(a)(1) Each employer required to deduct and withhold tax under this chapter from the wages of employees shall be liable for such tax and shall file a withholding return as prescribed by the Commissioner of Revenue Services and pay over to the commissioner, or to a depositary designated by the commissioner, the taxes so required to be deducted and withheld at the times specified in subsection (b) of this section.
(2) Each payer shall deduct and withhold tax under this chapter from the nonpayroll amounts of payees, shall be liable for such tax and shall file a withholding return as prescribed by the commissioner and pay over to the commissioner, or to a depository designated by the commissioner, the taxes so required to be deducted and withheld at the times specified in subsection (b) of this section.
(b) (1) (A) With respect to the tax required to be deducted and withheld under this chapter from wages paid during any calendar year beginning on or after January 1, 2005, and in accordance with an annual determination described in subdivision (2) of this subsection, each employer shall be either a weekly remitter, monthly remitter or quarterly remitter for the calendar year. If an employer is a weekly remitter, the employer shall pay over to the commissioner the tax required to be deducted and withheld under this chapter in accordance with subdivision (3) of this subsection. If an employer is a monthly remitter, the employer shall pay over to the commissioner the tax required to be deducted and withheld under this chapter in accordance with subdivision (4) of this subsection. If an employer is a quarterly remitter, the employer shall pay over to the commissioner the tax required to be deducted and withheld under this chapter in accordance with subdivision (5) of this subsection. Notwithstanding any provision of this subsection, if an employer is a household employer, the employer shall pay over to the commissioner the tax required to be deducted and withheld under this chapter in accordance with subdivision (6) of this subsection.
(B) With respect to the tax required to be deducted and withheld under this chapter from nonpayroll amounts paid during any calendar year beginning on or after January 1, 2005, and in accordance with an annual determination described in subdivision (2) of this subsection, each payer shall be either a weekly remitter, monthly remitter or quarterly remitter for the calendar year. If a payer is a weekly remitter, the payer shall pay over to the commissioner the tax required to be deducted and withheld under this chapter in accordance with subdivision (3) of this subsection. If a payer is a monthly remitter, the payer shall pay over to the commissioner the tax required to be deducted and withheld under this chapter in accordance with subdivision (4) of this subsection. If a payer is a quarterly remitter, the payer shall pay over to the commissioner the tax required to be deducted and withheld under this chapter in accordance with subdivision (5) of this subsection.
(2) (A) The annual determination for an employer required to deduct and withhold tax under this chapter shall be based on the employer's reported liability for the tax required to be deducted and withheld under this chapter during the twelve-month look-back period, provided, if any employer fails timely to file one or more required withholding tax returns for the four quarterly periods within the twelve-month look-back period, the commissioner may base the annual determination for the employer on any information available to the commissioner. If an employer's reported liability for the tax required to be deducted and withheld under this chapter during the twelve-month look-back period was more than ten thousand dollars, the employer is a weekly remitter for the calendar year next succeeding such twelve-month period. If an employer's reported liability for the tax required to be deducted and withheld under this chapter during the twelve-month look-back period was more than two thousand dollars but not more than ten thousand dollars, the employer is a monthly remitter for the calendar year next succeeding such twelve-month period. If an employer's reported liability for the tax required to be deducted and withheld under this chapter during the twelve-month look-back period was two thousand dollars or less, the employer is a quarterly remitter for the calendar year next succeeding such twelve-month period. Notwithstanding any provision of this section, if an employer is a seasonal employer, the annual determination shall be based on the seasonal employer's reported liability for the tax required to be deducted and withheld under this chapter during the twelve-month look-back period multiplied by a fraction, the numerator of which is four, and the denominator of which is the number of quarterly periods during such twelve-month period that the employer paid wages to employees.
(B) The annual determination for a payer required to deduct and withhold tax under this chapter shall be based on the payer's reported liability for the tax required to be deducted and withheld under this chapter during the look-back calendar year, provided, if any payer fails timely to file the required withholding tax return for the look-back calendar year, the commissioner may base the annual determination for the payer on any information available to the commissioner. If a payer's reported liability for the tax required to be deducted and withheld under this chapter during the look-back calendar year was more than ten thousand dollars, the payer is a weekly remitter for the calendar year for which the annual determination is being made. If a payer's reported liability for the tax required to be deducted and withheld under this chapter during the look-back calendar year was more than two thousand dollars but not more than ten thousand dollars, the payer is a monthly remitter for the calendar year for which the annual determination is being made. If a payer's reported liability for the tax required to be deducted and withheld under this chapter during the look-back calendar year was two thousand dollars or less, the payer is a quarterly remitter for the calendar year for which the annual determination is being made.
(3) (A) An employer that is a weekly remitter shall pay over to the department the tax required to be deducted and withheld from wages under this chapter on or before the Wednesday next succeeding the weekly period during which the wages from which the tax was required to be deducted and withheld were paid to employees.
