CT State DRS 2021 Tax Amnesty Program Overview
The Connecticut Department of Revenue Services (DRS) is offering tax amnesty from November 1, 2021, to January 31, 2022. Taxpayers can report and pay CT back taxes without penalties.
You can use this program to report and pay almost every tax administered by the DRS, and it can significantly reduce your tax bill. Here is what you need to know.
What CT Taxes Are Available for Amnesty?
All taxes administered by the CT DRS are available for amnesty, except for Motor Carrier Road Tax also called International Fuel Tax Agreement (IFTA) tax. You can claim amnesty for the following Connecticut taxes:
- Business use tax
- Cigarette tax
- Corporate business tax
- Gift tax
- Individual income tax
- Estate income tax
- Trust income tax
- Individual use tax
- Motor fuel tax
- Sales and use tax
- Withholding tax
- Pass-through entity tax
You cannot use the CT Tax Amnesty program to get relief on taxes not administered by the CT DRS. This includes taxes such as CT property taxes, federal taxes, payroll taxes owed to the Department of Labor, and annual fees imposed by the Secretary of State.
The program applies to all tax periods ending on or before December 31, 2020. You can apply for tax amnesty for any period up to that date, but you cannot apply for amnesty for taxes from 2021.
Who Can Apply for Tax Amnesty in CT?
Both individuals and businesses can apply for tax amnesty in Connecticut if any of the following situations apply:
- You have unfiled returns.
- You have unreported tax liabilities.
- You have delinquent tax balances.
- You are under an audit with the DRS.
- You have an ongoing protest in front of the DRS's Appellate Division.
- You are pursuing civil litigation with the DRS.
You cannot apply for amnesty if you are currently under criminal investigation by the DRS or are party to criminal litigation pending as of November 1, 2021. You are also ineligible for amnesty if you are a party to a closing agreement with the DRS, you're party to a managed audit agreement, or the DRS has accepted an offer in compromise (OIC) agreement from you.
Benefits of the CT Tax Amnesty Program
If you qualify for the tax amnesty program, the CT DRS will waive all the penalties associated with the tax and reduce your interest by 75%. For example, if you have penalties of $1000 and interest of $1000 on your account, your total penalties and interest will drop to just $250.
This program also allows you to avoid criminal persecution. CT tax amnesty applications are confidential, and the DRS does not use them as evidence in criminal investigations unless you knowingly file an application with false information.
When you apply for amnesty, you agree to waive all rights of appeal related to the tax liability.
How to Apply for Tax Amnesty in Connecticut
Again, you can apply for tax amnesty anytime between November 1, 2021, and January 31, 2022. You can apply online at GetRightCT.com — just click "apply now" to get started. Or you can apply through the DRS's online payment portal at myconneCT.
To apply online, you need the following information:
- List of tax types and tax periods for which you want amnesty.
- Amount of tax due each period.
- Record of estimated tax payments made.
If you cannot apply online, you can call the DRS Amnesty Help Line at 1-866-658-1528.
Amnesty Application Instructions Based on Your Situation
The CT DRS has specific instructions on how to apply for tax amnesty depending on your situation. You can learn more about what to do by contacting a tax professional.
Taxpayers with unfiled returns
If you are applying for amnesty for unfiled returns, you should complete the returns to determine how much you owe. Don't file the returns or send them to the CT DRS. Simply note the amount due on your amnesty application, and then, keep the returns for your records in case you are audited or the DRS wants more information.
Taxpayers with underreported liabilities on filed returns
You should fill out an amended return if you are seeking amnesty on underreported taxes. Do not send the amended return to the DRS. Note the additional tax due on your amnesty application, and keep the amended return for your records in case of an audit or a request for additional information.
Taxpayers with delinquent tax liabilities
If you have an existing delinquent tax liability, the CT DRS should send you an Offer of Amnesty. When you apply, you need to enter the Amnesty ID printed on your notice.
The CT DRS says that taxpayers with outstanding liabilities who have not received an Offer of Amnesty should contact the Amnesty Help Line at 1-866-658-1528.
Taxpayers with back taxes and underreported tax liabilities from the same tax period.
In this case, you need to complete two different amnesty applications. Follow the prompts to apply using the Amnesty ID on your Amnesty Offer Letter. Then, fill out an amended tax return and complete a second amnesty application following the above instructions for taxpayers with underreported tax liabilities on already filed returns.
Taxpayers with pending appeals or protests
This applies to taxpayers with pending appeals before the DRS Appellate Division and to taxpayers with protests pending before the Tax Session of the Connecticut Superior Court.
If you have a pending case with the DRS Appellate Division, you should withdraw your protest by sending a fax to (860) 297-4780. If you appealed to the CT Superior Court, you must file a written Withdrawal of Action using the court's required forms.
Once your protest or appeal has been withdrawn, you can apply for amnesty. If your withdrawal is not processed before you apply, any payment you make will be applied to your outstanding liability.
Taxpayers under audit by the DRS
To get amnesty, talk to your revenue examiner about closing the audit under amnesty guidelines. Then, apply as usual based on your situation.
Paying Tax Liabilities Through the CT Tax Amnesty Program
In exchange for tax amnesty, the CT DRS expects you to pay your bill in full. To qualify for this program, you need to pay the entire liability at the time of application. You can pay with direct debit, ACH credit, or credit card.
There are no payment plans or extensions available with the tax amnesty program. If you can't afford to pay in full right away, the DRS will deny your application, and you will owe the taxes plus penalties and interest.
Calculating the Amount Due When You Apply for Amnesty
If you have a delinquent balance, the amount owed will show in your Offer of Amnesty letter. If you have unfiled returns or underreported liabilities, you will figure out how much tax you owe when you fill out a return or amended return.
When you use the amnesty program, you don't have to pay any penalties, and again, your interest will be reduced by 75%. Don't try to calculate the interest on your own. When you fill out the amnesty application, it will calculate the interest for you so that you know exactly how much to pay.
Rejected CT Tax Amnesty Applications
The CT DRS will send you a letter if your amnesty application has been denied, and the DRS will apply any payments you have made to your tax balance. If your application is accepted, the DRS will not notify you.
The CT DRS's Amnesty Offer Letter
The CT DRS plans to send Amnesty Offer Letters to people with outstanding liabilities who qualify for amnesty. This letter contains an ID you should use when applying for amnesty.
If you have recently made a payment on your account, the offer letter may show an Eligible Balance that is higher than your actual balance. Do not simply subtract your payment when applying for amnesty. Instead, contact the Amnesty Help Line to ensure your application is processed correctly.
The offer letters don't pause the collection process. As a result, you may get both an offer letter and a bill. Even if you get a bill, you are still eligible for amnesty.
Audit After Amnesty
The CT DRS has the right to audit you for the periods related to your amnesty application. If you are audited, your amnesty will not be revoked. However, if the audit reveals additional taxes due, you will be subject to interest and penalties.
If the department finds out that you have falsified your amnesty application, you can be fined up to $5000, imprisoned for up to five years, or both.
Get Help Applying for CT Tax Amnesty
The CT DRS's Tax Amnesty Program offers an invaluable opportunity for individuals and businesses. The last time the state offered amnesty was in 2017 and before that in 2013. If you do not take advantage of the amnesty program, you will owe outstanding taxes plus penalties and interest.
To get help applying for tax amnesty in Connecticut, contact a CT tax professional that specifically helps with tax amnesty today. These tax professionals are experienced in dealing with the CT DRS, and they can help you make the most of this opportunity.