Connecticut Payroll Instructions

Connecticut has state income tax withholding, using multiple payroll tax tables. The Connecticut tax calculation is by far the most complicated for any US state. It includes an initial exemption table, a main tax table and a tax credit table. The "jump" intervals in the tax credit tables are the weirdest in North America.

The tables have changed in 20 of the past 33 years, including two complete revisions to the calculation methods, and frequent tinkering with the number of steps. We really dread doing this state, every year.

One withholding tables changed slightly in 2019. Tables were unchanged from 2020 to 2022, and again in 2023 (phew!).

NOTE: In 2015, Connecticut added a new Table C 3% Tax Rate Phase-Out Add-Back (we're not making that up!). It applies to annual wages between $50K and $100K per year. Also, a new Table D Tax Recapture that applies to annual wages between $200K and $700K. Frankly, the adjustments are small, and adding the new tables required so much extra programming that we decided to skip them. We only have room for four computation tables, and CT already uses them all. No other US state uses more than two.

Come on, CT legislators, enough is enough! How about, look at the tax formulas for any other state in the US? Mathematically speaking, it is possible to match any desired "tax curve" with a single step table.

Click here to download free updates for Connecticut and federal payroll tax tables. TurtleSoft provides updated tax withholding tables around the first of each year.

Connecticut State Withholding Instructions

You will need to assign different Tax Packages to employees, depending on their filing status. The Marital Status field in each Employee account is only used for Federal taxes.

To assign tax packages and enter withholding information for an employee in your Goldenseal company file, follow these steps:

Choose Employees from the Accounts menu.
Locate the employee's record.
Click the Payroll Setup button.
Choose either Single or Married.
Enter the appropriate tax package into the Tax Package field. Base it on their filing status from Line 1 from Form CT-W4 (status A, B, C or D), and their W4 details. See note below.
Enter the number of federal dependents into the Federal Exemptions field.
Enter the number of Connecticut state dependents into the State Exemptions field.
Click OK.

If any additional amount is to be withheld, enter this amount into the State Withhold field in the Employee Account. If there is a claimed amount to be subtracted from annual withholding, as indicated on Line 3 from Form CT-W4, enter this as a negative amount into the State Withhold field.

NOTES: Connecticut state tax is calculated using a triple table method. Filing statuses A through C have exemptions and personal tax credits that are based on annual wages. Filing status D receives no exemptions or tax credits. Taxable income is determined by a standard step table.

We had to add an extra set of Tax Tables in 2021, then another set in 2022. Choose Old W4 if the employee uses pre-2020 forms. Choose New W4 Step2- if they did not check the box in step 2 of the new form. Choose Step2+ if they did check it.

Connecticut State Unemployment Tax Instructions

In 2022, the Connecticut SUTA tax (unemployment insurance) applies to the first $15,000 in annual wages for each employee (unchanged since 1999, but a big jump is in the works for 2025). After the first year, the rate can range between 1.9% and 6.8%, depending on past experience.

To enter the Connecticut SUTA tax rate for your business in Goldenseal payroll software, follow these steps:

Choose Payroll Setup from the Costs menu, and choose Tax Items.
You'll see a list of Tax Items. Open your state's HINT: If you don't see Connecticut SUTA in the list, you'll need to import Connecticut payroll info first.
Enter the percentage rate that you pay into the field to the right of Calculation method.
If the cutoff amount has changed, enter it into the dollar field to the right of First Adjustment.