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Public Act 18-49, passed on May 31, 2018, includes a new Pass-Through Entity Tax which changes how income earned by S corporations and partnerships is taxed. For tax years starting on or after January 1, 2018 the partnership or S corporation pays tax on its own income instead of passing through the tax to the partners, shareholders or members. Partners, shareholders, and members are allowed a credit for the tax paid by their pass-through entity.

These changes have an impact on the 2018 estimated tax payments. Pass-Through Entities must now start paying estimated tax as outlined in the Guidelines below. Note that the first payment was due June 15. Individuals with pass through income may no longer need to make estimated payments for their pass-through income.

Individuals who do make estimated payments for their pass-through income may be able to re-characterize the payments so that the payment is applied to the entity’s tax liability instead of the individual’s tax liability.

Connecticut expects to release more information regarding re-characterization later this year. Individual TaxAct users may modify their Form CT-1040ES. Both individuals and entities may log into the Connecticut Taxpayer Service Center (TSC) to make estimated payments.

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