Connecticut Tax Relief Options and DRS Notice Help

Owe Connecticut state taxes or received a notice from the Connecticut Department of Revenue Services (DRS)? Do not guess your next move. We review your Connecticut tax balance, notice, deadline, payment options, and collection risk so you know what to do next.

Get Connecticut Tax Relief Review

See Connecticut Tax Relief Options

No guarantee of outcome. We will tell you if settlement is not realistic. A review by phone: (888) 260-9441

Reviewed by William McLee, Enrolled Agent

Last reviewed: June 27, 2026

Reviews content for accuracy against official sources. About our review process

Received a DRS assessment, notice of proposed disallowance, tax lien, tax warrant, bank levy, wage garnishment, or business keeper notice from Connecticut? These are not normal bills. Deadlines and collection risk matter.

These are not normal bills.

Deadlines and collection risk matter.

Check My Connecticut Collection Risk

Speak with a tax relief specialist: (888) 260-9441

Connecticut Tax Relief Overview

Owing Connecticut state taxes is different from owing the IRS. The Connecticut Department of Revenue Services (DRS) has its own rules, deadlines, and collection tools. Federal tax relief options, such as Offers in Compromise, may have state counterparts, but the rules are not the same.

Connecticut Interest Generally Cannot Be Waived

Under current, standard DRS relief programs, interest on unpaid Connecticut taxes continues to accrue, and DRS says it cannot waive interest. Interest accrues at 1% per month (12% per year) from the due date until the date of payment under Conn. Gen. Stat. §§ 12-35, 12-419, and 12-735. Penalties may be waived for reasonable cause, but under the currently available tax relief program options, interest is not reduced. (Connecticut's now-expired CT Fresh Start voluntary compliance program, which ended November 30, 2018, did reduce interest by 50% for participants — but that program is historical and is no longer available.) Any claim that Connecticut interest can be routinely "negotiated away" under today's programs is false.

Connecticut offers several resolution paths depending on your situation, a Connecticut tax relief program for nearly every stage of the balance:

An Offer in Compromise (OIC) to settle for less than the full amount
A payment plan (up to 12 months under current DRS guidance, max $50K liability)
Penalty relief when reasonable cause is proven
A protest and appeal if you dispute the assessment (60-day deadline)
Lien release or levy/warrant resolution if collection action has started
Filing help if you have unfiled Connecticut tax returns

If you run a business in Connecticut and owe sales tax or withholding tax, the stakes are higher. Trust fund taxes are treated very seriously by DRS, and willful failure to collect, account for, or pay over these taxes can result in a 100% personal liability penalty under Conn. Gen. Stat. § 12-414a.

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Connecticut Tax Relief Options at a Glance

Option	What It Does	Best For	Key Deadline / Limit
Offer in Compromise	Settle tax debt for less than the full amount	Cannot pay the full balance; genuine dispute or insufficient assets/income	No strict deadline; OIC rejection not reviewable by court
Payment Plan	Pay balance over time	Liability ≤$50K; can afford monthly payments	Apply through myconneCT; current DRS guidance limits standard plans to 12 months
Penalty Relief	Request waiver of penalties for reasonable cause	Penalties are large; had illness, disaster, DRS error	File Form DRS-PW within 1 year of the first penalty notice; tax and interest must generally be paid or under an active protest, appeal, or payment plan
Protest / Appeal	Challenge the assessment at the DRS Appellate Division, then the Superior Court	You disagree with the amount owed and have proof	60 days from assessment; jeopardy = 10 days
Lien Release	Remove or discharge tax lien from property records	Lien filed, but balance paid or compromised	Request a certificate of Release after payment
Tax Warrant / Levy Help	Respond to bank levy, wage garnishment, or business keeper	Bank account frozen, wages garnished, or a keeper placed in business	Act immediately

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What Connecticut DRS Notice Did You Receive?

Select your notice type for a quick explanation of what it means and your options.

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Not Sure Where to Start?

We can review your Connecticut tax notice, balance, and deadlines — and explain your options in plain English. Call (888) 260-9441 or request a review. We will tell you if settlement is not realistic.

Get Connecticut Tax Relief Review

No pressure. No guarantee. Just a clear review of your options.

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What the Connecticut Department of Revenue Services Can Do to Collect

If you owe Connecticut state taxes and do not address the balance, DRS has a range of collection tools authorized by the Connecticut General Statutes. Not every case reaches the most serious actions, but the longer a balance goes unpaid, the more options the state may use.