(B) A payer that is a weekly remitter shall pay over to the department the tax required to be deducted and withheld from nonpayroll amounts under this chapter on or before the Wednesday next succeeding the weekly period during which the nonpayroll amounts from which the tax was required to be deducted and withheld were paid to payees.
(4) (A) An employer that is a monthly remitter shall pay over to the department the tax required to be deducted and withheld from wages under this chapter on or before the fifteenth day of the month next succeeding the month during which the wages from which the tax was required to be deducted and withheld were paid to employees.
(B) A payer that is a monthly remitter shall pay over to the department the tax required to be deducted and withheld from nonpayroll amounts under this chapter on or before the fifteenth day of the month next succeeding the month during which the nonpayroll amounts from which the tax was required to be deducted and withheld were paid to payees.
(5) (A) An employer that is a quarterly remitter shall pay over to the department the tax required to be deducted and withheld from wages under this chapter on or before the last day of the month next succeeding the quarterly period during which the wages from which the tax was required to be deducted and withheld were paid to employees.
(B) A payer that is a quarterly remitter shall pay over to the department the tax required to be deducted and withheld from nonpayroll amounts under this chapter on or before the last day of the month next succeeding the quarterly period during which the nonpayroll amounts from which the tax was required to be deducted and withheld were paid to payees.
(6) An employer that is a household employer shall pay over to the department the tax required to be deducted and withheld under this chapter on or before the April fifteenth next succeeding the calendar year during which the wages from which the tax was required to be deducted and withheld were paid to household employees.
(c) In the case of an overpayment of tax under this chapter by an employer, refund or credit shall be made to the employer only to the extent that the amount of such overpayment was not deducted and withheld by the employer.
(d) The amount of tax required to be deducted and withheld and paid over to the commissioner under this chapter, when so deducted and withheld, shall be held to be a special fund in trust for the state. No employee or other person shall have any right of action against the employer with respect to any moneys deducted and withheld from wages and paid over to the commissioner in compliance or in intended compliance with this chapter.
(e) (1) If an employer required to deduct and withhold tax under this chapter from the wages of employees and to pay over to the commissioner the taxes so required to be deducted and withheld sells out the employer's business or stock of goods or quits the employer's business, such employer's successors or assigns shall withhold a sufficient portion of the purchase price to cover the amount of such taxes, and any interest and penalties thereon, due and unpaid, as of the time of such sale or quitting of the business, until the employer produces a receipt from the commissioner showing that the taxes, interest and penalties have been paid or a certificate indicating that no such taxes are due.
(2) If the purchaser of a business or stock of goods fails to withhold a portion of the purchase price as required, the purchaser shall be personally liable for the payment of the amount required to be withheld by the purchaser, to the extent of the purchase price, valued in money. Not later than sixty days after the latest of the dates specified in subdivision (3) of this subsection, the commissioner shall either issue a certificate indicating that no taxes are due or mail notice to the purchaser in the manner provided in section 12-728 of the amount that must be paid as a condition of issuing the certificate. Failure of the commissioner to mail the notice shall release the purchaser from any further obligation to withhold a portion of the purchase price as provided in this subsection. The period within which the obligation of the successor may be enforced shall begin when the employer sells out the employer's business or stock of goods or quits the employer's business or when the assessment against the employer becomes final, whichever event occurs later.
(3) For purposes of subdivision (2) of this subsection, the latest of the following dates shall apply:
(A) The date that the commissioner receives a written request from the purchaser for a certificate;
(B) The date of the sale or quitting of the business; or
(C) The date that the employer's records are made available to the commissioner for audit.
(f) (1) Whenever any employer or payer required to deduct and withhold tax under this chapter (A) owes such taxes, which taxes have been finally due and payable for a period of ninety days or longer and for which any administrative or judicial remedies, or both, have been exhausted or have lapsed, or (B) has failed to file one or more withholding tax returns required under this chapter, the commissioner may require any employer or payer to deposit with the commissioner such security as the commissioner determines necessary, provided the amount of such security shall not be greater than six times the employer's or payer's estimated liability for the prior twelve-month period or the employer's or payer's liability for the next twelve-month period, determined in such manner as the commissioner deems proper. The commissioner may increase or decrease the amount of the security, subject to the limitations in this subsection.
(2) The commissioner may sell the security at public auction if it becomes necessary to do so to recover any tax or amount required to be collected or any interest or penalty due. Notice of such sale may be served personally or by mail upon the person that deposited the security. If the notice is served by mail, it shall be made in the manner prescribed for service of notice of a deficiency assessment and shall be addressed to such person at the person's address as it appears in the commissioner's records. Upon any sale, any surplus above the amounts due shall be returned to the person that deposited the security.
