Monday, August 1, 2011

Connecticut State Tax - Revised changes due to release next week

The state of Connecticut has had some issues with the new tax rules that were effective 8/1/2011. Microsoft has been diligently working with the state to get these conundrums resolved. The state of Connecticut will be issuing a press release statement next week that will clarify some of the calculation steps for all companies to abide by, currently, they have contradictory information on their website between different documents.

Once the state of CT releases this information, Microsoft will review it and make changes as necessary. Since this is a time sensitive situation, they are going to try and turn this around as quick as possible and probably release a hot fix (chunk file format) that will be faster and easier for you to install if you run payroll for employees in the state of CT. This would require you to have the Round 6 CT tax code and table already loaded.

Here are the current areas of concern Microsoft has with the state, but not limited to:
  • Additional withholding , there was nothing specified in the original calculation method around addition amounts and how they should be factored in.
  • If employees are hired after 8/1 , they should have a reduce amount taken as they started later in the year and the YTD step in the calculation should be skipped, again, was not in the released calculation rules (Microsoft will probably have a new filing status for this type of employee identifying the later start date and it will have the correct calculations steps for them)

Potential changes in the future:
There is talk of a federal tax change to release
Puerto Rico has released a new tax change/table - Microsoft is reviewing this.

The Connecticut re-release will be Microsoft's first and top priority and then will release another tax update for the future updates noted above, once all is finalized.

We will send out an update as soon as we know more.

If you have any questions, please contact or at 888-391-6690.