04 October 2017 Connecticut to end joint account election to potentially lower SUI tax rate The Connecticut Department of Labor recently notified EY that as of January 1, 2018, it will no longer be able to administer the joint account election due to significant and permanent reductions in staff. As a result, and effective immediately, no new requests for joint accounts will be processed. In addition, all existing joint accounts will be dissolved effective December 31, 2017. Each employer will receive notification of the dissolution from the Department. Connecticut law gives the Department authority to give employers the option of combining state unemployment insurance (SUI) accounts to potentially lower their state unemployment insurance contribution rates. To apply, the Connecticut joint account election was required to be made by September 30 prior to the calendar year of election. The joint account election lasts only one calendar year and must be renewed each September 30. (Connecticut General Statutes Section 31-225a(i) (1).) The joint account option allows the employer to request that the state combine the SUI tax experience of two or more companies in the state for SUI contribution rate purposes. When determining if there is a cost-benefit advantage in forming a joint account, it is important to consider the state's "lock-in" period — the period of time the joint account must remain in place before the employer can dissolve it. Dissolution of most joint accounts can be accomplished only by written request at the expiration of the lock-in period. For more information on statutory elections that can potentially lower an employer's SUI tax rate, see the Ernst & Young LLP Guide to Unemployment Insurance. Document ID: 2017-1626 |
