Connecticut Small Businesses Beware: The Mandatory MyCTSavings Program Has Been Extended Until August 31, 2023
By Joseph Feehan, Partner, Tax & Business Services
The State of Connecticut’s mandatory MyCTSavings program, which began on April 1, 2022, has laid a significant responsibility on the shoulders of employers, with stringent penalties levied for any non-compliance. The program is now extended until August 31, 2023, and immediate action is essential to comply with Connecticut law, or employers will face penalties.
MyCTSavings is a new retirement savings program created to help Connecticut’s private-sector employees without access to employer-sponsored retirement plans. The program uses automatic enrollment and savings through payroll contributions to help employees save. Connecticut will impose additional penalties on those employers who fail to remit payroll deductions on time. Eligible employees can opt-out if they don’t want to participate or prefer to save another way.
Defining Employer Obligations in Connecticut
Connecticut employers are required to facilitate the program if they fulfill the following criteria:
- Employed five or more employees in Connecticut as of October 1st of the previous calendar year, and;
- Paid at least five employees $5000 or more in taxable wages in the previous calendar year, and;
- Do not currently provide a qualified, employer-sponsored retirement savings plan.
Connecticut requires employers to facilitate the program for all employees whose services are performed in the state, even if those employees live in other states.
Tiered Enrollment System: Ensuring Compliance for All Business Sizes
Connecticut uses a tiered enrollment system, whereby businesses enroll based on the number of employees. As of April 1, 2022, employers with 100 or more employees have until June 30 to enroll; those with 26-99 employees have until October 31; and those with 5-25 employees have until March 30, 2023.
More Time for Smaller Businesses
However, Connecticut has recently provided a reprieve for small businesses, extending the registration period for employers with fewer than 26 employees through August 31, 2023. Marcum’s New England SALT practice can assist if your business meets the program’s requirements with MyCTSavings program enrollment until the deadline. Enrollment will then be closed until Spring 2024.
Additional information on this program can be found in the FAQ section of the MyCTSavings website. Please reach out to SALT Partner Joe Feehan via email at [email protected] or via phone at 617.807.5153.