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Add Penalties and Interest

Late filing and late payment penalties can add up quickly. Interest accrues at 1% per month (12% annually) on the unpaid balance until it is paid in full. Penalties may be waived for reasonable cause, but under current DRS relief programs, interest is not reduced.

Send Collection Notices

DRS sends a series of notices before taking enforced collection action. Ignoring these notices can lead to more serious consequences. A Notice of Assessment or Proposed Disallowance triggers a 60-day protest deadline.

Offset Tax Refunds

Connecticut may offset a taxpayer's Connecticut and federal income tax refunds against a past-due Connecticut income tax liability. Connecticut's participation in the federal Treasury Offset Program allows the state to request that a taxpayer's federal refund be applied to an unresolved Connecticut income tax debt, generally after DRS sends a Notice of Intent to Offset and a 60-day window to resolve or dispute the debt has passed.

File a Tax Lien

A Connecticut tax lien attaches to all of the taxpayer's real estate in the state, and DRS may record a certificate of lien with the town clerk in any town where the taxpayer owns property. For sales tax, the lien attaches from the last day of the month preceding the due date (§ 12-420). For income tax, it attaches from the last day of the taxable year (§ 12-734). Liens can affect credit, the ability to sell or refinance property, and business operations.

Issue a Tax Warrant

Under Conn. Gen. Stat. § 12-35, DRS may issue a tax warrant directed to a serving officer (state marshal, constable, or DRS employee) for distraint upon any property of the person found within the state—real or personal—once a tax remains unpaid 30 days past its due date. The warrant has the same force as an execution. A keeper may be placed in any place of business to secure income for the state.

Levy Bank Accounts and Garnish Wages

A tax warrant may include orders to third parties holding bank accounts, securities, salaries, or wages. The serving officer is entitled to receive the full amount available, not to exceed the tax liability. This can create immediate cash-flow problems for individuals and businesses.

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Connecticut Offer in Compromise (OIC)

Unlike many states, Connecticut does have an offer-in-compromise program under Conn. Gen. Stat. § 12-2d. The Commissioner of Revenue Services (or a designated agent) may compromise any tax liability arising from the application or enforcement of Connecticut tax laws. This is one of Connecticut's most important tax relief tools—available to both individuals and businesses.

Connecticut Has an OIC Program

Form CT-656 is used for business tax OICs. Form CT-656a is used for personal taxes (including income tax). Both forms are available on the DRS website. A decision not to accept an OIC is final and not subject to review by the Superior Court.

Three Grounds for a Connecticut OIC

Ground	What It Means	Applies To
Doubt as to Liability	There is a genuine dispute about the existence or amount of the correct tax liability under the law. The taxpayer believes the assessed tax is incorrect.	Audit-assessed taxes only (not self-assessed). Only after notice of assessment has been issued.
Doubt as to Collectibility	The taxpayer's assets and income are less than the full amount of the correct tax liability. DRS is unlikely to collect the full amount.	Audit-assessed OR self-assessed taxes. Full financial disclosure required.
Both	A genuine dispute exists, AND the taxpayer's assets and income are insufficient to pay the full liability.	Audit-assessed taxes only.

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Where to Submit Your Connecticut OIC

OIC Type	Submit To
Doubt as to Collectibility	Bureau Chief, Compliance Process Group, DRS
Doubt as to Liability (before Final Determination)	Director, DRS Appellate Division
Doubt as to Liability (after Final Determination, before Superior Court appeal)	Director, DRS Legal Division
Doubt as to Liability (after Superior Court appeal)	General Counsel, DRS

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Circumstances Where OIC Is Generally NOT Accepted

Not all required tax returns have been filed
The taxpayer is being criminally prosecuted for the tax debt
The taxpayer is in voluntary bankruptcy
Undisclosed assets, income, or liabilities
The tax could reasonably be paid in installments from future income
The offer appears to be a delaying strategy

OIC Rejection Is Final

A decision by the Commissioner or designated agent not to accept an offer of compromise is final and is NOT subject to review by the Superior Court. This means if your OIC is rejected, you cannot appeal the rejection itself. You must explore other options, such as a payment plan, paying in full, or filing a protest if you dispute the liability.

Connecticut Tax Payment Plans

If you cannot pay your Connecticut state tax balance in full, a payment plan (installment agreement) may be an option. However, Connecticut payment plans have limits compared to the IRS and some other states.

