CT HB05513

Employers must continue deducting and withholding personal income tax from employee wages during each payroll period, with the amount computed to result in withholding substantially equivalent to estimated tax owed for the calendar year.

Payers of distributions from retirement plans, pension payments, annuities, and similar accounts must withhold taxes only upon request from the individual recipient, except for lump sum distributions.

For lump sum distributions exceeding 50% of account balance or $5,000 (whichever is less), payers must withhold at the highest marginal tax rate if the recipient does not request withholding, unless the distribution was previously taxed or is a direct rollover.

Distributions to resident individuals must not be withheld in full; distributions must be paid even if withholding applies.

The Commissioner of Revenue Services may require other persons to withhold taxes and may allow withholding agreements for non-wage payments if both parties agree.

The law becomes effective January 1, 2025, for taxable years commencing on or after January 1, 2025.