Athletes and Entertainers Tax Withholding
Connecticut venues, such as SCSU, that contract to pay athletes, entertainers or performing entities for services performed in CT are considered designated withholding agents by the Department of Revenue Services (DRS). As such, SCSU is required to withhold income tax at the source of payment unless the Department of Revenue Services grants a request for reduced withholding. The current withholding rate is 6.99% of the gross payment to Athletes & Entertainers. Please visit DRS to verify the current rate and review the most recent Policy Statement regarding Income Tax Withholding for Athletes or Entertainers, which further explains these requirements.
Who is subject to Athlete and Entertainers tax?
Performer - an athlete, including but not limited to a wrestler, boxer, golfer, tennis player, or other athlete as well as a referee or trainer. An entertainer includes but is not limited to an actor, singer, musician, dancer, circus performer, comedian, public speaker**, writer, director, set designer or member of a sound or light crew.
** Public speaker does not include a speaker who 1) is engaged as part of a course offered by SCSU, or 2) is part of an educational or academic conference, seminar, or symposium sponsored by SCSU; and is paid $5,000 or less.
Performing Entity - any corporation, partnership, limited partnership, or limited liability company that employs, engages or is composed of one or more performers.
What payments are exempt from the withholding?
1) Payments of $1,000 or less for a performance or series of performances do not require withholding.
2) Payments of $5,000 or less by an educational institution to a speaker engaged as part of a course offered or as part of an academic conference, seminar or symposium do not require withholding.
How does a performer or performing entity request a waiver of withholding?
A performer or performing entity may request a waiver of withholding by completing formCT-590 in the follow cases:
1) Non resident performer with annual CT source income of $3,000 or less. CT-590 must be submitted to DRS for approval.
2) Performing entity is registered as an employer with DRS. CT-590 must be submitted to DRS for approval.
3) Performer is a CT resident. CT-590 is submitted to Accounts Payable along with the payment documentation. The CT-590 will be retained by AP for up to four years as required by DRS policy.
4) Performer is an employee of SCSU. CT-590 is submitted to Accounts Payable along with the payment documentation. The CT-590 will be retained by AP for up to four years as required by DRS policy.
5) Performing Entity continuously maintains, occupies, and uses an office in CT. The CT-590 is submitted to Accounts Payable along with the payment documentation. The CT-590 will be retained by AP for up to four years as required by DRS policy.
How does a performer or performing entity request reduced withholding?
The performer or performing entity may request reduced withholding when they believe that the withholding is likely to exceed their CT income tax liability.
A performer or performing entity may request reduced withholding by completing form CT-588 which must be submitted to DRS.
How does a performer or performing entity submit forms to DRS?
Forms must be received by DRS at least 14 calendar days before the date of performance. Foms may be faxed to (860) 541-4599.
What happens after forms are submitted?
DRS will grant or deny the request and will issue notice of its decision by issuing CT-595 - to SCSU Accounts Payable with a copy to the performer or performing entity. In the case of reduced withholding, DRS will indicate the amount to be withheld. If notification is not received by SCSU before the date that payment is to be made, SCSU must withhold at the current withholding rate of 6.7%. Performers or performing entities may call the DRS Entertainment Withholding Section at (860) 297-5925 for information on the status of their request.