Interest Continues to Accrue on Payment Plans

Under current DRS guidance, interest is not waived—even while your payment plan is active, interest continues to accrue at 1% per month (12% per year) on the unpaid balance. A payment plan does not stop interest. A lien may still be placed on your property to secure the state's collection rights.

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Key Conditions for Connecticut Payment Plans

Requirement	Details
Maximum Liability	$50,000 or less in current liabilities
Maximum Term	Current public DRS guidance limits standard payment plans to 12 months
Account Status	Not in active collection with DRS or a collection agency
Exclusions	Not under tax warrant, bankruptcy, or criminal investigation
Filing Requirement	All required tax returns must be filed and current
How to Apply	Through myconneCT
Financial Disclosure	DRS may require financial disclosure as part of reviewing the request
Lien	A tax lien may still be placed on your property to secure the debt, even if a plan is approved
Interest	Continues at 1% per month on the unpaid balance
Default Conditions	Plan stays in effect only if: accurate financial info is provided; each installment is paid on time; future tax obligations are paid when due; up-to-date financial info is provided when requested. Modified terms require 30 days' notice.

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Default Risk

An installment plan stays in effect only if you meet all conditions. If you miss a payment, fail to file future returns, fail to pay current taxes, or provide inaccurate financial information, DRS may terminate the plan and resume collection action — including tax warrants, levies, and garnishments.

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See If a Connecticut Payment Plan Makes Sense

A Connecticut payment plan may help if you cannot pay in full, but the 12-month maximum and $50K cap mean it is not available for everyone. The right move depends on your balance, notice status, income, assets, and whether collection has already started. We will tell you if a plan is not realistic.

See If a Connecticut Payment Plan Makes Sense

No guarantee of approval. DRS makes the final decision. Interest continues at 1% per month regardless.

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Which Connecticut Tax Relief Option Fits Your Situation?

Option	Best If	Deadline / Limit	Interest Stops?
Offer in Compromise	You cannot pay the full balance and have a genuine dispute or insufficient assets/income	No strict deadline; rejection not reviewable by court	Yes, if accepted and paid
Payment Plan	Liability ≤$50K; you can pay within the current 12-month guidance	Max 12 months; max $50K liability	No, 1%/month continues
Penalty Relief	Penalties make the balance unpayable, and you have reasonable cause	File Form DRS-PW within 1 year; tax and interest generally must be paid, unless under protest, appeal, or an active payment plan	No, interest continues under current programs
Protest / Appeal	You disagree with the assessment and have evidence	60 days from assessment (10 days for jeopardy)	No, accrues during protest
Lien / Warrant Help	A lien has been filed, a warrant issued, or your bank/wages are targeted	Act immediately	No

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Connecticut Penalty Relief

Penalty relief is different from a payment plan. A payment plan lets you pay over time. Penalty relief asks DRS to reduce or remove penalties when allowed under state rules.

Penalties May Be Waived — Interest Is Not, Under Current Programs

The commissioner may waive all or part of a penalty when it is proven that the failure to timely file, pay tax, or comply was due to reasonable cause and was not intentional or due to neglect under Conn. Gen. Stat. § 12-3a and PS 2019(3). Under current DRS relief programs, interest is not reduced, so even if all penalties are removed, interest at 1% per month continues until the tax is paid in full.

Reasonable Cause Circumstances

Circumstances beyond the taxpayer's control — the key is whether the taxpayer could have anticipated or foreseen the circumstances
Death, serious illness, or unavoidable absence — documented evidence (obituary, medical records) is advised
IRS waiver presumption — DRS will presume reasonable cause exists if the IRS waived a penalty for the same tax type and period
First-time penalty presumption — DRS will presume reasonable cause if this is the first time the taxpayer has been subject to a penalty (for monthly, quarterly, or annual tax types)
Documented DRS error — reliance on erroneous information from DRS usually constitutes reasonable cause
Tax preparer error — generally does NOT constitute reasonable cause, but may if documented miscalculation/typographical error despite exercise of ordinary business care

Important Requirements for Penalty Waiver

Tax and interest generally must be paid before a penalty waiver request will be considered—unless the liability is under protest, appeal, or an active payment plan
No outstanding filing obligations
Request must be filed on Form DRS-PW no later than ONE YEAR from the date of the first notice of penalty
A Form LGL-001 (Power of Attorney) must accompany requests filed by a representative
Financial hardship generally is not a basis for penalty waiver—if the ability to pay is the issue, consider an OIC or payment plan instead

Penalties NOT Eligible for Waiver

Penalties assessed during an audit
Criminal penalties
Penalties due to negligence, willfulness, fraud, intentional disregard, or intent to evade
Penalties for failure to disclose a reportable/listed transaction
Penalties specifically identified as civil penalties/fines, where waiver is not authorized

Penalty Review Committee for Large Waivers

If the commissioner recommends waiver of a penalty in excess of $5,000, the recommendation is subject to review and approval by the Penalty Review Committee, comprised of the commissioner of revenue services, state comptroller, and secretary of OPM (or their designees). The committee cannot waive penalties on its own—it only reviews the commissioner's recommendation.

