DRS Error Will Mean Surprise Tax Bill for Some Homeowners
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Some Connecticut families may be surprised to receive a supplemental tax bill well after filing their taxes this year thanks to an error by the Department of Revenue Services. State officials learned on Friday that DRS failed to apply certain property tax credit changes to joint, separate and Head of Household filers who, as a result, would be underpaying or filing for refunds in amounts higher than they are entitled to.
“The incompetence in state government has seeped down to the roots,” Deputy Republican Leader Vincent Candelora lamented. “This tax change was a poor decision to begin with, but now to have surprise tax bills going out to people after they have paid their taxes is going to be very upsetting.”
Additionally, Candelora said the error may cause an increase in the budget deficit for the current fiscal year which was recently pegged at $220 million. The policy change was effective on July 1st, 2015 but non-partisan analysts were not aware of the error when preparing deficit projections and are still unsure how many people were affected.
“The process of closing such a huge budget deficit with just a few months remaining in the fiscal year is very difficult and to have a mistake by state government make that job harder is frustrating. This wasn’t an obscure policy change buried in the bowels of a budget bill. We debated this change, Republicans fought hard against it. I don’t know how they forgot about it,” Candelora added.
The change was adopted as part of the budget passed by the Democrats last June. Republicans opposed the change to the tax credit, arguing it is a direct tax increase on middle class families.
DRS is attempting to make adjustments to their systems to correct the issue for those who have yet to file their taxes this year. It is unclear how many people will be affected by this error but it appears DRS will be required to issue supplemental tax bills to those affected who have already filed.