1) Connecticut Tax Registration
When opening a small business in Connecticut, you will need to apply for the identification numbers, licenses and permits that correspond with the types of services you are offering. While some of the more common taxes include sales and use tax, withholding tax and business entity tax, the following taxes may also apply if relevant to the nature of your business:
- Controlling interest transfer tax
- Real estate conveyance tax
- Motor vehicle fuels tax
- Motor carrier road tax
- Franchise tax
Visit the State of Connecticut Department of Revenue Service’s site for more information and a longer list of possible business taxes. The site also offers electronic filing services, tax forms, a research library and updated news on changes in tax policies.
2) Business Licenses
Connecticut’s requires new businesses to obtain permits and licenses that correspond to their available services. The cost of the license or permit will depend on the trade or occupation. For examples, licenses exist for medical laboratory services, landscape construction, casino and bingo gaming and real estate appraising. Visit the Connecticut Licensing Info Center for a list of possible permits and licenses. The site includes online verification and registration for licenses.
3) Local Permits
The local government in your area, such as that of your city or county, may require specific permits and licenses. Each municipality may have its own unique regulations. Here are some of the most common licenses and permits you may need.
- Alarm Permit
- Building Permit
- Business License and/or Tax Permit
- Health Permit
- Occupational Permit
- Signage Permit
- Zoning Permit
4) Incorporation Filing
Connecticut businesses that assume the form of corporations, non-profit organizations, partnerships and limited liability companies must register with the Secretary of State. Visit the Connecticut Secretary of State site to find registration forms. The site also features press releases and useful links for business owners.
Businesses that take the form of sole proprietorships do not need to register with the Colorado Secretary of State; however, a business that falls under that category must take on the personal name of the owner. In addition, the owner will be liable for any of the business’s debts.
5) Doing Business As
To avoid associating your business’s name with your personal name, you should either file for a trade name or register as a corporation. This process is often referred to as Doing Business As. Visit the Connecticut Commercial Recording Division’s page to file for a trade name or browse through existing businesses. If a business has already registered your trade name, you will need to select a new one.
6) Withholding Income Taxes
After the 4th quarter of the year, employers should continue to keep employment tax information on file for at least the next four years. Here are a few items that you should record:
- Information on annuity, wage and pension payments
- Employees’ personal information, such as contact information
- Your employer information, including your employer identification number
On the IRS website, you will find a more extensive list of items to keep in your record books. Recording these items will be beneficial to organizing your business and keeping track of important information.
W-4 and W-2 Forms
Form W-4 is a withholding exemption certificate. Connecticut employees must return a signed copy of this document to employers. Connecticut employers should be prepared to send the form to the IRS.
Form W-2 is a document that holds withheld taxes and paid wages information for employees. Employers should send a copy of the document to the Social Security Administration at the end of each February. If the document is submitted electronically, it is not due until the end of March. Employees should receive copies of this same document by the end of the following January.
These links will provide information and applications necessary for filing W-2 and W-4 forms:
- The Social Security Administration’s Employer W-2 Filing Instructions and Information page
- The Internal Revenue Service’s Employer Tax Guide
7) Employee Eligibility Verification (Form I-9)
A Form I-9 is proof of eligibility to work in the US. New Employees must fill out and return this document to the employer within three days of employment. The employer should then keep the document on file for future reference.
You can find the Form I-9 at the website of the United States Citizenship and Immigration Services.
8) New Hire Reporting
Connecticut employers must report information about new and returning employees within 20 days of hiring or re-hiring. The reported information will include items such as the employee’s personal information and a few items related to the employer’s identification. Visit the Connecticut Department of Labor’s New Hire Reporting system to submit the report online. The site also features a FAQ page to address common concerns.
9) Insurance Requirements
If you need employees for your Connecticut-based business, you will need to pay for additional taxes, including workers’ compensation tax and unemployment insurance tax.
The workers’ compensation tax aids Connecticut employees who are injured and rendered ill while on the job. You can register for the tax or research more information by visiting the official site of the State of Connecticut Workers’ Compensation Commission. New business owners should download the site’s information packet to gain a full understanding of how the tax works.
The unemployment insurance tax focuses on Connecticut workers who are still unemployed yet able to work. You can find information for this tax on Connecticut Department of Labor website.