Nov 22 Tax Alert: Connecticut Tax Amnesty Program Available Through January 31, 2022

On October 29, 2021, Commissioner Mark Boughton announced the 2021 Connecticut Tax Amnesty program (“Amnesty” or “the Program”) will offer individuals and businesses the opportunity to pay their back taxes within a favorable environment. The Amnesty program offers an opportunity for taxpayers to settle their Connecticut back taxes for any taxable period ending on or before December 31, 2020 without having to pay interest or penalties.  All taxes administered by the Connecticut Department of Revenue Services, except for Connecticut motor carrier road tax (IFTA), are eligible for Tax Amnesty.

The program ends on January 31, 2022. The program will abate 75% of the interest due on unpaid tax and will fully abate any applicable penalties for taxes due on or before December 31, 2020.

Taxpayers seeking Amnesty can access the program via the state’s website at GetRightCT.com. Tax Amnesty applications must be filed electronically, and payment must be made in full by January 31, 2022. At the end of the program, taxpayers will be liable for the full tax, interest, and applicable penalty (if any) on any amount owed.

One key item to note is that the Connecticut Amnesty program does not have a limited look-back period. Depending on the facts and circumstances in each case, this caveat can materialize as a substantial issue. Generally, when SAX LLP State and Local Tax professionals engage in mitigation procedures with the state, we ensure that the look-back period is limited.  The look-back period is how far a state can audit with respect to tax years. In the case of a taxpayer that has state exposure dating back more than three or four years, our recommendation is to discuss the issue with a SAX LLP State and Local Tax professional before engaging in the Amnesty program. This type of issue, without professional guidance, may turn out to be a fundamental web that ill-advised taxpayers find themselves ensnared within.

For any questions on the Connecticut Amnesty program, or more information on tax related issues, feel free to reach out to Sax’s Tax Department at www.saxllp.com.