment records must be retained in Connecticut for a minimum period of four years. This information generally includes: name; social security number; dates of hire, rehire and termination; wages by period; payroll pay periods and pay dates; date and circumstances of termination.

The Connecticut State Agency charged with enforcing the state wage and hour laws is:

The Department of Labor
Wage and Workplace Standards Division
200 Folly Brook Blvd.
Wethersfield, CT 06109
860-263-6790
www.ctdol.state.ct.us/

The state minimum wage in Connecticut is $7.10 per hour.

The general provision in Connecticut concerning paying overtime in a non-FLSA covered employer is one and one half times regular rate after 40-hour week.

Connecticut State new hire reporting requirements are that every employer must report every new hire, rehire and contractor if the contract exceeds $5,000.00 for a calendar year. . The employer must report the federally required elements of:

• Employee's name
• Employee's address
• Employee's social security number
• Employer's name
• Employers address
• Employer's Federal Employer Identification Number (EIN)
• For contractors state EIN

This information must be reported within 20 days of the hiring or rehiring. The information can be sent as a W4 or equivalent by mail, fax or electronically. There is a no penalty for a late report in Connecticut.

The Connecticut new hire reporting agency can be reached at 860-263-6310 or on the web at www.ctdol.state.ct.us/lmi/newhire.htm

Connecticut does not allow compulsory direct deposit

Connecticut requires the following information on an employee's pay stub:

• Gross and Net Earnings
• straight time and overtime pay
• hours worked
• itemized deductions

In Connecticut the statutory requirement concerning pay frequency is weekly, however, pay frequency can be as long as monthly if the Connecticut Labor Commissioner agrees. The lag time between when the services are performed and when the employee must be paid cannot exceed 8 days.

Connecticut payroll law requires that involuntarily terminated employees must be paid their final pay by the next business day however if the employee is suspended during a labor dispute or laid over the employer has until the next regular payday.

Voluntarily terminated employees must be paid their final pay by the next regular payday.

Deceased employee's wages up to $20,000.00 need to be paid to the surviving spouse or next of kin; or to the funeral director or physician if they have a preferred claim. The wages are paid upon application from the surviving spouse or next of kin; or upon affidavit of debt due from the funeral director or physician.

Escheat laws in Connecticut require that unclaimed wages be paid over to the state after three years.

The employer is further required in Connecticut to keep a record of the wages abandoned and turned over to the state for a period of 10 years.

There is a provision in Connecticut law that tip credits of up to $2.02 per hour against State minimum wages.

In Connecticut the payroll laws covering mandatory rest or meal breaks are: a 30-minute meal period during a 7 and one half-hour shift. Taking place after the first two hours and before the last two hours of the shift.

There is no provision in Connecticut law concerning record retention of wage and hour mandates a retention period of not less than three years.

The Connecticut agency charged with enforcing Child Support Orders and laws is:

Department of Social Services
Child Support Enforcement Program
25 Sigourney
Hartford, CT 06105-5033
800-842-1508
www.dss.state.ct.us/svcs/csupp.htm

Connecticut has the following provisions for child support deductions:

• When to start Withholding? First pay period after 14 days from service
• When to send Payment? Within 7 days of Payday.
• When to send Termination Notice? "Promptly"
• Maximum Administrative Fee? No provision.
• Withholding Limits? 85% of first $145.99 exempt

Please note that this article is not updated for changes that can and will happen from time to time.

Charles J. Read, CPA has been in the payroll, accounting and tax business for 30 years, the last fifteen in private practice. Mr. Read is the author of "How to Start a New Business".

For Professional Payroll services at a Budget Price go to http://www.PayrollonaBudget.com a Paperless Payroll Company.

Go to http://www.CustomPayroll.com For a full service payroll service bureau with CPA's on staff.

See an excerpt of Mr. Read’s interviews from William Shatners "Heartbeat of America" television show on the websites linked above.

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