Penalty Relief vs. Payment Plan

A penalty waiver and a payment plan are separate processes. A payment plan does not automatically remove penalties. Penalty relief must be requested separately on Form DRS-PW and approved based on reasonable cause. Even if penalties are waived, the underlying tax and interest generally must still be paid.

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‍Connecticut Tax Protest and Appeals

A notice of assessment or proposed disallowance from the Connecticut Department of Revenue Services is a serious step. Once issued, it becomes the official amount DRS says you owe. If you ignore it, your options to challenge the balance may be limited.

60-Day Protest Deadline (10 Days for Jeopardy)

A protest of a notice of assessment or proposed disallowance must be received within 60 days (or bear a US postmark within 60 days) after the date of the notice under Conn. Gen. Stat. § 12-418. For jeopardy assessments, the deadline is only 10 days from the date of the notice under Conn. Gen. Stat. § 12-417.

Interest continues to accrue during the protest if the assessment remains unpaid.

The Connecticut Protest Process

File a written protest with the DRS Appellate Division (may use Form APL-002)
An appellate officer is assigned, considers all relevant information, and sends a final determination letter.
If dissatisfied with the final determination, you may appeal to the Superior Court for the Judicial District of New Britain within ONE MONTH from the date of the final determination letter under Conn. Gen. Stat. § 12-422

About the Superior Court for New Britain — Tax and Administrative Appeals Session

Tax appeals from DRS determinations are filed with the Superior Court for the Judicial District of New Britain as part of the Tax and Administrative Appeals Session of the Connecticut Superior Court.

Superior Court Filing Requirements

Filing fee—the CT Judicial Branch FAQ page lists this fee as of July 1, 2016; confirm the current amount with the Judicial Branch or your representative before filing, since court fees can change
Complaint/Appeal signed and returnable to the New Britain Judicial District
Citation/Summons
Statement of amount in demand
Marshal's return of service

Interest Does Not Stop During Protest

If you are protesting a notice of assessment and the assessment has not been paid, interest will continue to accrue on the tax assessed. In contrast, the protest is pending before the Appellate Division. Under current DRS programs, interest is not paused during a protest — before, during, or after.

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Review My Connecticut Notice

If you received a Connecticut Notice of Assessment or Proposed Disallowance, review the deadline before doing anything else. Missing the 60-day protest deadline can severely limit your ability to challenge the assessment.

Review My Connecticut Notice

This is not legal advice. Consult a qualified representative for your specific situation.

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Connecticut Tax Liens

A tax lien is a legal claim filed by the state against your property. In Connecticut, liens attach to all real estate of the taxpayer within the state, and DRS may record a certificate of lien with the town clerk. Liens can affect your credit, your ability to sell or refinance property, and your business reputation.

How Connecticut Tax Liens Work

Sales Tax Liens (§ 12-420): The lien attaches from the last day of the month next preceding the due date of the tax until discharged by payment.
Income Tax Liens (§ 12-734): The lien attaches from the last day of the taxable year until discharged by payment.
Filing: A certificate of lien signed by the commissioner may be filed for record in the office of the clerk of any town where the taxpayer's real estate is situated.
Effect: No lien is effective against a bona fide purchaser or qualified encumbrancer unless properly recorded.
Foreclosure: Any action for foreclosure of a tax lien is brought by the Attorney General in the superior court for the judicial district where the property is situated.

Lien Release

When a tax lien has been satisfied, the commissioner shall issue a Certificate of Release discharging the lien, which must be recorded in the same office where the lien was recorded. The taxpayer is responsible for having the Certificate of Release recorded. The Commissioner may use an electronic signature on lien documents.

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Connecticut Tax Warrants, Bank Levies & Business Keepers

Connecticut's tax warrant system is among the most aggressive state collection tools. Under Conn. Gen. Stat. § 12-35, a tax warrant has the same force as an execution and can reach virtually any property of the taxpayer.

