Posted on January 25, 2019 by jdooley
State Rep. Laura Devlin today reminded taxpayers receiving pension and annuity income distributions that a recent change in state law requires plan administrators to withhold state taxes from those payments.
With passage of Public Act 17-147, pension plan administrators or payers of pensions or annuities are now required to withhold income taxes from disbursements. Prior law allowed taxpayers to instruct their plan administrators to withhold the appropriate amount of tax but did not require they do so. Taxpayers could choose to pay the full liability at the time they filed state income taxes.
Similar to choosing income withholding, Connecticut residents must file form CT-W4P indicating their pension and annuity withholding choices with their plan administrator otherwise the top level of 6.99% will be withheld. Differences between the amount of tax withheld and the amount actually due when filing state taxes will be assessed or returned to the taxpayer.
According to Rep. Devlin, many people who receive pensions or annuities rely on that income for day-to-day expenses, and while not a new or increased tax on these payments this change is potentially confusing and could cause some taxpayers to see a fluctuation in their checks or tax liability
Additionally, the Department of Revenue Services has updated their online taxpayer assistance information at www.ct.gov/DRS and will be available to answer questions by calling 1-860-297-5962.