CT SB00529

Establishes a voluntary employer compensation expense tax beginning with the taxable year commencing January 1, 2019, for employers with covered employees earning more than $40,000 annually.

Employers must make elections through their organizational structure (unanimous vote for non-corporations and trusts, authorized persons for corporations, chief elected officer for governmental entities) with effectiveness determined by election timing.

Tax rates on payroll expenses above $40,000 per covered employee are 1.5% for 2019, 3% for 2020, and 5% for 2021 and thereafter, calculated quarterly.

Provides personal income tax credits to covered employees of electing employers at corresponding rates (1.5%, 3%, 5%) on wages and compensation above $40,000, with excess credits carried forward to succeeding tax years.

Employers cannot deduct the tax from employee wages; all tax administration follows standard withholding procedures under existing Connecticut tax law.