The state tax department is aware that many Connecticut employees are continuing to experience significant over-withholding of state income tax due to difficulties arising from the mandated, retroactive application of this year's personal income tax increase.

It's particluarly problematic in cases of employee bonuses, overtime, other extra compensation, as well as income earned in another state and by seasonal employees

Since last May, the state Department of Revenue Services (DRS) has informed employers, payroll companies and the public on ways to avoid over-withholding during interim implementation of the state income changes from August through December, 2011. 

While some employers and payroll providers have experienced no problems, many others unfortunately have. 

To help straighten out this situation, the DRS is again providing guidance for employers and payroll companies while asking employers to share this information with their employees: DRS Announcement 2011(6), Additional Guidance Regarding Withholding Calculation Rules for Supplemental Compensation and Use of Newly Issued Form CT-W4T

  • Employers are also being reminded that state law allows employers simply to correct the over-withholding by returning the money to their affected employees (as some employers have already done).

Visit the DRS website to view Announcement 2011(6) and the attached Form CT-W4T, or to find other tax information and to file and pay Connecticut taxes online.

For telephone assistance, call the DRS Taxpayer Services Division at 800.382.9463 (Connecticut calls outside the Greater Hartford area) or 860.297.5962 (from anywhere).