Connecticut Paid Family and Medical Leave Tax

This article provides an overview of the Connecticut Paid Family and Medical Leave Tax Act.

BACKGROUND

On June 25, 2019, Connecticut Governor Ned Lamont signed the Paid Family and Medical Leave Act (PFML) which provided benefits to eligible employees who take leave for covered reasons. The passing of this law has payroll and HR considerations you'll want to have in mind if you have employees in Connecticut. 

  • Funding for twelve weeks of paid leave becomes effective January 1, 2021. For specific rates, please visit the 2022-2023 Federal and State: Payroll and Tax Fact Sheet.

  • Benefits will be available for eligible employees January 1, 2022. 

  • Coverage is being expanded to employers with as few as one Connecticut employee, and for employees who have worked for their employer as little as twelve weeks with no minimum hours requirement.

  • Connecticut Family Medical Leave Act covered reasons are expanding to include caring for grandparents, children, siblings, and those considered equivalent to a family member.

  • The amount of leave available to eligible employees is being expanded.

 

TIP:

Employers are required to deduct and withhold a mandatory tax of gross wages from all employee paychecks beginning January 1, 2021. For specific rates, please visit the 2022-2023 Federal and State: Payroll and Tax Fact Sheet.

 

NEXT STEPS

We have added the CT-PFML tax type to Namely Payroll for you to add the appropriate taxes to your company tax setup by clicking Company > Tax.

You can get a jump start on things by going to the Connecticut Paid Leave website to register for an ID number. Once the tax type is available, you can add the ID to the system. Namely does not collect or remit for taxes without a valid tax ID or ones that are in “applied for” status, so make sure that you apply for your CT-PFML tax ID as soon as possible to avoid any penalties and interest.

Employers have the option of purchasing their own private insurance plan to provide paid leave benefits to their employees as an alternative to registering for the state program. If you choose to offer a private Paid Family and Medical Leave Plan, you must apply to the Connecticut Paid Leave Authority for an exemption from the tax.

If you decide to purchase your own insurance, submit a case to Namely as soon as you receive your exemption letter so that we can exclude this tax from future payroll cycles.

 

FREQUENTLY ASKED QUESTIONS

When will employees begin to be deducted for this tax?

Employees will begin to be deducted for the CT-PFML tax starting pay dates on or after January 1, 2021.

Do employers have to contribute to this tax?

No. This tax is paid by Connecticut employees only.

What is the annual limit of the CT-PFML tax?

Employees contribute a percent of all gross wages up until the Social Security taxable limit. For specific rates, please visit the 2022-2023 Federal and State: Payroll and Tax Fact Sheet.

I provide a private insurance plan with paid leave benefits to my employees. Am I exempt from this tax?

As an alternative to registering for the Program, employers have the option of purchasing their own private insurance plan to provide paid leave benefits to their employees. If you choose to offer a private Paid Family and Medical Leave Plan, you must apply to the CT Paid Leave Authority for an exemption from the Program.

Can Namely advise when my Connecticut employees are eligible for Paid Family and Medical Leave?

Namely does not provide legal, accounting, or tax advice. Please consult with professional counsel for any tax, accounting or legal questions.

If our organization is exempt from this tax, what do we do?

Submit a case in the Help Community with the product name Payroll and the subject line Connecticut PFML Tax, along with proof of your organization’s exemption and our service team will be able to assist you.