Connecticut explains new pension withholding for 2018

The Connecticut Department of Revenue Services (DRS) has issued a special notice that explains newly enacted personal income tax withholding requirements for pension and annuity payments (see Payroll Management Guide Report Letter No. 1497, dated July 18, 2017). The requirements take effect on January 1, 2018. Before the new withholding requirement, a payer of pensions and annuities maintaining an office or transacting business in Connecticut was required to withhold income tax from distributions to a resident individual only if the individual requested the withholding. The notice provides guidance on:

  • Withholding registration requirements;
  • Calculating the withholding amount;
  • Forms that must be completed by payers and recipients of pension and annuity distributions;
  • Electronic filing and payment requirements; and
  • Reconciliation and reporting of taxes withheld. (Connecticut Department of Revenue Services, Special Notice 2017(5), October 17, 2017.)

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