Tax Warrants Allow Business Keepers

Under Conn. Gen. Stat. § 12-35, if a tax warrant is issued, the serving officer may place a "keeper" in any place of business. The keeper's duty is to secure the income of the business for the state and, when in the best interest of the state, to force cessation of business operation. This means DRS can effectively shut down your business to collect tax debts.

Key Facts About Connecticut Tax Warrants

Authority: DRS may issue a warrant upon failure to pay tax within 30 days of the due date
Serving Officer: State marshal, constable, or DRS employee
Property Subject to Levy: Any real property, tangible personal property, or intangible personal property—including bank accounts, securities, receivables, salaries, and wages
Force of Law: The warrant has the same force as an execution
Notice: For a warrant served on a third party holding intangible personal property (such as a bank account or wages), the statute requires the state collection agency to first notify the property owner in writing of its intent to issue the warrant, generally at least 30 days beforehand, except for jeopardy assessments
Officer Fees: Serving officers collect fees equal to twice the authorized amount, with a minimum charge of $5. Fees are paid first from collected funds
Business Keeper: A person placed in the business to secure income and potentially force closure

Jeopardy Assessments

Jeopardy assessments are subject to more immediate enforcement action than the standard notice timeline. A taxpayer may request an immediate review and obtain a stay of collection by posting a security deposit during the review process.

If your account has been targeted by a tax warrant, bank levy, or business keeper, you need to act quickly. A levy may be lifted or modified in certain situations, but the timeline is tight. No guarantee of release.

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Connecticut Wage Garnishment for Tax Debt

Under a Connecticut tax warrant, DRS may garnish wages, salaries, bonuses, commissions, and any other compensation. A tax warrant may be directed to the taxpayer's employer, who is required by law to withhold and remit funds to the serving officer.

How Connecticut Wage Garnishment Works

A tax warrant is served on the employer with an order to withhold
The employer must comply with the law
Garnishment continues for subsequent pay periods until the total amount has been withheld and remitted

Wage Garnishment vs. Bank Levy vs. Business Keeper

Feature	Wage Garnishment	Bank Levy	Business Keeper
Target	Your paycheck	Your bank account	Your business operations
Amount	Ongoing from each paycheck	Full account balance (up to liability)	All business income is secured for the state
Duration	Continues each pay period until paid	One-time at the time of service	Remains until the debt is resolved or the business is forced to close
Notice	Employers must comply with the law	The bank must comply with the law	Generally preceded by the statutory notice-of-intent process for warrants on intangible property, except in jeopardy cases

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If you have received notice of garnishment or an intent to garnish, do not ignore it. Once garnishment starts, the money is taken before you receive your paycheck.

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Get Help With a Connecticut Collection Notice

If Connecticut DRS has filed a lien, issued a tax warrant, placed a keeper in your business, frozen a bank account, started wage garnishment, or sent a serious collection notice, waiting usually makes the problem worse. Get the notice reviewed before you make random payments or ignore the deadline.

Get Help With a Connecticut Collection Notice

No guarantee of outcome. We review your facts and explain your options. We will tell you if settlement is not realistic. Call (888) 260-9441

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Connecticut Unfiled Tax Returns

If you have not filed Connecticut tax returns for one or more years, that can block most resolution options. DRS may estimate your tax and issue assessments based on those estimates—sometimes higher than what you actually owe.

Filing accurate returns can sometimes reduce an incorrect balance. But do not rush or file bad returns. It's better to get the returns prepared correctly with the right income, deductions, and Connecticut credits.

Why Filing Matters

Unfiled returns block Offer in Compromise eligibility
Unfiled returns block payment plan eligibility
DRS may issue substitute returns with higher tax than you actually owe
Penalty relief and OIC generally require all returns to be filed
The statute of limitations on assessments may not start until a return is filed

Connecticut Statute of Limitations

General rule: 3 years after the return is filed for deficiency assessments (§ 12-733, § 12-415)
Substantial omission: 6 years if more than 25% of income is omitted (§ 12-733(2))
No return filed: If no return is filed, DRS may estimate and assess at any time (§ 12-416)
Fraud: No statute of limitations in cases of fraud or intent to evade

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Connecticut Business, Sales Tax, and Payroll Tax Debt

Business tax debt is riskier than individual income tax debt. Sales tax, use tax, and income withholding tax are trust fund taxes — money you collected or withheld that belongs to the state. DRS takes these very seriously.

