Several states have recently launched voluntary tax amnesty programs that offer delinquent taxpayers opportunities to file returns or correct underreporting errors without penalty and at reduced interest rates. Connecticut’s Fresh Start Tax Amnesty program offers residents of the state a similar opportunity, though anyone wishing to take advantage must apply to do so via a simple, online form before the window closes on November 30, 2018.
As we reported this past summer, Governor Murphy signed a bill into law to establish the seventh New Jersey Tax Amnesty program in the state’s history back in July 2018.
Administered by Connecticut’s Department of Revenue Services (DRS), the Fresh Start Tax Amnesty program is open to all individuals and businesses. These taxpayers may be eligible to participate in the tax incentive program if they failed to file a return or underreported the full amount of tax on a return previously filed, so long as the tax return in question was due on or before December 31, 2016.
Although both individuals and businesses are eligible, only those taxes administered by the DRS (such as income, business entity, sales and use, withholding, corporate business, and gift taxes) are included in the Fresh Start Tax Amnesty program. Taxes such as local property, payroll and federal taxes, those imposed by the Secretary of State, and a few others, are outside the purview of the Fresh Start Tax Amnesty program and are therefore ineligible for inclusion.
Benefits of participation include allowing for taxpayers to: go back and pay the taxes for which they are in arrears without incurring any penalties; reduce the interest these taxpayers would customarily owe in full, by 50%; avoid potential criminal prosecution; and, in some instances, qualify for a limited look-back period for non-filers.
If you have questions about whether or not you qualify or need assistance applying for the Connecticut Fresh Start Tax Amnesty program before the end of November, please contact your Untracht Early advisor.