State of Connecticut Tax Withholding
As everyone who runs payroll already knows, there are some substantial problems with the tax calculations that the State of Connecticut provided to the payroll software providers. The state is in the process of issuing additional guidance. We have identified two situations that will empact employers.
The first situation is where the employee has requested additional withholding. The initial guidance did not address this and Microsoft Dynamics GP’s payroll calculations do not differentiate between regular, required withholding and additional, elective withholding. The result is that employees with additional withholding will see their net pay increase instead of decrease.
The second issue is in regards to mid-year new hires. The GP code annualizes the new pay amounts and over-withholds – sometimes a very significant amount.
As soon as the state provides new guidance for managing these and other identified challenges we will update this blog. In the meantime don’t hesitate to contact us for assistance.
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Will this issue be fixed on January 1, 2012? I have been netting only 49% of my gross pay since August. I was offered my job right out of college in July, and this tax problem is really irritating me. Nobody should allow the state to KEEP 51% of my paycheck every single week (when I make as little as I do).
Lauren, it is a bit late in the year but you can ask your employer if she/he can use an “estimated” withholding amount for the rest of the year. The key is that you will need to have them go back to the regular state tax tables as of January 1. Contact the office more more details on this. As of January 1 all of this withholding nonsense should be behind us. And, if you have overpaid your 2011 taxes, you wll get a refund from the state of Connecticut when you file your tax return. Sandra