Responsible Person Warning: 100% Personal Liability

Under Conn. Gen. Stat. § 12-414a, any person (other than a retailer) who is required, on behalf of a retailer, to collect, truthfully account for, and pay over sales tax, and who willfully fails to do so or willfully attempts to evade the tax, is liable for a penalty equal to 100% of the tax evaded or not collected, accounted for, or paid over.

Who can be held liable? Officers, employees, members of LLCs or partnerships under a duty to file returns or collect/pay tax. "Person" is broadly defined. The penalty is imposed only if the tax cannot be collected from the retailer.

Key points:

The dissolution of a retailer does NOT discharge a responsible person from personal liability
Any amount collected from the responsible person is credited against the retailer's liability
"Willful" means voluntary, conscious, and intentional conduct
Non-owner employees acting solely under the dominion and control of others are generally not targeted
Unpaid volunteer board members of 501(c) organizations may be exempt

Withholding Tax — Also Trust Fund

Under Conn. Gen. Stat. § 12-736, any person required to collect, truthfully account for, and pay over income tax withholding who willfully fails to do so is liable for a penalty equal to 100% of the unpaid tax. The employer remains primarily liable. Amounts withheld are held in a special fund in trust for the state under § 12-706.

Successor Liability for Sales Tax

Under Conn. Gen. Stat. § 12-424, if you purchase a business, you must withhold sufficient purchase price to cover the seller's sales tax liability until the seller produces a receipt or certificate showing no amount is due. If you fail to withhold, you become personally liable for the full purchase price. A purchaser can avoid this by obtaining a tax clearance certificate from DRS at least 90 days before closing.

Connecticut Sales Tax Debt

Unpaid sales tax can lead to aggressive collection action, 100% personal liability for responsible persons under § 12-414a, successor liability for buyers, and tax liens. Sales tax records must be kept for at least 6 years.

Connecticut Payroll / Withholding Tax Debt

Unremitted withholding tax can trigger 100% personal liability under § 12-736, tax warrants with business keepers, and aggressive collection by DRS. Amounts withheld are held in trust for the state.

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Review My Connecticut Business Tax Debt

Sales tax and payroll withholding tax problems can create higher risk for business owners. If Connecticut DRS believes tax was collected or withheld but not paid, do not treat it like ordinary income tax debt. The 100% responsible person penalty and business keeper provisions make Connecticut business tax debt especially serious.

Review My Connecticut Business Tax Debt

No guarantee of outcome. We review your facts and explain your options. We will tell you if settlement is not realistic.

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Connecticut Tax Relief Tools & Calculators

Use our Connecticut calculators to estimate penalties, interest, or garnishment risk. Then request a review if the numbers show the balance is growing or collection is already active.

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Connecticut Tax Penalty & Interest Calculator

Estimate how much penalties and interest have added to your balance. Connecticut's interest is 1% per month and, under current DRS programs, is not waived.

Open Calculator →

Connecticut Sales Tax Penalty Calculator

Estimate sales tax penalties and interest for businesses. Includes 15% negligence penalty and 1% monthly interest.

Open Calculator →

Connecticut Wage Garnishment Estimator

See how wage garnishment under a Connecticut tax warrant could affect your take-home pay.

myconneCT Portal

Access your Connecticut tax account online to view balances, make payments, and apply for payment plans.

myconneCT →

Connecticut Tax Forms

Find Connecticut state tax forms from the official DRS website.

DRS Forms →

Connecticut General Statutes — Title 12

Access the full text of Connecticut tax laws from the Connecticut General Assembly.

Title 12 Statutes →

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Connecticut Government Resources

These are the official Connecticut sources for tax information, payment plans, appeals, and rules. Always check the official source for the most current information.

Connecticut Department of Revenue Services (DRS) — Official tax agency portal
myconneCT — Online account portal for taxpayers
DRS Penalty Waiver Request, Offer in Compromise, or Protest — OIC, protest, and penalty waiver information
DRS Offer of Compromise page — OIC overview
IP 2004(31), Procedures for Making Offers of Compromise — OIC procedures
PS 2019(3), Requests for Waiver of Civil Penalties — Penalty waiver rules (search current DRS Policy Statements)
DRS Treasury/Federal Offset Program — Refund offset rules
CT Fresh Start Welcome Page — Historical program information (closed November 30, 2018)
CT Judicial Branch — Tax and Administrative Appeals Session FAQs — Superior Court tax appeals
Connecticut General Statutes Title 12 — Complete tax statutes

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Not Sure What to Do With Your Connecticut Tax Situation?

