Withholding for resident individuals who are recipients of pensions or annuities

(a) General. Any payer of pensions or annuities maintaining an office or transacting business within this state shall withhold Connecticut income tax from pension or annuity payments that are distributed to a resident individual recipient if requested to do so by such recipient. This requirement applies to all payers, whether public or private, and to all payments, including lump sum distributions, on account of which a federal Form 1099-R is required to be furnished to the payee by the payer, whether or not such payments are made from a Connecticut location.

(b) To qualify for withholding. To qualify for withholding of Connecticut income tax, the pension or annuity payment shall be income to the recipient that would be includible in such recipient's Connecticut adjusted gross income.

(c) Amount to be deducted and withheld. The request to deduct and withhold Connecticut income tax shall be made in a specific whole dollar amount. This amount shall be at least $10 per payment.

(d) Manner of making request. The payer shall provide all resident individuals who are recipients of pension or annuity payments with a Form CT-W4P (Withholding Certificate for Pension or Annuity Payments) or a facsimile thereof. A request to deduct and withhold Connecticut income tax on pension or annuity payments should be made by the payee by completing the Form provided by the payer.

(e) When request becomes effective. Upon receipt of a request by a payee to deduct and withhold Connecticut income tax from pension or annuity payments, the payer shall deduct and withhold the amount specified in such request commencing no later than the first payment made on or after the date which occurs:

(1) in a case in which no previous request is in effect, three calendar months after the date on which the request is furnished to such payer; or

(2) in a case in which a previous request is in effect, the first status determination date (January 1, May 1, July 1 and October 1 of each year) which occurs at least 30 days after the date on which such request is so furnished.

(f) Duration and termination of request. The request under this section shall remain in effect until terminated by the payee. The payee may terminate the request by furnishing the payer with a signed written notice of termination. Except as otherwise provided, such notice of termination is effective with respect to the first payment of a pension or annuity made on or after the first status determination date (January 1, May 1, July 1 and October 1 of each year) which occurs at least 30 days after the date on which such notice of termination is furnished. However, the payer may elect to terminate withholding of Connecticut income tax with a pension or annuity payment made on or after the date the termination notice is furnished and before the status determination date.

(h) Reporting the tax withheld. Except as otherwise provided in this section or in § 12-707-1, payers of pensions or annuities who withhold Connecticut income tax shall report and pay over taxes in the same manner that employers are required to report and pay over Connecticut income tax under this Part. Payers of pensions or annuities shall give to each payee from whom Connecticut income tax was withheld the "state copy" of the federal Form 1099-R, showing thereon the amount of Connecticut income tax that was deducted and withheld, on or before January 31 of the succeeding taxable year. Payers of pensions or annuities shall file a Form CT-1096, with a duplicate of the "state copy" of such federal Form 1099-R for each payee from whose pension or annuity Connecticut income tax was deducted and withheld, with the Department on or before the due date that is specified in § 12-727(a)-2 of Part XI.

(Effective November 18, 1994; Amended August 3, 2001)

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