Tax & Accounting Blog

Connecticut Enacts State Tax Amnesty, Will Waive Penalties and Reduce Interest

1042-S, 1099, ONESOURCE, State Reporting, Tax Information Reporting, Tax Information Reporting Webcasts June 12, 2013

The Connecticut legislature has approved a tax amnesty program as part of the general state budget bill H.B. 6704. The amnesty period will run from September 16 to November 15, 2013, and is open to individuals, businesses, or other taxpayers that owe Connecticut state taxes (other than motor carrier road taxes) for any taxable period ending on or before November 30, 2012.

If a taxpayer files the amnesty application during the amnesty period and pays all the taxes owed for the applicable tax periods, plus interest, civil penalties will be waived and there can be no criminal prosecution for those periods. And if the taxpayer pays the taxes due by November 15, 2013, the interest on the overdue tax will be cut to one-fourth of the interest that the department’s records show to be due and payable as of the filing of the amnesty application.

Connecticut’s standard interest rate on overdue taxes is 1% per month, so any tax paid after the amnesty will be subject to that 1% per month or part of a month from the date it was originally due until the payment date. After November 15 when the amnesty closes, a special penalty of 25% of unpaid tax will be imposed on taxpayers that would have been covered by the amnesty terms but did not file a timely amnesty application.

Amnesty is not available to taxpayers who are parties to:

  • Any criminal investigation or criminal litigation pending on July 1, 2013 in any federal or Connecticut court;
  • A closing agreement with the DRS commissioner or have made a compromise offer that has been accepted by the commissioner;
  • A managed audit agreement

Editor’s notes:
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