Select the card that matches your situation to jump to the relevant section.

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Received a Notice of Assessment

Review the 60-day protest deadline first. Do not let the deadline pass. Interest accrues on the unpaid balance during the protest.

Jump to Appeals Section →

Cannot Pay in Full

Connecticut offers both OIC and payment plans. OIC may settle for less. Payment plans are currently limited to 12 months for liabilities up to $50K.

Jump to Payment Plan Section →

Penalties Are the Main Issue

Penalty relief may be available for reasonable cause. Under current DRS relief programs, interest is not reduced.

Jump to Penalty Relief Section →

Tax Warrant or Business Keeper

A tax warrant can lead to a lien on your business, bank levies, and wage garnishment. Act immediately.

Jump to Lien Section → | Jump to Levy Section → | Jump to Garnishment Section →

Business Sales or Payroll Tax Debt

Responsible persons face 100% personal liability under §§ 12-414a and 12-736. Get help before making random payments.

Jump to Business Tax Section →

Unfiled Tax Returns

Unfiled returns block most resolution options, including OIC and payment plans. File accurate returns first.

Jump to Unfiled Returns Section →

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Frequently Asked Questions

Does Connecticut have an offer-in-compromise program?

Yes. Connecticut has an Offer in Compromise (OIC) program under Conn. Gen. Stat. § 12-2d. The Commissioner of Revenue Services may compromise any tax liability arising from the application or enforcement of Connecticut tax laws. OICs can be based on doubt as to liability (genuine dispute about the tax owed), doubt as to collectibility (assets and income are less than the full liability), or both. Form CT-656 is used for business tax OICs; Form CT-656a is used for personal taxes, including income tax. A decision not to accept an OIC is final and not subject to court review.

Can Connecticut waive interest on taxes?

Generally, no. Under Connecticut's current standard, DRS tax relief programs do not waive interest. Interest on unpaid Connecticut taxes accrues at 1% per month or fraction thereof from the due date until payment, under Conn. Gen. Stat. §§ 12-35, 12-419, and 12-735. Unlike penalties, which may be waived for reasonable cause, interest is not reduced under today's routine relief paths. (Connecticut's CT Fresh Start program, a limited-time voluntary compliance initiative that closed on November 30, 2018, did reduce interest by 50% for participants, but that program is no longer available.) Anyone claiming they can routinely "negotiate away" Connecticut interest today is giving false information.

How long are Connecticut payment plans?

Current DRS guidance limits standard installment agreements to a maximum term of 12 months. To qualify, the taxpayer must have current liabilities of $50,000 or less, not be under warrant, bankruptcy, or criminal investigation, and have all tax returns filed. The account must not be in active collection with DRS or a collection agency. Payment plans are applied for through myconneCT. DRS may require financial disclosure as part of its review of the request. Interest continues at 1% per month during the plan.

What is a tax warrant keeper in Connecticut?

Under Conn. Gen. Stat. § 12-35, when the Department of Revenue Services issues a Connecticut tax warrant, the serving officer (state marshal, constable, or DRS employee) may place a "keeper" in any place of business. The keeper's duty is to secure the income of the business for the state and, when in the best interest of the state, to force cessation of business operation. This means DRS can effectively place a person in your business to collect revenue or shut down operations until the tax debt is resolved. A tax warrant has the same force as an execution and may be levied on any property of the taxpayer.

Can I appeal a Connecticut tax assessment?

Yes. You have 60 days from the date of a notice of assessment or notice of proposed disallowance to file a written protest with the DRS Appellate Division (Conn. Gen. Stat. § 12-418). For jeopardy assessments, the deadline is only 10 days (§ 12-417). An appellate officer is assigned and issues a final determination letter. If dissatisfied, you may appeal to the Superior Court for the Judicial District of New Britain within ONE MONTH from the date of the final determination letter (§ 12-422). Interest continues to accrue during the protest if the assessment is unpaid.

What is the responsible person's liability for Connecticut sales tax?

Under Conn. Gen. Stat. § 12-414a, any person (other than a retailer) who is required to collect, truthfully account for, and pay over sales tax, and who willfully fails to do so, is liable for a penalty equal to 100% of the tax evaded or not collected, accounted for, or paid over. "Person" includes officers, employees, and members of LLCs or partnerships. The penalty is imposed only if the tax cannot be collected from the retailer. Dissolution of the retailer does NOT discharge the responsible person's liability. A similar 100% penalty applies to withholding tax under § 12-736.

