State of Connecticut Office of the State Comptroller MEMORANDUM NO. 99-1

The Seal of the Office of the State Comptroller


January 4, 1999


ATTENTION: Chief Administrative and Fiscal Officers, Business Managers, and Payroll and Personnel Officers
SUBJECT: Notice of Election to Not Withhold Federal and State Income Tax on the Value of Non-Business Use of Employer-Provided Vehicles

Until further notice, the State of Connecticut will continue its election to not withhold income and employment taxes, other than social security, on the imputed value of an employee's non-business use of an employer-provided vehicle in the 1999 calendar year.

It is imperative that, prior to January 31, 1999, each agency notify its employees of the State's decision to not withhold Federal and State income tax on the vehicle use benefits. In your notification to agency employees, inclusion of the following information is recommended.

"Personal Use of a non-exempt State vehicle by State employee(s) for commuting or other non-business purposes must be considered taxable compensation and reported on the employee's Form W-2. Although the State does not withhold income and employment taxes, employee(s) will still be incurring a tax liability. The payment of this tax liability may be postponed until the employee's return is filed.

However, employees should recognize that the required annual withholding is the smaller of:

  1. 90% of your total expected tax for the current year, or
  2. 100% of the previous year's tax liability.

It is the employee's responsibility to seek tax counseling, if needed, insofar as increasing payments by revisions to his or her Form W-4 and CT-W4 and/or estimated taxes."

Questions may be directed to the Comptroller's Policy Services Division at (860) 702-3437.



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