CT Debit Card Tax Refund FAQ – 2012

February 2, 2012 by Wayne Schulz

The State of Connecticut has moved to completely eliminate issuing checks for 2012 income tax refunds. You may still have your refund wire transfered to your bank account however there is no longer an option to receive a paper check in the mail.

In an effort to reduce costs, the Department of Revenue Services (DRS) may issue debit cards for income tax refunds not designated for direct deposit. The DRS has contracted with JPMorgan Chase (Chase) to administer the debit card program.

Instead those who would formerly have received a check for their Connecticut income tax refund will instead receive a Chase Debit Card which looks like this:

Some other interesting notes from the State of Connecticut FAQ regarding their new income tax debit card refund program:

QUESTION: Can I send my debit card back to DRS and request that a refund check be mailed to me or request that a credit be added to my account?

ANSWER: No. You will not be able to mail the debit card back to DRS to request a replacement refund check or a credit.

QUESTION: Is my debit card ready to use once I receive it?

ANSWER: No. Before you can use your card, you must first activate it by calling Chase Customer Service at 1-866-586-1705. Have the card in front of you when making the call. You will be prompted to enter your social security number and Zip code. Once your card is activated, you may choose option 4 from the main menu to create a PIN (Personal Identification Number) in order to withdraw cash at ATMs. Once you have activated your card don’t forget to sign it.

QUESTION: Where can I use my debit card?

ANSWER: You can use your debit card at:

Banks and Credit Unions displaying the VISA logo
ATMs
Retail locations (both store front businesses and on-line businesses) that accept VISA
Gas Stations to purchase fuel. (However, you will not be able to use the “pay at the pump” feature. You must go inside and pre-pay for all fuel purchases.)

QUESTION: Are there fees imposed when I use my debit card?

ANSWER: In some cases, yes. Please refer to the chart below (or the card carrier and the brochure that accompanied your Chase debit card).

State of Connecticut Debit Card FAQ

CT Withholding Taxes May Be Zero if Period Ending Date in 2011 And Check/Quarter Date in 2012

January 3, 2012 by Wayne Schulz

I haven’t been able to figure this out totally because it’s not happening for every one of my test employees — however one customer on Sage ERP MAS 90 4.3.0.23 had it occur on all her employees and I can duplicate it on some employees in my test Sage ERP MAS 90 4.50 system (though only on existing employees and not newly created ones).

For employees with CT withholding codes:

If the period ending date in payroll data entry is in 2011 and the current payroll quarter is in 2012 — when you go to run the payroll tax calculation you may notice that some CT employees have no CT tax withheld unless they have an override amount in their employee maintenance screen.

I was able to resolve this by changing the period end date so it falls into 2012 and recomputing the payroll taxes.

CT Withholding Tables – 2012 (pdf)

December 31, 2011 by Wayne Schulz

The State of Connecticut have released their withholding tables for 2012. These lookup tables allow you to verify employee wage withholding against any computerized payroll computations. CT tax statuses A, B C, D, and F are included as well as weekly, bi-weekly, semi-monthly, monthly wage payment periods.

CT DRS 2012 Withholding Tables

CT W-4 for 2012

CT 2012 Withholding Forms and Tables

CT Payroll Tax Withholding Wrong? Join The Club

December 31, 2011 by Wayne Schulz

The Hartford Courant is reporting that over 700 Connecticut employees contacted the state to ask why their December 2011 tax withholding was incorrect. Apparently this widespread issue is due to the state attempting to apply some retroactive tax adjustments to worker’s pay. The reason so many are experiencing issues in December is automated payroll systems miscalculate income tax owed when workers have either overtime pay, a Christmas bonus or a buyback of unused sick days.

Provided your pay is regular each period the Connecticut withholding tax tables appear to work just fine. When payroll is different weekt to week (as may be the case with vacation or holiday pay or year end bonus) then the CT Withholding tables (provided by the state) may inaccurately withhold too much.

According to the Courant:

Because the increase in state income taxes began in August, but was retroactive to the beginning of the year, state income tax withholding is designed to both take out the right amount for the current pay period and for the first two-thirds of the year. But when employees have higher pay than usual, many payroll systems assume they’ve been earning that amount all year.

Even the state of Connecticut had overwithholding issues, with Department of Transportation workers after Tropical Storm Irene. The state did not make a fix to its software, because the same thing happened again in December, for corrections officers who received holiday pay and overtime.

“Those employees have been refunded where possible,” said Tara Downes, spokeswoman for the state Comptroller.

The good news: no worker, no matter how plumped up his check is with overtime or bonuses, will see this glitch starting Sunday. That’s because the systems will no longer be trying to calculate retroactive withholding.

via: Hartford Courant and State of CT Withholding Tables for 2012 (PDF)

Do CT Employers Have To Pay Employees Idled By The Halloween Power Failure?

November 7, 2011 by Wayne Schulz

Here’s an interesting answer to a question that my friend Corrine Nadolny has just sent to me via email.

According to Corrine, who is a consultant for Paychex payroll processing, she was being asked by her customers:

Some CPA’s and clients have asked, if businesses were closed last week due to power outages and hourly employees were available to work but couldn’t, do they still have to be paid? Or should they collect? If the employer offers them extra hours to make up the lost hours, do they have to pay OT?

To which Corrine say’s that she called the CT Department of Labor and received this response:

I just called the Dept of Labor:
Exempt ee’s have to be paid

Non-exempt employees:
Do not have to be paid, they have the right to collect
If they work more than 40 hours to make up the time, they have to be paid 1.5 X
Comp time is illegal for non-exempt ee’s

Paychex’s contingency plan was tested again and payrolls were processes last week without missing a beat! If any of your clients had difficulty with their payroll processing and need help, please ask them to contact me directly.

Corrine
Corrine Nadolny
Paychex Inc
714 Brook Street
Suite 120
Rocky Hill, Ct 06067
Office (860)257-0677 Ext. 25012
Fax (866)784-5725
cnadolny@paychex.com

Tip: Always check with your own tax provider about these types decisions. The information on our web site is general in nature and may not apply to your company’s particular situation. We are not in the business of providing tax or accounting advice and make not guarantee about the reliability of the above information.

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