(g) As used in this section and sections 12-705 and 12-706:
(1) “Employer” means an employer, as defined in Section 3401 of the Internal Revenue Code;
(2) “Payer” means a person making a payment of nonpayroll amounts to one or more payees;
(3) “Payee” means a person receiving a payment of nonpayroll amounts from a payer;
(4) “Nonpayroll amounts” includes (A) gambling winnings, other than Connecticut lottery winnings, that are paid to a resident, or to a person receiving payment on behalf of a resident, and that are subject to federal income tax withholding; (B) Connecticut lottery winnings that are required to be reported by the Connecticut Lottery Corporation to the Internal Revenue Service, whether or not subject to federal income tax withholding, whether paid to a resident, nonresident or a part-year resident, and whether paid to an individual, trust or estate; (C) pension and annuity distributions, for which the payer is required to deduct and withhold tax under this chapter; (D) military retired pay, where the payee is a resident individual and has requested that tax be deducted and withheld under this chapter; (E) unemployment compensation, where the recipient has requested that tax be deducted and withheld under this chapter; and (F) payments made to an athlete or entertainer, where the payments are not wages for federal income tax withholding purposes and where the commissioner requires the payer to deduct and withhold tax under this chapter;
(5) “Reported liability” means, in the case of an employer, the liability for the tax required to be deducted and withheld under this chapter, as shown on the employer's withholding tax returns for the four quarterly periods within the twelve-month look-back period, and, in the case of a payer, the liability for the tax required to be deducted and withheld under this chapter, as shown on the payer's withholding tax return for the look-back calendar year;
(6) “Twelve-month look-back period” means the twelve-month period that ended on the June thirtieth next preceding the calendar year for which the annual determination for an employer is made by the commissioner;
(7) “Look-back calendar year” means the calendar year preceding by two years the calendar year for which the annual determination for a payer is made by the commissioner;
(8) “Seasonal employer” means an employer that regularly in the same one or more quarterly periods of each calendar year pays no wages to employees;
(9) “Household employee” means an employee whose services of a household nature in or about a private home of an employer constitute domestic service in a private home of the employer, as the phrase is used in Section 3121(a)(7) of the Internal Revenue Code or in regulations adopted thereunder;
(10) “Household employer” means an employer of a household employee;
(11) “Weekly period” means the seven-day period beginning on a Saturday and ending on the following Friday; and
(12) “Quarterly period” means the period of three full months beginning on the first day of January, April, July or October.
(June Sp. Sess. P.A. 91-3, S. 58, 168; May Sp. Sess. P.A. 92-5, S. 7, 37; P.A. 94-139, S. 1, 2; P.A. 96-221, S. 21, 25; P.A. 03-107, S. 4; P.A. 04-201, S. 5; P.A. 11-61, S. 58; P.A. 17-147, S. 5, 8.)
History: June Sp. Sess. P.A. 91-3, S. 58, effective August 22, 1991, and applicable to taxable years of taxpayers commencing on or after January 1, 1991; May Sp. Sess. P.A. 92-5 made various technical and minor changes, effective June 19, 1992, and applicable to taxable years of taxpayers commencing on or after January 1, 1992; P.A. 94-139 allowed employer withholding less than $500 to file return and pay over taxes on or before the last day of the month next succeeding the calendar quarter for which the taxes were deducted and withheld, effective May 24, 1994, and applicable to taxes deducted and withheld on or after January 1, 1995; P.A. 96-221 limited provision re payment of taxes withheld of less than $500 per quarter to cases where federal law requires employer to pay withheld federal taxes on or before the last day of the month next succeeding such calendar quarter, effective June 4, 1996; P.A. 03-107 divided existing provisions into Subsecs. (a) and (b), added provision in Subsec. (a) re certain refunds to employers and made a technical change in Subsec. (b), effective for calendar years commencing on or after January 1, 2003; P.A. 04-201 divided existing provision into Subsecs. (a)(1), (c) and (d), amended Subsec. (a) to delete provision re deduction and withholding and make conforming changes in Subdiv. (1) and add Subdiv. (2) re nonpayroll amounts withheld by employers, added new Subsec. (b) re schedule for remittance of withheld amounts and added new Subsec. (e) re definitions, effective January 1, 2005, and applicable to wages and nonpayroll amounts paid on or after that date; P.A. 11-61 added new Subsec. (e) re withholding requirements upon purchase of a business or stock of goods and redesignated existing Subsec. (e) as Subsec. (f), effective July 1, 2011, and applicable to sales of a business or stock of goods occurring on or after that date; P.A. 17-147 amended Subsec. (a)(2) to delete “of nonpayroll amounts”, added new Subsec. (f) re security required from employer or payer that fails to pay taxes owed or file withholding tax returns, and redesignated existing Subsec. (f) re definitions as Subsec. (g), effective October 1, 2017, and amended redesignated Subsec. (g) to add references to Secs. 12-705 and 12-706 and redefine “nonpayroll amounts” and made technical changes, effective January 1, 2018.