CT SB01241

Establishes a 5% payroll expense tax on employers beginning January 1, 2025, calculated quarterly on wages and compensation paid to covered employees, with employers prohibited from deducting the tax from employee wages.

Covered employees (those earning above minimum wage and not employed by state, municipal, tribal, or federal government) receive a tax credit against state income tax starting in the 2025 tax year, reduced by the federal income tax rate calculated by the Commissioner of Revenue Services.

Creates a state Social Security program account to receive the difference between full and reduced tax credits, to be invested by the Treasurer for covered employee benefits with eligibility and payment requirements substantially similar to the federal Social Security Act.

Requires the Commissioner of Revenue Services, Comptroller, and Treasurer to jointly develop a state Social Security program and submit a report to the legislature by February 1, 2024, detailing program design, system requirements, and funding needs.

Applies existing Connecticut tax administration provisions (sections 12-548 to 12-554 and 12-555a) to the payroll expense tax with the same force and effect as if fully incorporated, allowing for regulations to implement the tax.