Connecticut State Tax Update: Fresh Start Tax Amnesty Program

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Kellie M. Smith, CPA, Senior Tax Manager


Connecticut announced it is launching the CT Fresh Start, an amnesty program for all eligible taxes administered by the Department of Revenue Services (DRS).  The program started on October 31, 2017 and runs through through November 30, 2018. 

Connecticut is allowing eligible taxpayers to enter into a CT Fresh Start Agreement during this time by completing a simple online application.  Taxpayers will only have to pay the tax due and ½ the interest at the time of the application filing.  The state will waive all penalties and the other half of the interest that is due. 

And the best part about the program?  No returns are actually required to be filed!

Connecticut Tax Amnesty for Both Personal and Business Tax Delinquencies

  • All qualifying delinquent taxes due and payable as of December 31, 2016 that are unreported or underreported are eligible. The qualifying taxes may be either personal or business taxes and include all taxes administered by the DRS (except for the taxes imposed under chapter 222 (IFTA), such as:
  • Income tax,
  • Business entity tax,
  • Sales and use tax,
  • Withholding tax,
  • Corporation business tax, and
  • Gift tax

Note that the amnesty program  does not apply to local property taxes, payroll taxes administered by the CT Department of Labor, fees imposed by the Secretary of State, or taxes owed to the federal government.

What’s Not Eligible for Amnesty

Taxpayers who have received prior communications from the Department of Revenue Services for any tax type and period, such as a bill, are currently under audit, are party to a closing agreement with DRS, have made an offer of compromise that has been accepted by DRS, have protested a determination of an audit, or who are a party to litigation against the Commissioner, are not eligible under this program for that particular tax liability.  However, taxpayers may be eligible to resolve other tax liabilities through the program.

More Good News: Limited Look Back Period

Another  great feature of the CT Fresh Start program is that it offers a limited look-back period.  

That means that while normally, there is no limit to how many years the DRS can go back to assess tax, penalties and interest on any return that was not filed, under the CT Fresh Start, the taxpayer will only be required to “look-back” and report the tax on just three years of unfiled returns.  If the taxpayer complies with the terms of their agreement, all liabilities for the applicable taxes prior to the three year look-back will be abated.

In order to qualify for the limited look-back period, the taxpayer must have never been registered or filed a return for that tax type. Any taxpayer that believes they qualify for a limited look-back period, must call DRS prior to applying for CT Fresh Start.

Following the CT Fresh Start program, the taxpayer is required to be compliant with any tax return and payment for the three-year period after the date of the CT Fresh Start application. If the taxpayer does not comply with the CT Fresh Start agreement, the DRS may reinstate all applicable penalties and interest for the taxable periods covered by the CT Fresh Start agreement.  

Freed Maxick Can Help You with the Connecticut State Tax CT Fresh Start Program

So if you are looking for a “fresh start”, our state and local tax professionals can assist you with getting started with the application and help you navigate through the process towards becoming compliant with Connecticut taxes.

Contact us here, or call 716.847.2651 for a no cost, no obligation discussion of your situation.

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