Can Connecticut file a tax lien?

Yes. For sales tax, the lien attaches to all real estate from the last day of the month preceding the due date (§ 12-420). For income tax, from the last day of the taxable year (§ 12-734). A certificate of lien signed by the commissioner is filed with the town clerk where the taxpayer owns property. The lien affects credit and the ability to sell or refinance property. Upon satisfaction, the Commissioner issues a Certificate of Release, which must be recorded where the lien was filed. The taxpayer is responsible for recording the release.

Can Connecticut levy a bank account?

Yes. Under a tax warrant (Conn. Gen. Stat. § 12-35), DRS may levy on any real property, tangible personal property, or intangible personal property — including bank accounts. The serving officer is entitled to receive the full amount in the account at the time of levy, not to exceed the tax liability. For a warrant on intangible property such as a bank account, the statute requires advance written notice to the property owner, generally at least 30 days, except in jeopardy cases. This can create immediate cash-flow problems.

Can Connecticut garnish wages for state taxes?

Yes. Under a Connecticut tax warrant, DRS may garnish wages, salaries, bonuses, commissions, and any other compensation. A tax warrant directed to the employer requires the employer to withhold and remit funds to the serving officer. The garnishment remains in effect for subsequent pay periods until the total amount has been withheld and remitted.

Can Connecticut waive penalties?

Yes, civil penalties may be waived when reasonable cause is proven under Conn. Gen. Stat. § 12-3a and DRS Policy Statement 2019(3). Qualifying reasons include circumstances beyond the taxpayer's control, death or serious illness, an IRS waiver of the same penalty (presumption), a first-time penalty (presumption), a documented DRS error, and tax preparer error in limited cases. Tax and interest generally must be paid, or the liability must be under protest, appeal, or an active payment plan, before a penalty waiver will be considered. Form DRS-PW must be filed within one year of the first penalty notice. Financial hardship generally is not a basis for penalty waiver.

What if I have unfiled Connecticut tax returns?

Unfiled returns block most resolution options, including Offers in Compromise and payment plans. DRS may estimate your tax and issue assessments that are higher than what you actually owe (Conn. Gen. Stat. § 12-416). Filing accurate returns can sometimes reduce an incorrect balance. Do not rush or file bad returns — get them prepared correctly. The general statute of limitations is 3 years from the filing date, but if no return is filed, DRS may assess at any time.

What if my Connecticut tax debt is from sales tax or payroll withholding?

Sales tax and payroll withholding debt is treated very seriously by Connecticut DRS because these are trust fund taxes—money collected or withheld that belongs to the state. Under § 12-414a (sales tax) and § 12-736 (withholding), any responsible person who willfully fails to collect, account for, or pay over these taxes may be personally liable for a penalty equal to 100% of the unpaid tax. This includes officers, employees, and members of LLCs or partnerships. The dissolution of the business does not discharge this personal liability. Additionally, DRS may place a keeper in the business under a tax warrant (§ 12-35).

Does a Connecticut payment plan stop collection?

A Connecticut payment plan does not prevent all collection actions. DRS may still place a tax lien on your property to secure the debt, even if a plan is approved. The plan also does not prevent refund offsets. If you default — by missing a payment, failing to file returns, failing to pay current taxes, or providing inaccurate financial information — DRS may terminate the plan and resume collection action, including tax warrants, levies, and garnishments. Interest at 1% per month continues to accrue during the plan.

Does Connecticut have a Fresh Start program?

No — the Connecticut Fresh Start program expired on November 30, 2018. It was a limited-time voluntary compliance program available from October 31, 2017 through November 30, 2018 that provided penalty waivers, a 50% interest reduction, and limited look-back periods for non-filers and under-reporters. It is no longer available. Do not confuse it with current resolution options. The current programs are: Offer in Compromise (§ 12-2d), installment agreements (currently up to 12 months, max $50K), and penalty waiver for reasonable cause.

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‍Disclaimer: This page provides general information about Connecticut state tax collection procedures and is not legal advice. Tax laws and agency procedures change. Always consult the official Connecticut Department of Revenue Services website or a qualified tax professional for advice specific to your situation. No guarantee of any particular outcome is expressed or implied. Interest on Connecticut tax debt generally cannot be waived under current DRS programs, and approval of offers in compromise, payment plans, and penalty waivers is discretionary.