Registration and Liability (Employer Status)
The principal function of the Employer Status Unit of the
Tax Division is to identify employers' liability for unemployment insurance
coverage and assist them in their efforts to comply with state unemployment
insurance laws and regulations.
The major tasks within this function are:
CONDITIONS OF LIABILITY
Identify potential employers subject to UI tax law
Determine status (e.g. new, successor, non-subject status)
Notify employers of their liability and initial rates
Terminate inactive employer accounts
Process and record all coverage information
Handle liability appeals
Maintain accurate and current files on each employer
Any employer who (a) in any calendar quarter in either the
current or preceding calendar year paid wages for services in employment of
$1,500 or more or (b) had in employment at least one individual for some portion
of a day in each of twenty different weeks, not necessarily consecutive, in
either the current or preceding calendar year becomes liable on the first day of
the year or the first day of business, whichever is earlier.
Federal Tax Liability
Employers who are liable under the Federal Unemployment Tax Act (FUTA)
become liable under the Connecticut Unemployment Compensation Law from the
beginning of the calendar year or the beginning of operations in Connecticut if
at least one person is employed in this state.
An employer becomes federally liable if, during either the
current or preceding calendar year, he (a) paid wages of $1,500 or more in any
calendar quarter or (b) had one or more employees at any time in each of twenty
Government sub-divisions and certain qualified non-profit
organizations are not subject to the Federal Unemployment Tax Act.
An employer becomes liable immediately by acquiring substantially all of the
assets, organization, trade or business of another employer who was liable at
the time of acquisition. If the predecessor employer was not liable at the
time of acquisition, the number of weeks he employed one or more persons in the
calendar year of acquisition is counted along with the number of weeks the
successor employer employed one or more persons in the calendar year to arrive
at the twenty weeks of employment to determine liability.
Executors, administrators, successors or assignees of any
former employer acquire the experience of the predecessor employer with the
following exception: The experience of a predecessor employer who leased the
premises and equipment from a third party and who has not transferred any assets
to the successor, shall not be transferred if there is no common controlling
interest in the predecessor and successor entities.
Effective January 1, 1978, an employer who has service performed by an
individual in agricultural labor is liable if the service is performed for a
person who (a) during any calendar quarter in either the current or preceding
calendar year paid remuneration in cash of $20,000 or more to individuals
employed in agricultural labor, or (b) employed for some portion of a day in
each of twenty different calendar weeks, not necessarily consecutive, ten or
more individuals regardless of whether they were employed at the same moment in
Agricultural coverage under FUTA is also created by the
conditions described above in (a) and (b). Liability to FUTA creates
liability to Connecticut Law from the beginning of operations in Connecticut if
at least one person is employed in this state.
Aliens admitted to the United States to perform
agricultural services are considered employees.
Any person who employs an individual for domestic service in a private home,
college club or chapter of a college fraternity or sorority and who paid cash
remuneration of $1,000 or more, for any calendar quarter in the current or the
preceding calendar year, to individuals employed in such service, is subject to
the provisions of this law.
Only cash wages are taxable under Connecticut domestic
service coverage. The cash value of other than cash payments is not
taxable. This includes meals, lodging, rent, clothing or merchandise.
Most non-profit organizations, even if exempt from income taxes under the
Internal Revenue Code, are subject to the Connecticut Unemployment
Compensation Law. If an organization has a Sec. 501 (c)(3) exemption and
has one or more employees for some portion of a day in each of thirteen
different calendar weeks, whether or not consecutive, within either the current
or preceding calendar year, liability commences at the end of the thirteenth
All other non-profit organizations are considered to be
regular employers. Refer to section entitled "Conditions
Non-profit organizations exempt from Federal income taxes
as provided under Internal Revenue Code Section 501 (c) (3), are given the
option of paying unemployment taxes on the wages of covered employees, or
reimbursing the Unemployment Compensation Fund for the amount of benefits paid
to former employees.
Section 501 (c) (3) includes any corporation and any
Community Chest fund or foundation organized and operated exclusively for
religious, charitable, scientific, testing for public safety, literary or
educational purposes, or for the prevention of cruelty to children or animals,
no part of net earnings of which inures to the benefit of any private
stockholder or individual, no substantial part of the activities of which is
carrying out propaganda or otherwise attempting to influence legislation and
which does not attempt to participate or intervene in (including the publishing
or distributing of statements) any political campaign.
An employer not liable under the law may volunteer to accept coverage for
all his employees with one exception. The law prohibits the voluntary
coverage of service performed by an individual in the employ of his son,
daughter or spouse and service performed by children under eighteen years of age
in the employ of either or both parents. A voluntary acceptance form must
be submitted in writing and must include all employees who are eligible for
Voluntary acceptance of liability may be revoked by the
employer at the end of any calendar year following the calendar year of
Discontinuance of Business
Employers who discontinue business are required to notify the Administrator
in writing, giving employer number, date of discontinuance, trade name and
address of successor, if any.
For more information, contact the Employer Status Unit at