The State of Connecticut has enacted legislation that
requires all employers to withhold Connecticut State tax on nonresident
"performers" on the income derived from Connecticut sources. Performers
include actors, singers, musicians, dancers, writers, directors and set
designers and supporting acts crews (i.e. lighting). Other payments subject
to this withholding include payments to public speakers, athletes, trainers
and referees. Independent Contractors, such as nonresident owners of bands,
orchestras, plays, dance teams and other similar performing entities are
also subject to these withholding rules.
Withholding is also required on
payments to agents and third parties on behalf of the nonresident performer
or performing entity.
Nonresident alien visitors or employees are not exempt
from Connecticut State tax or tax withholding under any circumstances, since
Connecticut does not recognize federal tax treaties with foreign countries.
Note-Federal Form 1099-Misc is required by the State of
Connecticut for withholding on Corporations for CT A&E tax.
Exceptions to withholding:
An individual who is treated, for tax purposes, as an
employee by the University.
The performing entity registers to withhold income
tax as a Connecticut employer.
The performer/performing entity is a corporation,
LLC, or partnership that has an office in Connecticut.
The amount of any individual payment derived from
Connecticut sources is less than $1,000.
The amount of all payments within a calendar year is
expected not to exceed $3,000. A Form CT-590-Request for waiver of
withholding must be completed and sent to the Connecticut DRS
(Department of Revenue Services).
Receives reduced withholding or a waiver (Form
CT-595) from the Connecticut Department of Revenue Service.
The services are not performed in Connecticut.
Speakers and lecturers receive an automatic exemption
for any performance fee under $5,000.
Effective Tax Withholding Rate: The mandatory tax
withholding rate is 6.7%.
Under certain circumstances, the State of Connecticut may issue a waiver
or reduce the withholding rate. To apply for a reduced rate of waiver the
performing entity must file a reduced withholding request (Form CT-588) with
the Department of Revenue Services. The State requires up to 14 days to
process these requests and Wesleyan is required to withhold at the 6.7%
until the waiver has been approved.
Procedure for withholding and reporting: