CT Athlete and Entertainer (A&E) Tax Withholding
Summary of Administrative Changes
The CT Department of Revenue Services (DRS) recently issued Policy Statement 2002(1), which provides administrative relief from CT A&E Tax withholding rules effective for payments made on or after January 1, 2002.
The following is a summary of the key changes:
· Establishment
of a “No Paperwork” Payment Threshold:
[Payments of $1,000 or less]
If a performer or performing entity is paid $1,000 or less for a performance (or series of performances) by the University, the performer or performing entity is no longer required to complete Form CT-590 to obtain an exemption from CT A&E tax withholding (5%). The University is no longer required to withhold CT income tax (5%) from such payments.
This rule also applies to subsequent performances (or series of performances) during the calendar year for which the performer or performing entity is paid $1,000 or less.
· Increase
in Annual CT Source Income Threshold (increase in threshold from $1,500 to
$3,000):
[Payments of $3,000 or less
and greater than $1,000]
The policy statement provides an exemption from the 5% withholding for payments made to a nonresident performer who:
i.) expects to be paid $3,000 or less during the calendar year from all CT sources for services performed in CT, and
ii.) completes and submits to the University a Form CT-590, Athlete or Entertainer Request for Waiver of Withholding, certifying the facts in item i.), above
If subsequent payments to the performer during the calendar year result in the performer being paid, in the aggregate, more than $3,000 during the calendar year for services performed in CT, the performer may not request a waiver of withholding from that point forward until the end of the calendar year. Catch-up withholding is not required for a performer who reasonably believed that payments to him or her for services performed in CT for the calendar year would not exceed $3,000, but who subsequently is paid more than $3,000 for services performed in Connecticut for the calendar year.
Reminder: The CT A&E tax applies to guest lecturers and guest speakers in addition to those categories (e.g., musicians, referees, actors, etc.) traditionally considered athletes or entertainers.
Note: Form CT-590, Athlete or Entertainer Request for Waiver of Withholding, and Form CT-588, Athlete or Entertainer Request for Reduced Withholding, have been revised to reflect these changes (forms available at www.yale.edu/ppdev/forms/quickforms.html and www.yale.edu/tax/ct_a_e.html). The revised forms must be used for payments made after February 1, 2002.
Please refer to University Policy 3410, Connecticut Income Tax Withholding for Nonresident Athletes and Entertainers, and Procedure 3410 PR.1, Obtaining Exemption or Reduced Rate of Withholding for Connecticut Athlete and Entertainer Withholding Tax, for a more detailed discussion of the CT A&E withholding rules and the process for obtaining exemption.
Please contact the University Tax Department at 432-5530 if you have any questions.
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